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ACC 290 Principles of Accounting Final Exam Answer

1.During the year, Sarah’s Pet Shop’s merchandise inventory decreased by $30,000. If the company’s cost of goods sold for the year was $450,000, purchases would have been

A.$480,000

B.$420,000

C.$390,000

Insufficient data to determine
2.At the beginning of the year, Wildcat Athletic had an inventory of $200,000. During the year, the company purchased goods costing $700,000. If Wildcat Athletic reported ending inventory of $300,000 and sales of $1,000,000, their cost of goods sold and gross profit rate would be
A.$400,000 and 60%

B.$600,000 and 40%

C.$400,000 and 40%

D.$600,000 and 60%
3.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption

A.$11,300

B.$12,000

C.$10,000

D.$10,700
4.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption

A.$11,300

B.$12,000

C.$10,000

D.$10,700
5.The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $300 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?
A.$11,300

B.$12,000

C.$10,000

D.$10,700
6.At the beginning of the year, Uptown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,500,000. If Uptown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate would be

A.$900,000 and 65%

B.$900,000 and 35%

C.$1,300,000 and 35%

D.$1,300,000 and 65%

7.Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

A.debit Office Supplies Expense, $1,100; credit Office Supplies, $1,100

B.debit Office Supplies, $2,900; credit Office Supplies Expense, $2,900

C.debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900

D.debit Office Supplies, $1,100; credit Office Supplies Expense, $1,100