Question

1. Which of the following would be disclosed in the Summary of Significant Accounting​ Policies?

A.

details of a related party transaction

B.

definition of cash equivalents

C.

composition of inventories

D.

maturity dates of long−term debt

2. Sampe Company has the following data​ available:

Transaction	Units Purchased	Unit Cost	Units Sold
Beginning Inventory	400	​$10
March 1 Purchase	200	​$12
April 25 Sale			350
June 10 Purchase	300	​$14
July 20 Sale			250
October 30 Purchase	350	​$15
December 15 Sale			400

If Sampe Company uses a perpetual FIFO inventory​ system, the cost of goods sold for the year is​ ________.

A.

​$4,200

B.

​$16,850

C.

​$12,100

D.

​$5,400

Answer 1

1

Which of the following would be disclosed in the Summary of Significant Accounting​ Policies?

Answer:

definition of cash equivalents

_____________________________________________

2

The cost of goods sold for the year is​ =$12,100

Working notes for the above answer is as under

Cost of goods sold
Transaction	Units Purchased	Unit Cost	Total cost
From Beginning Inventory	400	10	4000
From March 1 Purchase	200	12	2400
From June 10 Purchase	300	14	4200
From October 30 Purchase	100	15	1500
Total	1000		12100