Question

Wholesome Ltd. has a days in inventory ratio of 50 and average inventory of $320,000. What is its cost of goods sold?

	$2,336,000
	$2,191,780
	cannot be determined
	$16,000,000

Use the following information to answer the question:
Cost of goods sold $434,000
Income tax expense 67,200
Operating expenses 344,000
Sales 1,100,000
Sales discounts 24,000
Sales returns and allowances 74,000

The gross profit margin would be

	34.3%
	43.3%
	39.5%
	56.7%

An employee authorized to sign cheques should not record

	Shipping Documents
	Mail Receipts
	Cash Disbursement Transactions
	Sales Transactions

A Corporation gathered the following reconciling information in preparing its October bank reconciliation:
Cash balance per books, October 31 $6,200
Deposits in transit 225
Electronic collection of account receivable 1,150
Bank charge for cheque printing 25
Outstanding cheques 1,700
NSF cheque 200
The reconciled cash balance per books at October 31 is

	$7,125
	$5,200
	$5,650
	$6,900

Answer 1

Inventory turnover = Cost of goods sold / Average inventory

50 = Cost of goods sold / $320,000

Cost of goods sold = 50 * $320,000

= $16,000,000

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Net sales = Sales - Sales discounts - Sales returns and allowances

= $1,100,000 - $24,000 - $74,000

= $1,002,000

Gross profit = (Net sales - Cost of goods sold) / Net sales

= ($1,002,000 - $434,000) / $1,002,000

= 56.7%

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The answer is Cash disbursement transactions.

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Balance per books	$6,200
Electronic collection of accounts receivable	$1,150
Bank charge for check printing	$(25)
NSF cheque	$(200)
Cash balance per books	$7,125