Question

Use the information provided below, for Snow Plumbing Services, which uses the periodic inventory system, to...

Use the information provided below, for Snow Plumbing Services, which uses the periodic inventory system, to answer question 7: R                          

Inventory (1 July 20.7)………………………..................................

150 000

Cash purchases……………………………………………………....

Credit purchases……………………………………………………...

Purchases returns…………………………………………………....

15 000

6 000

2 000

Freight inwards………………………………………………………..

Freight outwards………………………………………………………

Settlement discount received………………………………………..

Settlement discount granted…………………………………………

1 200

1 800

1 700

2 500

Inventory (31 July 20.8)…………………….

120 000

7. The cost of sales is … R

(1)

47 500

(2)

17 300

(3)

10 300

(4)

19 000

(5)

18 000

2. Middy Garden Services provides you with the following information at 28 February 20.9.

                          R

Machinery   60 000

Bank        250 000

Vehicles   100 000

What is the net asset value (equity) of Middy Garden Services as at 28 February 20.9?

                  R

(1) 445 000

(2) 450 000

(3) 440 000

(4) 435 000

(5) 405 000

3. Which of the following statements are correct?

(a) When income earned by an entity is more than its expenditure, the entity makes a profit.

(b) When the income earned by an entity is less than its expenditure, the entity makes a profit.

(c) The profit that an entity makes, increases the net worth of the owner.

(d) The loss that an entity makes, decreases the net worth of the owner.

(e) The statement of financial position measures the financial performance of an entity.

(1) a,b,c,d and e.

(2) a,b,c and e.

(3) a,c,d,and e.

(4) a,b,c and d.

(5) a,c,and d.

Homework Answers

Answer #1

Question7) Cost of goods sold = opening inventory + Net Purchases made during the year - closing inventory = 150,000 + 15,000+ 6,000 - 2,000 - 120,000 = 49,000

But the same is not given in the option.

3) Net asset value = sum of all the assets = 60,000+250,000+100,000 = 410,000

But options given in the question do not have the answer.

4) when income earned by an entity more than its expenditure the entity it makes a profit. However in the reverse situation it makes a loss. Also profit it increases the net worth of the owner. The statement of financial position measures the financial performance of an entity.

Hence the correct answer is 3

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Use the information provided below for Herbie to answer questions 4 to 6. The following is...
Use the information provided below for Herbie to answer questions 4 to 6. The following is the general ledger balances of Herbie a herb trading business entity as at 31 July 20.8: HERBIE EXTRACT FROM THE LIST OF BALANCES AT 31 JULY 20.8 R Capital………………………………………………………………………………………….. Drawings……………………………………………………………………………………….. Vehicles at cost (1 August 20.7)…....……………………………………………………….. Accumulated depreciation: Vehicles (1 August 20.7)……………………………………. 100 000 52 000 100 000 46 000 Inventory: Trading (1 August 20.8)………………………………………………………….. Stationery (1 August 20.7)……………………….…………………………………………... Fixed deposit…………………………………………………………………………………... Bank (favourable)…………………………………………………………………………….. Mortgage...
QUESTION 5 The following information for the year ended 28 February 2015 relates to Zimba Traders:...
QUESTION 5 The following information for the year ended 28 February 2015 relates to Zimba Traders: R Trading inventory (01 March 2014) 42 000 Trading inventory (28 February 2015) 50 000 Purchases 734 000 Sales 1 196 000 Carriage on purchases 18 000 Import duties 10 000 The cost of sales for the year ended 28 February 2015 amounts to ___________: A R754 000 B R744 000 C R452 000 D none of the above (3) 1.7 QUESTUION 5 Which...
Blossom Company maintains a perpetual inventory system. Below, Blossom provides you with the beginning inventory at...
Blossom Company maintains a perpetual inventory system. Below, Blossom provides you with the beginning inventory at July 1 as well as the details for the 4 purchases of inventory and 3 sales of inventory occurring during July: Date Unit Price Quantity Extended Beg. Balance 1-Jul $2.50 1,000 $2,500 July Purchases: Date Unit Price Quantity Extended 1 2-Jul $3.00 1,000 $3,000 2 5-Jul $3.15 1,500 $4,725 3 8-Jul $3.50 1,400 $4,900 4 13-Jul $4.15 2,000 $8,300 July Customer Sales: Date Unit...
1. Alpha Company uses the periodic inventory system and had the following inventory & sales activity...
1. Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016: Date Activity Quantity Unit Price 5/1 Beginning Inventory 175 $10 5/5 Purchase 200 $12 5/15 Purchase 300 $15 5/25 Purchase 150 $16 Sales were 525 units at $20.  Using the LIFO method, determine the dollar values following for the month of May: 1. Ending Inventory 2. Cost of Goods Available for Sale 3. Cost of Goods Sold 2. The...
A company that uses the net method of recording purchases and a perpetual inventory system purchased...
A company that uses the net method of recording purchases and a perpetual inventory system purchased $3,200 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $900 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the payment on July 28 is: a: Debit Merchandise Inventory $2,300; credit Cash $2,300. b:Debit Cash $2,300; credit Accounts Payable $2,300. c: Debit Accounts Payable $2,300; credit Merchandise Inventory $46;...
Hubb Inc. is a merchandising company which uses the periodic inventory system. Based on the   ...
Hubb Inc. is a merchandising company which uses the periodic inventory system. Based on the    selected account balances below, determine Hubb's beginning inventory: Net Income       $37,000 Sales Revenue                                                        175,000     Purchases                                                                 90,000     Inventory (ending)                                                   17,000     Purchase Returns and Allowances                            3,000     Transportation – in                                                    4,000     Transportation – out                                                 6,000     Sales Discounts                                                        8,000     Sales Returns and Allowances                               5,000     Operating Expenses                                                35,000                       Purchase Discounts                                                   7,000 A. $23,000 B. $72,000 C. $84,000 D. $90,000 E. $17,000
Described below are certain transactions of Stellar Corporation. The company uses the periodic inventory system. 1....
Described below are certain transactions of Stellar Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $68,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $48,000 from General Motors Company, paying $3,000 in cash and signing a...
If a company uses a periodic inventory system, which of the following entry or entries is/are...
If a company uses a periodic inventory system, which of the following entry or entries is/are required to record the sale of merchandise on account? I Debit Accounts Receivable; Credit Sales Revenue II Debit Cost of Goods Sold; Credit Purchases III Debit Cost of Goods Sold; Credit Inventory IV Both I & III are necessary entries Select one: a. II b. III c. IV d. I In a period of rising prices, which method would yield the lowest ending inventory,...
Montoure Company uses a periodic inventory system. It entered into the following calendar-year purchases and sales...
Montoure Company uses a periodic inventory system. It entered into the following calendar-year purchases and sales transactions. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 760 units @ $70.00 per unit Feb. 10 Purchase 480 units @ $67.00 per unit Mar. 13 Purchase 280 units @ $52.00 per unit Mar. 15 Sales 880 units @ $100.00 per unit Aug. 21 Purchase 260 units @ $75.00 per unit Sept. 5 Purchase 660 units @ $71.00...
Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The...
Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2018 with inventory of 6,400 units of its only product. The beginning inventory balance of $105,600 consisted of the following layers:    2,400 units at $14 per unit = $ 33,600 4,000 units at $18 per unit = 72,000 Beginning inventory $ 105,600    During the three years 2018–2020, the cost of inventory remained constant at $20 per unit. Unit purchases and...