A Company Had the Following Purchases and Sales During Its

question 75

Multiple Choice

A company had the following purchases and sales during its first year of operations: $$\begin{array} { | l | l | l | } \hline & \text { Purchases } & \text { Sales } \\\hline \text { January: } & 10 \text { units at } \$ 120 & 6 \text { units } \\\hline \text { February: } & 20 \text { units at } \$ 125 & 5 \text { units } \\\hline \text { May: } & 15 \text { units at } \$ 130 & 9 \text { units } \\\hline \text { September: } & 12 \text { units at } \$ 135 & 8 \text { units } \\\hline \text { November: } & 10 \text { units at } \$ 140 & 13 \text { units } \\\hline\end{array}$$ On December 31, there were 26 units remaining in ending inventory. Using the Perpetual FIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

• A)$5,400.
• B)$3,540.
• C)$5,130.
• D)$8,670.
• E)$3,270.

Identify and correct common errors in accounting entries.

Calculate total credits on a trial balance.

Recognize the effects of purchasing supplies on account.

Analyze the effect of transactions on cash balance.

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Definitions:

Nuclear Membrane

The double lipid bilayer membrane which surrounds the genetic material and nucleolus in eukaryotic cells.

Cell Organelle

Specialized subunits within a cell that have specific functions, essential for the cell to operate properly, such as mitochondria and the Golgi apparatus.

Nucleus

The central and most important part of an atom, cell, or object, containing the protons and neutrons in the case of an atom, or genetic material in the case of a cell.

Carbonic Acid

A weak acid that is formed in solution when carbon dioxide is dissolved in water, playing a vital role in the buffering system of the blood.