4.A 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

Answer

	a.	$10,200
	b.	$10,000
	c.	$11,200
	d.	$9,800

5. Who pays the freight cost when the terms are FOB destination?

Answer

	a.	the buyer
	b.	either the buyer or the seller
	c.	the customer
	d.	the seller

6. Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Product Z	Units	Cost
May 3	Purchase	5	$30
May 10	Sale	3
May 17	Purchase	10	$34
May 20	Sale	6
May 23	Sale	3
May 30	Purchase	10	$40

Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.

Answer

	a.	$494
	b.	$520
	c.	$422
	d.	$502

7. If the physical count of the inventory revealed $72,000 of merchandise on hand and the inventory records reported $73,200, what would be the necessary adjusting entry to record inventory shortage?

Answer

	a.	Cost of Merchandise Sold debit $1,200; Merchandise Inventory credit $1,200.
	b.	Merchandise inventory debit $1,200; Cost of Merchandise Sold credit $1,200.
	c.	Merchandise inventory debit $72,000; Cost of Merchandise Sold credit $72,000.
	d.	Cost of Merchandise Sold debit $73,200; Merchandise Inventory credit $72,000.