Question 1 (8 points)

Given below are account balances for Charlie Company:

Gross sales, $108,000

Sales returns and allowances, $5,000

Selling expenses, $12,000

Cost of goods sold, $46,000

Interest expense, $3,000

How much is the gross profit margin? (enter your percentage as a decimal rounded to two decimal places.Example - enter 46% as .46)

Question 2 (8 points)

Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts Receivable and crediting Sales for $2,000.If payment occurs on January 21, the journal entry would include a credit to:

Question 2 options:

Sales Discounts for $40

Accounts Receivable for $1,960

Accounts Receivable for $2,000

Cash for $1,960

Question 3 (8 points)

Merchandise was returned to a supplier.The goods were previously purchased on account.The goods had not been paid for and there were no discounts.Assuming a periodic system, what journal entry is needed by the purchaser to record the return?

Question 3 options:

Debit Accounts Payable, and Credit Inventory.

Debit Accounts Payable, and Credit Purchase Returns and Allowances.

Debit Accounts Payable, and Credit Purchase Discounts.

Debit Accounts Payable, and Credit Purchases.

Question 4 (9 points)

Alpha Company provided the following data concerning its income statement: sales, $975,000; purchases, $431,000; beginning inventory, $200,000; ending inventory, $232,000; operating expenses, $120,000; freight-in, $5,000; sales discounts, $25,000; purchases discounts, $15,000; sales returns & allowances, $134,000; and purchases returns & allowances, $38,000.The data are complete and provide the basis for preparation of an income statement.How much is net income?

Question 5 (8 points)

Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.

> Alpha Company sold on account merchandise costing $3,000 to Bravo Company on May 2, 2016. Selling price was $4,500. Freight charges related to this transaction of $200 were paid by Alpha Company.

> Bravo Company returned, to Alpha Company, merchandise with an original cost to Alpha of $300 on May 3, 2016. Merchandise was sold to Bravo for $450

Use this information to prepare Alpha Company'sGeneral Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write "No Entry Required."

Question 6 (8 points)

Alpha Company replenished a $500 petty cash fund.The petty cash box contained vouchers of $87 for postage, $173 for supplies, $58 for gasoline, and cash on hand of $180.The journal entry to reflect replenishment would include a:

Question 6 options:

credit to Cash for $318

credit to Cash or $180

credit to Petty Cash for $2

debit to Cash Short for $2