85) The following information is available for Don't Pay a Cent Corporation for the year ended December 31, 2010:
Sales revenue$300,000
Sales commissions$7,500
Purchases (cost)$200,000
Advertising$6,000
Freight-out$700
Freight-in$800
Sales returns$3,000
Purchase returns$2,000
Sales allowances$1,000
Purchase allowances$1,500
Sales discounts$7,000
Purchase discounts$8,000
Calculate the following for Don't Pay a Cent Corporation:
a.Net sales for 2010.
b.Net purchases for 2010.
86) The following data are available for Big Box Corporation:
Beginning inventory$12,500
Purchases returns and allowances800
Purchases45,000
Sales85,400
Purchases discounts1,200
Sales returns2,000
Sales discounts1,300
Operating expenses31,700
Ending inventory15,000
Compute:
a.Net purchases
b.Net sales
c.Cost of goods sold
d.Gross margin
e.Gross margin rate and allowances
f.Net income
87) What is the most important asset of a merchandising business?
88) What is the major expense shown on the income statement for a merchandising business?
89) State which of the following inventory methods would best attain the goals of management. Indicate your answer by writing the proper letter in the blank beside each specific goal.
a.FIFO
b.Weighted-averaged.
c.Specific identification
1.________Management wants to report approximate current inventory replacement costs on its year-end balance sheet during a period of rising prices.
2.________Management wants to maximize net income during a period of rising prices.
3.________The company sells yachts, deep-sea fishing boats, and off-shore speed boats.
4.________Management wants to minimize net income during a period of falling prices.