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MCD2160 Trimester 2 2022 Tutorial 12 MCQ H01 Questions

Question 1

From the following information, calculate the amount of the Gross Profit in the Income Statement: Operating expenses $540,000, Sales Returns $156,000, Sales Discount $72,000, Sales Revenue $1,800,000 and COGS $924,000

A $912,000

B $720,000

C $648,000

D $108,000

Question 2

For Parker Brothers Furniture Retailer, the current ratio appears to be stronger in 20X9 than 20X6. A possible explanation is

A CA Inventory increased more than CL Creditor increased

B CA Inventory decreased more than CL Creditor decreased

C CA Inventory increased less than CL Creditor increased

D None of the above

Question 3

If the RTA of Parker Brothers Furniture appears to have increased. A possible explanation includes

A An increase in NP margin and no change in sales volume

B An increase in NP margin and a greater decrease in sales volume

C No change in NP margin and a decrease in sales volume

D A decrease in NP margin and no change in sales volume

Question 4

From the following lists what cost would be included in the cost of inventory before the inventory is ready to sell?

A Advertising

B Gift Wrap

C Freight costs to deliver to the customer

D Insurance for the inventory in transit from the supplier

Question 5

Florida Inc. uses a periodic inventory system with the weighted average method of cost assignment. The following data are available:

Date Units       Unit Cost   Total                Cost

Beginning Inventory Jan 1   2000        $4   $8 000

Purchase Mar 13 4000     $7   $28 000

Purchase June 20 6000     $8   $48 000

Ending Inventory Dec 31 1000

The cost of the ending inventory to the nearest dollar is:

A $6,000

B $7,000

C $8,000

D $8,333

Question 6

Kogan Ltd retails a bottle of imported cosmetics. All the cosmetics have a use by date. Details for January 2021 are as follows:

January 1 Opening Inventory 20,000 total cost per item $88

June 10 Purchases       40,000 purchase price per item $80

June 25 Sales        25,000 selling price per item $60

Additional information

Customs Duty on each unit of purchases is $8 per item

June 30 Closing inventory    35,000 from the stocktake

Required

Calculate the total cost of closing inventory applying FIFO

A $2,800,000

B $4,200,000

C $3,080,000

D $4,480,000

Question 7

A2 Milk Ltd has purchased equipment on 1 July 2016. The list price of the equipment was $800,000 but Blackmores Ltd was invoiced and paid only $1,440,000. A2 Milk Ltd had to pay for insurance in transit $200,000 and installation costing $160,000 on 1 July 2016 before the equipment could be used for the first time. In addition, the company purchased an annual insurance policy for the equipment costing $48,000. The equipment will be depreciated using the reducing balance method at a rate of 10% per annum. Calculate the components of the cost of the Equipment. The cost of the equipment is:

A $1,848,000

B $1,960,000

C $2,008,000

D $1800,000

Question 8

Refer to Question 7 A2 Milk Ltd. On 1 September 2016, the equipment broke down and A2 Milk Ltd spent $80,000 cash to get it back to working condition. What is the journal entry to record the $80,000?

A Dr Equipment $80,000

Cr Bank $80,000

B Dr Bank $80,000

Cr Repairs Revenue $80,000

C Dr Prepaid Repairs Revenue $80,000

Cr Bank $80,000

D Dr Repairs Expenses $80,000

Cr Bank $80,000

Question 9

Invictus Ltd leased an item of machinery to Windsor Ltd on 1 July 2019.

The agreement contained the following details:

Lease term 3 years

Annual lease payment $75,000 (due at 30 June each year)

Guaranteed residual payment $18,000 (due on 30 June 2022)

Interest rate implicit in the lease 10%

The cost of the machinery at 1 July 2019 was $200,037, which was also the present value.

The journal entry for the lease payment for the year ended 30 June 2020 is:

A. 

Dr Lease liability 54,996

Dr Lease interest 20,004

Cr Bank 75,000

B. 

Dr Bank 75,000

Cr lease liability 75,000

C. 

Dr Lease liability 75,000

Cr Bank 75,000

D. 

Dr Bank 75,000

Cr Interest Revenue 20,004

Cr Lease Asset 54,996

Question 10

Deliza Felix receives a salary of $200,000 each year and is entitled to 4 weeks of annual leave and a leave loading of 17.5%.  The journal entry for the weekly accrual of annual leave would be as follows:

A. $15,384.62

B. $18,076.92.

C. $200,000.

D. $347.63