ACCT 220 – QUIZ 2
Respond to each question below. Show all your work. No credit will be given for
answers only.
1. RePay Company began the accounting period with USD 80,000 of merchandise,
and net cost of purchases was USD 260,000. A physical inventory showed USD
92,000 of merchandise unsold at the end of the period. What is the cost of goods
sold of RePay Company for the period? (15 points)
2. Buttercup Company records its sales taxes in the same account as sales revenues.
The sales tax rate is 6.35 percent. At the December 31, the Sales account has a
balance of USD 863,000. What is the amount of sales tax payable? (15 points)
3. Name and describe the major sections of a classified income statement. (10
points)
4. HW Incorporated purchased merchandise for USD 22,000 on account; terms are
2/10, n/30. If USD 2,000 of the merchandise was returned and the remaining
amount due was paid within the discount period, what is the amount paid? What
is the purchase discount? (15 points)
5. Zoey & Roxy Company began the accounting period with inventory of 3,500
units at USD 25 each. During the period, the company purchased an additional
4,000 units at USD 26 each and sold 3,600 units. Assume the use of periodic
inventory procedure, what is the ending inventory under FIFO? LIFO? (30
points)
6. Determine the adjusted cash balance for December 31, given:
Balance per bank statement USD 2,981.20
Balance per ledger 2,979.60
Deposits in transit 271.20
Outstanding checks 467.45
NSF check 161.20
Service charges 33.45
(15 points)
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