Use the following information for questions 11-12: Product Helmets Bats Shoes To

Question

Use the following information for questions 11-12: Product Helmets Bats Shoes Total Market $15,000 Units 200 100 100 400 Cost $20,000 $20,000$11,000 $10,000 $50,000 00$25,000 $51,000 11) The company's ending inventory includes the items above. What is the total ending inventory if the lower of cost or market is applied separately to each product? a. $45,000 b. $46,000 c. $50,000 d. $51,000 12) The company's ending inventory includes the items above. What is the total ending inventory if the lower of cost or market is applied to total inventory? a. $45,000 b. $46,000 c. $50,000 d. $51,000 13) All of the folowing are reasons why companies allow customers to use th party credit cards except: a. The company doesn't have to evaluate customer's credit standing b. The credit card company assumes the risk if customers do not pay. c. The company typically receives cash from customers faster than from credit card companies. d. A variety of credit options for customers offer potential to increase sales 14) The Company sold merchandise for $500 and accepted the customer's AA Credit Card. AA charges a 496 fee and immediately transfers cash to the company. Which of the following is a debit for the journal entry? a. Debit cash for $500 b. Debit accounts receivable for $500 c. Debit sales for $500 d. Debit credit card expense for $20

Explanation / Answer

11)Ending inventory cost here for each item we take lower of cost or market
=15000+20000+10000=45000
Option A
12)If applied to total inventory then lower of cost or market for total is considered and it is 50000
Option C
13)Option C since rest all are benefits to company
14)The entry for this is
cash(db) 480
credit card expense(db) 500*4%=20
Sales(cr)500
so it is option D

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