8. On August 1 Kim Company accepted a 90-day note receivable as payment for se

8. On August 1 Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were
$10000 face value and 6% interest. On October 30 the journal entry to record the collection of the note should include a

Answer
debit to Interest Receivable for $150 debit to Notes Receivable for $10000 credit to Notes Receivable for $10150 credit to Interest Revenue for $150

9. If ending inventory for the year is understated net income for the year is overstated.

Answer True
False

10. Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May
1. Date Product Z Units Cost May 3 5 $30 May 10 3 May 17 10 $34 May 20 6 May 23 3 May 30 10 $40 Assuming that the company uses the perpetual inventory system determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost
method.
Answer $196 $250 $180 $204

11. Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May
1. Date Product Z Units Cost May 3 5 $30 May 10 3 May 17 10 $34 May 20 6 May 23 3 May 30 10 $40 Assuming that the company uses the perpetual inventory system determine the ending inventory value for the month of May using the FIFO inventory cost
method.
Answer $494 $520 $422 $502