Question 4 Fenn Stores , Inc . had sales of $ 1,000,000 during December 2004 . Experience has shown that merchandise equaling 7 % of sales will be returned within 30 days and an additional 3 % will be returned within 90 days . Returned merchandise is readily resalable . In addition , merchandise equaling 15 % of sales will be exchanged for merchandise of equal or greater value . What amount should Fenn report for net sales in its income statement for the month of December 2004 ? Question 5 During January 2004 , Metro Co ., which maintains a perpetual inventory system , recorded the following information pertaining to its inventory : Under the LIFO method , what amount should Metro report as inventory at January 31 , 2004 ? Question 6 Anders Co . uses the moving-average method to determine the cost of its inventory . During January 2005 , Anders recorded the following information pertaining to its inventory : What amount of inventory should Anders report in its January 31 , 2005 , balance sheet ? Question 7 When the double extension approach to the dollar-value LIFO inventory method is used , the inventory layer added in the current year is multiplied by an index number . Which of the following correctly states how components are used in the calculation of this index number ? Question 8 Fireworks , Inc . had an explosion in its plant that destroyed most of its inventory . Its records show that beginning inventory was $ 40,000 . Fireworks made purchases of $ 480,000 and sales of $ 620,000 during the year . Its normal gross profit percentage is 25 %. It can sell some of its damaged inventory for $ 5,000 . The insurance company will reimburse