1.Company X sold merchandise for $50,000 with terms 3/30, n/90 On January 29, Company X received half the payment in cash. On March they received the remaining half. Prepare the journal entries to record the sale and the receipt of cash under (1) the gross method and (2) the net method.

What effect does using the gross method vs. the net method have on the companys current ratio after the sale? After the receipt of cash?

2.Company Z had the following transactions in its first year of operations:

(1)On January 15, purchased 5,000 units of inventory for $20 each. (2). On March 1, purchased 10,000 units of inventory for $22 each. (3). On March 30, sold 7,000 units of inventory for $48 each.(4).On June 20, purchased 9,000 units of inventory for $25 each .(5).On August 10, sold 12,000 units of inventory for $50 each.(6).On September 3, sold 1,000 units of inventory $49 each

Company Z records transactions using a perpetual system. Calculate the cost of goods sold and ending inventory using (1) average cost, (2) FIFO, and (3) LIFO. Company Z asks you to advise them on which inventory method to use. What method would you choose if he company wants to take out a loan from a bank in the near future that requires the company to meet a large threshold for its current assets

value? What method would you choose if the company has a near term investment opportunity that requires more cash on hand? Explain your answers.