Question
1. Mower-Blower Sales Co. started business on January 20, 2016. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during
1. Mower-Blower Sales Co. started business on January 20, 2016. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2016 were as follows:
Blowers | Mowers | |||||||
January 21 | 21 | @ | $ | 194 | ||||
February 3 | 46 | @ | 195 | |||||
February 28 | 38 | @ | 200 | |||||
March 13 | 15 | @ | 192 | |||||
April 6 | 19 | @ | $ | 218 | ||||
May 22 | 44 | @ | 220 | |||||
June 3 | 42 | @ | 216 | |||||
June 20 | 68 | @ | 228 | |||||
August 15 | 17 | @ | 220 | |||||
September 20 | 19 | @ | 218 | |||||
November 7 | 22 | @ | 194 | |||||
The December 31, 2016, inventory included 9 blowers and 26 mowers. Assume the company uses a periodic inventory system.
Required:
a-1. Compute ending inventory valuation at December 31, 2016, under the FIFO and LIFO cost-flow assumptions. (Hint: Compute ending inventory under each method, and then compare results.)
#2. The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2017, and 2016:
12/31/17 | 12/31/16 | |
Accounts receivable, less allowance for uncollectible accounts of $8,200 and $1,100, respectively | $153,000 | $105,300 |
Required:
b. If bad debts expense for 2017 totaled $10,500, what was the amount of accounts receivable written off during the year? (Hint: Use the T-account model of the Allowance account, plug in the three amounts that you know, and solve for the unknown.)
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