1. Perpetual Inventory Using FIFO

Cost of the Merchandise Sold Schedule

First-in, First-out Method

Portable DVD Players

Beginning inventory, purchase and sales data for portable DVD player

April 1Inventory75 units @$99

10Sale58 units

15Purchase43 units @ $103

20Sale26 units

24Sale14 units

30Purchase25 units @ $ 109

b.Based upon the preceding data, would you expect the inventory to be higher or lower using thelast-in, first-out method?

2. Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

Jan. 1

Inventory

1,075 units @ $130

Feb. 17

Purchase

1,425 units @ $131

Jul. 21

Purchase

1,570 units @ $133

Nov. 23

Purchase

1,125 units @ $134

There are 1,200 units of the item in thephysical inventoryat December 31. The periodic inventory system is used. Do not round intermediate calculation and round final answer to nearest whole value.

a.Determine the inventory cost by thefirst-in, first-outmethod.

$ _________

b.Determine the inventory cost by thelast-in, first-outmethod.

$ _________

c.Determine the inventory cost by the weighted average cost method.

$ __________

3. Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July:

1.Cashbalance according to the company's records at July 31 $20,010.

2.Cash balance according to thebank statementat July 31, $21,110.

3.Checks outstanding, $4,060.

4.Deposit in transit, not recorded by bank, $3,260.

5.A check for $480 in payment of an account was erroneously recorded in the check register as $840.

6.Bank debit memo for service charges, $60.

a.Make a bank reconciliation

b.If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash?

$_________

c.Must a bank reconciliation always balance (reconcile)?

4. Nature of Uncollectible Accounts

The XYZ Corporation owns and operates hotels and casinos including the XYZ Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, XYZ reported accounts receivable of $440,000 and allowance for doubtful accounts of $62,040 Patient Care manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, Patient Care reportedaccounts receivableof $964,000 andallowance for doubtful accountsof $38,560.

Round all amounts to one decimal place.

a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for the XYZ Corporation.

_______%

b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Patient Care.

________ %

c.Possible reasons for the difference in the two ratios computed in (a) and (b) include:

5. Identify Journals

Assuming the use of a two-column (all-purpose)general journal, arevenue journal, and acash receipts journal, indicate the journal in which each of the following transactions should be recorded:

Pick the correct journal from the list.

a.Receipt of cash refund from overpayment of taxes.

b.Adjustment to record accrued salaries at the end of the year.

c.Providing services on account.

d.Investment of additional cash in the business by the owner.

e.Receipt of cash on account from a customer.

f.Receipt of cash for rent.

g.Receipt of cash from sale of office equipment.

h.Sale of used office equipment on account, at cost, to a neighboring business.

i.Closing of drawing account at the end of the year.

j.Providing services for cash.