Question
1) The ledger of METU Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances
1) The ledger of METU Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances $20,000.
(a) If METU uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming METU determines that L. Doles $1,400 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.
2) Slim Company beginning inventory on January 1 was of 150 units of Product 4-18-15 at a cost of $23 per unit. The following purchases were occured.
Date | Units | Price |
Mar. 15 | 430 units | $20 |
July 20 | 200 units | $20 |
Sept. 4 | 330 units | $20 |
Dec. 2 | 110 units | $30 |
1,000 units were sold. METU Company uses a periodic inventory system.
(a) Determine the cost of goods available for sale.
(b) Determine (1) the ending inventory, and (2) the cost of goods sold under each of the
assumed cost flow methods (FIFO, LIFO, and average-cost).
(c) Which cost flow method results in (1) the highest inventory amount for the balance
sheet, and (2) the highest cost of goods sold for the income statement?
3) The following selected transactions relate to Slim Company.
Mar. 1 Made Visa credit card sales totaling $6,200. A 2.5% service fee is charged by Visa.
Mar. 2 Accepted JIM Companys $30,000, 6-month, 10% note for balance due.
Mar. 3 Sold $40,500 of goods to Salem Company, terms 2/10, n/30.
Mar.11 Received payment in full from Salem Company for balance due on existing accounts receivable.
Mar.13 Made Slim Company credit card sales for $16,200.
Mar.15 Sold accounts receivable of $9,040 to Hashim Company. Hashim Company assesses a service charge of 2.01% of the amount of receivables sold.
Mar.16 Received collections of $10,500 on Slim Company credit card sales and added finance charges of 2.01% to the remaining balances.
Instructions: Prepare the journal entries for the transactions. (Ignore entries for the cost of goods sold.)
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