400 6.75 2 . Informa Unit Extended Units Cost Cost Beginning Inventory 1/1/200X 400 9.00 $ 3,600.00 Purchases 2/6/2007 300 8.40 2,520.00 5/19/200X 500 7.56 3,780.00 8/12/2007 7.00 2,800.00 10/4/200x 400 2,700.00 Avaliable for Sale 2,000 15,400.00 Units Revenue Total year sales (Revenue) 1,400 40,000.00 Fill in the following boxes: FIFO LIFO Weighted Avg Value of Ending Inventory Cost of Goods Sold Gross Profit 2 Make Journal entries for the following transactions for the Hat Store 3/1 Hat Store buys hats on account for $4,600 from a distributor with terms FOB shipping point and payment 2/10 net 30 3/2 Paid freight on the purchase from 3/1 cash $150 3/5 Sold 20 hats to a baseball team for $600 on account 3/10 net 30. The cost of the hats was $200 3/6 Hat store returned 3 damaged hats, related to 3/1 purchase and received a $200 credit 3/8 Paid the distributor for the purchase in # 1 in full and took the discount. Remember to subtract the discount.. 3/8 Hat store bought more hats for $5,500, cash. No freight cost 3/9 Received payment from the customer for merchandise sold on 3/5. Customer took the discount. 3/9 Hat store sold 50 hats for $1200 cash. Terms are FOB destination. The cost of the 50 hats was $50 3/10 The Hat store paid freight on the 3/9 sale $100 cash 3/11 Customer from 3/9 sale returned 5 hats and we gave them cash back of $120. The cost on those hats was $50 DATE Account Debit Credit 1-Mar 2-Mar 5-Mar 6-Mar 8-Mar 8-Mar 9-Mar 3 For the above transactions create an Income statement for March just down to the Gross Profit Revenue less Discounts less Returns & Allowances Net Revenue Cost of Goods Sold Gross Profit NOTE: The Following 4 problems are connected to the same company ABC Software has revenue of 290,000 in 2002 and estimates they should put 10% of revenue in the Allowance for Doubtful accounts. 4 Make the entry on 12/31/2002 for this below - assume they have not had any entries to the Allowance prior to this. DATE DATE Account Debit Credit Accounts Receivable (gross) at 12/31/2002 is the following aged: Age Amount Target Allowance (% they don't think they can collect) 7-30 days 60,000 5% 31-60 days $ 40,000 10% 61-90 days 30,000 50% over 90 days $ 10,000 90% Total A/R $ 140,000 5 Based on the above schedule, how much should they have in the Allowance for Doubtful accounts? 6 Make the Journal entry to adjust the allowance account. Use #4 answer as the current amount in that account Account Debit Credit 7 Early the next year they decide to write off the receivable from a customer for $2,000 Describe this with a journal entry DATE Account Debit Credit Bill's Photos buys a truck on 4/1/2000 for the business. The cost is 150,000 and they expect to use it for 6 years and expect a salvage value at that time of $6,000. Use straight line depreciation. PAY ATTENTION TO THE DATES 8. Describe the purchase of the truck with a journal entry: DATE Account Debit Credit 9. Describe the first MONTHS depreciation with a journal entry: DATE Account Debit Credit 10 Create the T-accounts for the accounts in #1 and #2 and show the balance at 4/30/2000 Accounts payable Truck 150000 GIVEN - nothing required Accumulated Depreciation Depreciation Expense 11 They decide to sell the truck on 10/31/2005. What is the net book value at this time? 12. The truck is sold for 12,000 cash on 10/31/2005. Describe this with a journal entry. DATE Account Debit Credit Go back to the original assumptions. Assume they used miles driven as the method of depreciation. They believe it will be used 100,000 miles with the same 6,000 salvage value. 13. Describe the first months depreciation if they drive the truck 3,000 miles. DATE Account Debit Credit 14. If they drive it for 90,000 miles and sell it for 5,000, create the journal entry. DATE Account Debit Credit 10/31/2005