1. A sales invoice included the following information: merchandise price, $3,100; terms 1/10, n/eom; FOB shipping point with prepaid freight of $447 added to the invoice. Assuming that a credit for merchandise returned of $600 is granted prior to payment and that the invoice is paid within the discount period, what is the amount of cash that should be received by the seller?

   a.$3,100

   b.$600

   c.$2,922

   d.$3,512

2. Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September.

   Sep. 1		Inventory	20 units at $20
   4		Sold	10 units
   10		Purchased	30 units at $25
   17		Sold	20 units
   30		Purchased	10 units at $30

   If Addison uses LIFO, the September 17 cost of goods sold would be:

   a.$600

   b.$500

   c.$400

   d.$450

3. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

   Date	Blankets	Units	Cost
   May 3	Purchase	5	$20
   10	Sale	3
   17	Purchase	10	$24
   20	Sale	6
   23	Sale	3
   30	Purchase	10	$30

   Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.

   a.$348

   b.$444

   c.$356

   d.$452

4. Thompson Corporation gathered the following reconciling information in preparing its October bank reconciliation:

   Cash balance per bank, 10/31	$16,711
   Note receivable collected by bank	3,817
   Outstanding checks	9,883
   Deposits in transit	4,807
   Bank service charge	90
   NSF check	1,015

   Using the above information, determine the cash balance per books (before adjustments) for Thompson Corporation.

   a.$14,347

   b.$8,923

   c.$19,423

   d.$11,635

5. Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation:

   Cash balance per books, 9/30	$3,164
   Deposits in transit	523
   Notes receivable and interest collected by bank	755
   Bank charge for check printing	22
   Outstanding checks	1,591
   NSF check	152

   Calculate the adjusted cash balance per books on September 30.

   a.$3,745.

   b.$2,096.

   c.$2,829.

   d.$2,677.

6. At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $583. During the year, $374 of previously written off accounts were reinstated and accounts totaling $828 are written off as uncollectible. The end-of-year balance (before adjustment) in the Allowance for Doubtful Accounts should be the one listed below.

   a.$828

   b.$129

   c.$374

   d.$583

7. Allowance for Doubtful Accounts has a credit balance of $547 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $14,730. Based on this estimate, which of the following adjusting entries should be made?

   a.debit Allowance for Doubtful Accounts, $547; credit Bad Debt Expense, $547

   b.debit Bad Debt Expense, $547; credit Allowance for Doubtful Accounts, $547

   c.debit Allowance for Doubtful Accounts, $15,277; credit Bad Debt Expense, $15,277

   d.debit Bad Debt Expense, $14,183; credit Allowance for Doubtful Accounts, $14,183

8. An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $4,955. If Allowance for Doubtful Accounts has a $1,194 debit balance, the adjustment to record the bad debt expense for the period will require a

   a.debit to Allowance for Doubtful Accounts for $6,149.

   b.credit to Allowance for Doubtful for $4,955.

   c.debit to Allowance for Doubtful Accounts for $4,955.

   d.debit to Bad Debt Expense for $6,149.

9. Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $392,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 4% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,800 before adjustment?

   a.

   Bad Debt Expense	11,880
   Allowance for Doubtful Accounts		11,880

   b.

   Bad Debt Expense	12,880
   Allowance for Doubtful Accounts		12,880

   c.

   Bad Debt Expense	12,380
   Allowance for Doubtful Accounts		12,380

   d.

   Bad Debt Expense	13,880
   Allowance for Doubtful Accounts		13,880

Using the following information:

1. The bank statement balance is $3,751.
2. The cash account balance is $4,215.
3. Outstanding checks amounted to $756.
4. Deposits in transit are $1,151.
5. The bank service charge is $60.
6. A check for $56 for supplies was recorded as $47 in the ledger.

Prepare a bank reconciliation for Candace Co. for May 31.

Candace Co. Bank Reconciliation May 31

Cash balance according to bank statement		$fill in the blank 1
Adjustments:
Bank service chargeDeposits in transit not recorded by bankError in recording check	$- Select -
Bank service chargeError in recording checkOutstanding checks	- Select -
Total adjustments		fill in the blank 6
Adjusted balance		$fill in the blank 7
Cash balance according to company's records		$fill in the blank 8
Adjustments:
Bank service chargeDeposits in transit not recorded by bankOutstanding checks	$- Select -
Deposits in transit not recorded by bankError in recording checkOutstanding checks	- Select -
Total adjustments		fill in the blank 13
Adjusted balance		$fill in the blank 14

1. At the end of the current year, Accounts Receivable has a balance of $118,270; Allowance for Doubtful Accounts has a debit balance of $4,953; and sales for the year total $1,085,000. Bad debt expense is estimated at 1/2 of 3% of sales.

   a. Determine the amount of the adjusting entry for bad debt expense. $fill in the blank 1

   b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

   	Adjusted Balance
   Accounts Receivable	$fill in the blank 2
   Allowance for Doubtful Accounts	fill in the blank 3
   Bad Debt Expense	fill in the blank 4

   c. Determine the net realizable value of accounts receivable. $fill in the blank 5