Question
ACCT 501 Final Summer 2019 Company ABC has the following balance for its balance sheet accounts at the end of 2018: Cash - $50,000 Inventory
ACCT 501 Final
Summer 2019
Company ABC has the following balance for its balance sheet accounts at the end of 2018:
Cash - $50,000
Inventory - $10,000 (10000 pairs of socks at $1 each)
Accounts Receivable - $20,000
Allowance for Doubtful Accounts - $2,000 (credit balance)
Equipment - $50,000 (useful life 10 years, 0 residual value)
Accumulated Amortization - Equipment - $17,500
Accounts Payable - $3,000
Unearned Revenue - $5,000
Retained Earnings - $20,000
Company ABC using straight line method to estimate amortization expenses and 1% of total sales to
estimate bad debt expenses, and FIFO for its inventory.
In 2019 following happened:
1. Customer 222 ordered and paid 15,000 pair of socks at $6/pair with GST
2. ABC purchased 20,000 pairs of socks at $1.5/pair with GST
3. ABC paid balance owing to and its supplier
4.
ABC shipped 1,000 pair of socks to its customer 111 who paid in 2018 (no other undelivered
orders from 2018)
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