At the start of April, Moreta Manufacturing had 50 accounting professor action gures on hand that cost $10 to manufacture. During the month of April, Moreta manufactured 100 more action gures at a cost of $11 per action gure and sold 80 action gures to customers at a price of $20 each.

Required:

A. How much prot did Moreta make during April from the sale of the action

gures? Is there a single answer to this question? Briey explain.

B. Assuming that Moreta chooses the FIFO method of accounting for cost of goods

sold, give the journal entries needed to account for the sale of the action gures,

assuming that customers purchased them on account.

C. Give the adjusting entry that would be needed to account for Moretas estimate

that $100 of the accounts receivable would ultimately be uncollectible.

D. At the end of April, ODonovan, LLC, an aorney for C. Riley, noties Moreta

that Riley plans to sue Moreta. Riley claims that the action gures appear to be

exact likenesses of R. Pfeier, and when she saw one of the action gures in a

store, it caused her severe mental distress because of her past trauma suered in

Pfeiers accounting class many years ago. Riley is claiming damages for pain

and suering of $10 million.

Moretas aorney, Savelson & Sullivan, LLC, advises Moreta that it is probable that Moreta will have to pay some amount of money as a result of this lawsuit,

but it isnt possible to estimate how much the amount might be until the lawsuit is either seled or adjudicated.

Briey explain the proper accounting treatment for these facts under GAAP and provide any journal entry that might be necessary.

THREE At the start of April, Moreta Manufacturing had 50 accounting professor action figures on hand that cost $10 to manufacture. During the month of April, Moreta manufactured 100 more action figures at a cost of $11 per action figure and sold 80 action figures to customers at a price of $20 each Requiredt A. How much profit did Moreta make during April from the sale of the action figures? Is there a single answer to this question? Briefly explain. B. Assuming that Moreta dwooses the FIFO method of accounting for cost of goods sold, give the journal entries needed to account for the sale of the action figures. assuming that customers purchased them on account. C. Give the adjusting entry that would be needed to account for Moreta's estimate that $100 of the accounts receivable would ultimately be uncollectible. D. At the end of April, ODonovan, LLC, an attomey for C. Riley, notifies Moreta that Riley plans to sue Moreta. Riley claims that the action figures appear to be exact likenesses of R. Pfeiffer, and when she saw one of the action figures in a store, it caused her severe mental distress because of her past trauma suftered in Pfeiffer's accounting class many years ago. Riley is claiming damages for pain and suffering of 510 million. Moreta's attomey, Savelson \& Sullivan, LLC, advises Moreta that it is probable that Moreta will have to pay some amount of money as a result of this lawsuit, 4 but it isn't possible to estimate how much the amount might be until the lawsuit is cither settled or adjudicated. Briefly explain the proper accounting treatment for these facts under GAAP and provide any joumal entry that might be necessary