Complete the following journal entries in a proper format for ABC Company.

1.On September 2^nd, ABC Company sold furniture to XYZ for $8,000. Terms were 2/10, n/30. The cost of the furniture was $5,000.

2.On September 6^th, ABC Company sold furniture to EFG for $10,000. Terms were 2/10, n/30. The cost of the furniture was $6,000.

3.On September 7^th XYZ company returned $3,000 of the furniture.

4.On September 14^th XYZ paid the balance due on their furniture purchase.

5.On September 15^th EFG paid the balance due on their furniture purchase.

6.On September 30^th ABC Company recorded bad debts for the month based on a 4 percent of credit sales. For the month of September sales were $80,000, credit sales were $75,000, the balance in Allowance for Doubtful Accounts is $2,500.

7.On September 30^th ABC Company recorded bad debts for the month based on an aging schedule. For the month of September sales were $80,000, credit sales were $75,000, the balance in Allowance for Doubtful Accounts is $2,500. The aging schedule is as follows:

Aged Accounts Receivable	Percent Uncollectible	Amount Uncollectible
Not Yet Due 40,000	2%
Up to 90 Days Past Due 20,000	10%
Over 90 Days Past Due 5,000	30%

8.$1,700 of accounts receivable are written off in September.

Problem 2 Inventory Costing Methods (34%)

Required:

1.Determine the dollar amount of cost of goods sold, dollar amount of ending inventory, and dollar amount of gross margin using the FIFO, LIFO and specific identification inventory costing methods for the month of October.

2.Complete journal entries for October 3^rd and 8^th using the specific identification method assuming all purchases and sales were on account.

Beginning Inventory Units 1 5 at $24 each	120
October 3 Purchased Units 6 15 at $25 each	250
October 8 Sold 8 Units at $40 each		320
October 15 Purchased Units 16 25 at $26 each	260
October 20 Sold 9 Units at $40 each		360
October 25 Purchased Units 26 35 at $27 each	270
October 31 Sold 12 Units at $42 each		504

For Specific Identification purposes the inventory sold were units 1, 2, 3, 6, 7, 8, 9, 10 on October 8^th, units 4, 11, 12, 13, 18, 19, 20, 21, 22 on October 20^th and units 14, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34 and 35 on October 31^st.

Problem 3 Property, Plant and Equipment (33%)

Required:

Complete the following journal entries for PAT Company.

1.An assembly machine was purchased for $500,000, shipping cost was $10,000, and the company incurred $5,000 installation cost and $3,000 in testing cost. The company took out a $450,000 15 year 8 percent note payable and paid the balance in cash.

2.PAT Company paid $7,500 in routine maintenance costs.

3.Improvements of $10,000 were paid on an old machine which extended its useful flie..

4.Monthly depreciation of $8000 was recorded.

5.The monthly depreciation of a $100,000 asset with a salvage value of $4,000 at the end of its useful life of 8 years was recorded. The company uses a straight line method of depreciation.

6.The monthly depreciation of a $60,000 asset with a salvage value of $6,000 at the end of its useful life of 12,000 hours of production was recorded. The production for this month was 50 hours. The company uses a unit of production method of depreciation.

7.An old machine with an original cost of $30,000, accumulated depreciation of $20,000, residual value of $3,000 and market value of $7,000 was sold for $6,000 in cash.