During March, Polly Ester Fabrics produces material for sale to its customers. It reports the following production runs of fabric, along with each production run's cost: - March 4: 19,210 yards of fabric at \$22 per yard - March 17: 17,860 yards of fabric at \$24 per yard - March 26: 16,540 yards of fabric at $25 per yard On March 1, it had 16,250 yards of fabric on hand, which cost $19 per yard. It uses periodic inventory. During the month, it reported the following sales-related transactions: - March 6: Sold 15,230 yards of fabric to Laura Lynne Hardy Studios at $75 per yard, terms 4/9,n/20 - March 12: Laura Lynne Hardy Studios returned 270 yards of fabric, and received a credit - March 15: Laura Lynne Hardy Studios paid the correct amount on its invoice - March 23: Sold 18,970 yards of fabric to Stan Still Stationery Store at $73 per yard, terms 6/12,n/25 - March 29: Sold 14,550 yards of fabric to Manny Kinn's Clothiers at $77 per yard, terms 3/5,n/30 At the end of the month, Polly Ester Fabrics estimates 2.3\% of its net sales will become uncollectible. Its Allowance for Doubtful Accounts has an irregular balance of $19,735. You may assume Polly Ester Fabrics has not yet received payment on the March 23 and 29 sales. - March 17: 17,860 yards of fabric at $24 per yard - March 26: 16,540 yards of fabric at \$25 per yard On March 1, it had 16,250 yards of fabric on hand, which cost $19 per yard. It uses periodic inventory. During the month, it reported the following sales-related transactions: - March 6: Sold 15,230 yards of fabric to Laura Lynne Hardy Studios at $75 per yard, terms 4/9,n/20 - March 12: Laura Lynne Hardy Studios returned 270 yards of fabric, and received a credit - March 15: Laura Lynne Hardy Studios paid the correct amount on its invoice - March 23: Sold 18,970 yards of fabric to Stan Still Stationery Store at $73 per yard, terms 6/12, n/25 - March 29: Sold 14,550 yards of fabric to Manny Kinn's Clothiers at $77 per yard, terms 3/5, n/30 At the end of the month, Polly Ester Fabrics estimates 2.3\% of its net sales will become uncollectible. Its Allowance for Doubtful Accounts has an irregular balance of $19,735. You may assume Polly Ester Fabrics has not yet received payment on the March 23 and 29 sales. QUESTIONS: 1. For the month ending March 31, what is Polly Ester Fabrics' cost of goods sold if it uses the average cost method? ( 2 points) 2. For the month ending March 31, what is Polly Ester Fabrics' gross profit if it uses FIFO? (HINT you may want to write down all the necessary journal entries.) (Remember: gross profit equals net sales minus COGS) (4 points) 3. As of March 31, what is the balance in Polly Ester Fabrics' Allowance for Doubtful Accounts after all adjustments have been made? ( 2 points)
