Question
INVENTORY PROBLEMS No. 1 The following data sheet list inventory transactions in 2018 James Company, which uses a perpetual inventory system. January 1 Beginning inventory,
INVENTORY PROBLEMS
No. 1 The following data sheet list inventory transactions in 2018 James Company, which uses a perpetual inventory system.
January 1 Beginning inventory, 90 units @ $75 per unit.
March 8 Purchased 160 units @ $80 per unit.
August 19 Sold 225 units.
October 24 Purchased 400 units @ $90 per unit.
November 19 Sold 250 units
Compute the cost of the ending inventory and cost of goods sold using the following methods:
a. FIFO
b. LIFO
No. 2 Dan Tire has the following inventory records for the month ending July 31, 2011:
Units Unit Cost
Beginning Inventory 100 $18.00
Purchased July 10 400 $15.00
Purchased July 18 300 $17.00
Purchased July28 200 $16.00
Dan Tire sold 140 tires on July 11 and 300 tires on July 27. Compute the ending inventory and the cost of goods sold under the periodic inventory system using the three methods listed below.
FIFO,
LIFO,
Weighted-average
Bad Debt Problems
No. 3 {15 Points} At December 31, 2018, retailer Lord & Sailor had a balance of $82,700 in its Accounts Receivable account and a credit balance of $280 in its Allowance for Doubtful Accounts account. The company analyzed and aged its accounts receivable based on the following estimated uncollectible amounts:
Age of Accounts Receivables Balance Estimated % Uncollectible
Current $43,500 0.6%
31 to 60 day 22,100 2.2%
61 to 90 days 8,900 5.4%
Over 91 days 8,200 21.0%
Total $82,700
The company bases its provision for credit losses on the aging analysis.
Required:
a. What amount of bad debt expense will Lord & Sailor report in its 2018 income statement? Round all your calculations to the nearest dollar.
b. How would Accounts Receivable and the Allowance for Doubtful Accounts appear in Lord & Sailors December 31, 2018, balance sheet?
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