Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

600

units

@ $40 per unit

Feb.

10

Purchase

360

units

@ $37 per unit

Mar.

13

Purchase

150

units

@ $25 per unit

Mar.

15

Sales

765

units

@ $80 per unit

Aug.

21

Purchase

200

units

@ $45 per unit

Sept.

5

Purchase

580

units

@ $42 per unit

Sept.

10

Sales

780

units

@ $80 per unit

Totals

1,890

units

1,545

units

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 260 from the February 10 purchase, 150 from the March 13 purchase, 150 from the August 21 purchase, and 385 from the September 5 purchase.

At December 31, Hawke Company reports the following results for its calendar year.

Cash sales	$	2,067,020
Credit sales	$	3,976,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable	$	1,204,728	debit
Allowance for doubtful accounts	$	19,020	debit

Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption.

a. Bad debts are estimated to be 2% of credit sales.

b. Bad debts are estimated to be 1% of total sales.

c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31). (Do not round intermediate calculations.)

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1a.

3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1c. (Do not round intermediate calculations.)

On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $15,000. Jarden prepares a schedule of its December 31 accounts receivable by age.

Accounts Receivable		Age of Accounts Receivable	Expected Percent Uncollectible
$	860,000	Not yet due	1.15	%
	344,000	1 to 30 days past due	1.90
	68,800	31 to 60 days past due	6.40
	34,400	61 to 90 days past due	32.25
	13,760	Over 90 days past due	67.00

Required: 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31.

2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to nearest whole percent. Do not round intermediate calculations.)

Perpetual FIFO: Goods Purchased # of Cost per units unit Cost of Goods Sold Cost per Cost of Goods Sold unit # of units sold Date Jan 1 Inventory Balance Cost per # of units Inventory unit Balance 600 $ 40.00 = $ 24,000.00 600 @ $ 40.00 = $ 24,000.00 380 @ $37.00 = 13,320.00 $ 37,320.00 Feb 10 360 @ $37.00 Mar 13 150 @ $ 25.00 600 360 m 150 $ 40.00 = $ 37.00 = $ 25.00 = $ 24,000.00 13,320.00 3,750.00 $ 41,070.00 Mar 15 600 = S 40.00 $ 37.00 S 24,000.00 0.00 S 24,000.00 @ $ 37.00 $25.00 = 150 @ 3,750.00 $ 3,750.00 Aug 21 200 @ $ 45.00 $ 37.00 $ 25.00 $ 45.00 Sepl 5 580 @ $ 42.00 $ 37.00 $ 25.00 $ 45.00 $ 42.00 Sept 10 Totals S 24,000.00 $ 0.00 Perpetual LIFO: Cost of Goods Sold Goods Purchased # of units unit Cost per Date # of units sold Cost per Cost of Goods Sold unit Inventory Balance Cost per # of units Inventory unit Balance 600 $40.00 = $ 24,000.00 Jan 1 Feb 10 Mar 13 Mar 15 Aug 21 Sepl Sept 10 0 Totals 03 0.00 Specific Identification Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory Cost per Cost per # of units Cost of Goods Available for Sale # of units sold Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory unit unit 600 $ 40.00 $ 27,000 0 $ 40.00 $ 0 Beginning inventory Purchases: Feb 10 360 $ 37.00 260 $ 37.00 9,620 100 $ 37.00 3,700 March 13 150 $ 25.00 0 16,800 5,400 5,000 23,000 200 $ 25.00 $ 45.00 $ 42.00 O O o od Aug 21 Sep 5 $ 45.00 580 $ 42.00 0 Total 1,890 $ 77,200 260 $ 9,620 100 $ 3,700 1 2 3 Bad debts are estimated to be 2% of credit sales. Note: Enter debits before credits. Transaction General Journal Debit Credit .