On December 1, 2020, Cambridge Printers had the account balances shown below.

		Debit				Credit
Cash		$4,550		Accumulated Depreciation-Equipment		$1,500
Accounts Receivable		3,700		Accounts Payable		2,800
Inventory		1,850		Share Capital		20,000
Equipment		21,000		Retained Earnings		6,800
		$31,100				$31,100

Beginning Inventory

2,960 units X $0.625 = $1,850

Adjustment Data:

1. Accrued salaries payable $350

2. Depreciation $250 per month.

Instructions

a. Journalize the December transactions and adjusting entries, assuming Cambridge uses the perpetual inventory method.

b. Enter the December 1 balances in the ledger T-accounts and post the December transactions. In addition to the account mentioned above.

c. Prepare an adjusted trial balance as of December 31, 2020.

d. Prepare an income statement for December 2020 and a classified statement of financial position at December 31, 2020.

e. Compute ending inventory and cost of goods sold under FIFO, assuming Cambridge uses the periodic inventory system.

f. Compute ending inventory and cost of goods sold under average-cost, assuming Cambridge uses the periodic inventory system.

Dec. 3 Purchased 4,000 units of inventory on account at a cost of $0.72 per unit.

5 Sold 4,400 units of inventory on account for $0.92 per unit.

(It sold 3,000 of the $0.65 units and 1,400 of the $0.72)

7. Granted the December 5 customer $184 credit for 200 units of inventory returned costing $144. These units were returned to inventory.

17 Purchased 2,100 units of inventory for cash at $0.78 each.

22 Sold 2,000 units of inventory on account for $0.95 per unit. (It sold 2,000 of the $0.72 units)