Question
Part 1 - Merchandise Transactions Maeve's Store had the following transactions during December, the last month of the accounting period: Dec 1 Sold merchandise on
Part 1 - Merchandise Transactions
Maeve's Store had the following transactions during December, the last month of the accounting period:
Dec 1 Sold merchandise on credit for $7,000, cost $3,000, terms 1/10, n/30.
Dec 3 Purchased merchandise for cash, $1,900.
Dec 4 Purchased merchandise on credit for $5,600, terms 2/10, n/30.
Dec 5 Issued a credit memorandum for $600 to a customer who returned merchandise purchased November 29, cost $400.
Dec 11 Received payment for merchandise sold December 1.
Dec 15 Received a credit memorandum for $600 for the return of faulty merchandise purchased on December 4.
Dec 18 Paid freight charges of $50 for merchandise ordered last month.
Dec 23 Paid for the merchandise purchased December 4 less merchandise returned.
Required:
Prepare general journal entries to record these transactions, using a perpetual inventory system.
Acct 122 - Introductory Financial Accounting
Final Exam - Fall 2020
Part 2 - Inventory Valuation: FIFO Method
During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows:
Units
Cost per unit
Begin Inventory
100
$12
Jan 5
Sale
50
10
Purchase
70
$16
15
Sale
25
25
Sale
35
Prepare schedule to show the cost of goods sold and ending inventory using the FIFO cost flow assumption.
Part 3 - Bad Debts
Triple Mint Gum Co. uses the allowance method of accounting for bad debts. Their Allowance for Doubtful Accounts account has a year-end debit balance, prior to adjustment, of $500. The bad debts are estimated at 5% of $200,000, the year-end accounts receivable. Prepare the year end adjusting journal entry for bad debt expense.
Acct 122 - Introductory Financial Accounting
Final Exam - Fall 2020
PART 1: Merchandising Journal Entries
Acct 122 - Introductory Financial Accounting
Final Exam - Fall 2020
PART 2: FIFO Method
PART 3: Bad Debts Expense
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started