Problem 1 04-Sep Sanford purchased inventory totalling $27,500 from Michelsen on terms 2/15, n/30, FOB destination Freight costs $1,800. 08-Sep Sanford sold product with a cost of $5,100 to Tools Inc. for $8,900. Terms 2/10,n/30 10-Sep Sanford returned $1,800 of the merchandise purchased from Michelsen on September 4 14-Sep Tools Inc. returned $1,300 worth of product to Sanford. The cost of the returned merchandise was $745. 18-Sep Tools Inc. paid Sanford for their inventory purchases. 19-Sep Sanford paid Michelsen for the inventory purchased earlier in the month. Required: Prepare journal entries for the above transactions. Problem 2 Primal Inc. made the following inventory transactions for the month of August. 04-Aug Purchased 150 units $30 each. 08-Aug Sold 40 units at a selling price of $85. 12-Aug Purchased 40 units $31 each. 15-Aug Purchased 25 units $32 each. 19-Aug Sold 145 units at a selling price of $85. 25-Aug Sold 25 units at a selling price of $85. 29-Aug Purchased 40 units $33 each. On July 31, Primal had 20 units in inventory that cost $28 each. Required: 1. Calculate cost of goods sold and ending inventory using the FIFO method and weighted inventory method. 2. Calculate September's gross profit and gross profit percentage under each inventory valuation method. Problem 3 Thomson Limited's March 31, 2020 bank reconciliation is shown below: Thomson Limited Bank Reconciliation March 31, 2020 Unreconciled balance $26,987 Add: Deposit in transit 11,500 Less: Outstanding cheques Chq #198 1,195 Chq #200 9,650 Cha #201 3,120 Reconciled balance 13,965 $24,522 The company's April 2020 bank statement and General Ledger transactions are show below: National Bank April 30, 2020 Date Details Debits Credits Balance 01-Apr $26,987 02 Apr Deposit 11,500 $38,487 03-Apr Chq# 200 9,650 $28,837 07-Apr Chq# 198 1,195 $27,642 11 Apr Deposit 6,840 $34,482 12 Apr NSF cheque 3,000 $31,482 12.Apr NSF fee 50 $31,432 Chq #201 3,120 $28,312 17 Apr Chq 203 $24,912 17-Apr EFT, M. Sinclair 14,085 $38,997 20 Apr Cha #204 1,800 $37,197 22 Apr Chq #202 1,625 $35,572 24-Apr EFT payment 4,600 $30,972 24-Apr Deposit 10,060 $41,032 25-Apr Chq #207 3,250 $37,782 27-Apr Chq #208 8,500 $29,282 28 Apr Chq #209 2,920 $26,362 30 Apr Bank charges 75 $26,287 16-Apr 3,400 General Ledger Details Cheques Deposits Cha #202 1,625 11 Apr 6,840 Chq #203 4,300 24-Apr 10,060 Chg #204 1,800 30-Apr 5,550 Chq #205 1,975 Cha #206 4,480 Chq #207 3,250 Chq #208 8,500 Chq #209 2,920 Chq #210 3,800 Cha #211 2,520 Cha #212 3,005 Additional information: 1. The EFT on Apr. 24 was a loan payment with includes $600 of interest and the remainder is a payment against a bank loan. 2. Thomson made an error recording Cha #203 in the General Ledger. 3. The company hadn't recorded the EFT from M. Sinclair as of month-end. Required: Prepare Thomson Limited's April 30, 2020 bank reconciliation. Problem 4 On September 1, 2019 Pashmore Corporation received a five-month note from Gerry Group for the sale of used equipment. The face value of the note is $75,000 and bears 6% interest. Required: Prepare journal entries for: 1. The acceptance of the note. 2. Adjustments at year end. 3. Payment of the note. Problem 5 Mercantile Limited has the following Accounts Receivable aging report on December 31, 2019. Mercantile Limited Accounts Receivable Aging Report December 31, 2019 0-30 days 31-60 days 61-90 days 90+ days A/R Balance 475,000 258,000 109,000 47,500 Estimated Unrecoverable 1% 8% 15% 30% Mercantile has a debit balance of $3,200 in Allowance for Doubtful Accounts on December 31. The company has also determined that one account (M. Davis) cannot be recovered and should be written off. The value of the Davis account is $1,975. Required: 1. Prepare the journal entry to record the estimated bad debt for 2019. 2. Show how accounts receivable will be presented on the December 31, 2019 Statement of Financial Position. 3. Prepare the journal entry to write off the Davis account. 4. On January 30, 2020, M. Davis paid their account in full. Prepare the journal entries to record the payment