Problem I 15 Points

Journalize the following merchandise transactions:

A.	Sold merchandise on account, $21,300 with terms 2/10, net 30. The cost of the merchandise sold was $17,000.
B.	Received payment less the discount.

C. Purchased merchandise on account from a supplier for $6,500, terms 2/10, net 30.

D. Returned $1,500 of the merchandise and received full credit.

E. Paid for the merchandise within the discount period.

Problem II 10 Points

The beginning inventory and purchases of an item for the period were as follows:

Beginning inventory	6 units at $73 each
First purchase	10 units at $72 each
Second purchase	18 units at $74 each
Third purchase	10 units at $75 each

The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations: (a) first-in, first-out; (b) last-in, first-out; (c) average cost.

Problem III 10 Points

Using the following information, prepare a bank reconciliation for Cole Co. for May 31 of the current year:

(a)	The bank statement balance is $3,012.
(b)	The cash account balance is $3,165.
(c)	Outstanding checks amounted to $590.
(d)	Deposits in transit are $704.
(e)	The bank service charge is $30.
(f)	A check for $76 for supplies was recorded as $67 in the ledger.

Problem IV 10 points

Good Day Service Center received a 120-day, 6% note for $250,000, dated April 12 from a customer on account.

a.	Determine the due date of the note.

b.	Determine the maturity value of the note using a year of 365 days.

Last Day Service Center received a 90-day, 6% note for $150,000, dated March 12 from a customer on account.

a.	Determine the due date of the note.
b.	Determine the maturity value of the note using a year of 365 days .

Problem V 15 points

Equipment purchased at the beginning of the fiscal year for $30,000 is expected to have a useful life of 5 years, or 15,000 operating hours, and a residual value of $3,000. Compute the depreciation for the first and second years of use by each of the following methods:

(a)	straight-line
(b)	units-of-production (2,500 hours first year; 3,250 hours second year)
(c)	declining-balance at twice the straight-line rate

(Round the answer to the nearest dollar.)

First Year

(a)	straight-line
(b)	units-of-production (2,500 hours first year)
(c)	declining-balance at twice the straight-line rate

Second Year

(a)	straight-line
(b)	units-of-production (3,250 hours second year)
(c)	declining-balance at twice the straight-line rate

Problem VI 10 Points

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

Sales salaries	$135,000
Federal income tax withheld	32,300
Office salaries	30,000
Medical insurance withheld	7,370
Social security tax withheld	10,200
Medicare tax withheld	2,550

Journalize the entries to record (a) the payroll and (b) the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $30,000 of salaries are subject to unemployment taxes.