Question
Q. The inventory of Ahrsun Ventures Corporation was destroyed by fire on February 29, 2020. The following data is for the first two months of
Q.
The inventory of Ahrsun Ventures Corporation was destroyed by fire on February 29, 2020. The following data is for the first two months of the year: Sales $51,000, Sales Returns and Allowances $1,000, Purchases $28,200; Freight-In $1,200; and Purchase Discounts $1,400. According to the financial statements at year-end December 31, 2019 the balance of Merchandise Inventory was $20,000. Ahrsun Ventures has a gross profit rate of 30% on net sales and uses the periodic method of inventory.
REQUIRED: Determine the merchandise lost by fire.
Q.
On March 31 2020 the adjusted year-end account balances of ABC Company were as follows:
Accounts Payable | $16,250 | Equipment | $70,000 | |
Accounts Receivable | 13,000 | Interest Revenue | 2,200 | |
Accumulated Depreciation | 12,000 | Merchandise Inventory | 26,250 | |
Depreciation Expense | 4,000 | Rent and Utilities Expense | 38,500 | |
Cash | 3,500 | Salaries Expense | 118,000 | |
Cost of Goods Sold | 299,850 | Sales | 505,000 | |
Rob Williams, Capital | 66,500 | Sales Discounts | 13,850 | |
Rob Williams, Withdrawals | 15,000 |
Required: Prepare, in good form, a classified Balance Sheet. ABC Company uses the perpetual inventory method.
Q.
The March 31, 2019 balance sheet of Kalakaua Corporation had Accounts Receivable of $525,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During the year ended March 31, 2020, the following transactions occurred: sales on account $1,550,000; sales returns & allowances, $120,000; collections from customers, $1,350,000; accounts written off $41,000; previously written off accounts of $5,000 were collected.
- Using the above information, what is the balance of Accounts Receivable at March 31, 2020? (2 marks)
- Suppose that it is the company policy to use the percentage of sales basis to estimate bad debts expense and anticipates 3% of net sales to be uncollectible, what is the adjusting entry at March 31, 2020? (Show calculations.) (4 marks)
Date | Account Titles and Explanations | Debit | Credit |
- Ignore the entry made in b) above.
Assume that it is company policy to use the aging of receivables basis to estimate bad debt expense. It determines that uncollectible accounts are expected to be $38,400. What is the adjusting entry at March 31, 2020? Assume the March 31, 2020 balance of Accounts Receivable is $575,000 and Allowance for Doubtful Accounts has an existing balance of $3,000 (cr). (Show calculations) (4 marks)
Date | Account Titles and Explanations | Debit | Credit |
Q. The following figures are provided for Hanauma Marketing Corp. What is gross margin? (3 marks)
Sales revenue $480,000
Cost of goods sold 300,000
Sales discounts 20,000
Sales returns and allowances 15,000
Operating expenses 85,000
Interest revenue 5,000
a) $105,000
b) $140,000
c) $145,000
d) $ 90,000
e) $180,000
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