During August, Tim Burr Logging produces lumber for sale to its customers. It reports the following production runs of lumber, along with each production run's cost: August 6: 10,100 board-feet at $18 per board-foot August 15: 12,500 board-feet at $21 per board-foot August 28: 14,650 board-feet at $24 per board-foot On August 1, it had 8,260 board-feet of lumber on hand, which cost $17 per board-foot. It uses periodic inventory. During the month, it reported the following sales-related transactions: August 8: Sold 9,625 board-feet of lumber to Bill Jerome Holm Construction at $64 per board- foot, terms 3/12, n/20 August 10: Bill Jerome Holm Construction returned 540 board-feet, and received a credit August 18: Bill Jerome Holm Construction paid the correct amount on its invoice August 24: Sold 13,470 board-feet of lumber to M.T. Lott Developers at $61 per board-foot, terms 5/10, n/35 August 30: Sold 7,810 board-feet of lumber to Laura Lynne Hardy Movie Studio at $67 per board-foot, terms 4/5, n/25 At the end of the month, Tim Burr Logging estimates 2.1% of its net sales will become uncollectible. Its Allowance for Doubtful Accounts has an irregular balance of $3,150. You may assume Tim Burr Logging has not yet received payment on the August 24 and August 30 sales. QUESTIONS: 1. For the month ending August 31, what is Tim Burr Logging's cost of goods sold if it uses the average cost method? (2 points) 2. For the month ending August 31, what is Tim Burr Logging's gross profit if it uses FIFO? (HINT: you may want to write down all the necessary journal entries.) (Remember: gross profit equals net sales minus COGS) (4 points) 3. As of August 31, what is the balance in Tim Burr Logging's Allowance for Doubtful Accounts after all adjustments have been made? (3 points) During August, Tim Burr Logging produces lumber for sale to its customers. It reports the following production runs of lumber, along with each production run's cost: August 6: 10,100 board-feet at $18 per board-foot August 15: 12,500 board-feet at $21 per board-foot August 28: 14,650 board-feet at $24 per board-foot On August 1, it had 8,260 board-feet of lumber on hand, which cost $17 per board-foot. It uses periodic inventory. During the month, it reported the following sales-related transactions: August 8: Sold 9,625 board-feet of lumber to Bill Jerome Holm Construction at $64 per board- foot, terms 3/12, n/20 August 10: Bill Jerome Holm Construction returned 540 board-feet, and received a credit August 18: Bill Jerome Holm Construction paid the correct amount on its invoice August 24: Sold 13,470 board-feet of lumber to M.T. Lott Developers at $61 per board-foot, terms 5/10, n/35 August 30: Sold 7,810 board-feet of lumber to Laura Lynne Hardy Movie Studio at $67 per board-foot, terms 4/5, n/25 At the end of the month, Tim Burr Logging estimates 2.1% of its net sales will become uncollectible. Its Allowance for Doubtful Accounts has an irregular balance of $3,150. You may assume Tim Burr Logging has not yet received payment on the August 24 and August 30 sales. QUESTIONS: 1. For the month ending August 31, what is Tim Burr Logging's cost of goods sold if it uses the average cost method? (2 points) 2. For the month ending August 31, what is Tim Burr Logging's gross profit if it uses FIFO? (HINT: you may want to write down all the necessary journal entries.) (Remember: gross profit equals net sales minus COGS) (4 points) 3. As of August 31, what is the balance in Tim Burr Logging's Allowance for Doubtful Accounts after all adjustments have been made? (3 points)
