WEEK 3 Problems

The following is the inventory record of widgets for the ABC Company:

Units

Cost/Unit

1/1

Beginning Inventory

100

$ 10.00

4/15

Purchase

200

$ 11.00

8/24

Purchase

300

$ 12.00

11/27

Purchase

400

$ 13.00

At the end of the fiscal year, the physical inventory found 450 widgets on hand at 12/31. Total sales for the year were 500 widgets sold at a retail price of $20.00 per widget.

REQUIRED

a)Calculate the ending inventory value under each of the following inventory methods:

i.FIFO

ii.LIFO

iii.Weighted Average

b)Calculate the gross profit for each of the inventory methods.

The Allowance for Doubtful Accounts balance on 1/1/X8 is $ 528.00 for the Farrior Hotel. The aged accounts receivables listing as of 12/31/x8 is as follows:

CURRENT

30 days

60 days

90 days

120 days

Adert

300

200

100

Bortz

200

250

Carl

300

Diker

500

200

Ebbert

300

300

Others

26,200

5,200

2,450

1,600

1,500

The estimated percentage of bad debts is as follows:

Current2%

304%

6010%

9020%

12040%

REQUIRED

a)Using the Allowance Method- Aged Accounts Receivable, calculate the balance of the allowance for doubtful accounts as of 12/31/X8.

b)Prepare the appropriate journal entry.