+1 862 207 3288 . Southwest Hardware provides the following information relating to its June inventory activity. Hahn uses a perpetual inventory system.
Transaction
Units
Unit Cost
Total Cost
June 1
Inventory
1 3
$8.00
$104.00
June 7
Purchase
22
9.50
209.00
June 12
Sale
20
June 18
Purchase
10
10.25
102.50
June 20
Sale
14
June 26
Purchase
16
11
176
June 30
Sale
15
Required
a. Compute the ending inventory and cost of goods sold using the FIFO, LIFO, and moving average costing methods. Round dollar amounts to the nearest penny.
b. Calculate the sum of the ending inventory and cost of goods sold for each method.
2. The following information is available for Unique Global Corp, as of end of this month:
a. Cash on the books as of month end amounted to $44,287.52. Cash on the bank statement for the same date was $51,451.46.
b. A deposit of $5,110.25, representing cash receipts of month end, did not appear on the bank statement.
c. Outstanding checks totaled $3,936.80.
d. A check for $1,920.00 returned with the statement was recorded incorrectly in the check register as $1,290.00. The check was for a cash purchase of merchandise.
e. The bank service charge for the month amounted to $30.
f. The bank collected $10,300.00 for Unique Global Corp., on a note. The face value of the note was $10,000.00 while the 3% interest on the note was $300.
g. An NSF check for $298.56 from a customer, Evelyn Smith, was returned with the statement.
h. The bank mistakenly charged to the company account a check for $1,500.00 drawn by another company.
i. The bank reported that it had credited the account for $495.95 in interest on the average balance for the month.
Required
a. Prepare bank reconciliation for Unique Global Corp. , Inc., as of current month end.
b. Why is bank reconciliation considered an important control over cash?
Assignment #4
(40 points)
The following questions are independent.
1. Princeís Pipe Co. purchases equipment with a list price of $22,000. Regarding the purchase, Prince:
ï Received a 2% discount off the list price
ï Paid shipping costs of $800
ï Paid $1,750 to install the equipment, $1,200 of which was for a unique stand for the equipment.
ï Paid $2,800 to insure the equipment. The $2,800 includes $300 for insurance while in transit and $2,500 for a two-year policy to cover equipment usage.
ï Paid $600 to have the manufacturer train employees on safety features.
Required: Determine the acquisition cost of the equipment.
2. Development Industries purchased a depreciable asset for $50,000 on January 1 of year 1. The asset has a five-year useful life and a $10,000 estimated salvage value. The company will use the straight-line method of depreciation for book purposes. However, Development will use the double-declining-balance method for tax purposes.
Required
a. Prepare depreciation schedules using the straight-line and double-declining-balance methods of depreciation for the useful life of the asset.
b. Under the straight-line method of depreciation, what is the gain or loss if the equipment is sold (1 ) at the end of year 3 for $30,000 or (ii) at the end of year 4 for $16,000?
Assignment #5
(40 points)
1. The following is a list of liability accounts on the ledger of Caravan Inc. on January 1 :
Sales Tax Payable $7,500
Accounts Payable 9,500
Unearned Revenue 16,500
The following transactions occurred during the month of January:
Jan. 1 Borrowed $25,000 from Atlanta Bank on a 6-month, 6% note.
9 Provided service for customers who had paid $6,000 in advance.
15 Paid state treasurer for sales taxes collected in December, $7,500.
18 Bought inventory on credit for $1 2,000.
23 Sold goods on credit for $3,000, plus 7% sales tax.
The employees of the Chop House earned gross salaries of $45,000 during January. The company complied with the law regarding employeesí withholdings and employer matching. Withholdings were 6.2% for Social Security tax, 1.45% for Medicare tax, $3,058 for federal income tax, and $1,900 for state income tax. Salaries earned in January will be paid during February.
Required:
a. Prepare journal entries for the January transactions.
b. Prepare adjusting entries at January 31 for the salaries expense, payroll tax expense, and notes payable.
2. Irons Incorporated entered into the following stock transactions during the year.
Apr. 5-Issued 30,000 shares of common stock with $3 par value for $180,000.
May 31-Purchased 1,000 shares of treasury stock for $50,000.
Oct. 1-Issued 3,000 shares of preferred stock with $40 par value for $65 per share.
Required
Prepare the journal entries to record the transactions. Use the cost method to account for the purchase of treasury stock.
Assignment #6
(30 points)
1. The auditor for First Corporation noticed that its income statement (copied below) was incorrect.
First Corporation
Income Statement
December 31
Sales Revenue $130,000
Cost of Goods Sold 80,000
Accounts Receivable 19,500
Gross Profit 30,500
Interest Expense 15,000
Selling Expense 13,000
Total Operating Costs (28,000)
Operating Profit 2,500
Interest Revenue 16,500
Interest Payable 4,000 8,500
Income Before Taxes 11,000
Income Tax Expense (12,850)
Net Income (Loss) ($1,850)
Required
Prepare a corrected multi-step income statement such as the example on page 241 of the textbook.
2. A company enters into the following transactions:
a. Issued $25,000 par value common stock in exchange for cash.
b. Issued a long-term note in exchange for a machine worth $45,000.
c. Received $21,000 in cash from accounts receivable.
d. Paid $7,500 on accounts payable.
e. Issued $50,000 par value common stock upon conversion of convertible bonds with a face value of $50,000.
f. Declared and paid a cash dividend of $78,000.
g. Sold an investment costing $10,000 for $10,000 in cash.
Required
Classify each of the preceding transactions as a cash inflow or a cash outflow from operating activities, investing activities, or financing activities, or as a non-cash transaction
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