+1 862 207 3288 Periodic inventory system
1. Given the following information about purchases and sales during the year, compute the cost to be assigned to ending inventory under each of three methods: (a) average-cost, (b) FIFO, and (c) LIFO. (Show your work.)
Assume that a periodic inventory system is used.
Jan. 1 Beginning inventory 225 items @ $3 = $ 675
May 1 Purchases 675 items @ $6 = 4,050
Totals 900 items $4,725
Total sales 450 items
Dec. 31 Ending inventory 450 items
2. Assuming a perpetual inventory system is used, use the following information to calculate cost of goods sold on an average-cost basis.
Dec. 1 Beginning inventory 50 units @ $22
9 Purchases 50 units @ $24
17 Sales 25 units
22 Purchases 75 units @ $27
27 Sales 40 units
3. The following information pertains to the bank transactions of Rawlins Company:
a. Cash on the books as of April 30 was $499. Cash as shown on the bank statement for the same date was $1,330.
b. A deposit of $160, representing cash receipts as of April 30, did not appear on the bank statement.
c. Outstanding checks totaled $240.
d. Bank service charges for April amounted to $9
e. The bank collected for Rawlins Company $840 (which includes $40 interest) on a note left for collection.
f. An NSF check for $80 from a customer, Joe Beck, was returned with the statement.
Required:
1. Prepare a bank reconciliation for Rawlins Company as of April 30.
2. State the amount of cash that would appear on the balance sheet as of April 30.
Rawlins Company
Bank Reconciliation
April 30, 2014
4. Jasmine Company has established a petty cash fund for small expenditures. Prepare journal entries for the following transactions (omit explanations).
April 5 Established a $200 petty cash fund with cash withdrawn from company checking account.
30 The petty cash fund has $10 remaining and is replenished. Expenditures for April were $60 for supplies, $50 for meals, $65 for postage, and $20 for freight-in.
May 31 The petty cash fund has $20 remaining and is replenished. Expenditures for May were $55 for postage, $40 for charitable contributions, $56 for supplies, and $25 for freight-in.
GENERAL JOURNAL
Date
Description Post. Ref.
Debit
Credit
5. Chao Corporation uses the accounts receivable aging method to account for Uncollectible Accounts Expense. As of December 31, Chao’s accountant prepared the following data about ending receivables: $40,000 was not yet due (1 percent expected not to be collected), $20,000 was 1-60 days past due (4 percent expected not to be collected), and $4,000 was over 60 days past due (8 percent expected not to be collected). At December 31, Allowance for Uncollectible Accounts had a credit balance prior to adjustment of $400. In the journal provided, prepare Chao’s end-of-period adjustment for estimated uncollectible accounts. Also prepare the entry that would have been made had the credit balance instead been a debit balance.
GENERAL JOURNAL
Date
Description Post.
Ref.
Debit
Credit
6. Assuming that the allowance method is being used, prepare journal entries to record the following transactions. Omit explanations.
Mar. 15 Sold merchandise to Foster for $12,000 on account.
Apr. 15 Received $6,000 from Foster.
Aug. 15 Wrote off Foster’s account as uncollectible.
Nov. 15 Unexpectedly received payment in full from Foster.
GENERAL JOURNAL
Date
Description Post.
Ref.
Debit
Credit
7. Preston Corporation purchased a truck for $40,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $4,000 at the end of that time. During the second year, the truck was driven 27,500 miles. Compute the depreciation for the second year under each of the following methods: (a) straight-line, (b) production, and (c) double-declining-balance. (Show your work.)
8. On November 1, 2013, Rob’s Auto Repair purchased diagnostic equipment for $18,000. The equipment had an estimated residual value of $3,000 and a five-year life and was sold on May 1, 2015. Assuming that the company depreciates the asset on a straight-line basis and reports on a calendar-year basis, journalize the following independent transactions in the journal provided. (Omit explanations.)
a. The entry to update depreciation to May 1, 2015
b. The entry to record the sale for $15,000
c. The entry to record the sale instead for $11,000
d. The entry to record the sale instead for $13,500
GENERAL JOURNAL Page 1
Date
Description Post.
Ref.
Debit
Credit
9. Paula Giltz earns an hourly wage of $18 with time-and-a-half pay for hours worked over 40 per week. During the most recent week, she worked 46 hours, her federal tax withholding totaled $93, her state tax withholding totaled $27, and $5 was withheld for union dues. Assuming a 6.2 percent social security tax rate and a 1.45 percent Medicare tax rate, prepare the journal entry to record Giltz’s wages and related liabilities. Round to the nearest penny.
GENERAL JOURNAL
Date
Description Post.
Ref.
Debit
Credit
10. Prepare journal entries for the following transactions involving notes payable for Homer Company, whose fiscal year ends June 30. Omit explanations.
June 20 Paid a trade account payable with a 90-day, 9 percent $60,000 note. Interest is in addition to the face value.
30 Made end-of-year adjusting entry to accrue interest expense for the note.
30 Made end-of-year closing entry pertaining to interest expense.
Sept. 18 Paid amount due on note, plus interest.
GENERAL JOURNAL
Date
Description Post.
Ref.
Debit
Credit
(20 points)
11. Given the adjusted trial balance below, prepare (in good form) an income statement, statement of retained earnings, and balance sheet. The name of the business is Palo Verde Landscaping Services and the accounting period coincides with the calendar year.
Palo Verde Landscaping Services
Adjusted Trial Balance
December 31, 20×5
Cash $ 795
Accounts Receivable 1,800
Supplies 30
Prepaid Insurance 30
Office Equipment 3,000
Accumulated Depreciation–Office Equipment $ 450
Accounts Payable 1,800
Salaries Payable 105
Common Stock 1,000
Retained Earnings 1,100
Service Revenue 3,300
Salaries Expense 1,680
Supplies Expense 120
Insurance Expense 150
Depreciation Expense–Office Equipment 150 ______
$7,755 $7,755
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