Reference no: EM132774500
Question -
Q1. 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.
Q2. 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:
Current 2%
30 4%
60 10%
90 20%
120 40%
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.