Reference no: EM131115959

1. Compute the ending inventory using the FIFO and the weighted average method below. Use the perpetual method for both.

		units	price
1-Jan	Beginning inventory	3,500	$ 3.00
14-Jan	Bought	1,500	$ 3.15
5-Feb	Sold	1,000
22-Feb	Bought	2,000	$ 3.20
7-Mar	Sold	1,500
15-Mar	Sold	2,000
5-Apr	Bought	1,000	$ 3.25
10-Apr	Sold	800
12-Apr	Sold	800
22-Apr	Sold	500
4-May	Sold	600
10-May	Bought	2,000	$ 3.30
25-May	Sold	500

FIFO method (scroll down for Weighted Average entry area)

Balance
units	cost	total
3500	$ 3.00	$ 10,500.00

2. Complete journal entries for the following transactions related to accounts receivable and the allowance for doubtful accounts:

1. Sales for the month of June were $75,000. Using a percentage allowance method of 1% record the allowance for doubtful accounts.

2. On June 30, it was determined that two customers with receivables totaling $980 were not likely to pay.

3. On July 15, surprisingly one of the customers who owed $400 and was written off on June 30, paid their bill.

4. On July 31, our fiscal year ends, the allowance for doubtful accounts has a balance of $1,780

The company uses an aging method to calculate the desired allowance balance.

An accounts receivable aging shows the following:

30 days or less = $68,500
31 -60 days = $10,400
61-90 days = $4,300
Over 90 days = $1,200

The company wants an ending reserve equal to:

30 days or less = 1%
31-60 days = 3%
61-90 days = 5%
over 90 days = 15%