Reference no: EM13928659
Problem 1:
At December 31, 2013 Mike Muzzillo Imports reported the following information on balance sheet:
Accounts Receivables $ 1,200,000
Less: Allowance for doubtful accounts $80,000
Instructions:
a) Prepare the journal entries to record the five transactions.
b) Prepare the T accounts of accounts receivable and allowance for doubtful accounts.
c) Prepare the journal entry to record bad debts expense for 2000 assuming that bad debts are estimated to be $70,000.
Problem 2:
On July 31, 2015, Long Company had a cash balance per books of $ 5,815.30. The statement from the bank showed a balance of $7,075.80. A comparison of the bank statement with the cash account revealed the following facts:
1. The bank service charge for July was $25.
2. The bank collected a note receivable of $1,200 for Long Company on July 15, plus $48 of interest. The bank made a $10 charge for the collection.
3. The July 31 receipts of $1,819.60 were not included in the bank deposits for July. These deposits were deposited by the company in night deposit vault on July 31.
4. Company Check No.2480 issued to J.Brokaw, a creditor for $492 was incorrectly entered in the cash payments on July 10 as $429.
5. Checks outstanding on July 31 totaled $2,480.10
6. On July 31, the bank statement showed an NSF charge of $550 for a check received by the company from R.Close, a customer, on account.
Instructions:
a) Prepare the bank reconciliation as of July 31.
b) Prepare the necessary adjusting entries at July 31.
Problem 3:
Steward Company had a beginning inventory of 400 units at a cost of $8 per unit. During the year, purchases were:
Feb 20 700 units @ $9
May 5 500 units @ $10
Aug 12 300 units @ $11
Dec 8 100 units @ $ 12
Steward Company sales totaled 1550 units.
Instructions:
a) Determine the cost of goods available for sale.
b) Determine the cost of goods sold and the ending inventory under FIFO, LIFO and Average Cost methods.
Problem 4:
The Nisson Distributing Company completed the following merchandising transactions in the month of April.
Apr
2 Purchased merchandise on account from Kentucky Supply Co. $4,900, terms 2/10, n/30.
4 Sold merchandise on account $5,400, FOB destination, terms 2/10, n/30.
5 Paid $ 200 freight on April 4 sale.
6 Returned merchandise to Kentucky for $300.
11 Paid Kentucky in full less discount .
13 Received collections in full less discount from customers billed on April 4.
14 Purchased merchandise for cash $4,400.
18 Purchased merchandise from Pigeon Distributors $4,200, FOB shipping point, terms 2/10, n/30.
20 Paid freight on April 18 purchase $100.
23 Sold merchandise for cash $ 6,400.
26 Purchased merchandise for cash $2,300.
27 Paid Pigeon distributors in full, less discount.
29 Customers returned defective merchandise for $90.
30 Sold merchandise on account $3,700, terms n/30.
Instructions:
Journalize the above transactions using the periodic system.