Solved by verified expert :ACC 131 Exam II
Problems I-IV Problem INybus gifts reported the following current-year data
for its only product. The company uses a periodic inventory system, and its
ending inventory consists of 300 units, 100 from each of the last three
purchases. Determine the cost assigned to ending inventory and cost of goods
sold using a.) Weighted average, b.) FIFO and c.) LIFO. Which method will yield
the lowest net income?
Jan. 1
Beginning inventory
280 units @$3.00
$ 840
Mar. 7
Purchase
600units @$4.00=
2,400
July 28
Purchase
800units @$5.00=
4,000
Oct. 3
Purchase
1,000units @$6.00=
6,000
Dec. 19
Purchase
250 units @$6.50=
1,625
Totals
2,930 units
$14,865
Problem
2 The following
information was available for reconciling Rapid Service Company’s December 31,
2012 book balance of cash with its bank statement balance of that same date.A) The December 31 cash balance according to the accounting records was
$2,779.90. The bank statement balance of that date was $2,651.50.B) As of November 30 when the book and bank statement balances were
last reconciled, there were two checks outstanding, number 872 for $103.50 and
number 876 for $93.15. Check number 876 was returned with the December canceled
checks but number 872 was not.C) Upon comparing the December canceled checks with the entries in the
check register, it was found that check number 901 had been correctly drawn for
$183 in payment for several items of store supplies, however, it was entered in
the check register in error as though it had been drawn for $138.D) It was also found that checks numbers 953 for $81.25 and 955 for
$72.10 both of which had been written and entered in the check register on
December 30 were not among the cancelled checks returned by the bank.E) Two debit memos and a credit memo were included with the returned
checks. None of the memos had been recorded. The credit memo showed that the
bank had collected a $500 note receivable for Rapid Service Company, deducted a
$2 collection fee, and credited the balance to the Rapid Service account. One
of the debit memos was for $42.35 and had attached to it a NSF check in that
amount. The other debit memo, $6.40, was for printing checks.F) Included with the cancelled checks was a check drawn by another
company with a similar name, Rapid Supply Company, in the amount of $71.10 and
paid in error by the bank from the Rapid Service Company’s Account.G) The December 31 cash receipts amount to $718.40 and this amount had
been placed in the bank’s night depository after banking hours on the 31st.
Consequently this amount did not appear on the bank statement.REQUIRED:1. Prepare December 31 bank reconciliation for Rapid Service Company.2. Prepare in general journal form the entries needed to adjust the
company’s book balance of cash to the reconciled balance.Problem 2 Cont.Problem
2 CONT.Problem
3On Monday morning, June
14, the manager of Smart Shop unlocked the store to learn that thieves had
broken in over the weekend and stolen the store’s entire inventory. The
following information for the period, January 1 through June 13, was available
to establish the amount of loss:
January 1 merchandise
inventory at cost
$32,500
Purchases
92,310
Purchases Returns
415
Freight-in
560
Sales
139,875
Sales returns
1,375
Required:Under the assumption
the store had earned an average 32% gross profit on sales during the past five
years, prepare a calculation showing the estimated loss.Problem 3 CONT.
Problem 4On December 31, 2012 the Swift Company estimated that
it would lose as bad debts an amount equal to ¼ of 1% of its $844,000 in credit
sales and provided an addition to its allowance for doubtful accounts equal to
that amount. On the following April 7 it decided the $520 account of James
Clark was uncollectible and wrote it off as a bad debt. On August 10 James
Clark unexpectedly paid the amount previously written off.Give the required entries in general journal form to
record these transactions.
