The Montclair Corporation

1. The Montclair Corporation had the following inventory transactions for its only product during 2012:
Purchases
February 15 2,000 units @$27.00 each
April 20 3,000 units @$28.40 each
October 25 1,200 units @$31.25 each
Sales
March 1 1,200 units @$50.00 each
June 12 2,000 units @$52.00 each
August 10 1,000 units @$53.00 each
December 14 1,600 units @$55.00each

The Montclair Corporation had 1,000 units in its January 1, 2012, beginning inventory with a unit cost of $24 each. Montclair uses the periodic inventory system.

Required:
a. Determine the cost assigned to Montclair’s December 31, 2012, ending inventory and Montclair’s cost of goods sold for 2012 under each of the following inventory costing methods:
1. Weighted average cost
2. FIFO
3. LIFO
b. Determine Montclair’s gross profit for 2012 under each of the following inventory costing methods:
1. Weighted average cost
2. FIFO
3. LIFO

c. Determine Montclair’s inventory turnover and days’ sales in inventory for 2012 under each of the following inventory costing methods:
1. Weighted average cost
2. FIFO
3. LIFO




2. At December 31, 2012, the following selected accounts appeared in Delta Company’s unadjusted trial balance:
Accounts receivable $81,000
Allowance for doubtful accounts 1,200 (credit)
Notes receivable (Jason, Inc) _ 12,000

Net credit sales for 2012 were $250,000. The $12,000 note receivable was a 90 day, eight percent note dated December 13, 2012. The following adjusting entries and transactions occurred at the end of 2012 and during 2013:

2012
December 31: Recorded the adjusting entry for the bad debts expense, at 1.5% percent of net credit sales.
December 31: Recorded the adjusting entry for interest on the $12000 note receivable.

2013
March 12: Received payment on the $12,000 note receivable from Jason, Inc., plus interest.
April 5: Wrote off the account of Abilene Company, $2,850.
July 9: Wrote off the account of Acme Suppliers, $1,450.
Sept. 5: received payment from Acme Suppliers, which is in bankruptcy proceedings, for $450 in final settlement of the account written off on July 9.
December 6: Wrote off the account of Walton, Inc., $1,300
December 31: Changed from the percentage-of-net-sales method of providing for uncollectible accounts to an estimate based on the accounts receivable aging method. The account analysis indicated a desired credit balance of $4,500 in the Allowance for Doubtful Accounts.

Required:
Prepare the journal entries for these adjustments and transactions.