ACCOUNT
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Assignment |
2 |
Marks |
3.75 (10 Points) |
|
Course Title |
Principles of Accounting |
Code |
ACCT 101 |
|
Uploading |
End week 5 |
Submission |
End week 6 |
|
Date |
Sat 06/10/2018 |
Dates |
Sat 13/10/2018 |
Instructions:
· The answers must be in English .
· Students must include their details (Name, Student ID, CRN, Date of submission)
· Answer the ALL questions.
· Do NOT write the questions in the answer papers JUST write the question number .
· Assignments should be submitted in MS Word format
· Font should be Times New Roman with 14 points .
· You are required to work in this assignment individually .
· You should submit the assignment via the Blackboard System .
· Students, who submit assignments after deadline, will get ZERO .
· If you engaged in plagiarism, you will get ZERO marks in the assignment.
Q1.XYZ Company uses a periodic inventory system. The beginning balance of inventory and the purchases made by XYZ during the month of July are given below:
|
Date |
Description |
Units |
Unit cost |
Total cost |
|
July 01 |
Beginning inventory |
500 |
$20 |
$10,000 |
|
July 18 |
Inventory purchased |
800 |
$24 |
$19,200 |
|
July 25 |
Inventory purchased |
700 |
$26 |
$18,200 |
|
|
|
|
|
|
|
|
Total |
2,000 |
|
$47,400 |
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|
|
|
|
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The XYZ Company sold 1,400 units during the month of July.
Required: Compute inventory on 31st July and cost of goods sold for the month of July using FIFO inventory costing method: (3 marks)
Answer to Q1:
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Q2. ALPHA Company reported the following year-end information:
|
Cash |
$ 52,000 |
|
Short-term investments |
12,000 |
|
Accounts receivable |
54,000 |
|
Inventory |
325,000 |
|
Prepaid expenses |
17,500 |
|
Accounts payable |
106,500 |
|
Other current payables |
25,000 |
Instructions: 1- Explain the purpose of the acid-test ratio. (1 mark) 2- Calculate the acid-test ratio for ALPHA Company. (2 marks)
Answer to Q2:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Q3. Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May:
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May 3 |
Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350. |
|
May 4 |
Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250. |
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May 6 |
Sold merchandise to a customer on credit for $1,300, term 2/10, n/30. The cost of the merchandise sold was $750. |
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May 8 |
The customer from May 3 returned merchandise with a selling price of $100. The cost of merchandise returned was $55. |
|
May 15 |
The customer from May 6 paid the full amount due, less any appropriate discounts earned. |
|
May 31 |
The customer from May 3 paid the full amount due, less any appropriate discounts earned. |
Instructions:
Prepare the required journal entries that Maia's Bike Shop must make to record these transactions. (3 marks)
Answer to Q3:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Q.4 What does FOB stand for? Differentiate between FOB shipping point (or FOB factory) and FOB destination? (1 mark)
Answer to Q4:
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