ACC422
Accounting2018
WileyAssignment-ACC422.docxNovak Enterprises owns the following assets at December 31, 2017.
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Cash in bank—savings account |
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64,400 |
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Checking account balance |
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22,500 |
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Cash on hand |
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9,040 |
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Postdated checks |
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830 |
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Cash refund due from IRS |
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37,900 |
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Certificates of deposit (180-day) |
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96,170 |
What amount should be reported as cash?
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Cash to be reported |
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$
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Sunland Family Importers sold goods to Tung Decorators for $39,600 on November 1, 2017, accepting Tung’s $39,600, 6-month, 6% note. Prepare Sunland’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
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Date |
Account Titles and Explanation |
Debit |
Credit |
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Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $3,165 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $173,020 as shown in the ledger. The following information is available for your first year in business.
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(1) |
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Collections from customers |
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$417,780 |
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(2) |
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Merchandise purchased |
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675,200 |
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(3) |
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Ending merchandise inventory |
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189,900 |
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(4) |
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Goods are marked to sell at 40% above cost |
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Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.
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The ending balance of accounts receivable from customers |
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$
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Apparent shortage |
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$
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The trial balance before adjustment of Sarasota Inc. shows the following balances.
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Dr. |
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Cr. |
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Accounts Receivable |
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$96,400 |
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Allowance for Doubtful Accounts |
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2,330 |
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Sales Revenue (all on credit) |
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$656,800 |
Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 5% of gross accounts receivable and (b) 6% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,774 credit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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No. |
Account Titles and Explanation |
Debit |
Credit |
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(a) |
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(b) |
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Flounder, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April. 1. On April 1, it established a petty cash fund in the amount of $237. 2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows.
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Delivery charges paid on merchandise purchased |
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$72 |
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Supplies purchased and used |
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37 |
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Postage expense |
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45 |
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I.O.U. from employees |
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29 |
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Miscellaneous expense |
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48 |
The petty cash fund was replenished on April 10. The balance in the fund was $2. 3. The petty cash fund balance was increased by $112 to $349 on April 20. Prepare the journal entries to record transactions related to petty cash for the month of April. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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Date |
Account Titles and Explanation |
Debit |
Credit |
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April 10 |
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Marin Lansbury Company deposits all receipts and makes all payments by check. The following information is available from the cash records.
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June 30 Bank Reconciliation |
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Balance per bank |
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$14,000 |
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Add: Deposits in transit |
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3,080 |
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Deduct: Outstanding checks |
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(4,000 |
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Balance per books |
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$13,080 |
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Month of July Results |
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Per Bank |
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Per Books |
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Balance July 31 |
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$17,300 |
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$18,500 |
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July deposits |
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10,000 |
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11,620 |
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July checks |
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8,000 |
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6,200 |
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July note collected (not included in July deposits) |
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2,000 |
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July bank service charge |
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30 |
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July NSF check from a customer, returned by the bank (recorded by bank as a charge) |
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670 |
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Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance.
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MARIN LANSBURY COMPANY Bank Reconciliation July 31 |
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$
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$
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$
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$
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$
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In your audit of Steve Company, you find that a physical inventory on December 31, 2017, showed merchandise with a cost of $480,770 was on hand at that date. You also discover the following items were all excluded from the $480,770.
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1. |
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Merchandise of $61,520 which is held by Steve on consignment. The consignor is the Max Suzuki Company. |
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2. |
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Merchandise costing $36,000 which was shipped by Steve f.o.b. destination to a customer on December 31, 2017. The customer was expected to receive the merchandise on January 6, 2018. |
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3. |
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Merchandise costing $49,580 which was shipped by Steve f.o.b. shipping point to a customer on December 29, 2017. The customer was scheduled to receive the merchandise on January 2, 2018. |
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4. |
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Merchandise costing $90,200 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Steve on January 4, 2018. |
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5. |
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Merchandise costing $49,250 shipped by a vendor f.o.b. shipping point on December 31, 2017, and received by Steve on January 5, 2018. |
Based on the above information, calculate the amount that should appear on Steve’s balance sheet at December 31, 2017, for inventory.
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Inventory as on December 31, 2017 |
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$
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Waterway Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.
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Item D |
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Item E |
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Item F |
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Item G |
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Item H |
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Item I |
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Estimated selling price |
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$126 |
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$116 |
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$100 |
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$95 |
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$116 |
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$95 |
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Cost |
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79 |
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84 |
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84 |
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84 |
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53 |
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38 |
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Cost to complete |
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32 |
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32 |
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26 |
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37 |
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32 |
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32 |
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Selling costs |
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11 |
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19 |
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11 |
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21 |
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11 |
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21 |
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Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.
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Item D |
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$
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Item E |
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$
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Item F |
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$
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Item G |
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$
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Item H |
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$
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Item I |
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$
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Grouper Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
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Item No. |
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Quantity |
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Cost per Unit |
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Cost to Replace |
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Estimated Selling Price |
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Cost of Completion and Disposal |
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Normal Profit |
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1320 |
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1,800 |
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$3.55 |
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$3.33 |
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$5.00 |
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$0.39 |
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$1.39 |
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1333 |
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1,500 |
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3.00 |
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2.55 |
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3.89 |
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0.56 |
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0.56 |
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1426 |
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1,400 |
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5.00 |
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4.11 |
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5.55 |
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0.44 |
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1.11 |
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1437 |
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1,600 |
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4.00 |
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3.44 |
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3.55 |
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0.28 |
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1.00 |
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1510 |
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1,300 |
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2.50 |
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2.22 |
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3.61 |
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0.89 |
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0.67 |
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1522 |
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1,100 |
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3.33 |
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3.00 |
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4.22 |
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0.44 |
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0.56 |
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1573 |
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3,600 |
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2.00 |
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1.78 |
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2.78 |
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0.83 |
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0.56 |
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1626 |
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1,600 |
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5.22 |
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5.77 |
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6.66 |
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0.56 |
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1.11 |
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From the information above, determine the amount of Grouper Company inventory.
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The amount of Grouper Company’s inventory |
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$
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You are called by Tim Duncan of Blossom Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately. The following data are available.
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Inventory, July 1 |
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$ 34,800 |
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Purchases—goods placed in stock July 1–15 |
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80,400 |
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Sales revenue—goods delivered to customers (gross) |
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110,400 |
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Sales returns—goods returned to stock |
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3,900 |
Your client reports that the goods on hand on July 16 cost $33,000, but you determine that this figure includes goods of $6,400 received on a consignment basis. Your past records show that sales are made at approximately 40% over cost. Duncan’s insurance covers only goods owned. Compute the claim against the insurance company. (Round ratios for computational purposes to 2 decimal places, e.g. 78.73% and final answer to 0 decimal places, e.g. 28,987.)
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Claim against the insurance company |
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$
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Culver Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost.
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Lumber |
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25% |
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Millwork |
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30% |
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Hardware and fittings |
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40% |
On August 18, a fire destroyed the office, lumber shed, and a considerable portion of the lumber stacked in the yard. To file a report of loss for insurance purposes, the company must know what the inventories were immediately preceding the fire. No detail or perpetual inventory records of any kind were maintained. The only pertinent information you are able to obtain are the following facts from the general ledger, which was kept in a fireproof vault and thus escaped destruction.
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Lumber |
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Millwork |
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Hardware |
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Inventory, Jan. 1, 2017 |
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$246,100 |
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$91,600 |
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$44,200 |
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Purchases to Aug. 18, 2017 |
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1,485,500 |
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381,500 |
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162,700 |
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Sales to Aug. 18, 2017 |
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2,072,500 |
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495,300 |
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217,000 |
Submit your estimate of the inventory amounts immediately preceding the fire. (Round ratios for computational purposes to 5 decimal places, e.g. 78.74265% and final answers to 0 decimal places, e.g. 28,987.)
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Lumber |
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Millwork |
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Hardware |
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Inventory |
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$
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$
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$
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The records of Marigold’s Boutique report the following data for the month of April.
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Sales revenue |
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$100,800 |
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Purchases (at cost) |
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$49,000 |
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Sales returns |
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1,800 |
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Purchases (at sales price) |
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86,500 |
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Markups |
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10,300 |
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Purchase returns (at cost) |
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1,800 |
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Markup cancellations |
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1,500 |
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Purchase returns (at sales price) |
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2,700 |
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Markdowns |
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8,700 |
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Beginning inventory (at cost) |
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31,880 |
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Markdown cancellations |
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2,700 |
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Beginning inventory (at sales price) |
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42,700 |
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Freight on purchases |
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2,100 |
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Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)
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Ending inventory using conventional retail inventory method |
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$
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