United Co. has the following account balances: Cash $60,000, Accounts Receivable: $25,000, Allowances of Uncollectible Accounts $4,500, Inventory: $15,000, consisting 500 units at $30 per unit. All accounts are in normal balance. The company has a credit term of 1/10, N/30, FOB: shipping point to their customers, at 2/10, N/30 FOB: shipping point to their vendors. It also has the policy of selling 1 1/2 times of their merchandise costs, and use FIFO for inventory flow. It is under perpetual inventory system. Please make journal entries for the following transactions and post them to the general ledger: (When calculating unit costs, ignore freight-in costs. For all returns, use FIFO also, unless specified.) (It maybe helpful to set up subsidiary ledgers.) For customers returns, please use each total sales/total units. For example: if the sale was $200,000 for 25,000 units, then it is $200,000/25,000=$8/unit. June 1 Purchased 2,000 units@$32 from Black Co. on account. June 2 Paid $500 for June 1 shipment June 5 Returned 250 units of June 1 shipment. June 8 Sold 600 units to Brown Co. on account June 9 Paid Black Co. June 10 Brown Co. returned 25 unitsof merchandise. June 11 Purchased 800 units @$34 from Black Co. on account. June 12 Paid $250 freight costs for June 11 shipment. June 14 Sold 900 units to Green Co. on account. June 15 One of the original customers, Grey Co. filed for bankruptcy. United wrote off their balance of $2,000. June 16 Returned 100 units to Black from June 11 shipment. June 18 Received payment from Brown Co. June 18 Received 50 units returned merchandise from Green Co. June 19 Purchased 1,000 units @$35 from Black co. on account. June 19 Paid freight of $500 for June 19 shipment. June 20 Paid Black Co. for June 11 shipment. June 21 Another original customer White Co. disappeared. United wrote off their balances of $3,000. June 23 Sold 600 units to Blue Co. June 24 Received payment from Greene Co. June 30 Put 6% of net sales into Allowance account. Make Journal Entries for the above transactions and post the to 4-column ledger accounts. After posting, prepare partial income Statement through Gross Profit, and show Net Realizable Accounts Receivable.
Paper#5954 | Written in 18-Jul-2015Price : $25