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Q1) Recording Journal Entries for Net Sales with...

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Q1) Recording Journal Entries for Net Sales with Credit Sales and Sales Discounts The following transactions were selected from the records of Evergreen Company: ? July 12Sold merchandise to Wally Butler, who paid for the $1,000 purchase with cash. The goods cost Evergreen Company $600. ? July 15 Sold merchandise to Claudio?s Chair Company at a selling price of $5,000 on terms 3/10, n/30. The goods cost Evergreen Company $3,500. ? July 20 Sold merchandise to Otto?s Ottomans at a selling price of $3,000 on terms 3/10, n/30.The goods cost Evergreen Company $1,900. ? July 23Collected payment from Claudio?s Chair Company from the July 15 sale. ? July 25 Collected payment from Otto?s Ottomans from the July 20 sale. Required: Assume Evergreen Company uses a perpetual inventory system and that sales discounts are reported as a contra-revenue. 1. Prepare journal entries to record the transactions. 2. Using the information in compute net sales for the two months ended August 31. Date Description Debit in $ Credit in $ Q2) (a) Ebert Electronics distributes consumer electronics. One product has been selected for use in this case. Assume the completion of the following summarized transactions during the month of March 2008 inthe order given. All transactions involved cash. Units Unit Cost Beginning inventory (March 1) 11 $200 New inventory purchases (March 15) 5 208 Sales (March 19) (selling price, $420) 12 ? New inventory purchases (March 21) 9 220 Compute the following amounts using the FIFO and LIFOmethodsapplied on a perpetual basis Answer:- FIFO Perpetual Calculation Date Purchases Sales COGS Balance Qty Unit price Value Qty Unit price Value Avg. price Value Qty Avg. price Value LIFO Perpetual Calculation Date Purchases Sales COGS Balance Qty Unit price Value Qty Unit price Value Avg. price Value Qty Avg. price Value (b)Which method of Inventory Valuation do you recommend and why? Q3) Kat Bardash, a student at a small state college, has just received her first checking account statement forthe month ended September 30. This is her first chance to attempt bank reconciliation. The bank?sstatement of account shows the following information: Bank balance, September 1 $1,150 Deposits during September 650 Checks cleared during September 900 Bank service charge 25 Interest earned 5 Bank balance, September 30 880 Kat is surprised that her bank has not yet reported the $50 deposit that she made onSeptember 29 and pleased that her $200 rent check has not yet cleared her account. Her September 30 checkbook balance is $750. Required: 1. Complete Kat?s bank reconciliation. What adjustments, if any, does she need to make in her checkbook? 2. Why is it important for individuals and businesses to prepare bank reconciliation each month? Answer:-

 

Paper#8141 | Written in 18-Jul-2015

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