FINANCIAL ACCOUNTING ASSIGNMENT
You are required to work in this assignment individually. Any suspicious activities or cheating will result zero grade in this assignment.
1. Describe perpetual system and periodic system.
2. Describe the Four Methods of Inventory Valuation.
3. The trial balance before adjustment of XYZ Company reports the following balances:
Dr. Cr.
Accounts receivable $100,000
Allowance for doubtful accounts $ 2,500
Sales (all on credit) 750,000
Sales returns and allowances 40,000
Instructions
Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.
4. During June, the following changes in inventory item 29 took place:
June 1 Balance 1,400 units @ $24
14 Purchased 900 units @ $36
24 Purchased 700 units @ $30
8 Sold 400 units @ $50
10 Sold 1,000 units @ $40
29 Sold 500 units @ $44
Perpetual inventories are maintained in units only.
Instructions
What is the cost of the ending inventory for item 29 under the following methods? (Show calculations.)
(a) FIFO.
(b) Average Cost.
5. Calculate the Cost of Goods Sold under periodic method from the following information:
Sales 58450
Sales Return 395
Purchases 35975
Purchase Discount 3590
Beginning Inventory 18780
Gross Margin 25 % on Cost
Ending Inventory 4721
6. Sales and purchases of company XYZ for the year 2010 had been $1,400,000 and $980,000, respectively. The beginning inventory (Jan. 1, 2010) was $170,000; XYZ's gross profit is 40% of selling price.
Instructions
Compute the cost of ending inventory.