Problem 1:
On May 12, 2011, Falwell Computing sold computers to Computing Plus for $10,000, subject to terms 3/10, n/30. Falwell uses the net method of accounting for sales discounts.
Required:
a. Prepare the journal entry to record the sale.
b. Prepare the journal entry to record receipt of the payment, assuming the correct amount was received on May 20, 2011.
c. Prepare the journal entry to record receipt of the payment, assuming the correct amount was received on June 5, 2011.
Problem 2:
Jones's inventory record for Product X reported the following:
Units Unit Cost
January 1, 2011 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2011 2,600 $20.00
January 25, 2011 2,400 $21.00
February 16, 2011 1,000 $22.00
March 15, 2011 1,800 $23.00
A physical inventory on March 31, 2011, shows 2,500 units on hand.
Required: Determine the cost of goods sold and ending inventory at March 31, 2011, under each of the following inventory methods assuming that Jones uses the periodic method:
(a) FIFO.
(b) LIFO.