Assignment
I. Record the entry to adjust allowance for uncollectible accounts at the year-endHazelton Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2016 with $93,300 in inventory of its only product. The beginning inventory consisted of the following layers:
5,100 units at $7 per unit $ 35,700
7,200 units at $8 per unit 57,600
Total $ 93,300
During 2016, 7,100 units were purchased at $9 per unit and during 2017, 9,200 units were purchased at $10 per unit. Sales, in units, were 9,200 and 16,400 during 2016 and 2017, respectively.
Required:
1. Calculate cost of goods sold for 2016 and 2017.
2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for 2016 and 2017.
Is the LIFO liquidation a profit or loss for 2016 and 2017? This is also part of the question
II. A summary of Klugman Company's December 31, 2016, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:
|
Age Group
|
Amount
|
%
|
|
0-60 days
|
$63,000
|
.5
|
|
61-90 days
|
23,500
|
1.0
|
|
91-120 days
|
3,300
|
10.0
|
|
Over 120 days
|
1,000
|
50.0
|
The allowance for uncollectible accounts had a balance of $1,430 on January 1, 2016. During the year, bad debts of $780 were written off.
Required:
Prepare all journal entries for 2016 with respect to bad debts and the allowance for uncollectible accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Part 1
• Record the entry to write-off specific accounts
Part 2
Record the entry to adjust allowance for uncollectible accounts at the year-end.