ACC 201 week 2 assignment 1

ACC 201 week 2 assignment 1

3 - 22 Identifying product and period cost

Indicate whether each of the following costs is a product cost or a period (selling and administrative) cost.

1. Advertising expense.
2. Insurance on vans used to deliver goods to customers.
3. Salaries of sales supervisors.
4. Monthly maintenance expense for a copier.
5. Good purchased for resale.
6. Cleaning supplies for the office.
7. Freight on goods purchased for resale.
8. Salary of the marketing director.
9. Freight on goods sold to customer with terms FOB destination.
10. Utilities expense incurred for office building.

3 – 25 Comprehensive cycle problem: perpetual system

At the beginning of 2012, the jeater company had that following balances in its accounts:

Cash $ 4,300 Inventory 9,000 Common stock 10,000 Retained earnings 3,300

1. Purchased inventory that cost $2,200 on account from Blue Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $110 were paid in cash.
2. Returned $200 of the inventory that it had purchase because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.
3. Paid the amount due on its account payable to Blue Company within the cash discount period.
4. Sold inventory that had cost $3,000 for $5,500 on account, under terms 2/10, n/45.
5. Received merchandise returned from a customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. The customer was paid $710 cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $60 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.

Required

1. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
2. Record each event in a statement model