ACC 216 - Week 3

1. Classify the following items as (a) an addition to the bank balance, (b) a subtraction from the bank balance, (c) an addition to the book balance, or (d) a subtraction from the book balance:

_____ $20 in service charges

_____ A $300 check deposited that was returned NSF

_____ An outstanding check that you wrote for $2,000

_____ A deposit in transit of $5,500

_____ Bank Error: the bank credited your account for a deposit made by another customer

2. During 2011, Jimmy Enterprises completed the following transactions:
a. Sales revenue on account, $550,000.
b. Collections on account, $325,000
c. Write-offs of uncollectible, $13,000
d. Uncollectible account expense, 5% of sales revenue
Required:
1. Prepare the journal entries for the above transactions.
2. Suppose Robotics, Inc.’s inventory records for a particular item indicated the following transactions in September:

September 1 Beginning Inventory 6 units @ $29
September 10 Purchase 19 units @ $32
September 22 Purchase 12 units @ $30
September 27 Purchase 4 units @ $31

Required: The company sold 22 units on September 30. Compute the ending inventory and cost of goods sold using each of the following methods:

1. LIFO
2. FIFO
3. Average Cost