Prepare the table showing the balances presently reported for Inventory and Cost of Goods Sold, and then displaying the adjustment(s) needed to correctly account for each of items (a)-(d), and finally determining the appropriate Inventory and Cost of Goods Sold balances. (Enter any decreases to account balances with a minus sign.)
E7-3 Recording Journal Entries to Correct Inventory Misreporting [LO 7-1, LO 7-2, LO 7-4]Seemore Lens Company (SLC) manufactures and sells contact lenses. For the year ended December 31, the company reported Inventory of $78,000 and Cost of Goods Sold of $436,000. |
| a. | Included in Inventory (and Accounts Payable) are $11,600 of lenses held on consignment. | | b. | Included in the Inventory balance are $5,800 of office supplies held in SLC’s warehouse. | | c. | Excluded from the Inventory balance are $8,800 of lenses in the warehouse, ready to send to customers on January 1. SLC reported these lenses as sold on December 31, at a price of $16,600. | | d. | Included in the Inventory balance are $3,400 of lenses that were damaged in December and will be scrapped in January, with no recoverable value. |
| Required: | For each item, (a–d), prepare the journal entry to correct the balances presently reported. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) |
E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 330 units. |
| Date | Units | Unit Cost | Total Cost | | Beginning Inventory | January 1 | | 180 | | $ | 75 | | $ | 13,500 | | | Purchase | January 15 | | 420 | | | 85 | | | 35,700 | | | Purchase | January 24 | | 320 | | | 105 | | | 33,600 | |
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| 1. | Calculate the number and cost of goods available for sale. |
| 2. | Calculate the number of units in ending inventory. |
| 3. | Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.
chapter 8
M8-8 Estimating Bad Debts Using the Aging Method [LO 8-2]Assume that Simple Co. had credit sales of $256,000 and cost of goods sold of $156,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,600. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $310. |
What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
M8-11 Recording Note Receivable Transactions [LO 8-3] Nova Corporation hired a new product manager and agreed to provide her a $26,000 relocation loan on a six-month, 5 percent note. |
| a. | The company loans the money on January 1. | | b. | The new employee pays Nova the interest owed on the maturity date. | | c. | The new employee pays Nova the full principal owed on the maturity date. |
Prepare journal entries to record the above transactions for Nova Corporation. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) |
M8-13 Reporting Accounts and Notes Receivable in a Classified Balance Sheet [LO 8-2, LO 8-3] Terracotta, Inc. reported the following accounts and amounts (in millions) in its financial statements for the year ended November 30, 2013. |
| | Accounts Payable | $ | 730 | | | Accounts Receivable | | 630 | | | Accumulated Amortization | | 460 | | | Accumulated Depreciation | | 800 | | | Allowance for Doubtful Accounts | | 20 | | | Cash and Cash Equivalents | | 840 | | | Equipment | | 5,055 | | | Income Taxes Payable | | 20 | | | Notes Payable (long-term) | | 1,600 | | | Notes Payable (short-term) | | 20 | | | Notes Receivable (long-term) | | 220 | | | Prepaid Rent | | 280 | | | Retained Earnings | | 7,030 | | | Service Revenue | | 460 | | | Short-term Investments | | 2,440 | | | Software | | 615 | | | Unearned Revenue | | 790 | |
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Prepare the current assets section of its balance sheet. The Allowance for Doubtful Accounts relates entirely to Accounts Receivable. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) |
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Solution: post acc111 unit 6 chapter 7 and 8 assignment latest 2015 november