ACCT 301-Partial information follows about net sales

B-05.06 Partial information follows about net sales, net purchases, cost of goods sold, grossprofit, total expenses, and net income for Slabaugh Company. Compute the missingvalues. NET SALESSales $ 900,000 Sales discounts 20,000 Sales returns and allowances ? Net sales 735,000 NET PURCHASESPurchases $ Freight-in 350,00020,000 Purchase discounts ? Purchase returns and allowances 2,500 Net purchases 413,500 COST OF GOODS SOLDBeginning inventory $ Ending inventory 85,40074,500 Cost of goods sold ? GROSS PROFITGross profit ? TOTAL EXPENSESRent $ 36,000 Salaries 145,700 Utilities 12,300 Freight-outOtherTotal expensesNET INCOMENet income ?24,100242,200 ? Name:Date: B-05.06 Section: SalesLess: $Sales discountsSales returns and allowances Net sales $ 900,000 20,00045,000 65,000$ 835,000 B-06.03 Dine-Corp International publishes ratings and reviews of the world’s finestrestaurants. Following are facts you need to prepare Dine-Corp’s March bankreconciliation:Balance per company records at end of monthBank service charge for the monthNSF check returned with bank statementNote collected by the bank during the monthOutstanding checks at month endInterest on note collected during the monthBalance per bank at end of monthDeposit in transit at month end $ 72,644.1244.001,440.6645,000.0031,553.574,500.00144,223.997,989.04 Name:Date: B-06.03 Section: Ending balance per bankstatement $ 144,223.99 Add:Deposit in transit to bank 7,989.04 Deduct:Outstanding Checks (31,553.57) Correct cash balance $ 120,659.46 Ending balance per companyrecords $ 72,644.12 Add:Note collected by the bankInterest on note $ 45,000.004,500.00 49,500.00 Deduct:NSF check returnedBank service charge Correct cash balance 1,440.6644.00 (1,484.66) $ 120,659.46 B-07.11 Prepare journal entries for each of the following transactions:On December 1, 20X5, Musaka received a 10%, 1-year, notereceivable from Lambert. This note was issued in payment for a$24,000 outstanding account receivable.On December 31, 20X5, Musaka recorded an end-of-year adjustingentry to record accrued interest on the note receivable.On November 30, 20X6, Lambert paid Musaka the full amount due onthe note receivable. How would the November 30 entry differ if Lambert defaulted on the payment? Name:Date: B-07.11 Section: GENERAL JOURNALDate Accounts Dec. 1 To record issuance of 10%, 1-year note, inexchange for outstanding receivableDec. 31 To accrued interest on note ($24,000 X 10%X 1/12)Nov. 30 To record interest income (11 months) andcollection of note receivable and previouslyaccrued interest Debit Credit I-07.01 Rocks Shoes is a three-year old company that started out producing specialty shoes forrock climbing and mountaineering. The shoe’s unique styling has made them a hit withclimbing enthusiasts, and the company is now growing rapidly. Rocks needs additionalcapital to expand its manufacturing capacity, and it plans to sell additional shares of stockto raise money.During its first three years in operation, Rocks used the direct-write off method to accountfor uncollectible accounts. Information about sales, write-offs, and the company’s incomefollows:SalesYear 1 $ 2,400,000 Write-offs$ Net Income- $ 100,000 Year 2 6,300,000 24,000 300,000 Year 3 12,900,000 111,000 550,000 Rocks is required to have audited financial statements prior to offering its shares of stockfor sale. This will require the company to recompute its income under generally acceptedaccounting principles for each of the three prior years. The only item that requiresadjustment is the treatment of uncollectible accounts.Rocks estimates that 3% of sales ultimately prove to be uncollectible — 1% in the yearfollowing a sale, and 2% in the year thereafter. (a) Prepare the journal entries that were used by Rocks for each year under the directwrite-off method. (b) Determine if the actual write-offs are aligning with the estimates provided by Rocks.Why does GAAP require an allowance method for uncollectibles? (c) Prepare the journal entries that would have been made each year had thepercentage of sales technique been used to establish an allowance account. Be sureto include entries to both establish the allowance and record the write offs. (d) How much is the corrected net income for each year? Will the reduction in incomepotentially impact the amount of capital that can be raised? Name:Date: I-07.01 Section: (a) GENERAL JOURNALDate Accounts Year 1 No Entry Year 2 Uncollectible Accounts Expense Debit 24,000 Accounts Receivable Year 3 Uncollectible Accounts ExpenseAccounts Receivable (b) Credit 24,000 111,000111,000 Name:Date: I-07.01 Section: (c) GENERAL JOURNALDateYear 1 Year 2 Year 2 Year 3 Year 3 Accounts Debit Credit Name:Date: (d) Section: I-07.01 B-08.03 Elizabeth Egbert owns a galvanizing plant. Customers bring in their fabricated steelproducts (like light poles, towers, trailers, etc.), and Egbert dips them into a heated vat ofmolten zinc. The zinc bonds to the metal and produces a highly durable corrosion resistantproduct.Egbert’s primary inventory is molten zinc purchased from suppliers in large blocks of solidmaterial. These blocks are immersed in the heated vat and will melt together with the zincalready in the pool. Egbert generally keeps the vat relatively full, and it is never allowed tocool.Egbert started the year 20X8 with 500,000 pounds of zinc in the pool. During the yearEgbert purchased 2,800,000 pounds of zinc. At year’s end, the pool contained 520,000pounds of zinc. (a) How much zinc was used during 20X8? (b) Accountants frequently refer to “goods available for sale.” Is this concept the sameas ending inventory? How much zinc, in pounds, was “available for sale?” (c) If the beginning inventory cost $1.25 per pound, and purchases during 20X8 cost$1.50 per pound, how much is the “cost of goods available for sale”? (d) In preparing financial statements for 20X8, to what financial statement elements willthe amount you calculated in part (c) be allocated? (e) If Egbert uses FIFO, how much should be attributed to ending inventory and howmuch to cost of goods sold? (f) If Egbert uses LIFO, how much should be attributed to ending inventory and howmuch to cost of goods sold? (g) What will be the difference in profitability between choosing the FIFO and LIFOmethods? Does is seem reasonable the choice of accounting method can change thereported profit? Name:Date: (a) (b) (c) (d) (e) (f) Section: B-08.03 Name:Date: (g) Section: B-08.03

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