Problem 1: Given below are account balances for Charlie Company:
Gross sales, $98,000
Sales returns and allowances, $8,000
Selling expenses, $12,000
Cost of goods sold, $54,000
Interest expense, $3,000
Required: How much is the gross profit margin?
Problem 2: Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts Receivable and crediting Sales for $2,000. If payment occurs on January 21, the journal entry would include a credit to:
Accounts Receivable for $1,960
Sales Discounts for $40
Accounts Receivable for $2,000
Cash for $1,960
Problem 3: Annapolis Company's bank statement indicated an ending cash balance of $8,740. Alpha's accountant discovered that outstanding checks amounted to $865 and deposits in transit were $520. Additionally, the bank statement showed service charges of $25. What is the correct adjusted ending cash balance?
Problem 4: Baltimore Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of:
|
Dollar Value
|
Age of Account
|
Estimated Collectible
|
|
$190,000
|
< 30 days old
|
99%
|
|
65,000
|
30 to 60 days old
|
91%
|
|
30,000
|
61 to 120 days old
|
72%
|
|
8,000
|
> 120 days old
|
10%
|
The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted balance of zero. After the adjusting entry is made, what will be the dollar balances in the Allowance for Doubtful Accounts? Round to nearest whole dollar.
Problem 5: Dorchester Company had the following balances at the end of 2018 and 2019 respectively:
Net Credit Sales - $1,000,000 for 2018 and $1,052,000 for 2019.
Accounts Receivable - $88,000 for 2018 and $103,000 for 2019.
Allowance for Doubtful Accounts - $4,000 for 2018 and 7,500 for 2019
Required: Calculate the accounts receivable turnover ratio to one decimal place.
Problem 6: Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019:
|
Date
|
Activity
|
Quantity
|
Unit Price
|
|
05-Jan
|
Beginning Inventory
|
150
|
$10
|
|
05-May
|
Purchase
|
210
|
$12
|
|
May-15
|
Purchase
|
290
|
$14
|
|
May-25
|
Purchase
|
280
|
$16
|
Required: Sales were 440 units at $20. Using the FIFO method, determine the dollar value of Cost of Goods Sold for the month of May.
Problem 7: Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019:
|
Date
|
Activity
|
Quantity
|
Unit Price
|
|
05-Jan
|
Beginning Inventory
|
150
|
$10
|
|
05-May
|
Purchase
|
200
|
$12
|
|
May-15
|
Purchase
|
210
|
$14
|
|
May-25
|
Purchase
|
225
|
$16
|
Required: Sales were 570 units at $20. Using the LIFO method, determine the dollar value of Cost of Goods Sold for the month of May.
Problem 8: Easton Company had average inventory for the year of $640,000 and an inventory turnover ratio of 11.1. What was the company's Days Outstanding in Inventory? Assume a 365 day year. Round to one decimal place.
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