BMGT220 Week 4 homework solutions
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Compute the ending inventory using the perpetual weighted average method below. These are the same transactions used in week 3 homework:
units price
1-Jan Beginning inventory 3,500 $ 3.00
14-Jan Bought 1,500 $ 3.15
5-Feb Sold 1,000
22-Feb Bought 2,000 $ 3.20
7-Mar Sold 1,500
15-Mar Sold 2,000
5-Apr Bought 1,000 $ 3.25
10-Apr Sold 800
12-Apr Sold 800
22-Apr Sold 500
4-May Sold 600
10-May Bought 2,000 $ 3.30
25-May Sold 500
Problem 2
Complete journal entries for the following transactions:
1. Sales for the month of June, 2014 were $75,000. Using a percentage allowance method of 1% record the allowance.
2. On June 30, it was determined that two customers with receivables totaling $980 were not likely to pay
3. On July 15, surprisingly one of the customers who owed $400 and was written off on June 30, paid their bill
4. On July 30, our fiscal year ends, the allowance for doubtful accounts has a balance of $1,780
The company uses an aging method to calculate the desired allowance balance.
An accounts receivable aging shows the following:
30 days or less = $68,500
31 -60 days = $10,400
61-90 days = $4,300
Over 90 days = $1,200
The company wants an ending reserve equal to:
30 days or less = 1%
31-60 days = 3%
61-90 days = 5%
over 90 days = 15%
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