PRINCIPLES OF ACCOUNTING I ACC 211 (FA15)

PRINCIPLES OF ACCOUNTING IACC 211 (FA15)QUESTION 1 (10 POINTS)SCORE:Tripoint Merchandise CompanyGeneral JournalTripoint Merchandise Company uses the perpetual inventory system and had the following transactions during themonth of January:Jan4 Purchased merchandise inventory on account from Vincent Company, $11,520.Terms 3/10, n/30, FOB shipping point.6 Paid freight bill of $140 on January 4 purchase.8 Returned half the inventory purchased on January 4 from Vincent Company.11 Sold merchandise inventory to Gregory Corporation. $12,300, on account, terms 1/10, n/30.Cost of goods, $6,600. FOB destination.12 Paid freight bill of $250 on January 11 sale.13 Sold merchandise inventory to Carter Company, $11,800, on account, terms of 2/15,n/45.Cost of goods, $6,360. FOB shipping point.14 Paid the net amount owed on account for the purchase of January 4.16 Granted a $300 allowance to Gregory Corporation to compensate for minor defects in goods sold on January 11.17 Received return of merchandise from January 13 sale to Carter Company.Original sales price, $720. Cost of goods, $540.20 Received net amount due from Gregory Corporation on sale of January 11.30 Received net amount due from Carter Company on on sale of January 13.REQUIRED: Prepare the required journal entries that Tripoint Merchandise Company must make to recordthese transactions. Use the General Journal template to the right for your answers. Explanations are notrequired.DateJanAccounts4DebitsCreditsPRINCIPLES OF ACCOUNTING IACC 211 (FA15)SCOREQUESTION 2 (10 Points)TR Tire Company completed the following perpetual inventory transactions during the month of May:May 1May 11May 23May 26May 29Beginning invetntory 16 tires @ $65 eachpurchased10 tires @ $75 eachsold12 tires at $90 eachpurchased14 tires at $80 eachsold15 tires at $80 eachIn the partially completed schedules provided below, show :1. the cost of goods sold for each of the sales; and2. the value of the inventory on hand after each saleusing the FIFO method, the LIFO method and the weighted average methods for valuing inventory. For theweighted average method, also show the average cost per unit used to compute the cost of goods sold andthe inventory after the sale, rounded to the nearest penny (two decimal points). Thus your answer shouldshow for each inventory costing method, two cost of goods sold figures (one for each sale) and two inventoryvalues (one for after each sale). Use the schedules below for your answers. The cells for the required answersare shaded but you may use the other unshaded cells for interim figures if it will help in calculating youranswers. Please show only the total values, not the cost and quantities of the individual cost layers of theinventories or goods sold. The first answer has been computed to illustrate the form of answer required.A. FIFO Method:DatePurchased/Sold No. of Units Unit PriceTotalPrice1-May Inventory1665107575023-May Sold12901,08026-May Purchased14801,12029-May Sold1590InventoryValue1,04011-May PurchasedCost ofGoods Sold1,3507801,010B. LIFO Method:DatePurchased/Sold No. of Units Unit PriceTotalPrice1-May Inventory16651075129014801,12029-May Sold1590Cost ofGoods Sold1,08026-May PurchasedAverage Costper Unit75023-May SoldInventoryValue1,04011-May PurchasedCost ofGoods Sold1,350C. Weighted Average Method:DatePurchased/Sold No. of Units Unit PriceTotalPrice1-May Inventory16651,04011-May Purchased107575023-May Sold12901,08026-May Purchased14801,12029-May Sold15901,350InventoryValuePRINCIPLES OF ACCOUNTING IACC 211 (FA15)SCORE:QUESTION 3 (10 POINTS)A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current yearan aging analysis of accounts receivable revealed the following:AccountsReceivable$80,00060,00040,00010,000$ 190,000Account Age1 – 30 days31 – 60 days61 – 90 daysOver 90 daysTotalEstimatedUncollectible0.4%5.0%6.0%50.0%Required:A. Calculate the amount of the Allowance for Doubtful Accounts that should be reported on the current year-end balancesheet. Use the partially completed template below to show your calculations.B. Calculate the amount of the Bad Debts Expense that should be reported on the current year’s income statement,assuming that the Allowance for Doubtful Accounts had a credit balance of $1,600 on December 31 of the current year.C. Prepare the adjusting journal entry to record bad debts expense on December 31 of the current year.Use the templates and spaces below for your answers.A.Computation of Balance Required for Allowance for Doubtful Accounts:B.CreditsCurrent Year’s Bad Debt ExpenseC.EstimatedPercentageUncollectibleDebitsAccount Age1 – 30 days31 – 60 days61 – 90 daysOver 90 daysTotal estimated amount uncollectibleAccountsReceivableAmountAdjusting Journal Entry:31-DecEstimatedAmountUncollectiblePRINCIPLES OF ACCOUNTING IACC 211 (FA15)SCORE:QUESTION 4 (10 POINTS)The Fortune Company purchased a piece of equipment for its factory for the price of$875,000. The Company paid an additional $5,000 in transportation expenses totransport the equipment to its factory and an additional $20,000 to install the equipmentin its assembly line. The equipment was estimated to have a useful life of 5 years and asalvage value at the end of the 5 years of $90,000.REQUIRED: Complete the depreciation tables below to show the the annualdepreciation expense over the life of the equipment, the accumulated depreciation onthe equipment at the end of each year, and its book value at the end of each year, using:A. The straight-line method of depreciation; andB. The double-declining method of depreciation.A. Straight-line method:YearCost12345DepreciationExpenseAccumulatedDepreciationBook ValueAccumulatedDepreciationBook ValueB. Double-declining method:YearCost12345DepreciationExpensePRINCIPLES OF ACCOUNTING IACC 211 (FA15)SCOREEXTRA CREDIT (10 POINTS)The following information is available for the Martin Company for the month of March:a. On March 31, after all transactions have been recorded, the balance in the company’s Cash account has abalance of $16,745..b. The company’s bank statement shows a balance on March 31 of $29,652.c. Outstanding checks at March 31 include check #2748 in the amount of $2,975 and check #2753 in theamount of $5,167.d. Examination of the checks on the bank statement with the entries in the accounting records revealsthat check #2732 for the payment of an account payable was correctly written for $5,365, but wasrecorded in the accounting records as $5,635.e. A debit memo included with the bank statement shows a $750 NSF check from a customer, C.Trainum.f. A credit memo included with the bank statement indicates that the bank collected $10,000 on anoninterest-bearing note receivable for Martin. The bank deducted a $25 collection fee, and creditedthe remainder of $9,975 to Martin’s account.g. A deposit made late in the afternnoon of March 31 totaled $4,695, and did not appear on the bankstatement.h. Included with the bank statement was a debit memorandum in the amount of $35 for bank servicecharges. It has not been recorded on the company’s books.REQUIRED:1. Prepare the March bank reconciliation for the Roberts Company.2. Based on the bank reconciliation prepared for Requirement 1, prepare the general journal entries Robertsmust make at March 31.Use the templates below for your answers.ROBERTS COMPANYBank ReconciliationMarch 31Bank Statement BalanceAdd:Book BalanceAdd:Less:Less:Adjusted bank balance, October 31GENERAL JOURNALAccountsAdjusted book balance, October 31DebitsCredits