Question

n gomerni ng CSE-Accounting 1-Fall19 InitialsTV Exam 2-(Chs. 5-6) Problems: There are 3 problems, Please complete all three: these are worth 10 Points each in order to receive full credit you must answer all parts of the question and show all of your work (A) The bank statement for Cole Co. indicates a balance of $3012.00 on May 31, 2007. After the ourmals for May had been posted, the cash account had a balance of $3,165.00. (1) Prepare a bank reconciliation for Cole Co. for May 31, 2007on the basis of the reconciling items below. (2) State which items would require adjusting journal entries on the Companies books. (a) The bank statement balance is $3,012 (b) The cash account balance is $3,165. Outstanding checks amounted to $590. (d Deposits in transit (not recorded on bank statement) are $704. The bank service charge is $30. (e). A check for $76 for supplies was recorded as $67 in the ledger. Y (B) Beginning inventory, and purchases data for tennis rackets are as follows: Feb 3 $15 $17 $20 12 units 13 units 9 units Inventory Purchase 11 21 Purchase nry There are 15 units left in ending inventory at December 31. Assuming the business maintains a periodic inventory system, calculate the cost of merchandise sold and ending inventory under the following assumptions: a. First-in, first-out b. Last-in, first-out Average Cost (C) The accounts receivable aging report reveals the following for CSE Student Company: Balance Percent Age Interval Uncollectible Not past due 1-30 $2,000 3,200 1,800 2,200 2% 31-60 15 61-90 25 91-180 900 40 Over 180 65 1,050 1. Estimate what the Allowance for Doubtful Accounts should be at year end using the Allowance Method

Answer 1

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As per HOMEWORKLIB POLICY I have solved first four questions. Thanks!

Cole Co.
Bank reconciliation as on May 31, 2007.
	Amount $	Remarks
Balance as per books	3,165.00
Add:
Outstanding checks not cleared by bank	590.00
Total	3,755.00
Less:
Deposits in transit	704.00
Service charged deducted by bank but not recorded in books	30.00	This requires adjusting journal entry in companies books.
Check recorded incorrectly (76-67)	9.00	This requires adjusting journal entry in companies books.
Balance as per bank	3,012.00

Tennis Rackets
Periodic FIFO
Date	Cost of Goods available for sale			Cost of Goods sold			Inventory Balance
	No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
3-Feb	12.00	15.00	180.00	12.00	15.00	180.00	-	15.00	-
11-Feb	13.00	17.00	221.00	7.00	17.00	119.00	6.00	17.00	102.00
21-Feb	9.00	20.00	180.00			-	9.00	20.00	180.00
Total	34.00		581.00	19.00		299.00	15.00		282.00
So ending Inventory Balance as per FIFO is $ 282.
So Cost of Goods sold as per FIFO is $ 299.
Periodic LIFO
Date	Cost of Goods available for sale			Cost of Goods sold			Inventory Balance
	No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
3-Feb	12.00	15.00	180.00			-	12.00	15.00	180.00
11-Feb	13.00	17.00	221.00	10.00	17.00	170.00	3.00	17.00	51.00
21-Feb	9.00	20.00	180.00	9.00	20.00	180.00	-	20.00	-
Total	34.00		581.00	19.00		350.00	15.00		231.00
So ending Inventory Balance as per LIFO is $ 231.
So Cost of Goods sold as per LIFO is $ 350.

Periodic Average Cost
Date	No. of Units	Cost per unit	Amount
3-Feb	12.00	15.00	180.00
11-Feb	13.00	17.00	221.00
21-Feb	9.00	20.00	180.00
Total	34.00		581.00
Average Cost per unit		17.09		This is Total cost/ Total Units
Units sold	19.00		324.68	This is 19 units * $ 17.09.
Ending Inventory	15.00		256.32	This is 15 units * $ 17.09.
So ending Inventory Balance as per Average Cost is $ 256.32.
So Cost of Goods sold as per Average Cost is $ 324.68.

CSE Student Company
Allowance for Doubtful Accounts that should be at year end:
	F	G	H=F*G
Age Group	Amount $	Uncollectible %	Allowance for Doubtful Accounts
Not Past due	2,000.00	2%	40.00
1-30 Days	3,200.00	5%	160.00
31-60 Days	1,800.00	15%	270.00
61-90 Days	2,200.00	25%	550.00
91-180 Days	900.00	40%	360.00
Over 180 days	1,050.00	65%	682.50
	11,150.00		2,062.50
Allowance for Doubtful Accounts should be at the year end is $ 2,062.50.
Effect on financial statements
Balance Sheet
Assets	Amount $	Amount $
Current Assets
Accounts Receivable	11,150.00
Allowance for Doubtful Accounts	2,062.50
Accounts Receivable, Net of Allowance		9,087.50
Journal Entry on July 8
Account	Debit ($)	Credit ($)
Allowance for Doubtful Accounts	3,500.00
Accounts Receivable		3,500.00
(being Accounts Receivable of Hahn Inc. is uncollectible and written off)
Journal Entry on Oct 20
Account	Debit ($)	Credit ($)
Accounts Receivable	3,500.00
Allowance for Doubtful Accounts		3,500.00
(being Accounts Receivable of Hahn Inc. previously written off as uncollectible now recovered in full)