Question

Question 4 On September 1, 2019, Blue Company Ltd. loaned $12,000 on a one year (due September 1, 2020), 6% note to BCM Corp. Blue Company's year end is December 31. Required Using the template below, prepare the journal entries for Blue Company to recognize the note, interest accrual and payment of the note from BCM Corp. Explanations are not required. DATE ACCOUNT DEBIT CREDIT Focus

Answer 1

Answer to Question 4)

In the books of Blue Company Ltd.

Date	Particulars	Amount($)	Amount($)
Sept1,2019	BCM Corp. 6% Note	12,000
	To, Bank		12,000
Dec31,2019	Interest on Loan Receivable	240
	To, Interest [$12,000x 4/12x 6%]		240
Dec 31,2019	Interest A/c Dr	240
	To, P&L		240
Sept1 ,2020	Interest on Loan Receivable	480
	To, Interest [$12,000x 8/12x 6%]		480
Sept1 ,2020	Bank A/c	12,720
	To,Interest on Loan Receivable		720
	To, BCM Corp. 6% Note		12,000

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Answer to Question 5)

Particulars	Amount($)
Opening Inventory	525,000
Add: Purchases	375,000
Less: Closing Stock	(630,000)
Cost of goods sold	270,000

Periodic Inventory System:

Date	Particulars	Debit($)	Credit($)
Dec 2019	Purchase A/c	3,75,000
	To, Accounts Payable		3,75,000
Dec 2019	Account Receivable A/C	6,23,000
	To, Sales		6,23,000
Dec 2019	Inventory A/c(Closing)	6,30,000
	Cost of goods sold (bal fig)	2,70,000
	To, Inventory (Opening)		5,25,000
	To, Purchases		3,75,000

Perpetual Inventory System:

Date	Particulars	Debit($)	Credit($)
Dec 2019	Inventory A/c	3,75,000
	To, Accounts Payable		3,75,000
Dec 2019	Account Receivable A/C	6,23,000
	To, Sales		6,23,000
Dec 2019	Cost of goods sold	2,70,000
	To, Inventory		5,25,000

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Answer to Question :6)

FIFO Method:

Purchase Sheet
Date	Particulars	Units	Unit Cost($)	Total Cost
01-Jan	Opening Inventory	30	120	3600
28-Feb	Purchases	35	125	4375
31-Jul	Purchases	45	130	5850
31-Oct	Purchases	40	135	5400
	Total	150		19225

FIFO Inventory (150 units- 90 units)
Date	Units	Unit Cost($)	Total Cost
31-Oct	40	135	5400
31-Jul	20	130	2600
	160		8000

Cost of goods sold under FIFO = Opening+ Purcahses - Closing Stock = $19,225 - $8,000 = $11,225

Weighted Average Method:

Purchase Sheet
Date	Particulars	Units	Unit Cost($)	Total Cost
01-Jan	Opening Inventory	30	120	3600
28-Feb	Purchases	35	125	4375
31-Jul	Purchases	45	130	5850
31-Oct	Purchases	40	135	5400
	Total	150	128.167	19225

Cost of goods sold = 90 units *128.167 = $11,535

Closing Stock = 60 units * 128.167 = $ 7690

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