P7-1.

  
(Determine Proper Cash Balance)
2
Francis Equipment Co. closes its books regularly on December 31, but at the end of 2014 it held its cash book open

1.   January cash receipts recorded in the December cash book totaled $45,6

2.   January cash disbursements recorded in the December check register liq

3.   The ledger has not been closed for 2014.

4.   The amount shown as inventory was determined by physical count on D

The company uses the periodic method of inventory.
Instructions
(a)   Prepare any entries you consider necessary to correct Francis's accounts at December 31.
(b)   To what extent was Francis Equipment Co. able to show a more favorable balance sheet at December 31
Dr. Cr.
Cash $39,000
Accounts r 42,000
Inventory 67,000
Accounts payable $45,000
Other current liabiliti 14,200
014 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disburseme

ember cash book totaled $45,640, of which $28,000 represents cash sales, and $17,640 represents collections on account for which cash d

he December check register liquidated accounts payable of $22,450 on which discounts of $250 were taken.

rmined by physical count on December 31, 2014.

t December 31.
balance sheet at December 31 by holding its cash book open? (Compute working capital and the current ratio.) Assume that the balance s
 Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below

ns on account for which cash discounts of $360 were given.

o.) Assume that the balance sheet that was prepared by the company showed the following amounts:
The information is given below.
The following are a series of unrelated situations.

1.  

2.  

3.  

4.  

5.  

Instructions
Answer the questions relating to each of the five independent situations as requested.
wing are a series of unrelated situations.

Halen Company's unadjusted trial balance at December 31, 2014, included the following accounts.

Allowance for doubtful accounts

Net sales
Halen Company estimates its bad debt expense to be 1½% of net sales. Determine its bad debt expense for 2014.

An analysis and aging of Stuart Corp. accounts receivable at December 31, 2014, disclosed the following.
Amounts estimated to be uncollectible
Accounts receivable
Allowance for doubtful accounts (per books)
What is the net realizable value of Stuart's receivables at December 31, 2014?

Shore Co. provides for doubtful accounts based on 3% of credit sales. The following data are available for 2014.
Credit sales during 2014
Allowance for doubtful accounts 1/1/14
Collection of accounts written off in prior years (customer credit was reestablished)
Customer accounts written off as uncollectible during 2014
What is the balance in Allowance for Doubtful Accounts at December 31, 2014?

At the end of its first year of operations, December 31, 2014, Darden Inc. reported the following information.
Accounts receivable, net of allowance for doubtful accounts
Customer accounts written off as uncollectible during 2014
Bad debt expense for 2014
What should be the balance in accounts receivable at December 31, 2014, before subtracting the allowance for doubtful acco

The following accounts were taken from Bullock Inc.'s trial balance at December 31, 2014.

Net credit sales

Allowance for doubtful accounts
Accounts receivable
If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2014.

he questions relating to each of the five independent situations as requested.

Debit Credit
$4,000
$1,200,000
$18,000

$180,000
1,750,000
125,000
$1,570,000

$2,400,000
17,000
8,000
30,000
$67,000

$950,000
24,000
84,000
$1,010,000

Debit Credit
$750,000
$14,000
310,000
$23,300
P8-4.  
(Compute FIFO, LIFO, and Average-Cost)
2
5
Hull Company's record of transactions concerning part X for the month of April was as follows.
Purchases Sales
April  1 (balance o 100 @ $5.00 April  5 300
4 400 @  5.10 12 200
11 300 @  5.30 27 800
18 200 @  5.35 28 150
26 600 @  5.60
30 200 @  5.80
Instructions
(a)   Compute the inventory at April 30 on each of the followin

1.   First-in, first-out (FIFO).

2.   Last-in, first-out (LIFO).

3.   Average-cost.
(b)   If the perpetual inventory record is kept in dollars, and co
 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent.

rst-out (FIFO).

st-out (LIFO).

d is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory in (1), (2),
t costs to the nearest cent.

as ending inventory in (1), (2), and (3) above? (Carry average unit costs to four decimal places.)