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Problem 1

DATA:

Beginning
Inventory
1st Purchase
nd
2 Purchase
3rd Purchase
UNITS
AVAILABLE
Ending
Inventory
Units Sold

$0

$0

125
275

@
@

$60
$70

=
=

$7,500
$19,250

500

$100

$50,000

900
225
675

76,750

1. Specific Identification
SOLD-> 100 from 1st purchase, SOLD-> 200 from 2nd. SOLD 375 from the 3rd purchase
A. Create the entry to record Cost of Sales under Specific Identification:
DEBIT
Cost of Goods Sold

CREDIT

$57,500
Inventory

$57,500

B. What is the value of Ending Inventory under Specific Identification:

Ending inventory

value under
$19,250.00

specific

identification

2. FIFO
A. Create the entry to record Cost of Sales under FIFO
DEBIT
Cost of Goods Sold

CREDIT

$54,250.00
Inventory

$54,250.00

B. What is the value of Ending Inventory under FIFO:

Ending inventory value under FIFO = $22,500

3. LIFO
A. Create the entry to record Cost of Sales under LIFO
DEBIT
Cost of Goods Sold

CREDIT

$62,250
Inventory

$62,250

B. What is the value of Ending Inventory under LIFO:

Ending inventory value under LIFO = $14,500

4. Weighted Average
A. Create the entry to record Cost of Sales under Weighted Average
DEBIT
Cost of Goods Sold

$57,564
Inventory

$57,564.00

B. What is the value of Ending Inventory under Weighted Average:


Ending inventory value umder Weighted Average= $19,188

Problem 2

CREDIT

GROSS PROFIT METHOD estimating Ending Inventory


Data:
Beginning inventory
Purchases

$ 50,000
$ 25,000

Sales
$ 200,000
Assume the Company has a Gross Profit Percentage of 25%
In the schedule show the detail on how Ending Inventory is calculated:

Gross Profit of 25 % = $200,000.00 x .25 = $50,000.00

Cost of Goods Available


($50,000 + $25,000)

Cost of Goods Sold


(200,000.00 - $50,000.00)

$75,000.00

$125,000.00

Ending Inventory
(75,000 - $125,000.00)
Estimated Cost of Ending Inventory

Problem 3

Create the bank reconciliation for MY COMPANY INC.

($50,000.00)
75,000

Swindle Bank Incorporation


Bank Statement

December 31st
Opening Balance
Disbursements

Date
12/1/2008
12/2/2008
12/3/2008
12/4/2008
12/5/2008
12/6/2008
12/7/2008
12/8/2008
12/9/2008
12/10/2008
12/11/2008
12/12/2008
12/13/2008
12/14/2008
12/15/2008
12/16/2008
12/17/2008
12/18/2008
12/19/2008
12/20/2008
12/21/2008

CK #

Amount
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120

$
$
$
$
$
$
$
$
$
$
$
$
$

123.00
125.46
127.97
130.53
133.14
135.80
138.52
141.29
144.11
147.00
149.94
152.94
155.99

$
$
$
$
$
$
$
$

159.11
162.30
165.54
168.85
172.23
175.67
179.19
182.77

25,000.00

Total

$ (3,171.35)

Deposits

12/1/2008
12/2/2008
12/3/2008

12/4/2008
12/5/2008
12/6/2008
12/7/2008
12/8/2008
12/9/2008
12/10/2008
12/11/2008
12/22/2008
12/23/2008
12/24/2008
12/25/2008

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

555.00
666.00
777.00
111.00
222.00
333.00
444.00
555.00
666.00
777.00
888.00
999.00
111.00
222.00
333.00

Total

$ 7,659.00

Other:
Service Charges
Interest

Net

$
$

(222.00)
555.00
$

333.00

Total Monthly Activity

4,820.65

Balance per Bank December 31st

29,820.65

MY COMPANY INC.
Check Book

Opening Balance

Date
12/1/2008
12/2/2008
12/3/2008
12/4/2008
12/5/2008
12/6/2008
12/7/2008
12/8/2008
12/9/2008
12/10/2008
12/11/2008
12/12/2008
12/13/2008
12/14/2008
12/15/2008
12/16/2008
12/17/2008
12/18/2008
12/19/2008
12/20/2008
12/21/2008
12/22/2008
12/23/2008
12/24/2008
12/25/2008
12/26/2008
12/27/2008
12/28/2008
12/29/2008

CK #

Amount

100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128

$
$
$
$
$
$
$
$
$
$
$
$
$

123.00
125.46
127.97
130.53
133.14
135.80
138.52
141.29
144.11
147.00
149.94
152.94
155.99

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

159.11
162.30
165.54
168.85
172.23
175.67
179.19
182.77
186.43
190.16
193.96
197.84
201.79
205.83
209.95
214.15

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

Deposit
555.00
666.00
777.00
111.00
222.00
333.00
444.00
555.00
666.00
777.00
888.00
999.00
333.00
444.00
111.00
222.00
333.00
444.00
555.00
666.00
777.00
999.00
111.00
222.00
333.00
444.00
666.00
777.00
555.00

25,000.00

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

25,432.00
25,972.54
26,621.57
26,602.04
26,690.90
26,888.10
27,193.58
27,607.29
28,129.18
28,759.18
29,497.25
30,343.31
30,520.32
30,805.21
30,753.91
30,810.37
30,974.52
31,246.29
31,625.61
32,112.42
32,706.65
33,519.23
33,440.07
33,468.11
33,603.27
33,845.48
34,305.65
34,872.70
35,213.56

12/30/2008

129 $

218.43 $

888.00

35,883.13

MY COMPANY INC.
Bank Reconciliation
Balance per the Books:
Add/ (Deduct): Deposits In transit
Date
12/13/2008
12/14/2008
12/18/2008
12/19/2008
12/20/2008
12/21/2008
12/22/2008
12/23/2008
12/24/2008
12/25/2008
12/26/2008
12/27/2008
12/28/2008
12/29/2008
12/30/2008
TOTAL

Add: Checks Outstanding


DATE
CHECK #
12/22/2008

$35,883.13

Amount
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

333.00
444.00
444.00
555.00
666.00
777.00
999.00
111.00
222.00
333.00
444.00
666.00
777.00
555.00
888.00
MINUS

AMOUNT
121 $

186.43

8,214.00

12/23/2008
12/24/2008
12/25/2008
12/26/2008
12/27/2008
12/28/2008
12/29/2008
12/30/2008

122
123
124
125
126
127
128
129

190.16

193.96

197.84

201.79

205.83

209.95

214.15

218.43

TOTAL

PLUS

1,818.54

Other Items
Service Charges
Interest

TOTAL
BALANCE PER THE BANK

$
$

(222.00)
555.00

$333.00

PLUS

29,820.67 OFF 2 cent!

Problem 4

Create the Journal Entry for the reconciliation above

Miscellaeous Expense

$222.00
$222.00

Cash
To record bank service chgs 12/08

Cash

$555.00
$555.00

Interest Revenue
To record interest paid by bank

Miscellaeous Expense

Cash
To offset adding error 12/08 bank statement

Problem 5

0.02
$

Create the Entry for the following Petty Cash Slips.

Ticket 1
Date: 3/1/09
Paid to Charlie
For Travel

Amount $1,234.00

Approved: Me

Ticket 2
Date: 3/2/09
Paid to Frank
For Travel

Amount $ 330.00

Approved: Me

0.02

Ticket 3
Date: 3/11/09
Paid to Tom
For Office
Supplies

Amount $999.00

Ticket 5
Date: 3/21/09
Paid to Tim
For desk

Amount $699.00

Ticket 7
Date: 3/23/09
Paid to Lilly
For paper

Amount $299.00

Ticket 9
Date: 3/25/09
Paid to you
Replenish
petty cash

Amount - $2,000.00

Ticket 11
Date: 3/27/09
Paid to David
For: Travel

Amount $330.00

Ticket 14
Date: 3/29/09

Amount $110.00

Approved: Me

Approved: Me

Approved: Me

Approved: Me

Approved: Me

Ticket 4
Date: 3/20/09
Paid to Linda
For Lunch

Amount $ 177.00

Ticket 6
Date: 3/22/09
Paid to you
Replenish
petty cash

Amount $ -4,900.00

Ticket 8
Date: 3/24/09
Paid to you
For: snow
removal

Amount $ 880.00

Ticket 10
Date: 3/26/09
Paid Dick
For: Coffee
supplies

Amount $ 80.00

Ticket 12
Date: 3/28/09
Paid Sam
For: Supplies

Amount $ 10.00

Ticket 15
Date: 3/30/09

Amount $ 227.00

Approved: Me

Approved: Me

Approved: Me

Approved: Me

Approved: Me

Paid to Cindy
For: desk pad

Approved: Me

Paid Sam
For: window
washer

Approved: Me

Petty Cash Entries


Date

Description
3/1/2009 Travel

Ticket

Debit
$ 1,234.00

3/1/2009 Cash
3/2/2009 Travel

330.00

999.00

177.00

699.00

699.00

3/21/2009 Cash
3/22/2009 Cash

177.00

3/20/2009 Cash
3/21/2009 Desk Expense

1,234.00

999.00

3/11/2009 Cash
3/20/2009 Lunch Expense

$
330.00

3/2/2009 Cash
3/11/2009 Office Supplies

Credit

$ 4,900.00

3/23/2009 Paper Expense

299.00

3/23/2009 Cash
3/24/2009 Snow Removal Expense

299.00

8.80

8.80

3/24/2009 Cash
3/25/2009 Cash

$ 2,000.00

0 $

3/1/2009 BEGINNING BALANCE UNKNOWN?

3/22/2009

To petty cash acct

4,900.00

3/25/2009

To petty cash acct

2,000.00

3/31/2009 Travel Expense

(ticket 1,2 & 11)

$ 1,894.00

(ticket 3,7,12,14 &15)

$ 1,645.00

Office Supplies

Office Funiture Expense (ticket 5)

699.00

Food Expense

(ticket 4 & 10)

Landscaping/maintenace Expense (ticket 8)


Cash in bank

257.00

880.00
$

1,525.00

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