INTERMEDIATE FINANCIAL ACCOUNTING ASSIGNMENT 3

INTERMEDIATE FINANCIAL ACCOUNTING

ASSIGNMENT 3

You are required to work in this assignment individually. Any suspicious activities or cheating will result zero grade in this assignment.

Q1 Describe perpetual system and periodic system [2 points]

Q2.AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit.

Prepare the journal entries for following:

1- Record the sale [1 point]

2- Payment on $6,000 of sales within discount period? [1 point]

3- Payment on $4,000 of sales received after discount period? [1 point]

Q3 An inventory taken the morning after a large theft discloses $60,000 of goods on hand as of March 12.  The following additional data is available from the books:

Inventory on hand, March 1                                     $ 84,000

Purchases received, March 1 – 11                              63,000

Sales (goods delivered to customers)                       120,000

Past records indicate that sales are made at 50% above cost.

Required:  Estimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss.  Show appropriate titles for all amounts in your presentation. [2.5 points]

Q4 Pinkel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2011, consists of products D and E, Relavant per-unit data for these products appear below.

Item                 Item

   D                     E  

Estimated selling price       €180               €165

Cost                                       110                 120

Cost to complete                     45                   45

Selling costs                            15                   27