Please help with question 15, 16, 17, 18 rpetual LIFO inventory method is used f

ID: 2339682 • Letter: P

Question

Please help with question 15, 16, 17, 18

rpetual LIFO inventory method is used from inception, determine the cost of T" Jimbo's ending January inventory. A. $300 B. $3,000 C. $3,200 D. $3,600 E. none of these 14. In a period of deflation (i.e. the per unit cost of inventory purchases decreases over time), which inventory method will produce the highest ending inventory balance for that period assuming not all inventory is sold? A. FIFO B. LIFO C. Moving Average D. All methods would generate the same ending inventory balance In 20X5 a company had sales revenues of $550,000, of which 70% was on account. At 12/31/ X5 the following ending balances before adjustment were available 15 DR CR 70,000 Accounts Receivable Allowance for Uncollectible Accounts 700 The Accounts Receivable aging reflects: Balance 38,000 estimated to be Uncollectible 2% 4% 10% 30%| urrent 1-30 days past due 12.00 /o 31-60 days past duel 9,000 over 60 days en the information above, the 12/31/X5 adjusting entry for uncollectible accounts based on the 11,000 aging percentages provided would include a debit to Bad Debt Expense of A. $6,140. B. $5,440. C. $4,740. D. $5,000. E. none of these

Explanation / Answer

Answers

--Working

Balances

% estimated to be uncollectible

Amount estimated to be uncollectible

$ 38,000.00

$ 760.00

$ 12,000.00

$ 480.00

$ 9,000.00

10%

$ 900.00

$ 11,000.00

30%

$ 3,300.00

$ 70,000.00

$ 5,440.00

--Answer

Unadjusted Balance in Allowance Account

$ 7.00

Debit

Adjusted Balance required

$ 5,440.00

Credit

Amount of Bad Debt Expense

$ 6,140.00

[$ 700 for clearing debit balance, plus $ 5440 for making adjusted balance]

Correct Answer

Option 'A': $ 6,140

The correct answer is Option ‘D’: Allowance account adjusted balance should reflect an estimate of the amount of ending accouts receivables that will ultimately prove to be uncollectible.

The correct answer is Option ‘B’ Unadjusted Debit balance in Allowance account means that the prior year’s estimated uncollectible accounts receivables must have been underestimated.

The correct answer is Option ‘B’: When using Allowance method, we use following entry to write off any uncollectible receivable account:

Allowance for Uncollectible account debited, and Accounts receivables account is credited.