Acct210 Exam 2-Chapter S Il. M Company uses the percentage of sales method to ac
ID: 2510508 • Letter: A
Question
Acct210 Exam 2-Chapter S Il. M Company uses the percentage of sales method to account for its uncollectible accounts. On December 31, 207 în sales and 50% of these sales were in cash. M has a$2,000 credt balance ihal doubtful account. Past experience suggested that 05% of credit sales are uncollectible. 1: What is the amount that M should report as its estimated bad debt expenses for year 20372 Question 2: What journal entry should M record? (2pts) Question 3: At the end of December and after M has recorded its bad debt expense, M determines uncollectible balance should be written off. What journal entry should M record?(2pts) t SI,000of the Problem 3-Cost of Goods Sold Model 1. Below is the cost of goods sold section for ABC. Use this information to answer the following questions 40,000 550 350 Beginning inventory Purchases (gross) Purchase returns and alowances Purchases (net) Freight-in Cost of goods available for sale Ending inventory 20,000 25,000 Cost of goods sold Question 1: What is the value of ABC's Cost of goods available for sale? (2pts) Question 2: What is the value of ABC's Purchases (net)? (2pts) Question 3: What is the value of ABC's Purchase (gross)? (2pts) Page 7132Explanation / Answer
Answer for problem number 3
1) cost of goods available for sale = 45000 (cost of goods sold + closing stock of finished goods)
2) Purchases (Net) = 4650 (Prime cost - Freight)
3) Purchases (gross) = 5200 (Purchase(net) + Returns&Allowances)
Notes : 1) here it is assumed that beginning inventory and ending inventory are finished goods.
2) Purchases and purchase returns are related to raw materials