Question

Part III. Comprehensive Questions (15’*2=30’)

1. During the whole December, Cruiser’s Boat Supply has the following transactions happened. (3’*6=18’)

1. Dec 2, Cruiser’s Boat Supply Sold merchandise inventory to Walmart, $ 9200, on account. Terms 1/20, n/60. Cost of goods sold, $3500. FOB destination with the freight of $99, in cash.
2. Dec 5, Cruiser’s Boat Supply purchased merchandise inventory with cash, $7900. FOB destination. Freight charged 75 of cash.
3. Dec 16, Cruiser’s Boat Supply rent an office for its headquarter because of office renovation. The rent is paid already for $3,000 for three months.
4. Dec 17, Cruiser’s Boat Supply returned $1200 of the merchandise purchased on December 5.
5. Dec 21, Cruiser’s Boat Supply received the payment from Walmart.

2. On Dec. 31, Cruiser’s Boat Supply made adjusting entries according to the following information. (3’*4=12’)

1. In December, Cruiser’s Boat has delivered $5,000 of boats to its customer Costco, who prepaid 10,000 of cash in November. The cost of those boat, $2,000.
2. The salaries of Cruiser’s Boat to its employees of December, $5,000 will be paid in next month.
3. Depreciation of equipment for the month, $ 200
4. Office rent which as prepaid on December 16 should be recorded for December, 2015.

Part IV. Conventional Question (10’)

1. Explain the difference between FIFO and LIFO. Try to indicate the different consequences if a company uses them.

Answer 1

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Comprehensive Question Paat Entries Jouanal Crlises's Boal Supply विक Credik Aiccounting Title Date g200 Account Recoavable To sales Ieovesue Dec 2 9200. merchandise (To socord sale înventory) Dec a Freigbt expenses. To cash (To srecoad freight on sales). Dec a Cost f goods sold To inventozy (TO Szecoad cost of goods sold 3500 3500 Dec'5 Inventory Freight expeposer (7900-75) १828 75 To cash (To recoad puacbase of inventosy for cash) 7900 Prepaid rent To cash (To secoad payement of S monts rent) Dec 16 3000 3000

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