Question

having trouble completing this assighment. someone help ? thank you in advance .

During 2015, a company sells 220 units of inventory. The company has the following inventory purchase transactions for 2018 (6 points) Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 115 $60 $0900 Sep 8 Purchase 210 62 13020 Nov 18 Purchase 6375 4101 $26.295 Calculate cost of goods sold and ending inventory for 2015 Specific ID Sold all of beginning inventory, 25 from Nov 18 purchase, and the rest out of Sep 8 purchase. FIFO LIFO AVERAGE COST BONUS QUESTION: At 1/1/2019 the allowance had a debit balance of 5600. Jackson Inc. wrote off $23.000 of customer accounts on Jun5, 2019. Customers repaid Johnson 10,500 of the accounts that were written off on August 20, 2019. At 12/31/2019 AR was 250,000 and estimated amount uncollectible was 15%. Jackson uses the allowance method for write offs. (3 points total) Given the above answer the following questions 1. What was the balance in the allowance account before adjustment( debitor credit) 2. What is bad debt expense at 12/31/2019? 3. What is the ending balance in the allowance account at 12/31/2019

Answer 1

Date	Transaction	Unit	Cost	Total
Jan. 1	Beginning Inventory	115	$60	$6,900
Sep. 8	Purchase	210	62	$13,020
Nov. 18	Purchase	85	75	$6375
		410		$26,295

FIFO - First In First Out

The company sells 220 units of Inventory :-

	Quantity Change	Actual Unit Cost	Actual Total Cost
	115	$60	$6,900
Sale	-115
Purchase (layer 1)	+210	$62	$13,020
Sale	-80
Purchase (layer 2)	+85	$75	$6,375
Sale	-25
Available Stock	190

Cost of Goods Sold :-

115 Beginning Inventory + 80 Purchases ( Sep. 8 ) + 25 Purchases ( Nov. 18 ) = 220 Units

Cost of goods sold	Units	Unit Cost	Total Cost
Inventory	115	$60	$6.900
FIFO layer 1	80	$62	$4,960
FIFO layer 2	25	$75	$1,875
	220		$13,735

LIFO - Last In First Out

The LIFO method assumes that the most recent products added to a company's inventory have been sold first.

Cost of goods sold	Units	Unit Cost	Total Cost
LIFO layer 1	85	$75	$6,375
LIFO layer 2	135	$62	$8,370
	220		$14,745

Average Cost

It is calculated by dividing the total number of units you have on hand by the total cost of goods.

Average Purchase Price - $26,295 / 410

= $ 64.134

Cost of Goods Sold - 220 units

Price for COGS - 220 * 64.134

= $ 14,109.51

Remaining Inventory = $ 12,185.46

Bonus Question :-

A) The balance in the allowance account before adjustment was $5,600 ( debit Balance ).

B)

Particular	Amount	Particular	Amount
Allowances	$5,600	debt. Written off	$23,000
Debt. Received	$18,500	Uncollectible @15%	$62,500
Account Receivable	$250,000	( $250,000 * 15 % )

Bad Debts = Uncollectible + loss on debt. written off

= ( 62,500 + 4,500 ) $

= $67,000

C)

Ending Balance in the Allowance A/c :-

( Debit Balance - Credit Balance )

= ( 274,100 - 85,500 ) $

= $ 188,600