A company just starting a business purchased three inventory items at the following cost: March 2,...

 

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A company just starting a business purchased three inventory items at the following cost: March 2, $150; March 7, $160; and March 15, $180. If the company sold one unit for $230 on March 10 and one unit for $250 on March 20 and uses the average cost formula in a perpetual inventory system, what is the cost of ending inventory? Question 6 (8 marks) For its fiscal year ended December 31, 2023, Fruitful Products had credit sales of $750,000. At year end, the unadjusted trial balance shows a debit balance of $1,800 in the Allowance for Expected Credit Losses (also known as Allowance for Doubtful Accounts AFDA), and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,XXX will prove to be uncollectible. On March 4, 2024, the credit manager authorizes a write off of the $2,ZZZ balance owed by Sand Beach. Instructions (a) Prepare the adjusting entry to record the estimated credit losses for 2023. (b) Show the statement of financial position presentation of accounts receivable at December 31, 2023. (c) On March 4, 2024, before the write off, assume the balance of Accounts Receivable account is $175,000 and the balance of Allowance for Expected Credit Losses is a credit of $4,500. Record the entry to write off the Sand Beach account. Also, show the statement of financial position presentation of accounts receivable before and after the write off. A company just starting a business purchased three inventory items at the following cost: March 2, $150; March 7, $160; and March 15, $180. If the company sold one unit for $230 on March 10 and one unit for $250 on March 20 and uses the average cost formula in a perpetual inventory system, what is the cost of ending inventory? Question 6 (8 marks) For its fiscal year ended December 31, 2023, Fruitful Products had credit sales of $750,000. At year end, the unadjusted trial balance shows a debit balance of $1,800 in the Allowance for Expected Credit Losses (also known as Allowance for Doubtful Accounts AFDA), and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,XXX will prove to be uncollectible. On March 4, 2024, the credit manager authorizes a write off of the $2,ZZZ balance owed by Sand Beach. Instructions (a) Prepare the adjusting entry to record the estimated credit losses for 2023. (b) Show the statement of financial position presentation of accounts receivable at December 31, 2023. (c) On March 4, 2024, before the write off, assume the balance of Accounts Receivable account is $175,000 and the balance of Allowance for Expected Credit Losses is a credit of $4,500. Record the entry to write off the Sand Beach account. Also, show the statement of financial position presentation of accounts receivable before and after the write off.

Answer rating: 100% (QA)

Here are the steps to solve this problem a To record the estimated credit loss... View the full answer