1. Discuss with your own examples the two methods of accounting for receivables and the two methods for estimating bad debts. (Note: Examples must include Journal entry)

     

2. X Company has the following receivables classified into individually significant and all other receivables.

Individually significant P Company Q Company R Company S Company All other receivables	$ 65,000 95,000 75,000 35,000	270,000 425,000
Total receivables.		695,000

X company determines that P’s receivable is impaired by $20,000, and S’s receivable is totally impaired. Both Q’s and R’s receivables are not considered impaired. X company also determines that a composite rate of 2% is appropriate to measure impairment on all other receivables.

Required: Calculate the total impairment on accounts Receivable

Q3. Rex Company’s record of transactions for the month of September was as follows.

Purchase			Sales
Date	Quantity	Unit Price	Date	Units
Sep 1	(Balance on hand) 100	$5.00	Sep 5	300
Sep 4	400	5.10	Sep 12	200
Sep 11	300	5.30	Sep 27	800
Sep 18	200	5.35	Sep 28	150
Sep 26	600	5.60
Sep 30	200	5.80
Total	1,800			1,450
	Total units (ending inventory) 350

Instructions:

Compute the ending inventory at September 30 on each of the following on periodic bases.

1. FIFO

2. LIFO

3. WA

Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and

Commodity Broker-Traders

Q5. Give examples for Gross profit and retail Methods of Estimating Inventory.

Answer rating: 100% (QA)

1 A METAODS FOR ACCOUNTING RECEIVABLES DIRECT WRITE OFF 2 EXPENSE OUTRIGHT A LLOWANCE SET UP OF RESE... View the full answer