PLEASE DO ALL THE STEPS AND ANSWER ALL THE QUESTIONS (ESPECIALLY 1-7 AT THE BOTTOM)

Wallys Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:

Cash	$	19,070		Unearned Revenue (35 units)	$	4,500
Accounts Receivable	$	10,100		Accounts Payable (Jan Rent)	$	1,600
Allowance for Doubtful Accounts	$	(1,050)		Notes Payable	$	15,000
Inventory (40 units)	$	3,200		Contributed Capital	$	5,300
				Retained Earnings Feb 1, 2012	$	4,920

	WWC establishes a policy that it will sell inventory at $170 per unit.
	In January, WWC received a $4,500 advance for 35 units, as reflected in Unearned Revenue.
	WWCs February 1 inventory balance consisted of 40 units at a total cost of $3,200.
	WWCs note payable accrues interest at a 12% annual rate.
	WWC will use the FIFO inventory method and record COGS on a perpetual basis.

February Transactions
02/01	Included in WWCs February 1 Accounts Receivable balance is a $1,800 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,800 balance to a note, and Kit Kat signs a 6-month note, at 10% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012.
02/02	WWC paid a $650 insurance premium covering the month of February. The amount paid is recorded directly as an expense.
02/05	An additional 140 units of inventory are purchased on account by WWC for $10,500 terms 2/15, n30.
02/05	WWC paid Federal Express $420 to have the 140 units of inventory delivered overnight. Delivery occurred on 02/06.
02/10	Sales of 110 units of inventory occurred during the period of 02/07 02/10. The sales terms are 2/10, net 30.
02/15	The 35 units that were paid for in advance and recorded in January are delivered to the customer.
02/15	20 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase.
02/16	WWC pays the first 2 weeks wages to the employees. The total paid is $2,500.
02/17	Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs.
02/18	Wrote off a customers account in the amount of $1,150.
02/19	$3,200 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense.
02/19	Collected $8,300 of customers Accounts Receivable. Of the $8,300, the discount was taken by customers on $5,000 of account balances; therefore WWC received less than $8,300.
02/26	WWC recovered $430 cash from the customer whose account had previously been written off (see 02/18).
02/27	A $650 utility bill for February arrived. It is due on March 15 and will be paid then.
02/28	WWC declared and paid a $900 cash dividend.

Adjusting Entries:

02/29	Record the $2,500 employee salary that is owed but will be paid March 1.
02/29	WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts.
02/29	Record February interest expense accrued on the note payable.
02/29	Record one months interest earned Kit Kats note (see 02/01).

Feb. 1	Notes Receivable	1,800
	Accounts Receivable		1,800
Feb. 2	Insurance Expense	650
	Cash		650
Feb. 5	Inventory	10,500
	Accounts Payable		10,500
Feb. 6	Inventory	420
	Cash		420
Feb. 10a	Accounts Receivable	18,700
	Sales Revenue		18,700
Feb. 10b	Cost of Goods Sold	8,660
	Inventory		8,660
Feb. 15a	Unearned Revenue	4,500
	Sales Revenue		4,500
Feb. 15b	Cost of Goods Sold	2,730
	Inventory		2,730
Feb. 15c	Inventory	1,560
	Cost of Goods Sold		1,560
Feb. 15d	Sales Returns and Allowance	3,400
	Accounts Receivable		3,400
Feb. 16	Wages Expense	2,500
	Cash		2,500
Feb. 17	Accounts Payable	10,500
	Inventory		210
	Cash		10,290
Feb. 18	Allowance for Doubtful Accounts	1,150
	Accounts Receivable		1,150
Feb. 19a	Accounts Payable	1,600
	Rent Expense	1,600
	Cash		3,200
Feb. 19b	Cash	8,200
	Sales Discounts	100
	Accounts Receivable		8,300
Feb. 26a	Accounts Receivable	430
	Allowance for Doubtful Accounts		430
Feb. 26b	Cash	430
	Accounts Receivable		430
Feb. 27	Utility Expense	650
	Accounts Payable		650
Feb. 28	Dividends Declared	900
	Cash		900
Feb. 29a	Wages Expense	2,500
	Wages Payable		2,500
Feb. 29b	Bad Debt Expense	802
	Allowance for Doubtful Accounts		802
Feb. 29c	Interest Expense	150
	Interest Payable		150
Feb. 29d	Interest Receivable	15
	Interest Revenue		15

1-b.

Post all February entries (transactions and adjustments) to the T-accounts.

1-c.

Prepare the financial statements at the end of February. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)

2.	Prepare all February 29 closing entries for WWC. Post to the T-Accounts in requirement 1-b. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Required:

1.

What is the WWCs gross profit for February?

2.	What is the gross profit percentage? (Round your answer to 1 decimal place.)

3.	What were WWCs net sales for February?

4.

(Round your answers to 2 decimal places.)

if WWC had chosen to use the percentage of sales method, takig 2% of sales, instead of using the aging method, WWC would have reported___________ of bad debt expensefor February and a net Accounts Receivable of __________

5.

How many units are in ending inventory?

6.

What is the cost per unit of the ending inventory?

7.	If WWC had chosen LIFO, calculate its February cost of goods sold.