Question $2$

Given the following information, prepare in good form the

cost of goods sold section of an income statement, using

the periodic inventory system.

Purchase returns and allowances Question $3$

Owl Ltd$.$ sells many products. Hoot is one of its popular

items. Below is an analysis of the inventory purchases and

sales of Hoot for the month of March. Owl uses the

perpetual inventory system.

Instructions

$($a$)$ Using the FIFO cost method, calculate the cost of

goods sold for March. Show calculations.

$($b$)$ Using the average cost method, calculate the

ending inventory at March $31.$ Show calculations and

use unrounded numbers in your calculations but round

to the nearest cent for presentation purposes in your

answer. Question $4$

Garmin Ltd$.$ uses the periodic inventory system and had

the following inventory information available:

A physical count of inventory on December $31$ showed

that there were $350$ units on hand.

Instructions

Answer the following independent questions and show

calculations supporting your answers.

$($a$)$ Assume that the company uses FIFO. The value of

the ending inventory at December $31$ is $

$($b$)$ Assume that the company uses average cost. The

value of the ending inventory on December $31$ is

$$.$

$($c$)$ Determine the difference in the amount of profit that

the company would have reported if it had used FIFO

instead of average cost. Would profit have been greater

or less?Question $5$

Broadway Limited had an $$800$ credit balance in

Allowance for Doubtful Accounts at December $31,2015,$

before the current year's provision for uncollectible

accounts. An aging of the accounts receivable revealed

the following:

Estimated Percentage

Uncollectible

Instructions

$($a$)$ Prepare the adjusting entry at December $31,2015,$

to recognize bad debts expense.

$($b$)$ Assume the same facts as above except that the

Allowance for Doubtful Accounts account had a $$800$

debit balance before the current year's provision for

uncollectible accounts. Prepare the adjusting entry for

the current year's bad debts.Question $1$

Presented below are selected transactions for Scotian

Corporation during July.

Jul $1$ Sold merchandise to Brunswick Inc. for $$800,$

terms $3/10,\frac{n}{30}.$ The merchandise sold cost $$400.$

$2$ Purchased merchandise from Founders

Corporation for $$4,500,$ terms $\frac{4}{10},\frac{n}{30}.$

$3$ Paid freight charges of $$100$ on items

purchased on July $2.$

$4$ Purchased merchandise from Edward Company

Ltd$.$ for $$5,000,\frac{n}{30}.$

$10$ Received payment from Brunswick Inc. for

purchase of July $1.$

$11$ Paid Founders Corporation for July $2$

purchase.

Instructions

$($a$)$ Record the above transactions for Scotian

Corporation, assuming a perpetual inventory system is

used. The cost of goods sold on July $1$ was determined

to be $$400.$

$($b$)$ Record the above transactions for Scotian

Corporation, assuming a periodic inventory system is

used.