What are the journal entries when the company provides a cash discount to its customer Gross Dr AR CR Sales DR Cash DR Sales discount CR A R Dr Cash CR A R Net DR AR CR Sales Sale Payment Early Payment Dr Cash CR A R After discount Period DR Cash CR A R CR Sales discount forfeited How is bad debt expense calculated Credit Sale estimates bad debt expense You are given the following calculations for ending inventory a 342 187 LIFO b 497 001 FIFO c 391 768 Average Cost method d When implementing Lower of Cost or Net Realizable value when will ending inventory have the lowest value when it is calculated by individual item by product line or for the entire inventory as one pool What are the main two methods to estimate inventory cost How are they different Question 1 Cash in bank savings account Certificates of deposit 60 day Cash on hand Postdated checks 132 200 128 000 1 000 6 800 Cash refund due from State Taxing Authority 52 000 Checking account balance 18 000 UNDER 90 DAYS Short term investment What amount should be reported as cash 132 200 128 000 1 000 18 000 279 200 Question 2 Southwest Company sold supplies of 46 000 to Northeast Company on April 12 of the current year with terms 1 15 n 60 Southwest uses the gross method of accounting for cash discounts What entry would Southwest make on April 19 assuming the customer made all of the payment on that date In the middle lines start with either DR CR or none and the rest either include the name of the account and amount or none if blank 46 000 1 0 01 45 540 DR Cash DR Sales discount 460 45540 CR Account Receivable 46 000 Question 3 For 2019 Rahal s Auto Parts estimates bad debt expense at 1 of credit sales The company reported accounts receivable and an allowance for uncollectible accounts of 86 500 and 2 100 respectively at December 31 2018 During 2019 Rahal s credit sales were 404 000 Rahal s 2019 bad debt expense under income statement approach is 1 404 000 4040 Question 4 Tropical Tours reported revenue of 250 000 for its year ended December 31 2021 During the year accounts receivable increased from 30 000 to 36 000 How much cash did Tropical Tours cash collect from its customers Question 5 The Calhoun Superstore adopted the dollar value LIFO method for its cars department on January 1 2018 when the inventory value of its one inventory pool was 660 000 The following information is available at the end of 2018 and 2019 Year Ended Ending Inventory at Base Year Costs Ending Inventory at Year End Costs Cost Index Relative to Base Year 2018 2019 851 000 927 200 740 000 760 000 1 15 1 22 In a separate inventory pool for clothes Calhoun uses the LIFO inventory method to estimate its ending inventories The following information is available at the end of 2019 Retail Cost Inventory Jan 1 65 000 67 000 Purchases 330 000 560 000 Net markups Net markdowns Net sales 12 600 9 000 390 000 1 Compute the inventory value for cars at December 31 2019 using the dollar value LIFO method 2 Estimate the ending inventory for clothes as of December 31 2019 3 If Calhoun uses the lower of cost or net realizable value per inventory pool what is the reported inventory amount on December 2019 The net realizable values are 730 000 and 115 000 for the cars and clothes pools respectively