ACC290 week 8 Accounting principles 1

ACC290 week 8 Accounting principles 1

BE5-1 Presented here are the components in Casilla Company’s income statement. Determine the missing amounts.  Compute missing amounts in determining net income.   (LO 1, 4), AP

Sales Revenue	Cost of Goods Sold	Gross Profit	Operating Expenses	Net Income
$ 71,200	(b)	$ 30,000	(d)	$12,100
$108,000	$70,000	(c)	(e)	$29,500
(a)	$71,900	$109,600	$46,200	(f)

 

BE5-2 Gerish Company buys merchandise on account from Mangus Company. The selling price of the goods is $900 and the cost of the goods sold is $590. Both companies use perpetual inventory systems. Journalize the transactions on the books of both companies. Journalize perpetual inventory entries. (LO 2, 3), AP

 

BE6-5 In its first month of operation, Kuhlman Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO. Explain why this amount is referred to as phantom profit. The company uses the periodic method.

Explain the financial statement effect of inventory cost flow assumptions.       (LO 3), AP

 

BE6-7 Sadowski Video Center accumulates the following cost and market data at December 31.

Determine the LCM valuation. (LO 4), AP

Inventory Categories	Cost Data	Market Data
Cameras	$12,500	$13,400
Camcorders	9,000	9,500
DVDs	13,000	12,200

 

BE7-4 Halleran Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure.

Identify the internal control principles applicable to cash receipts. (LO 3), C

(a)All over-the-counter receipts are entered in cash registers.

(b)All cashiers are bonded.
(c)Daily cash counts are made by cashier department supervisors.
(d)The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals.
(e)Only cashiers may operate cash registers.

 

BE7-5 While examining cash receipts information, the accounting department determined the following information: opening cash balance $150, cash on hand $1,125.74, and cash sales per register tape $988.62. Prepare the required journal entry based upon the cash count sheet.

Make journal entry using cash count sheet. (LO 3), AP

 

BE7-6 Catt Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure.

Identify the internal control principles applicable to cash disbursements. (LO 4), C

(a) Company checks are prenumbered.

(b) The bank statement is reconciled monthly by an internal auditor.
(c) Blank checks are stored in a safe in the treasurer’s office.
(d) Only the treasurer or assistant treasurer may sign checks.
(e) Check-signers are not allowed to record cash disbursement transactions.

TUTORIAL PREVIEW

Inventory Categories                Cost                 Market                            LCM   

Cameras                                   $12,500           $13,400                       $12,500 

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