entity361
Mar 22, 2014, 08:17 PM
I'm attaching the whole problem. This is just the intro.Instructions:You have just landed at temporary assignment at a small retail company in your area. The accountant, who had completed the books through the end of November, went out on maternity leave during the first week of December.The task you have been given is to take the ending Trial Balance for November, prepare December transactions,prepare the December financials, and close the books.The manager of the company has indicated that salaries, rent and depreciation for December are the same as the 11 months preceding (employees are paid at the end of the month). Additional transaction information follows:December Advertising = $900December Utilities = $700December Communications = $500The manager is pretty sure that they use LIFO for inventory, but it could be FIFO. Given the November transactions,determine which of the two methods is used. Then, use that same method to value ending inventory for December.Compute December Sales and Cost of Goods Sold, as well, and prepare the journal entries. Assume all inventory purchases are on credit. Also assume 80% of Sales are credit sales and the rest are for cash.NovemberDecember11 - 01begin with 500 units @ $22.00 each12 - 01begin with 1,350 units @ $36,00011 - 03sold 250 units @ $35.00 each12 - 04sold 350 units @ $38.00 each11 - 05purch 500 units @ $23.00 each12 - 10purch 500 units @ $29.00 each11 - 10sold 250 units @ $36.00 each12 - 13sold 600 units @ $40.00 each11 - 15purch 450 units @ $26.00 each12 - 18purch 600 units @ $31.00 each11 - 19purch 300 units @ $28.00 each12 - 20sold 600 units @ $41.00 each11 - 23sold 200 units @ $37.00 each12 - 21purch 400 units @ $30.00 each11 - 29purch 300 units @ $30.00 each12 - 24sold 550 units @ $42.00 eachDuring December, supplies purchased totaled $1,100. A physical count showed that there were $1,850 remainingat the end of the year. Prepare the necessary adjusting entry.It was discovered that the insurance policy was renewed on December 1st; coverage will cost $6,720 for the next 12 months. Prepare the necessary entries.Collected $18,500 in cash from previous sales on credit. Those customers received $350.00 in discounts.