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The Mitchum Company has a beginning inventory for July of
$375 (75 units at $5/unit) and
makes the following purchases and sales of tapes during July: (
40 pts
)
07/07
Purchase
50 units @ $7
07/12
Sales
100 units
07/20
Purchase
125 units @ $8
07/28
Sales
90 units
Compute the cost of sales and the ending inventory for May if
the firm uses the following:
a.
The perpetual inventory system and the FIFO cost flow
assumption
b.
The perpetual inventory system and the LIFO cost flow
assumption
For the FIFO method, you have to show the cost of sales (cost
of goods sold) and the
value of ending inventory
.
For the LIFO method, you have to show the cost of sales (cost
of goods sold) and the
value of ending inventory
.
2.
An examination of the accounting records and bank statement of
the Brian Donleavy Corporation at 31 May 2012 provides the
following information: (
40 pts
)
a)
The firm’s checkbook has a balance of $4,304
b)
The firm’s bank statement has a balance of $3,538
c)
The 31 May cash receipts of $1,500 were deposited in the bank
at the end of that day but were not recorded by the bank until 01
Jun 2005
d)
Checks issued and mailed in May but not included among the
checks listed as paid on the bank statement were as follows:
Check No. 1615
$568
Check No. 1618
$112
Check No. 1621
$235
e)
A bank service charge of $25 for May was deducted on the bank
statement
f)
A check received from a customer for $135 in payment of their
account and deposited by the Brian Donleavy Corporation was
returned marked “NSF” with the bank statement.
g)
Interest of $15 earned on the firm’s checking account was added
on the bank statement
h)
The Brian Donleavy Corporation discovered that Check No.
1585, which was correctly written as $584 for the May rent, was
recorded as $548 in the firm’s checking account.
Prepare the bank reconciliation as well as the adjusting journal
entries. (There are two items - one is a bank reconciliation and
the second are various journal entries)
3.
A condensed balance sheet and other financial data for the
Alpha Company appear below:
Alpha Company
Balance Sheet
Dec 31, 20X2
ASSETS
Current Assets
Cash
$
100,000
Account Receivable
200,000
Marketable securities
100,000
Inventory
200,000
Total Current Assets
$
600,000
Fixed Assets
500,000
Total Assets
$1,100,000
=========
LIABILITIES & STOCKHOLDERS' EQUI
TY
Liabilities
Accounts Payable
$
150,000
Other Current Liab.
50,000
Current liabilities
$
200,000
Long-term liabilities
100,000
Total liabilities
$
300,000
Stockholders' Equity
Common stock - $1 par value
100,000 shares
$
100,000
Additional Paid-in capital
500,000
Retained earnings
200,000
Total Stockholders' Equity
800,000
Total Liabilities & Stockholders' Equity
$1,100,000
=========
Alpha Company
Income Statement
For the Year Ended Dec 31, 20X2
Net Sales (100% credit sales)
$10,000,000
Cost of Goods Sold
6,000,000
Gross Income
$
4,000,000
Selling, General & Administrative Expenses
1,000,000
Earnings before Interest and Taxes
$
3,000,000
Interest Expense
500,000
Earnings before Income Taxes
$
2,500,000
Income Taxes (40%)
1,000,000
Net Income
$
1,500,000
=========
Compute the following ratios: (
40 pts
)
a.
Working capital
b.
Current ratio
c.
Quick ratio (acid-test)
d.
Average Collection Period (utilizing a banker's year)
e.
Profit Margin
All wor must be shown

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The Mitchum Company has a beginning inventory for July of $375 (75 u.docx

  • 1. The Mitchum Company has a beginning inventory for July of $375 (75 units at $5/unit) and makes the following purchases and sales of tapes during July: ( 40 pts ) 07/07 Purchase 50 units @ $7 07/12 Sales 100 units 07/20 Purchase 125 units @ $8 07/28 Sales 90 units Compute the cost of sales and the ending inventory for May if the firm uses the following:
  • 2. a. The perpetual inventory system and the FIFO cost flow assumption b. The perpetual inventory system and the LIFO cost flow assumption For the FIFO method, you have to show the cost of sales (cost of goods sold) and the value of ending inventory . For the LIFO method, you have to show the cost of sales (cost of goods sold) and the value of ending inventory . 2. An examination of the accounting records and bank statement of the Brian Donleavy Corporation at 31 May 2012 provides the following information: ( 40 pts ) a)
  • 3. The firm’s checkbook has a balance of $4,304 b) The firm’s bank statement has a balance of $3,538 c) The 31 May cash receipts of $1,500 were deposited in the bank at the end of that day but were not recorded by the bank until 01 Jun 2005 d) Checks issued and mailed in May but not included among the checks listed as paid on the bank statement were as follows: Check No. 1615 $568 Check No. 1618 $112 Check No. 1621 $235 e) A bank service charge of $25 for May was deducted on the bank statement f) A check received from a customer for $135 in payment of their
  • 4. account and deposited by the Brian Donleavy Corporation was returned marked “NSF” with the bank statement. g) Interest of $15 earned on the firm’s checking account was added on the bank statement h) The Brian Donleavy Corporation discovered that Check No. 1585, which was correctly written as $584 for the May rent, was recorded as $548 in the firm’s checking account. Prepare the bank reconciliation as well as the adjusting journal entries. (There are two items - one is a bank reconciliation and the second are various journal entries) 3. A condensed balance sheet and other financial data for the Alpha Company appear below: Alpha Company Balance Sheet Dec 31, 20X2 ASSETS Current Assets Cash $
  • 6. Total Assets $1,100,000 ========= LIABILITIES & STOCKHOLDERS' EQUI TY Liabilities Accounts Payable $ 150,000 Other Current Liab. 50,000 Current liabilities $ 200,000
  • 7. Long-term liabilities 100,000 Total liabilities $ 300,000 Stockholders' Equity Common stock - $1 par value 100,000 shares $ 100,000 Additional Paid-in capital 500,000 Retained earnings
  • 8. 200,000 Total Stockholders' Equity 800,000 Total Liabilities & Stockholders' Equity $1,100,000 ========= Alpha Company Income Statement For the Year Ended Dec 31, 20X2 Net Sales (100% credit sales) $10,000,000
  • 9. Cost of Goods Sold 6,000,000 Gross Income $ 4,000,000 Selling, General & Administrative Expenses 1,000,000 Earnings before Interest and Taxes $ 3,000,000 Interest Expense 500,000 Earnings before Income Taxes $
  • 10. 2,500,000 Income Taxes (40%) 1,000,000 Net Income $ 1,500,000 ========= Compute the following ratios: ( 40 pts ) a. Working capital b. Current ratio c.
  • 11. Quick ratio (acid-test) d. Average Collection Period (utilizing a banker's year) e. Profit Margin All wor must be shown