4. On December 31, the bank statement showed an NSF charge of $680 for a check r

Question

4. On December 31, the bank statement showed an NSF charge of $680 for a check received by the company from Zain, a customer, on account. The following transactions occurred during December. Purchase Units 3,000 4,000 Sold Units Unit Cost $0.60 $0.74 Beg. Inventory Dec. 3 Dec. 5 Dec. 17 Dec. 22 4,400 2,200 0.80 2,100 a) Prepare journal entries for each transactions and the adjusting entries b) Prepare double-declining-balance schedule using 20% rate for depreciate the car. c) Prepare a bank reconciliation as of December 31, 2017. d) Compute ending inventory and cost of goods sold using moving- average cost, assuming the Company uses the perpetual inventory system.

Explanation / Answer

4.. Journal entry Accounts Receivable 680 Bank 680 (Restoration of accounts receivable following NSF charge) Ending Inventory Units Rate Price Beginning Inventory 3000 0.6 1800 3-Dec Add: Purchases 4000 0.74 2960 Balance 7000 0.68 4760 5-Dec Less:Sale 4400 0.68 2992 Balance 2600 0.68 1768 17-Dec Add: Purchases 2200 0.8 1760 Balance 4800 0.735 3528 22-Dec Less: Sale 2100 0.735 1543.5 Balance 2700 0.735 1984.5

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