FAR Chapt 11 Answer Key.xlsx - MERCHANDISE INVENTORY Assume...

MERCHANDISE INVENTORY
Assume the following: Account DR CR
Merchandise Invty - Start 50,000 Opening Entry
Purchases 100,000 Purchases 100,000
Merchandise Invty - End 30,000 Cash 100,000
Merchandise Inventory 30,000
Income Summary 30,000
ALLOWANCE FOR DOUBTFUL ACCOUNTS
DR CR % OF GROSS SALES
Accounts Receivable 300,000 Account DR CR
Allowance for Doubtful Accounts 7,500 1% of Sales
Sales 500,000 Bad Debts Expense 5,000
Sales Returns and Allowances 15,000 Allowance for Doubtful Accounts 5,000
Sales Discount 9,000
% OF NET SALES
1% of Sales
Bad Debts Expense 4,760
Allowance for Doubtful Accounts 4,760
% OF ACCOUNTS RECEIVABLE - BY
3% of Accounts Receivable
Bad Debts Expense 9,000
Allowance for Doubtful Accounts 9,000
% OF ACCOUNTS RECEIVABLE - TO
3% of Accounts Receivable
Bad Debts Expense 1,500
Allowance for Doubtful Accounts 1,500
10K Beginning Allowance % AGING OF ACCOUNTS RECEIVABLE
Outstanding % Amount Outstanding Allowance
Current 0% 90,000 Current -
1-30 days 2% 80,000 1-30 days 1,600
31 to 60 days 5% 70,000 31 to 60 days 3,500
61 to 90 days 10% 30,000 61 to 90 days 3,000
91 to 180 days 40% 20,000 91 to 180 days 8,000
181 to 360 days 50% 10,000 181 to 360 days 5,000
Total 300,000 Total 21,100
Bad Debts Expense 11,100
Allowance for Doubtful Accounts 11,100

COGS Computation:
Merchandise Invty, Beg. 50,000
Add: Purchases 100,000
Total Goods Available for Sale 150,000
Less: Merch. Invty. End 30,000
Cost of Sales 120,000
Allowance for Doubtful Accounts
Beg. Balance 7,500
Additional Provision 5,000
End. Balance 12,500
Allowance for Doubtful Accounts
Beg. Balance 7,500
Additional Provision 4,760
End. Balance 12,260
Allowance for Doubtful Accounts AR - NET
Beg. Balance 7,500
Additional Provision 9,000
End. Balance 16,500
Allowance for Doubtful Accounts AR - GROSS
End Bal.. Allowance for DA 9,000
Less: Beg 7,500
Provision for Bad Debts 1,500
Allowance for Doubtful Accounts
End Bal.. Allowance for DA 21,100
Less: Beg 10,000
Provision for Bad Debts 11,100

REGAL SALES COMPANY
CHART OF ACCOUNTS
AS OF DECEMBER 31, 2022
No. Account Title
101 Cash
102 Accounts Receivable
103 Allowance for Doubtful accounts
104 Notes Receivable
105 Interest Receivable
106 Merchandise Inventory
107 Unused Supplies
108 Prepaid Advertising Expense
201 Furniture & Fixtures
202 Accumulated Depreciation - Furniture & Fixtures
203 Office Equipment
204 Accumulated Depreciation - Office Equipment
301 Accounts Payable
302 Notes Payable
303 Salaries Payable
304 Rent Payable
305 Taxes Payable
306 Interest Payable
307 Withholding Taxes Payable
308 SS Premiums Payable
309 Philhealth Premiums Payable
310 Unearned Rent Income
401 Cases, Capital
402 Cases, Drawings
403 Income & Expense Summary
501 Sales
502 Sales Return & Allowances
503 Sales Discount
601 Purchases
602 Freight In
603 Purchase Returns & Allowances
604 Purchase Discount
605 Freight Out
606 Salaries Expense
607 Advertising Expense
608 Utilities Expense
609 Rent Expense
610 Supplies Expense
611 Doubtful Accounts Expense

612 Depreciation Expense - Furniture & Fixtures
613 Depreciation Expense - Office Equipment
701 Rent Income
801 Interest Expense