Chapter 7- Day one- Spark

# Chapter 7- Day one- Spark - Announcements Presentation on...

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Announcements Presentation on 11/4 – mandatory  class.  Rep’s from Fruad Accounting,  Public Accounting and the FBI- all  former students from Mahar! Extra Credit Ireland Trip China Trip

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Sharon Sales Company (SSC) Date Transaction Jan. 1 Beginning inventory 100 units @ 20.00 \$ = 2,000 \$ Feb. 14 Purchased 200 units @ 21.50 \$ = 4,300 Apr. 5 Sold 220 units @ 30.00 \$ = 6,600 June 21 Purchased 160 units @ 22.50 \$ = 3,600 Aug. 18 Sold 100 units @ 30.00 \$ = 3,000 Sept. 2 Purchased 280 units @ 23.50 \$ = 6,580 Nov. 10 Sold 330 units @ 30.00 \$ = 9,900 Sharon Sales Company Description Let’s use LIFO to determine the cost of goods sold and  inventory for SSC at the end of 2008. This table describes the beginning inventory,  purchases, and sales transactions for SSC during 2008.
PRS What was COGS fro Sharon Sales under  LIFO with intermittent sales?  Input  answer as a whole number (I.E.  30500).

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PRS Do you think a company will collect the  full amount of accounts receivable on  their books? A. Yes B. No
Credit Terms and Bad Debts Some customers may be unwilling or unable to pay their  accounts receivable. Because we do not want to  overstate assets, we must show accounts receivable at  its net realizable value on the balance sheet. The net  realizable value is the gross amount of the receivables  less some estimated allowance for doubtful accounts. Let’s look at the revenue and doubtful account process. Let’s look at the revenue and doubtful account process.

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Revenue Recognition Event 1 Revenue Recognition During 2006, Matrix, Inc. a service company,  During 2006, Matrix, Inc. a service company,  renders services on account for customers in  renders services on account for customers in  the amount of \$375,000. the amount of \$375,000. Event No. Assets = Liab. + Equity Rev. Exp. = Net Inc. Cash Flow 1 375,000 = NA + 375,000 375,000 NA = 375,000 NA
Event 2 Collection of Receivables During the year, Matrix, Inc. collects cash of   During the year, Matrix, Inc. collects cash of   \$325,000 on its accounts receivable. \$325,000 on its accounts receivable. Event No.

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Chapter 7- Day one- Spark - Announcements Presentation on...

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