Metro Company sells lawn and garden products to wholesalers. The company’s fiscal year-end is December 31. During 2020, the following transactions related to receivables occurred: 2/28 Sold merchandise to Lennox, Inc., for $10,000 and accepted a 10%, 7-month note. 10% is an appropriate rate for this type of note. 3/31 Sold merchandise to Maddox Co. and accepted a noninterest-bearing note with a discount rate of 10%. The $8,000 payment is due on March 31, 2019. 4/3 Sold merchandise to Carr Co. for $7,000 with terms 2/10, n/30. Metro uses the gross method to account for cash discounts. 4/11 Collected the entire amount due from Carr Co. 6/30 Discounted the Lennox, Inc., note at the bank. The bank’s discount rate is 12%. The note was discounted without recourse. 12/31 An adjusting entry is recorded for the Maddox note .Required: Prepare the necessary journal entries for Metro for each of the above dates. For transactions involving the sale of merchandise, ignore the entry for the cost of goods sold (round all calculations to the nearest dollar).
Metro Company sells lawn and garden products to wholesalers. The company’s fiscal year-end is December 31. During 2020, the following transactions related to receivables occurred:
2/28 Sold merchandise to Lennox, Inc., for $10,000 and accepted a 10%, 7-month note. 10% is an appropriate rate for this type of note.
3/31 Sold merchandise to Maddox Co. and accepted a noninterest-bearing note with a discount rate of 10%. The $8,000 payment is due on March 31, 2019.
4/3 Sold merchandise to Carr Co. for $7,000 with terms 2/10, n/30. Metro uses the gross method to account for cash discounts.
4/11 Collected the entire amount due from Carr Co.
6/30 Discounted the Lennox, Inc., note at the bank. The bank’s discount rate is 12%. The note was discounted without recourse.
12/31 An
.Required:
Prepare the necessary
February 28
March 31
April 3
April 11
June 30
December 31
Use the following to answer the question(s) below:
Shown below is the activity for one of the products of Random Creations:
January 1 balance, 100 units @ $50
Purchases:
January 18: 40 units @ $51
January 25: 40 units @ $52
Sales:
January 22: 60 units
January 31: 50 units
Required: Compute the January 31 cost of ending inventory, assuming Random Creations uses FIFO and periodic inventory system.
Cost of ending inventory: $____________________
Your computations: (no credit if not shown).
25-2) Required: Compute the cost of goods sold for January, assuming Random Creations uses LIFO and periodicinventory system.
Cost of goods sold: $____________________
Your computations: (no credit if not shown)
25-3) Required: Compute the cost of goods sold for January, assuming Random Creations uses LIFO and perpetual inventory system.
Cost of goods sold: $____________________
Your computations: (no credit if not shown)
25-4) Required: Compute the January 31 cost of ending inventory, assuming Random Creations uses average cost and periodic inventory system.
Cost of ending inventory: $____________________
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