1. "The steps in the accounting cycle for a merchandising company are different from the accountingcycle for a service company." Do you agree or disagree? Explain.2. A local bank reported that it lost $150,000 as the result of an employee fraud. Mr. X is not clearon what is meant by an "employee fraud." Explain the meaning of fraud to Mr. X and giveexamples of frauds that might occur at a bank.3. On September 1, ABC Company had an inventory of 30 calculators at a cost of $18 each. Thecompany uses a perpetual inventory system. During September, the following transactionsoccurred. Sept. 6 Purchased 80 calculators at $20 each from DeVito Co. for cash. Sept. 9 Paidfreight of $80 on calculators purchased from DeVito Co. Sept. 10 Returned 2 calculators to DeVitoCo. for $42 credit (including freight) because they did not meet specifications. Sept. 12 Sold 26calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. Sept. 14Granted credit of $31 to Mega Book Store for the return of one calculator that was not ordered.Sept. 20 Sold 30 calculators costing $21 for $31 each to Barbara's Card Shop, terms n/30.Required: Journalize the September transactions.4. The following information pertains to PQR Company. 1. Cash balance per bank, July 31, $7,263. 2.July bank service charge not recorded by the depositor $28. 3. Cash balance per books, July 31,$7,284. 4. Deposits in transit, July 31, $1,500. 5. Bank collected $900 note for PQR in July, plusinterest $36, less fee $20.The collection has not been recorded by PQR, and no interest has beenaccrued, 6. Outstanding checks, July 31, $591.Required: Prepare a bank reconciliation at July 31.5. KLM Company reports the following for the month of June.June 1: Inventory 200 units @ $5 $1,000 June 12 :Purchase 300 units @ $6 $ 1,800June: 23 Purchase 500units @$ 7 $3,500 June: 30 Inventory 120 UnitsRequired: Compute the cost of the ending inventory and the cost of goods sold under FIFOMethod,

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1. "The steps in the accounting cycle for a merchandising company are different from the accounting cycle for a service company." Do you agree or disagree? Explain.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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