Trial Balance 12/1/2019 Cash 92,100 Notes Receivable 10,000 Accounts Receivable 331,300 Accounts Payable 17,600 Inventory 562,500 Common Stock 500,000 Allowance for Doubtful (14,954) Retained Earnings 463,346 Accounts Additional Information: Beginning Inventory: 3,750 units @ $150/unit Step 1: On the "Journal Entries" tab - write out the Journal entries for the dates above. Post the entries to the General Ledger |(represented by T-Charts for each account). Assume HPU uses a perpetual inventory system and FIFO cost-method for inventory. 1 12/2/19 - HPU purchased 1,600 units (karaoke machines) for $167/unit on credit. 2 12/5/19 - HPU sold 2,500 units for $250/unit to Walmart on credit. Payment terms are 2/10, n/30. 3 12/13/19 –HPU receives a check from Walmart for $306,250 for half of the sale made on 12/5. 4 12/17/19 – HPU purchased 1,000 units for $177/unit on credit. 5 12/19/19 – HPU received a check for $10,000 for accounts receivable previously recorded. 6 12/21/19 – HPU sold 1,950 units for $250/unit to Target on credit. Payment terms are 2/10, n/30. 7 12/28/19 -HPU receives a check for $312,500 for the remaining balance owed from Walmart's transaction on 12/5. 8 12/29/19 – HPU wrote and mailed a check for the purchases of inventory on 12/2 for $267,200. 9 12/30/19 – HPU received a check for $238,875 from Target for half the sale on 12/21. 12/31/19 – HPU's note receivable was issued on 12/1/2019 and has a maturity date of 2/28/2019. The note carries an annual 10 interest rate of 5%. Record the required adjustment for interest as of 12/31. Check Figure: Total Debits and Credits of #1-10 = $3,382,092 Step 2: COGS and Inventory If HPU used LIFO instead, how would that have changed your COGS and Ending Inventory Balances? (You don't need to do entries 1 for this, just math!) 2 If HPU used Average Cost? Step 3: Allowance for Doubtful Accounts and Bad Debt Expense: If HPU uses the Aging Method to record Bad Debt Expense- use the A/R aging below to calculate the ending ADA balance and BDE and record your entry. (NOTE: ADA has a BEGINNING BALANCE AND YOU MUST TAKE THAT INTO CONSIDERATION FOR YOUR 1 JOURNAL ENTRY!!) A/R Aging on 12/31/2019 Age Amount Default rate 0-30 days 243,750 0.01 31-60 days 118,000 0.03 61-90 days 105,650 0.1 91+ days 97,650 0.3 Step 4: Prepare a Bank Reconciliation using the following information (Note you get your bank balance from the General Ledger!): Bank Statement and Reconciliation Info Bank Balance 11/30/2019: 103,350 Checks cleared: (11,250) Deposits cleared: 628,750 Debit Memo: (13,397) Bank Service Fee: (450) Bank Balance 12/31/2019: 707,003 Outstanding Checks: 267,200 Deposits in Transit: 238,875