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Week 2 Quiz
All Questions Details given below (Please Check)
Question 1
On December 30, 2004, Astor Corp. sold merchandise for $75,000 to
Day Co. The terms of the sale were net 30, FOB shipping point. The
merchandise was shipped on December 31, 2004, and arrived at Day on
January 5, 2005. Due to a clerical error, the sale was not recorded until
January 2005 and the merchandise, sold at a 25% markup, was included
in Astor's inventory at December 31, 2004. As a result, Astor's cost of
goods sold for the year ended December 31, 2004, was
Question 2
Foster Co. adjusted its allowance for uncollectible accounts at year end.
The general ledger balances for the accounts receivable and the related
allowance account were $1,000,000 and $40,000, respectively. Foster
uses the percentage-of-receivables method to estimate its allowance for
uncollectible accounts. Accounts receivable were estimated to be 5%
uncollectible. What amount should Foster record as an adjustment to its
allowance for uncollectible accounts at year end?
Question 3
Jones Wholesalers stocks a changing variety of products. Which
inventory costing method will be most likely to give Jones the lowest
ending inventory when its product lines are subject to specific price
increases?