ACC 577 OUTLET Learn by Doing/acc577outlet.com ACC 577 OUTLET Learn by Doing/acc577outlet.com | Page 32

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-ofreceivables 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?
Question 4
Fenn Stores, Inc. had sales of $1,000,000 during December
2004. Experience has shown that merchandise equaling 7% of
sales will be returned within 30 days and an additional 3% will
be returned within 90 days. Returned merchandise is readily