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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