Multiple Choice Question 89 Sheridan has the following inventory information. Ju

Question

Multiple Choice Question 89 Sheridan has the following inventory information. July 1 Beginning Inventory 20 units at $20 $400 7 Purchases 50 units at $23 1150 22 Purchases 20 units at $24 480 $2030 A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is $1255. $1212. $1231. $1205.

Multiple Choice Question 84

Sheridan Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $608000 and credit sales are $2620000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Sheridan Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $5500 credit balance before adjustment?

Bad Debt Expense 24320     Accounts Receivable 24320

Explanation / Answer

89) Cost of goods sold unit = 90-35 = 55 units

Cost of goods sold = (20*20+35*23) = 1205

so answer is d) $1205

84) Journal entry :

so answer is c)

Date accounts & explanation debit credit Bad debt expense (608000*4%-5500) 18820    Allowance for Doubtful Accounts 18820

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