3 25 Comprehensive cycle problem: perpetual system
At the beginning of 2012, the jeater company had that following balances in its accounts:
Cash $ 4,300
Common stock 10,000
Retained earnings 3,300
- Purchased inventory that cost $2,200 on account from Blue Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $110 were paid in cash.
- Returned $200 of the inventory that it had purchase because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.
- Paid the amount due on its account payable to Blue Company within the cash discount period.
- Sold inventory that had cost $3,000 for $5,500 on account, under terms 2/10, n/45.
- Received merchandise returned from a customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. The customer was paid $710 cash for the returned merchandise.
- Delivered goods FOB destination in Event 4. Freight costs of $60 were paid in cash.
- Collected the amount due on the account receivable within the discount period.
- Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.
- Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
- Record each event in a statement model
Problem 4-20 The following data apply to superior auto supply inc. for may 2012
1. Balance per the bank on may 31, $8000
2. Deposits in transit not recorded by the bank, $975
3. Bank error, check written by allen auto supply was charged to superior auto sales account, $650
4. The following checks written and recorded by superior auto supply were not included in the bank statement: 3013-$385, 3054-$735, 3056-$1900
5. Not collected by the bank, $500
6. Service charge for the collection of note $10
7. The book keeper recorded a check written for $188 to pay for the may utilities expense as $888 in the cash disbursements journal
8. bank service charge in addition to the note collection fee $25
9. customer checks returned to the bank as NSF $125
Required: determine the amount of unadjusted cash balance per superior auto supply s books.