ACC290 Week5 Version 2

Price: $11.99



Resources: WileyPLUS and Financial Accounting
Access WileyPLUS using the link on the student website.
Complete the following in WileyPLUS:

• Brief Exercise BE5–1
• Brief Exercise BE5–2
• Brief Exercise BE6-5
• Brief Exercise BE6-7
• Brief Exercise BE7-4
• Brief Exercise BE7-6

BE5-1 Presented here are the components in Pedersen Company’s income statement.
Determine the missing amounts.

Cost of Gross Operating Net
Sales Goods Sold Profit Expenses Income
$ 71,200 (b) $ 30,000 (d) $10,800
$108,000 $70,000 (c) (e) $29,500
(a) $71,900 $109,600 $46,200 (f )

BE5-2 Prior Company buys merchandise on account from Wood Company. The selling
price of the goods is $900 and the cost of the goods sold is $630. Both companies use perpetual
inventory systems. Journalize the transactions on the books of both companies

BE6-5 In its first month of operation, Maze Company purchased 100 units of inventory
for $6, then 200 units for $7, and finally 150 units for $8. At the end of the month,
180 units remained. Compute the amount of phantom profit that would result if the company
used FIFO rather than LIFO. Explain why this amount is referred to as phantom
profit. The company uses the periodic method.

BE6-7 O’Connor Video Center accumulates the following cost and market data at
December 31.
Inventory Cost Market
Categories Data Data
Cameras $12,500 $13,400
Camcorders 9,000 9,500
DVDs 13,000 12,800
Compute the lower-of-cost-or-market valuation for O’Connor’s inventory.

BE7-4 Beaty Company has the following internal control procedures over cash receipts.
Identify the internal control principle that is applicable to each procedure.
(a) All over-the-counter receipts are registered on cash registers.
(b) All cashiers are bonded.
(c) Daily cash counts are made by cashier department supervisors.
(d) The duties of receiving cash, recording cash, and having custody of cash are assigned
to different individuals.
(e) Only cashiers may operate cash registers.

BE7-5 While examining cash receipts information, the accounting department determined
the following information: opening cash balance $150, cash on hand $1,125.74,
and cash sales per register tape $990.83. Prepare the required journal entry based upon
the cash count sheet

BE7-6 Newell Company has the following internal control procedures over cash disbursements.
Identify the internal control principle that is applicable to each procedure.
(a) Company checks are prenumbered.
(b) The bank statement is reconciled monthly by an internal auditor