Abbey Co. sold merchandise to Gomez Co.
21. Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?
22.The following units of a particular item were available for sale during the year:
Beginning inventory 150 units @ $755
Sale 120 units @ $925
First purchase 400 units @ $785
Sale 200 units @ $925
Second purchase 300 units @ $805
Sale 290 units @ $925
The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to FIFO?
a) The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible.
Est Uncollectible Accts
Age Interval: Balance: Percentage: Amount:
Not past due 850,000 3.50%
1~30 days past due: 47,500 5.00% 45,125
31~60 days past due: 21,750 10.00% 19,575
61~90 days past due: 11,250 20.00% 9,000
91~180 days past due: 5,065 30.00% 3,545.5
181~365 days past due: 2,500 50.00% 1,250
Over 365 days past due: 1,14595.00% 114.5
b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for the bad debt expense for the year.
24. An employee earns $40 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 60 hours during the week, and that the gross pay prior to the current week totaled $58,000. Assume further that the social security tax rate was 7.0% (on earnings up to $100,000), the Medicare tax rate was 1.5%, and the federal income tax to be withheld was $614.
(1) Determine the gross pay for the week.
(2) Determine the net pay for the week.