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Financial Accounting Questions Panaka Company and Scott Comp

P3-3A The completed financial statement columns of the work sheet for Panaka Company are shown below.
PANAKA COMPANY Work Sheet For the Year Ended December 31, 2002
Account Income Statement Balance Sheet
No. Account Titles Dr. Cr. Dr. Cr.
101 Cash 10,200
112 Accounts Receivable 7,500
130 Prepaid Insurance 1,800
157 Equipment 28,000
167 Accumulated Depreciation 8,600
201 Accounts Payable 12,000
212 Salaries Payable 3,000
311 Common Stock 20,000
320 Retained Earnings 14,000
332 Dividends 7,200
400 Service Revenue 44,000
622 Repair Expense 3,200
711 Depreciation Expense 2,800
722 Insurance Expense 1,200
726 Salaries Expense 36,000
732 Utilities Expense 3,700
Totals 46,900 44,000 54,700 57,600
Net Loss 2,900 2,900
46,900 46,900 57,600 57,600

Instructions
(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet.

(b) Prepare the closing entries.

(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.

(d) Prepare a post-closing trial balance.

P4-8A Scott Company had a beginning inventory of 400 units of Product E2-D2 at a cost of $8.00 per unit. During the year, purchases were:

Feb. 20 700 units at $9.00 Aug. 12 300 units at $11.00
May 5 500 units at $10.00 Dec. 8 100 units at $12.00
Scott Company uses a periodic inventory system. Sales totaled 1,500 units.

Instructions
(a) Determine the cost of goods available for sale.
(b) Determine (1) the ending inventory, and (2) the cost of goods sold under each of the as-sumed cost flow methods (FIFO, LIFO, and average). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods.
(c) Which cost flow method results in (1) the lowest inventory amount for the balance sheet, and (2) the lowest cost of goods sold for the income statement?

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Solution Summary

The solution is in an excel file that shows detailed calculations for the requirements

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