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1.

Beginning inventory, purchases, and sales data for tennis rackets are as follows:

April	3		Inventory	21 units	@	$17
	11		Purchase	12 units	@	$17
	14		Sale	16 units
	21		Purchase	14 units	@	$19
	25		Sale	17 units

Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.

	Purchases				Cost of Goods Sold				Inventory
Date	Qty.	Unit Cost	Total Cost		Qty.	Unit Cost	Total Cost		Qty.	Unit Cost	Total Cost
April 3										$	$
11		$	$							$	$
										$
14						$	$			$	$
						$
21		$	$							$	$
										$
25						$	$			$	$
						$
					Total Cost of goods sold		$		Ending inventory value		$

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2.

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables.

April 1	Sold merchandise on account to Jim Dobbs, $6,900. The cost of goods sold is $4,600.
June 10	Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.
Oct. 11	Reinstated the account of Jim Dobbs and received cash in full payment.

If an amount box does not require an entry, leave it blank.

April 1
April 1
June 10
Oct. 11
Oct. 11

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3.

Equipment was acquired at the beginning of the year at a cost of $78,660. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,920.

Required:

a.	What was the depreciation expense for the first year?
b.	Assuming the equipment was sold at the end of the second year for $59,486, determine the gain or loss on sale of the equipment.
c.	Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

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