Instructions: Prepare in journal form, without explanations, the end of month adjusting entries & closing entries for Flip’s Copy Shop for the month of June.

 

 

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Question 2: Suggested time 15 minutes: 15% points:

The following items were taken from the post adjusted trial balance of Flip Company. (All balances are normal.)

 

Mortgage payable                          $  1,443           Accumulated depreciation      3,655

Prepaid expenses                                  880           Accounts payable                    1,444

Equipment                                       11,000           Notes payable after 2015        1,200

Long-term investments                      1,100           Flip’s capital                          13,480

Short-term investments                     3,690           Accounts receivable                1,696

Notes payable in 2014                       1,000           Inventories                              1,756

Cash                                                   2,100

Instructions: Prepare a classified balance sheet in good form as of December 31, 2013.

 

Question 3: Suggested time 15 minutes: 15% points:

The following information is available for Flip Company:

Beginning inventory               600 units at $4

First purchase                          900 units at $6

Second purchase                     500 units at $7.20

 

Assume that Flip uses a periodic inventory system and that there are 700 units left at the end of the month.

 

Instructions: Compute the cost of ending inventory and Cost of Good Sold under the

(a)   LIFO method.

(b)   FIFO method.

(c)   Average-cost method