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Use the following information to answer questions 1-4: On May 1, EZ plumbing buys plumbing materials with a list price of $550.* At the time of the purchase, EZ gives Halpin a check for $225 and asks Halpin to put the remainder of the purchase on its account, which already has a balance of $475. On July 1, EZ goes out of business without making the additional purchases or payments. Halpin learns it will be unable to collect the outstanding receivable balance. Halpin uses the direct write- off method to account for bad debts. * From Halpin Plumbing Supplies 1. The amount Halpin Plumbing Supplies should record as sales revenue for the May 1 transaction is: A. $55 B. $495 C. $540 D. $550 2. What journal entry will Halpin make to record the May 1 sale? A.Debit Sales Rev, credit Account Rec B.Credit Sales Rev, debit Account Rec C.Debit Sales Rev,debit cash,credit Accounts Rec D.Credit Sales Rev, debit cash, debit Accounts Rec 3. What balance will Halpin's accounts receivable subsidiary ledger show for EZ Plumbing immediately after the May 1 sale? A. $475 B. $550 C. $745 D. $800 4. What entry will Halpin make on July 1 to record the bad debt? A.Credit Bad Debt Exp,debit Sales Revenue B.Debit Bad Debt Exp,credit Sales Revenue C.Debit Bad Debt Exp,credit Allowance for Doubtful Accounts. D.Debit bad debt Exp, credit accounts receivable-EZ Plumbing Use the following data to answer Questions 5 through 8. Assume that the company uses the periodic inventory system. September 1 On Hand, 300 units @$1.50 each $450.00 September 6 Purchased 1,000 units @$1.65 each $1,650.00 September 18 Purchased 800 units @$1.75 each $1,400.00 Total cost of goods available for sale $3,500.00 September 30 On Hand 425 Units 5. If the September 30 inventory included 250 units from the September 6 purchase and 175 units from the September 18 purchase, the ending inventory for September 30 under the specific identification method would be A. $701.25. B. $718.75. C. $722.50. D. $743.75. 6. If the company uses the FIFO inventory method, the amount assigned to the September 30 inventory would be A. $637.50 B. $656.25. C. $722.50. D. $743.75 7. If the company uses the weighted average cost inventory method, the amount assigned to the September 30 inventory would be A. $656.25. B. $694.17. C.$708.33. D. $718.75. 8. If the company uses the LIPO inventory method, the ending inventory at September 30 would be A. $637.50. B. $656.25. C. $722.50 D. $743.75.
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