P1. The following information pertains to merchandising tractions of Coyote company.

On 2/2/2021 Coyote Company Sold inventory costing $36,000 for $54,000 on credit, 4/20, n/60.

On 2/10/2021, Coyote received some of the inventory sold 2/2/2021. The cost of the returned goods was $6,000, and the selling price was $9,000.

On 2/20, Coyote received the full payment for the accounts receivable from the above transactions.

Instructions: prepare any necessary journal entries for the above three transactions of Coyote company.

P2. Coyote reported $600,000 of credit sales in 2018. Based on its prior experience, it was estimated that 1.5% of

Coyote’s credit sales will not be collectible. The followings are transactions related to accounts receivable.

On 12/31/2018, Coyote estimated bad debt expense for 2018.

On 1/4/2019, Coyote wrote off $500 of Accounts Receivable from a customer who was in financial difficulty.

On, 2/2/2019, Coyote received $400 from the customer whose account was written off before.

Instructions: Prepare any necessary journal entries for the above three transactions.

P3. On 10/1/2019, Coyote Bank received a promissory note from its customer borrowing $250,000. Terms of the

note were; principal $250,000, 6% interest and due on 12/31/2019

Instructions: Prepare any necessary journal entries for note transactions of Coyote on

  1. 10/1/2019.
  2. 12/31/2019, assuming that the note maker pay the principal and interests on time.

P4. The following information pertains to the reconciliation of the cash balance on Coyote’s book with the cash

balance on its bank statement as of 12/31/2019.

  1. The company records show a cash balance of $13,100, while the bank statement shows $13,400.
  2. Deposits in transit: $750.
  3. Outstanding checks: $1,300
  4. NSF checks: $250.
  5. Bank service fee: $200.
  6. Electronic Fund Transfer: $200

Instructions: Prepare

1) the bank reconciliation for the company as of 12/31/2019;

2) any necessary adjusting entries for Coyote’s bank reconciliation

P5. The followings are inventory transactions of Coyotes Co. during May 2020.

5/1 Beginning inventory of 400 units at $10/unit

5/5 Bought 800 units at $11/unit.

5/10 Sold 700 units for $16/unit.

5/15 Bought 1,000 units at $12/unit.

5/25 Sold 1,200 units for $16/unit.

Instructions: Compute costs of goods sold and costs of ending inventory for May using the following methods

under the periodic inventory system.

  1. Average method.
  2. First In First Out method.
  3. Last in First Out method.

Public Answer

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