Mathematics, 24.11.2021 15:30 cash8812
Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:
Cash $ 20,420 Unearned Revenue (35 units) $ 4,950
Accounts Receivable $ 11,450 Accounts Payable (Jan Rent) $ 2,500
Allowance for Doubtful Accounts $ (1,500) Notes Payable $ 16,000
Inventory (40 units) $ 3,600 Contributed Capital $ 6,200
Retained Earnings – Feb 1, 2012 $ 4,320
• WWC establishes a policy that it will sell inventory at $145 per unit.
• In January, WWC received a $4,950 advance for 35 units, as reflected in Unearned Revenue.
• WWC’s February 1 inventory balance consisted of 40 units at a total cost of $3,600.
• WWC’s note payable accrues interest at a 12% annual rate.
• WWC will use the FIFO inventory method and record COGS on
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Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012....