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1)Comprehensive cycle problem: Perpetual system At the beginning of 2012, the Jeater Company had the following balances in its accounts: During…

1)Comprehensive cycle problem: Perpetual system At the beginning of 2012, the Jeater Company had the following balances in its accounts: During 2012, the company experienced the following events. 1. Purchased inventory that cost $2,200 on account from Blue Company under terms 1y10, ny30. The merchandise was delivered FOB shipping point. Freight costs of $110 were paid in cash. 2. Returned $200 of the inventory that it had purchased because the inventory was damaged in transit. The freight company agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Blue Company within the cash discount period. 4. Sold inventory that had cost $3,000 for $5,500 on account, under terms 2y10, ny45. 5. Received merchandise returned from a customer. The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. The customer was paid $710 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $60 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period. Required a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). b. Record each event in a statements model like the following one. c. Prepare an income statement, a statement of changes in stockholders’ equity, a balance sheet, and a statement of cash flows. 2)”The following data apply to Superior Auto Supply Inc. for May 2012. 1. Balance per the bank on May 31, $8,000. 2. Deposits in transit not recorded by the bank, $975. 3. Bank error; check written by Allen Auto Supply was charged to Superior Auto Supply’s account, $650. 4. The following checks written and recorded by Superior Auto Supply were not included in the bank statement: 5. Note collected by the bank, $500. 6. Service charge for collection of note, $10. 7. The bookkeeper recorded a check written for $188 to pay for the May utilities expense as $888 in the cash disbursements journal. 8. Bank service charge in addition to the note collection fee, $25. 9. Customer checks returned by the bank as NSF, $125. Required Determine the amount of the unadjusted cash balance per Superior Auto Supply’s books.”



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