1. Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2021. At January 1, CSI reported an inventory of $170,000. Sales from January 1, 2021, to August 5, 2021, totaled $480,000 and purchases totaled $195,000 during that time. CSI consistently marks up its products 60% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be:

Multiple Choice

• $131,175.

• $65,000.

• $69,000.

• None of these answer choices are correct.

Data below for the year ended December 31, 2021, relates to Houdini Inc. Houdini started business January 1, 2021, and uses the LIFO retail method to estimate ending inventory.

	Cost				Retail
Beginning inventory	$	66,000			$	104,000
Net purchases		280,000				420,000
Net markups						20,000
Net markdowns						40,000
Net sales						375,000

Estimated ending inventory at cost is:

Multiple Choice

• $90,720.

• $83,500.

• $91,600.

• None of these answer choices are correct.

2.On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2022. Expenditures on the project were as follows:

January 1, 2021	$	300,000
September 1, 2021	$	450,000
December 31, 2021	$	450,000
March 31, 2022	$	450,000
September 30, 2022	$	300,000

Dreamworld had $5,000,000 in 12% bonds outstanding through both years.

Dreamworld's average accumulated expenditures for 2021 was:

Multiple Choice

• $300,000.

• $450,000.

• $525,000.

• $600,000.