1.Data related to the inventories of Costco Medical Supply are presented below:

	Surgical Equipment				Surgical Supplies				Rehab Equipment				Rehab Supplies
Selling price	$	263			$	130			$	344			$	145
Cost		151				127				269				137
Costs to sell		25				16				20				15

In applying the lower of cost or net realizable value rule, the inventory of surgical supplies would be valued at:

MULTIPLE CHOICE

a. $75

b. $127

c. $114

d. $100

2. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

	Skis				Boots				Apparel				Supplies
Selling price	$	169,000			$	161,000			$	116,000			$	76,000
Cost		139,000				136,000				75,400				49,400
Replacement cost		118,000				126,000				113,000				45,400
Sales commission		10	%			10	%			10	%			10	%

In applying the lower of cost or net realizable value rule, the inventory of apparel would be valued at:

MULTIPLE CHOICE

a. $75,400

b. $113,000

c. $104,400

d. $108,180

5. Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance.

	Old Equipment								Cash
	Book Value				Fair Value				Received
Equipment A	$	74,000			$	81,300			$	11,300
Equipment B	$	61,600			$	54,800			$	10,300

For Equipment B, Pensacola would record a gain/(loss) of:

MULTIPLE CHOICE

a. $5,300

b. $(6,800)

c. $(7,800)

d. none of these answer choices are correct

6. On January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Laramie record the purchase of land?

MULTIPLE CHOICE

a, $6.8 million

b. $5.0 million

c. $5.6 million

d. $6.2 million

8. Savings Mart is a national retail chain. To entice the company to open a mega store in its jurisdiction, the city of Populationville donated a 20-acre tract of land to be used for construction. The land was originally purchased by the city for $250,000 three years ago. The appraisal value at the time of the donation was $300,000. For what amount should Savings Mart record the donated land?

MULTIPLE CHOICE

a. $250,000

b. $275,000

c. $300,000

d. $0; donated assets are not recorded