1. Sheridan Company bought a machine on January 1, 2011 for $808000. The machine had an expected life of 20 years and was expected to have a salvage value of $78000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $393000 and its fair value was $305000. If the company does not plan to dispose of it, what should Sheridan record as an impairment loss on July 1, 2021?

$0

$119750

$10000

$31750

2. Sheffield Corp. received $102000 in cash and a used computer with a fair value of $318000 from Ivanhoe Company for Sheffield Corp.'s existing computer having a fair value of $420000 and an undepreciated cost of $391200 recorded on its books. The transaction has no commercial substance. How much gain should Sheffield recognize on this exchange, and at what amount should the acquired computer be recorded, respectively?

$28800 and $318000

$102000 and $391200

$0 and $289200

$1562 and $194362

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3. Blossom Company had a gross profit of $610000, total purchases of $828000, and an ending inventory of $472000 in its first year of operations as a retailer. Blossoms sales in its first year must have been

$1438000.

$966000.

$1082000.

$356000.

4. Sheridan Company purchased a tooling machine on January 3, 2014 for $970000. The machine was being depreciated on the straight-line method over an estimated useful life of 10 years, with no salvage value. At the beginning of 2021, the company paid $205000 to overhaul the machine. As a result of this improvement, the company estimated that the useful life of the machine would be extended an additional 5 years (15 years total). What should be the depreciation expense recorded for the machine in 2021?

$22000

$31700

$85000

$62000

5. Recording inventory at net realizable value is permitted, even if it is above cost, when there are no significant costs of disposal involved and

the internal revenue service is assured that the practice is not used only to distort reported net income.

the ending inventory is determined by a physical inventory count.

a normal profit is not anticipated.

there is a controlled market with a quoted price applicable to all quantities.

6. At the end of the fiscal year, Apha Airlines has an outstanding non-cancellable purchase commitment for the purchase of 1 million gallons of jet fuel at a price of $4.10 per gallon for delivery during the coming summer. The company prices its inventory at the lower of cost or market. If the market price for jet fuel at the end of the year is $4.50, how would this situation be reflected in the annual financial statements?

Only disclose the existence of the purchase commitment.

Record unrealized gains of $400,000 and disclose the existence of the purchase commitment.

No impact.

Record unrealized losses of $400,000 and disclose the existence of the purchase commitment.

7. Crane Corporation sells its product, a rare metal, in a controlled market with a quoted price applicable to all quantities. The total cost of 5100 pounds of the metal now held in inventory is $205000. The total selling price is $544000, and estimated costs of disposal are $20600. At what amount should the inventory of 5100 pounds be reported in the balance sheet?

$184400.

$205000.

$523400.

$544000.