1) The accountant at Rocketfire Corp. needs to estimate the companys quarter-end inventory to complete its interim financial statements. Rocketfire has a relatively small product offering and a captive market. As such, it has been able to maintain a constant gross margin of 40% over the last three years. Extracts from the companys general ledger follow: Sales (gross) $330,000 Sales returns and allowances 5,400 Purchases (gross) 175,000 Purchase discounts 6,000 Opening inventory 45,000 What amount should Rocketfire report on its financial statements as ending inventory estimated using the gross profit method?

2) In early 20X1, Textron Inc. entered into an agreement with Scantech Ltd. for the construction of a new office building. It is expected to take three years to complete construction. The initial total estimated cost of the building was $28 million and the price of the contract was set at $38 million. At December 31, 20X1, the total cumulative cost incurred was $18 million. Due to increasing costs of materials, the total estimated cost of the project at the end of 20X1 was $31 million. By the end of the 20X2 f iscal year, an additional $9 million of costs was incurred. At December 31, 20X2, the total estimated cost of the project remained the same as at December 31, 20X1. What amount should Textron recognize as gross profit (the profit element) for the December 31, 20X2, fiscal year?

3)On January 1, 20X3, Gaudreau Enterprises sold goods and accepted a $200,000, five-year interest-free note from the purchaser. The note was repayable at $40,000 per annum, with the first payment due on December 31, 20X3. The market rate of interest for similar notes was 6% per annum. Gaudreau Enterprises only records adjusting entries at year end, and all amounts are material. What amount of interest revenue should Gaudreau Enterprises accrue at its December 31, 20X3 year end?

5) On October 19, 20X3, Nanva Music sold a delivery vehicle that it no longer needed for

$6,500. The company took a note receivable from the customer, Ryan Tower Inc., for this

sale. The terms of the note state that it must be repaid in full within three years; however,

there is no fixed payment schedule. The note also bears interest at 12% per annum, which

is equal to the market rate of interest.

Ryan Tower has made the following payments on the note receivable to date:

The schedule below has not been updated since the December 31, 20X3, payment.

Date of payment	Total payment	Applied to interest
December 31, 20X3	$ 1,500.00	$ 156.00
April 15, 20X4	$ 1,000.00	$ 177.99
August 6, 20X4	$ 800.00	$ 161.01

The payments were applied appropriately, first to interest and then to principal. However,

interest income has not been accrued to December 31, 20X4.

Required:

Date	Days outstanding	Amount outstanding	Interest rate	Interest	Payment	Amount outstanding
October 19, 20X3		$6,500.00	12.00%			$6,500.00
December 31, 20X3	73	$6,500.00		$156.00	$1,500.00	$5,156.00
April 15, 20X4		$5,156.00				$5,156.00
August 6, 20X4		$5,156.00				$5,156.00
December 31, 20X4		$5,156.00				$5,156.00

6) Deta Corporation had the following inventory transactions for the month of December 20X5:

As at December 31, 20X5, ABC had 700 units of inventory on hand. What is the value of

the inventory held by ABC as at December 31, 20X5, if the company uses the FIFO

inventory valuation method under a periodic inventory system?

Date in December	Opening balance	Amount (units)	Price per unit
1	Purchase	400	$5.12
3	Purchase	1,100	$5.21
15	Purchase	900	$5.44
22	Purchase	250	$5.65
2	Sale	300	$6.50
6	Sale	800	$6.50
18	Sale	700	$8.00
25	Sale	150	$8.00