1.Brainiac Toys Inc. uses a perpetual inventory system. Brainiac has the following account balances at December 31, 2020, prior to making any year-end adjustments:

At the end of December 31, 2019, the net realizable value of Brainiac's ending inventory was $17,000 which exceeded its cost of $14,700. Brainiac has determined that the net realizable value of its ending inventory at December 31, 2020, is $15,200.

Required:

Calculate Brainiac Toys Inc.'s gross profit for the year ended December 31, 2020.

Answer:

2.

Assume that at the beginning of 2020, Spud Organics Ltd. purchased a tractor at a cost of $110000. Spud Organics expects the tractor to remain useful for 5 years (4,000 hours) and to have a residual value of $15,000. Spud Organics expects to use the tractor 800 hours the first year and 1,000 hours each year during years 2 through 4 and 1,200 hours the last year.

Required:

What is Spud Organic's first-year depreciation on the tractor using the double diminishing balance method? Round your answer to the nearest dollar.

3.

Home Hardware Ltd. sells patio loungers and uses a perpetual inventory system to account for its merchandise. The beginning balance of patio loungers and transactions during June of last year were as follows:

June 1	Opening balance: 85 units costing $250 each
June 5	Purchased 120 units costing $265 each
June 11	Sold 55 units
June 19	Sold 45 units
June 23	Purchased 75 units costing $300 each
June 25	Sold 45 units
June 30	Sold 70 units

Required:

Calculate the cost of Home Hardware Ltd.'s ending inventory at the end of June assuming the company keeps its records on a FIFO basis. Round your answer to the nearest dollar.

4.

Assume that at the beginning of 2020, The Rocky Mountaineer purchased a railcar at a cost of $500,000. Rocky Mountaineer expects the railcar to remain useful for 5 years and to have a residual value of $100,000.

Required:

Compute Rocky Mountaineer's fourth-year depreciation on the railcar using the double diminishing balance method.