82 L 2.14. Tucker's Technology had the period: 100 units @ $5 140 units @ 57 200 units @ $8 160 units @ $8.50 Beginning inventory Purchases (in order from first to last): end of the account Sales for the period were 530 units. uffer under the three methods (a) Compute the inventory balance and the cost of goods sold at the end of the ing period using average cost, FIFO, and LIFO. (b) Which method shows the highest ending inventory? (c) Which method shows the highest cost of goods sold? (d) Explain why ending inventory and cost of goods sold differ under the three me of inventory valuation 2.15. The FLA.C. Corporation sells a single product. The following is information on inventor purchase, and sales for the current year: Number of Units Unit Cost Sale Price 6.00 $ 3.00 10,000 Inventory January 1 Purchase 3.50 4,000 January 10 $5.00 Sales January 1-March 31 8,000 10,000 4.00 April 25 Purchase April 1-June 30 5.50 Sales 11,000 July 10 Purchase 6,000 4.50 July 1-September 30 Sales 3,000 October 15 Purchase 8,000 5.00 October 1-December 31 Sales 9,000 6.50 (a) Compute the inventory balance and the cost of goods sold expense reported at the end of the year using the following methods: FIFO, LIFO, and average cost. (b) Discuss the effect of each method on the balance sheet and income statement during! periods of inflation 2.16. The following information is available for Chemco Inc's inventories as of June 30, 2015 (in Thousands) 2015 2014 Finished goods $382,925 Work in process $303,249 76,524 Raw materials and supplies 60,588 72,246 Inventories at current cost 49,844 531,695 Less LIFO valuation 413,681 Total inventories (83,829) (88,368) $447,886 $325,313 We used the LIFO method of valuing our inventories total inventaries - - Question 2.17. Using the information provided in the problem on page 83, calculate/answer the following questions: a. Calculate the depreciation expense using the straight-line method for the equipment. b. Calculate the depreciation expense using the double-declining balance method for the first year the equipment was owned. c. Calculate the depreciation expense using the double-declining balance method for the second year the equipment was owned CHAPTER 2 The Balance Sheet 83 2.17. The Lazy O Ranch just purchased equipment costing 40.000. The equipment is expected to last five years and have no salvage value (a) Calculate the depreciation expense using the straight-line method for the first two years the equipment is owned (b) Calculate the depreciation expens using the double declining balance method for the first two years the equipment is owned. 2.18. Using the information below for Dean Comrat calculate the amount of dividends Dean most likely paid to common stockholders in 2013, 2014, and 2015. Year Net Income Retained Earnings Balances January 1, 2013 December 31, 2013 December 31, 2014 December 31, 2015 $ 700 990 1.045 1,010 2008 2009 2010 $250 225 2.19. From the following accounts, prepare a balance sheet for Chester Co. for the current calendar year. Accrued interest payable Property, plant, and equipment Inventory Additional paid-in capital Deferred taxes payable (noncurrent) Cash Accumulated depreciation Bonds payable Accounts payable Common stock Prepaid expenses Land held for sale Retained earnings Current portion of long-term debt Accounts receivable Notes payable $ 1.400 34,000 12,400 7,000 1,600 1,500 10,500 14,500 4,300 2,500 700 9,200 1,700 6.200 8,700 2.20. Writing Skills Problem. At fiscal year-end December 31, 2015, Shop World had the following assets and liabilities on its balance sheet (in millions): Current liabilities Long-term debt Other liabilities Total assets $9.459 12,330 1,180 37,411 Shop World reported the following information on leases in the notes to the financial statements: Total rent expense was $195 million in 2015, 5189 million in 2014, and $188 million in 2013. Most of the long-term leases include options to renew, with terms varying from 1 to 50 years. Certain leases also include options to purchase the property 82 L 2.14. Tucker's Technology had the period: 100 units @ $5 140 units @ 57 200 units @ $8 160 units @ $8.50 Beginning inventory Purchases (in order from first to last): end of the account Sales for the period were 530 units. uffer under the three methods (a) Compute the inventory balance and the cost of goods sold at the end of the ing period using average cost, FIFO, and LIFO. (b) Which method shows the highest ending inventory? (c) Which method shows the highest cost of goods sold? (d) Explain why ending inventory and cost of goods sold differ under the three me of inventory valuation 2.15. The FLA.C. Corporation sells a single product. The following is information on inventor purchase, and sales for the current year: Number of Units Unit Cost Sale Price 6.00 $ 3.00 10,000 Inventory January 1 Purchase 3.50 4,000 January 10 $5.00 Sales January 1-March 31 8,000 10,000 4.00 April 25 Purchase April 1-June 30 5.50 Sales 11,000 July 10 Purchase 6,000 4.50 July 1-September 30 Sales 3,000 October 15 Purchase 8,000 5.00 October 1-December 31 Sales 9,000 6.50 (a) Compute the inventory balance and the cost of goods sold expense reported at the end of the year using the following methods: FIFO, LIFO, and average cost. (b) Discuss the effect of each method on the balance sheet and income statement during! periods of inflation 2.16. The following information is available for Chemco Inc's inventories as of June 30, 2015 (in Thousands) 2015 2014 Finished goods $382,925 Work in process $303,249 76,524 Raw materials and supplies 60,588 72,246 Inventories at current cost 49,844 531,695 Less LIFO valuation 413,681 Total inventories (83,829) (88,368) $447,886 $325,313 We used the LIFO method of valuing our inventories total inventaries - - Question 2.17. Using the information provided in the problem on page 83, calculate/answer the following questions: a. Calculate the depreciation expense using the straight-line method for the equipment. b. Calculate the depreciation expense using the double-declining balance method for the first year the equipment was owned. c. Calculate the depreciation expense using the double-declining balance method for the second year the equipment was owned CHAPTER 2 The Balance Sheet 83 2.17. The Lazy O Ranch just purchased equipment costing 40.000. The equipment is expected to last five years and have no salvage value (a) Calculate the depreciation expense using the straight-line method for the first two years the equipment is owned (b) Calculate the depreciation expens using the double declining balance method for the first two years the equipment is owned. 2.18. Using the information below for Dean Comrat calculate the amount of dividends Dean most likely paid to common stockholders in 2013, 2014, and 2015. Year Net Income Retained Earnings Balances January 1, 2013 December 31, 2013 December 31, 2014 December 31, 2015 $ 700 990 1.045 1,010 2008 2009 2010 $250 225 2.19. From the following accounts, prepare a balance sheet for Chester Co. for the current calendar year. Accrued interest payable Property, plant, and equipment Inventory Additional paid-in capital Deferred taxes payable (noncurrent) Cash Accumulated depreciation Bonds payable Accounts payable Common stock Prepaid expenses Land held for sale Retained earnings Current portion of long-term debt Accounts receivable Notes payable $ 1.400 34,000 12,400 7,000 1,600 1,500 10,500 14,500 4,300 2,500 700 9,200 1,700 6.200 8,700 2.20. Writing Skills Problem. At fiscal year-end December 31, 2015, Shop World had the following assets and liabilities on its balance sheet (in millions): Current liabilities Long-term debt Other liabilities Total assets $9.459 12,330 1,180 37,411 Shop World reported the following information on leases in the notes to the financial statements: Total rent expense was $195 million in 2015, 5189 million in 2014, and $188 million in 2013. Most of the long-term leases include options to renew, with terms varying from 1 to 50 years. Certain leases also include options to purchase the property