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A fire destroyed the inventory of Mantis Company in June. Reconstructed data follows: Gross margin as a percentage of sales..................40% Sales to date of fire.......
A fire destroyed the inventory of Mantis Company in June. Reconstructed data follows: Gross margin as a percentage of sales..................40% Sales to date of fire....... $460,000 Gross purchases to date of fire.... ..267,000 Purchase returns and allowances to date of fire...8,000 Freight-in........ ...4,000 Sales returns... ..10,000 Beginning inventory.... ..28,000 What was the cost of the inventory lost in the fire? O a. $50,000 O b. $34.000 O c. $30,000 O d. $26,000 5 If the gross margin percentage used in the gross margin method were overstated (e.g.. 36% instead of 32%), what would happen? O a. Cost of goods sold would be overstated. O b. Ending inventory would be understated. O c. Ending inventory would be overstated. O d. Ending inventory would be correctly stated, but beginning inventory would be incorrect. Bowlarama owns a machine that it purchased on Jan 1, 2019 for $600,000. The machine had an estimated useful life of 5 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 20%. The machine was sold on December 31, 2021 for $140,000. What was the accumulated depreciation at December 31, 2021? O a. $292,800 O b. $180,000 O c. $150,000 O d. $76,800 Centennial owns a machine that it purchased on Jan 1, 2019 for $400,000. The machine had an estimated useful life of 10 years with a production capacity for 80,000 units and was expected to have no residual value. The company uses the units-of- production method to record depreciation. The machine produced 15,000 units in 2019, 18,000 units in 2020 and 25,000 units in 2021. The machine was sold on December 30, 2021 for $350,000. What was the accumulated depreciation at December 31, 2019? O a. $39,000 O b. $40,000 c. $75,000 O d. $90,000
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