Chapter 8 4 marks

(1)

Adrian Taylor Corporation is a newly formed entity that engages in the purchase and resale of amphibious tour vehicles. Purchases for the first year of operation were as follows:

Units Cost per unit in Dollars

Purchases $

January 7 50 15,000 each

March 15 70 16,000 each

June 16 30 16,500 each

August 3 90 17,000 each

October 11 25 17,200 each

Sales for this first year of operation amounted to 210 units and totaled $4,250,000

Using the Periodic Inventory System, compute the Cost of Ending Inventory; Cost of Goods Sold, and Gross Profit under:

(a)

The Average-Cost Method;

(b)

The FIFO Inventory Costing Method;

(c)

The LIFO Inventory Costing Method;

Round unit costs to cents and total to dollars

(2) For an extra mark!

For a given value for cost of goods available for sale,

1. the lower the ending inventory valuation, the lower the cost of goods sold

2. the higher the ending inventory valuation, the lower the cost of goods sold

3. the higher the ending inventory valuation, the higher the cost of goods sold

4. none of these

Chapter 10 4 marks

(1)

On January 1, 2013, Printing Company purchased a digital press for $1,450,000. It cost an additional $50,000 to deliver, install, and calibrate the press. This machine has a service life of 5 years; at which time it is expected that the device will be disposed of for a $100,000 Salvage Value.

The Company uses the Straight-Line Depreciation Method.

Required:

(a)

Prepare a Schedule showing Annual Depreciation Expense; Accumulated Depreciation; and related calculations for each year;

(b)

Show how the Asset and related Accumulated Depreciation would appear on a Balance Sheet at December 31, 2015.

(c)

Prepare journal or T-accounts entries to record Assets Acquisition (Purchase); and the Assets eventual Sale for $100,000 ;

(2) For an extra mark!

Land and a building on the land are purchased for $255,000. The appraised values of the land and building are $92,500 and $185,000, respectively. Round up percentage computation to the second decimal.