d. Vargo's property plant and equipment consists of a building with a cost of $840.000 and a salvage value of $40,000 with a 15 year life purchased on 6/1/14 and a piece of equipment that cost $88,000 and a salvage value of $4,000 with a 5 year life purchased on 9/1/17. Vargo incurred delivery and installation charges of $8,000 on the equipment. Vargo spent $39,000 painting the building during 2019. On 1/1/19, Vargo revised the estimate on the life of the building. Vargo now estimates that the building will be in service until 12/31/31. On 10/1/19, Vargo exchanged the piece of equipment for a similar piece of equipment with the Eakin Company. The new equipment has salvage a salvage value of $5,000 and is expected to be taken out of service at the same time the old equipment would have been. The transaction had no commercial substance. The fair value of the equipment they gave up was $47,000. The fair value of the equipment received from Eakin was $40,000. In addition to the equipment, they received $7,000 in cash. Prepare the journal entry to record the transaction on Vargo's books. Vargo considers depreciation to be an administrative expense. Compute depreciation expense for the building and equipment for 2019. Vargo computes depreciation to the nearest month and uses the 200% (double) declining balance method for both the building and equipment. Vargo sells two products. The first (the "tibed") is sold only for cash and represents a single performance obligation (sale of the product). "Tibed" sales for the year are 204,000 units. "Tibed" sells for a price of $23.80 per unit, and Vargo incurs shipping costs of $3.70 per unit sold. Vargo had sales discounts of $89,000 on "tibed" sales. The second is a software package (the "tiderc") and is new for 2019. It has two performance obligations (sale of the software and a software update after 2 years). 59,600 units of "tiderc" were sold. "Tidere" sells for $30 per unit (also cash sales). The standalone sales price of the software has been determined to be $25 and the standalone sales price of the update is $5. Vargo incurs a costs of $4.25 per software package. Report sales of the two products separately (one line for tibed and one line for tiderc) How much revenue will Vargo record for Tidere in 2019? What journal entry is required to record Tidere sales for 2019? b. Vargo uses the periodic LIFO method to account for the tibed"inventory. Vargo had the following inventory available for sale during the year. Units Cost Balance on 1/1/18 15.000 $6.25 3/15 purchase 55,000 $6.30 5/20 purchase 44,000 $6.45 7/11 purchase 25,000 $7.08 10/27 purchase 33,000 $7.25 12/2 purchase 46.000 $7.37 Freight-in of $2.75 per unit was incurred on "tibed" inventory, and is not reflected in the cost per unit above. Compute cost of goods sold for the tibed" product, and ending inventory (at historical cost). c. If the ending inventory had a replacement cost of $112.000 on 12/31/19. a realizable value of $149.000 and a normal profit of $26,500, what is the dollar value of inventory reported at on the balance sheet? What adjustment and journal entry (if any) would be required
