f ENTER SHIFT 40 A company purchased land for $350,000 cash. Real estate brokers before construction of a could start. Under the historical cost principle, the cost of land would be and $35,000 was spent for demolishing an old building on the land new building recorded at a $385,000 b $350,000 c $375,000 d $410,000. 41. A machine that was purchased on January 1 for $60,000 has an estimated salvage value of $12,000 if the machine's deprecation rate is 20%, its annual depreciation is a. $12,000 b. $48,000 c. $9,600 d. $14,400 42. The liability of a stockholder is usually limited to the stockholder's investment in the corporation. 43. Preferred stockholders generally do not have the right to vote for the board of directors 44. Short-term creditors are usually most interested in assessing a. solvency b. liquidity. c. marketabiity d profitability 45. Jason Hansen has invested $800,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Hansen stand to lose? a. Up to his total investment of $600,000 b. Zero c. The $800,000 plus any personal assets the creditors demand d $400,000. 30. A company may use more than one inventory cost flow method at the same time. 31. Computers have made the periodic inventory system more popular and easier to apply 32. The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead. 33. Which of the following should not be included in the physical inventory of a company? a. Goods held on consignment from another company. b. Goods in transit from another company shipped FOB shipping point. c. Goods shipped on consignment to another company. d. All of these answer choices should be included. 34. Manufacturers usually classify inventory into all the following general categories except: work in process finished goods merchandise inventory raw materials a. b. c. d. Baker Bakery Company just began business and made the following four inventory purchases in June 35. 1,040 1,560 1,680 1,320 150 units 200 units 200 units 150 units June 1 June 10 June 15 June 28 8 6 3 2 5.600 physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is a. $1,456 b. $1,508 C. $1,824 d. $1,848 36. A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80, Second purchase $95; Third purchase $85. If the company sold two units for a total of $270 and used FIFO costing, the gross profit for the period would be a. $95. b. $105. c. $90. d. $80 37. Goodwill is recorded only when there is an exchange transaction that involves the purchase of an entire business. Intangible assets are rights, privileges, and competitive advantages that result from ownership of long-lived assets without physical substance. 38. 39. In the notes to the financial statements, the depreciation and amortization methods used should be described
