Question
Final Written Exam Intermediate Accounting 90 Points 1. Given the following information for Goode Company: May 1 Beginning inventory 18 units @ $4 per unit
Final Written Exam
Intermediate Accounting
90 Points
1.Given the following information for Goode Company:
May 1
Beginning inventory
18 units @ $4 per unit
May 7
Purchase
12 units @ $5 per unit
May 10
Sale
14 units
May 17
Purchase
10 units @ $6 per unit
May 19
Sale
4 units
Required:
Answer the following questions for Goode Company:
a.
If FIFO is in use, what is the total ending inventory in dollars?
b.
If perpetual LIFO is in use, what is the cost of goods sold for the month?
c.
If weighted average is in use, what is the ending inventory?
2.The following data has been provided by Lee Company regarding its inventory purchases and sales throughout the year.
Transaction
Units
Cost per Unit
1-Jan
Balance
175
$86
14-Mar
Sale
55
23-May
Purchase
135
90
21-Aug
Sale
100
5-Nov
Purchase
175
91
18-Nov
Sale
100
30-Nov
Sale
100
5-Dec
Sale
100
10-Dec
Purchase
25
95
Required:
Compute the cost of goods sold and ending inventory using the perpetual inventory system for the FIFO cost flow assumption.
3.The following data has been provided by Lee Company regarding its inventory purchases and sales throughout the year.
Transaction
Units
Cost per Unit
1-Jan
Balance
175
$86
14-Mar
Sale
55
23-May
Purchase
135
90
21-Aug
Sale
100
5-Nov
Purchase
175
91
18-Nov
Sale
100
30-Nov
Sale
100
5-Dec
Sale
100
10-Dec
Purchase
25
95
Required:
Compute the cost of goods sold and ending inventory using the perpetual inventory system for the LIFO cost flow assumption.
4.On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company. Gold's machine had an original cost of $80,000, accumulated depreciation to date of $14,500, and a fair market value of $60,000. Cowboy's machine had an original cost of $95,000 and a book value of $45,000 and a fair value of $53,000.
Required:
a.
Prepare the necessary journal entry by Gold Company to record this transaction.
b.
Prepare the necessary journal entry by Cowboy Company to record this transaction.
5.On January 3, 2016, Mercury Company began self-constructing an asset that qualified for interest capitalization. On January 5, Mercury borrowed $300,000 on an 8% construction loan. In addition, Mercury had $400,000 of 6% notes payable and $600,000 of 9% bonds payable outstanding. By December 31, expenditures (occurring evenly throughout the year) of $900,000 had been made on the asset. Investment of unused funds during the year yielded $1,200 of interest revenue.
Required:
Compute the amount of interest that should be capitalized during 2016.
6. The Jefferson Co. purchased a machine on January 1, 2016. The machine cost $595,000. It had an estimated life of ten years, or 30,000 units, and an estimated residual value of $40,000. In 2016, Jeffries produced 3,000 units.
Required:
Compute the depreciation charge for 2016 using each of the following methods:
a.
Double-declining-balance method
b.
Activity method (units of output)
c.
Sum-of-the-years'-digits method
d.
Straight-line method
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Introductory Business Statistics
Authors: Alexander Holmes , Barbara Illowsky , Susan Dean
1st Edition
1506699847, 9781506699844
