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I need help solving # 22 and #28 of the attachment. If you can please assist with the steps to getting the answer that's provided

Name: __________________________ Date: _____________ 1. The two inventory costing systems used are the ______________ and ______________. 2. Inventory costing methods place primary reliance on assumptions about the flow of A) goods. B) costs. C) resale prices. D) values. 3. Apple-A-Day Company has the following inventory data: July 1 Beginning inventory 20 units at $20 7 Purchases 70 units at $21 22 Purchases 10 units at $22 $ 400 1,470 220 $2,090 A physical count of merchandise inventory on July 30 reveals that there are 25 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is A) $1,585 B) $1,590 C) $1,555. D) $1,540. 4. A company purchased inventory as follows: 200 units at $5.00 300 units at $5.50 The average unit cost for inventory is A) $5.00. B) $5.25. C) $5.30. D) $5.50. Page 1 5. Snug-As-A-Bug Blankets has the following inventory data: July 1 Beginning inventory 15 units at $60 5 Purchases 90 units at $56 14 Sale 60 units 21 Purchases 45 units at $58 30 Sale 42 units Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July? A) $5,802 B) $5,772 C) $5,796. D) $5,916 6. Hoover Company had beginning inventory of $15,000 at March 1, 2014. During the month, the company made purchases of $55,000. The inventory at the end of the month is $17,300. What is cost of goods sold for the month of March? A) $52,700 B) $55,000 C) $70,000 D) $72,300 7. Which of the following statements is correct with respect to inventories? A) The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. B) It is generally good business management to sell the most recently acquired goods first. C) Under FIFO, the ending inventory is based on the latest units purchased. D) FIFO seldom coincides with the actual physical flow of inventory. Page 2 8. Trumpeting Trumpets has the following inventory data: July 1 Beginning inventory 30 units at $120 5 Purchases 180 units at $112 14 Sale 120 units 21 Purchases 90 units at $115 30 Sale 84 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis. A) $10,992 B) $11,022 C) $23,088. D) $23,118 9. Dole Industries had the following inventory transactions occur during 2014: Units Cost/unit Feb. 1, 2014 Purchase 72 $90 Mar. 14, 2014 Purchase 124 $94 May 1, 2014 Purchase 88 $98 The company sold 204 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used and operating expenses of $2,000, what is the company's after-tax income using FIFO? (rounded to whole dollars) A) $4,176 B) $4,784 C) $3,349 D) $2,923 10. The term "FOB" denotes A) free on board. B) freight on board. C) free only (to) buyer. D) freight charge on buyer. Page 3 11. A company just began business and made the following four inventory purchases in June: June 1 150 units $ 825 June 10 200 units 1,120 June 15 200 units 1,140 June 28 150 units 885 $3,970 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is A) $1,134. B) $1,180. C) $1,100. D) $1,120. 12. The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $600 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption? A) $11,600 B) $13,000 C) $9,000 D) $10,400 13. In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure? A) Average cost method B) LIFO method C) FIFO method D) Need more information to answer 14. When the terms of sale are FOB shipping point, legal title to the goods remains with the seller until the goods reach the buyer. A) True B) False Page 4 15. Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods by the buyer. A) True B) False 16. The return on assets ratio can be computed from the profit margin ratio and the asset turnover ratio. A) True B) False 17. Certain types of leases, called capital leases, allow the lessee to account for the transaction as a rental. A) True B) False 18. An asset that cannot be sold individually in the market place is A) a patent. B) goodwill. C) a copyright. D) a trade name. 19. Which of the following methods of computing depreciation is production based? A) Straight-line. B) Declining-balance. C) Units-of-activity. D) None of these answer choices are correct. 20. Machinery was purchased for $170,000 on January 1, 2013. Freight charges amounted to $7,000 and there was a cost of $20,000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $30,000 salvage value at the end of its 5-year useful life. What is the amount of accumulated depreciation at December 31, 2014, if the straight-line method of depreciation is used? A) $66,800. B) $33,400. C) $28,600. D) $57,200. Page 5 21. A company purchased land for $84,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Proceeds from salvage of the demolished building was $1,200. Under the historical cost principle, the cost of land would be recorded at A) $94,800. B) $84,000. C) $89,800. D) $96,000. 22. During 2014, Phelps Corporation reported net sales of $3,000,000, net income of $1,320,000, and depreciation expense of $80,000. Phelps also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $800,000, and accumulated depreciation of $500,000. Phelps's asset turnover ratio is A) 1.5 times. B) 1.2 times. C) 2.0 times. D) 2.4 times. 23. A characteristic of a plant asset is that it is A) intangible. B) used in the operations of a business. C) held for sale in the ordinary course of the business. D) not currently used in the business but held for future use. 24. The Land account would include all of the following costs except A) drainage costs. B) the cost of building a fence. C) commissions paid to real estate agents. D) the cost of tearing down a building. 25. Nix Corporation sold equipment for $20,000. The equipment had an original cost of $60,000 and accumulated depreciation of $30,000. Ignoriing the tax effect, as a result of the sale A) net income will increase $20,000. B) net income will increase $10,000. C) net income will decrease $10,000. D) net income will decrease $20,000. Page 6 26. A company purchased factory equipment on June 1, 2014, for $96,000. It is estimated that the equipment will have a $6,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014, is A) $9,000. B) $5,250. C) $4,500. D) $3,750. 27. The following information is provided for Nguyen Company and Northwest Corporation. (in $ millions) Nguyen Company Northwest Corporation Net income 2014 $275 $390 Net sales 2014 1,500 4,100 Total assets 12/31/12 1,000 2,400 Total assets 12/31/13 1,050 3,000 Total assets 12/31/14 1,150 4,000 If Nguyen and Northwest are in the same industry and the industry average for the asset turnover ratio is equal to 1.20 times, which of the following statements is true? A) Nguyen is operating more efficiently than the industry. B) Northwest is operating more efficiently than Nguyen. C) Both Nguyen and Northwest are operating more efficiently than the average company in their industry. D) The asset turnover ratio does not address the question of efficient operations. 28. Runge Company purchased machinery on January 1 at a list price of $250,000, with credit terms 2/10, n/30. Payment was made within the discount period. Runge paid $12,500 sales tax on the machinery, and paid installation charges of $4,400. Prior to installation, Runge paid $10,000 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery? A) $261,900. B) $271,900. C) $276,900. D) $252,500. Page 7 29. Equipment costing $70,000 with a salvage value of $14,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years and no change in the salvage value, the depreciation expense for Year 3 would be A) $10,500. B) $9,333. C) $14,000. D) $7,000. 30. In recording the purchase of a business, goodwill should be recorded for the excess of ________________ over the _________________ of the net assets acquired. Page 8 Answer Key 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. periodic, perpetual B A C C A C C C A A B B B A A B B C A A D B B C B A B A cost, fair market value Page 9