Other than raw materials and manufacturing overhead, what is the third component of inventories for manufacturing companies?

Select one:

A.Direct labor

B.Indirect labor

C.Equipment cost

D.Processing cost

E.All of the above

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One difference between straight-line and double-declining-balance depreciation methods is that:

Select one:

A.Straight-line method will fully depreciate the asset more quickly.

B.Double-declining-balance method will fully depreciate the asset more quickly.

C.Income taxes paid will be lower under the double-declining-balance method.

D.Losses on disposal will be lower under the straight-line method.

E.None of the above.

3. Aiello, Inc. had the following inventory in fiscal 2016. The company uses the FIFO method of accounting for inventory.

Beginning Inventory, January 1, 2016: 130 units @ $15.00

Purchase 200 units @ $18.00

Purchase 50 units @ $13.50

Purchase 110 units @ $15.75

Ending Inventory, December 31, 2016: 120 units

The company's cost of goods sold for fiscal 2016 is:

Select one:

A.$6,090.00

B.$6,045.00

C.$6,157.50

D.$5,305.75

E.None of the above

Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale

Zimmer Company owns an executive plane that originally cost $1,280,000. It has recorded straightline depreciation on the plane for seven full years, calculated assuming a $160,000 expected salvage value at the end of its estimated 10year useful life. Zimmer disposes of the plane at the end of the seventh year.

a.At the disposal date, what is the (1) cumulative depreciation expense and (2) net book value of the plane?

(1) Cumulative depreciation expense $Answer

(2) Net book value $Answer

b.How much gain or loss is reported at disposal if the sales price is:

Note:Do not use a negative sign with your answers.

Sales Price

Gain or Loss

1.

A cash amount equal to the plane's net book value.

Answer

Answer

Gain

Loss

No gain or loss

2.

$285,000

Answer

Answer

Gain

Loss

No gain or loss

3.

$700,000

Answer

Answer

Gain

Loss

No gain or loss

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Central Supply purchased a new printer for $64,125 . The printer is expected to operate for nine (9) years, after which it will be sold for salvage value (estimated to be $6,413 ). How much is the first year's depreciation expense if the company uses the double-declining-balance method?

Select one:

a.None of these are correct.

b.$7,125

c.$12,825

d.$17,100

e.$14,250

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