Part I Jan 1, 2016. AAA Purchased a building (Cost: $500,000, salvage value: $200.000, usefal life S years) Cauchuate the amount of depreciable cost Suppose that you are using straight line method Calculate the depreciation rate. to calculate depreciation expense 1. Complete the table based on stright line method to calculate depreciation. Don't forget to fill all the blanks, includin table headings. End of Year Computation Annual Year Depreciation Rate Expense Depreciation Book Value 2.Complete the table based on sum of year's digit method Computation End of Year Expense Depreciation Book Va Year Rate 3. Define straiht line method depreciation 4. What is the sum-o-years digit method? What's unique thing about this method? table is of AAA # of units 100 200 $ 300 S 400 S 500 S Price per Unit 12 13 14 15 16 Total Cost 1 200 2 600 4 200 6 000 8 000 22 000 Beginning Inventor Dec 1 Dec 3 Dec 4 Dec 20 Purchase Purchase Dec 25 Puchase Total 1 500 During December, AAA sold 700 units at $30 How much is the Cost of Goods Available for Sale? How much is the net sale? Complete the following table In this table, you have to calculate Cost of Goods Sold and Ending Inventory under LIFO, FIFO, Weighted Average method For weighted average method, round up the average cost per unit to the two decimal points Suppose that your income tax rate is 27% of your income before income tax. FIFO LIFO W. Average Net Sales Cost of Goods Solk Operatimg Expense Other gai Income Tax Gross Profit 100.00 1 00.00 100.00 Income From Operation Income Before Income Tax Net Income 100,00 100,00 100,00 Among three different method, which inventory valuation method mininize income tax under inflation? Amont three different method, which inventory valuation method maximize ending inventory? Part III What is the difference between direct write-off method and allowance method? At the beginning of the year, AA prepared the Aging of Accounts Receivable Schedule. Complete the table. Jan 1. Customer Amount aber of Days Past Due 30-60 Over 90 1-30 S 10 000 (Not Yet Due) S 10000 1 000 2000 5 000 3 000 $ 21 000 S 1 000 $ 2000 EF s s 000 $ 3 000 $ 3 000 S 2 000 10% S 5 000 $ 10 000 5% S1 000 Total Percentage considered imcollectible Estimated Uncollectible Accounts 15% AA had previous balance of Allowance for Doubtful Accounts ($170) How much do they have to add to match the estimated uncollectible accounts that you calculated above? Jan 1 8 9 0 1 32 3 34 35 36 37 Jan 1. Please complete the journal entry to add the amouait that you calculated above to the allowance for D.A Date Explanation Debit Credit Jan 1. Post the allowance for doubtful accounts entries in T-account, and show the balance. Don't forget the previous balance 38 39 40 41 42 43 Allowance for Doubtful Account 45 46 Post the allowance for doubtful accounts entries in T-account, and show the balance Don't forget the previous balance Jan 1. Allowance for Doubtful Account Mar. 1 Company AA sold rooms to BB on account ($100) on. Date Explanation Debit Credit Company AA found that the account receivable for BB was uncollectible Jounalyze this transaction based on allowance method Mar. 31 Date Explanation DebitCredit April 5. BB notified that they would pay cash for their debt. Journalyze this transaction Date Explanation Debit Credit Apri 5. AA received cash and cleared the receivable from BB Jounalyze this tranxaction. Date Explanation Debit Credit
