Prunedale Co. uses a periodic inventory system. Beginning inventory on January I was overstated by $62,000. and its ending inventory on December 31 was understated by $62,000. These errors were not discovered until the next year. As a result, pruncdaler's cost of goods sold for this year was: a. Overstated by $94,000. b. overstated by $30,000. c. Understated by S94,000. d. Understated by $30,000. Simpson and Homer Corporation acquired an office building on three acres of Land for a lump sum price of $2, 400,000. The building was completely furnished. According to independent building, land, and furniture and fixtures, respectively. The initial values of the building, land, furniture and fixtures would be: Building Land Fixtures a. $1, 300,000 $ 780,000 $ 520,000 b. $1, 200,000 $ 720,000 $480,000 c. S 720,000 $1, 200,000 $480,000 d. None of these answer choices are correct. The cost of self-constructed fixed assets should: a. Include allocated indirect costs just as they are for production of products. b. Include only incremental indirect costs. c. Include only specifically identifiable costs. d. Not include indirect costs. Research and development expense for a given period includes: a. The full cost newly acquired equipment that has an alternative future use. b. Depreciation on a research and development facility. c. Research and development conducted on a contract basis for another entity. d. Patent filing and legal costs. Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of deprecation in the first year? a. Straight-line b. Unites-of-production. c. Double-declining balance. d. Sum-of-the-year's digits