Question 1: Suppose Company X purchases inventory as follows: (Rising prices or inflationary trend). Its beginning inventory is 25 units which were purchased for $500. Units Cost/unit Total cost January 15 100 units @$22 $ 2200 March 15 100 units @22.40 2240 June 15 100 units @22.80 2280 December 15 100 units @23.20 2320 Total 400 units $ 9040 At year end, an inventory count reveals 40 units in its ending inventory. Calculate the cost of goods sold and ending inventory under the following three methods of accounting (FIFO, LIFO and weighted average): FIFO LIFO Weighted average Beginning inventory + Purchases Total available for sale Less Ending Inventory Cost of Goods Sold Which method presented here will result in the highest: A-net income? B-Cash amount? Why? C-what is the LIFO reserve amount? Question 3: Given the following data, calculate the Impairment Loss (if any). Prepare necessary journal entries to reflect a loss if applicable. Also prepare journal entries to reflect amortization expense for 2013 and 2014. Intangible Assets: December 31,2013 From a partial Balance Sheet showing Intangible Assets. Patent 6,500 (Net of $14,000 Accumulated Amortization) Goodwill 10,900 Total intangible assets $16.900 During 2013, the company was unsuccessful in defending its patent as a plaintiff in a civil infringement case. The result prompted management to properly test for a potential impairment loss. This resulted in a revision of estimated future cash flows from the patent of $2,000 per annum for the next 4 years .Original estimates had a cash flow projection from the patent of $2,500 for the next 5 years. The fair value of the patent as of year-end is $5,896