Question 3: ( B1, C2, D3) (10 Points)

The following items were taken from the records ofDELTA Company at the end of 2018.

Bonds payable

$10,000

Accumulated Depreciation(land)

4,000

Prepaid Expense

1,000

Accounts Payable

3,000

Land

20,000

Long term Notes payable

1,000

Additional Paid in Capital

3,000

Long term investment

6,000

Short term investment

5,000

Common Stock

20,000

Accrual expense

2,000

Accounts Receivable

8,000

Cash

2,000

Retained Earnings

10,000

Patents

6,000

Inventories

5,000

Instructions: Prepare a classified balance sheet in good form as of December 31, 2018.

Question 4: ( B1, C1, D3) (10 Points)

Karim Company was formed on December 1, 2016. The following information is available from Karim's inventory record for Product X.

UnitsUnit Cost

January 1, 2017 (beginning inventory) 1,600$18.00

Purchases:

January 5, 20172,600$20.00

January 25, 20172,400$21.00

February 16, 20171,000$22.00

March 15, 20171,800$23.00

The total sales at 30 of March, 2017, shows 6900 units.

Instructions

Prepare schedules to compute the Cost of ending inventory and the Cost of goods sold at March 31, 2017, under each of the following inventory methods:

(a)FIFO.

(b)LIFO.

Answer of Question 4: