Question:

• Inventory Methods Assuming inventory prices are increasing over time and a company purchases enough inventory during the current period to cover total sales for the current period, which of the following inventory methods will result in the highest cost of goods sold?

A.	FIFO, perpetual
B.	average costing, periodic
C.	LIFO, periodic
D.	average costing, perpetual

1.25 points

QUESTION 2

• Accounts ReceivableBrian Inc. secured a $400,000 loan on March 1^stfrom Bank of America by using $500,000 of accounts receivable as collateral. Bank of America assessed a 2% finance charge on this loan and required a reasonable interest rate of 9%, payments due monthly. During March, Brian collected $250,000 on these accounts receivable. How much of the loan PRINCIPAL did Brian pay off on March 31^st?

A.	$250,000
B.	$247,000
C.	$246,250
D.	$214,000

1.25 points

QUESTION 3

• Fixed Asset Impairment Assuming a company has taken an impairment loss on asset impairment in a prior period and uses U.S. GAAP, on which type of asset can a company recover this prior period impairment if the asset has increased in value?

A.	fixed asset that the company is continuing to use
B.	a company can never recover prior impairment losses under U.S. GAAP
C.	goodwill
D.	fixed asset that the company intends to sell

1.25 points

QUESTION 4

• Nonmonetary ExchangeGamma Corp exchanges a fixed asset with a net book value of $200,000 and a fair market value of $250,000 for an asset with a fair market value of $225,000. Under which of the following circumstances (if any) will Gamma defer some of the gain or loss?

A.	Gamma receives $10,000 and the exchange has commercial substance
B.	Gamma receives $80,000 and the exchange has commercial substance
C.	Gamma received $10,000 and the exchange lacks commercial substance
D.	Gamma received $80,000 and the exchange lacks commercial substance

1.25 points

QUESTION 5

• Inventory Methods Company X began the month of April with 400 units of inventory valued at $5,000. On April 10^th, Company X sold 200 units of inventory. On April 14^th, Company X purchased an additional 200 units of inventory at a cost of $13.20 per unity. On April 20^th, 50 units of inventory purchased on April 10^thwere returned to Company X. On April 28^th, Company X sold 220 units of inventory. Assuming Company X utilizes a perpetual FIFO inventory system, what is the ending inventory for the month ending April 30^th?

A.	2,376
B.	2,875
C.	3,015
D.	3,036

1.25 points

QUESTION 6

• Accounts Receivable Under which scenario where a company holds accounts receivable is the company's risk of default removed?

A.	when the company sells, with recourse, its accounts receivable to a third-party
B.	when the company assigns its accounts receivable for a line of credit
C.	when the company factors, without recourse, its accounts receivable to a third-party
D.	when the company pledges its accounts receivable for a note payable

1.25 points

QUESTION 7

• Nonmonetary Exchanges of Fixed Assets If Company X exchanges a fixed asset for another fixed asset and receives boot in an exchange with commercial substance, what is the historical cost Company X assigns to the new asset?

A.	The old historical cost, less accumulated depreciation on the old asset
B.	The old historical cost
C.	The old historical cost, plus the boot received
D.	The fair market value of the new asset

1.25 points

QUESTION 8

• Fixed Asset Impairment Assume that the U.S. Congress passes a law changing the useful life of a patent from 20 years to 15 years. Alpha Corp has a patent, amortized straight-line, that has been used for 10 years. The patent has a historical cost of $20,000,000. The expected cash flows for each of the next five years is $2,500,000. Assuming the fair value of the patent is $9,500,000 and the market interest rate is 8% (PV$ = 0.681, PVOA = 3.993), what (if any) impairment loss should Alpha Corp record for the year?
• A.
• no impairment loss should be recorded
• B.
• $17,500
• C.
• $500,000
• D.
• $1,487,500