TABLE 5-3 AMANDA COMPANY had the following inventory transactions in August. Beginning Balance as of Aug.1 200 @ $3.20 Transactions Through the month Purchases 550 @ $3.10; 300 @ $3.30; 450 @ $3.40: 125 @ $3.50 Sales 150 @ $5.50; 400 @ $5.50; 250 @ $5.50; 100 @ $6.00; 300 @ $6.00; 100 @ $6.00 1. Refer to table 5-3 If Amanda uses a periodic inventory system, the LIFO basis ending inventory is: a. $1,027.50 b. $1,040.00 c. $1,072.50 d. $1,117.50 2. Refer to Table 5-3. If Amanda uses a perpetual inventory system, the LIFO basis ending inventory is: a. $1,027.50 b. $1,040.00 c. $1,067.50 d. $1,117.50 3. Refer to Table 4-3. If Amanda uses a perpetual inventory system, the FIFO basis ending inventory is: e. $1,027.50 f. $1,040.00 g. $1,117.50 h. $1,137.50 4. The ABC Company reported merchandise inventory at LIFO of $450,000 on the year-end financial statements. The company also reported a LIFO Reserve of $45,000. An estimate of the inventory balance if the inventory had been reported using the FIFO assumption is: a. $360,000 b. $405,000 c. $455,000 d. $495,000 5. The Sea King Corporation reported a LIFO Reserve of $50,000 at the end of the year. The beginning of the year LIFO Reseerve was $40,000. The cost of goods sold was $395,000 under LIFO. The cost of goods sold under FIFO should be: a. $375,000 b. $385,000 c. $445,000 d. $485,000 6. As a firm liquidates old LIFO layers of inventory, the lower costs of the LIFO layers are matched against current sales dollars resulting in a profit margin that is: a. always the same as under FIFO b. deflated c. inflated d. lower than normal 7. WAM, Inc. uses the lower of cost or market mehod to determine inventory value. The following information relates to Product W at the end of the year: cost $26; replacement cost $20; selling price $30; cost of completion $2; and normal profit $7. Based upon this information, the lower of cost or market for Product W is: a. $20 b. $21 c. $23 d. $26 TABLE 5-4 Dollar Balue LIFO inventory Data: Year Year End Price Price Index 1 $200,000 100 2 $250,000 105 3 $296,000 108 4 $286,000 110 8. Refer to Table 5-4. The inventory under dollar value LIFO at the end of Year 3 is __________ and at the end of Year $ is _________. a. $274,075; $238,096 b. $276,800; $240,000 c. $278,856; $263,657 d. $300,000; $286,000 9. Clermont Company started construction of a new office building on january 1,2000, and moved into the finished building on July 1, 2002. Of the buildings $2,500,000 was incurred by 12/31/2000 in even increments throughout the year. Clermonts weighted average borrowing rate was 12% throughout 2000, and the actual amount of interest incurred by Clermont during 2000 was $135,000. what amount should Clermont report as capitalized interest at 12/31/2000? a. $120,000 b. $135,000 c. $150,000 d. $240,000 10. The ABC Company purchased an oil well lease for $8,000,000 at the beginning of Year 7. During year 7, it drilled 10 oil wells at a cost of $9,000,000 each. Three of the wells were economically feasible wells and the remaining wells were dry holes. If ABC Company uses the full-cost approach to determine the asset cost, the capitalized cost is: a. $8,000,000 b. $27,000,000 c. $68,600,000 d. $98,000,000 11. The ABC Company purchased an oil well lease for $8,000,000 at the beginning of Year 7. During year 7, it drilled 10 oil wells at a cost of $9,000,000 each. Three of the wells were economically feasible wells and the remaining wells were dry holes. If ABC Company uses the successful-efforts approach to determine the asset cost, the capitalized cost is: a. $9,000,000 b. $27,000,000 c. $35,000,000 d. $98,000,000