The following inventory information is available:

Transaction	Date	Units	Dollars
Beginning Balance	1/1/2019	800	$6.00
Purchase	1/10/2019	600	$5.50
Purchase	1/20/2019	950	$5.25
Purchase	1/25/2019	350	$5.00
Sale throughout month		1700	$11.75

Calculate cost of goods available for sale, cost of goods sold, gross profit, gross profit margin and ending inventory using average cost, LIFO and FIFO inventory methods. The company uses the periodic inventory system. Then state which inventory method would provide the highest net income and Which inventory method provides the highest net income?

	Average Cost	LIFO	FIFO
Cost of goods available for sale
Cost of goods sold
Gross profit
Gross profit margin
Ending inventory

1. A piece of equipment with a net book value of $45,000 and an original cost of $63,000 was sold for a $2,500 gain. The equipment had a salvage value of $9,000 and an estimated useful life of 9 years. The company used straight line depreciation.
   1. What was the accumulated depreciated of this equipment when the equipment was sold?
   2. What was the equipment sold for?
   3. What is the annual straight line depreciation expense related to this equipment?
   4. How many years did the company own and depreciate the equipment?

Expert Answer