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Baker Company purchases a new delivery truck for \$20,000. The truck is expected to have a useful life of 90,000 miles before replacement, and a salvage value of \$2,000. In its first year the truck was driven 22,000 miles, and a further 19,000 miles in year two. What is the depreciation expense and book value at the end of year two? (Points: 5)
\$3,800; \$11,800
\$4,400; \$11,200
\$4,222.22; \$10,888.88
\$8,200; \$9,800

7. A delivery truck is purchased for \$38,000, has a salvage value of \$6,000 and is depreciated using MACRS. What is the first-year depreciation expense? (Points: 5)
\$4,578.80
\$5,430.20
\$7,600.00
\$15,200.00

8. Dennison Property Company purchases a new office space for lease to small businesses for \$2,400,000, including a land value of \$400,000. The property is placed in service on March 15, 1999. Using MACRS, what is the depreciation on this property at the end of its first year? (Points: 5)
\$40,660
\$43,656
\$50,260
\$57,850

Beginning Inventory 600 units @ \$3.50 per unit
Purchases:
January 20th 1,200 units @ \$4.00 per unit
February 20th 1,500 units @ \$3.76 per unit
March 20th 1,000 units @ \$3.80 per unit
Ending Inventory 800 units

Using the average cost method, what is ending inventory valued at?

(Points: 5)
\$2,976.42
\$3,040.00
\$3,999.00
\$4,694.12

10. If the current market value of the good was \$3.75 per unit on March 30 (when ending inventory for the quarter was recorded), and the lower-of-cost-or-market method is used, then the value of ending inventory: (Points: 5)
would not change.
would increase by \$40.
would decrease by \$40.
would decrease by \$400.

A firm has the following inventory information for the first quarter:

01/01 Beginning Inventory 50 units @ \$5
01/15 Purchases 80 units @ \$5.50
02/15 Purchases 60 units @ \$5.25
02/15 Purchases 40 units @ \$5.75
Sales 170 units @ \$10
Total operating expenses \$500

What is ending inventory under FIFO?

(Points: 5)
\$305
\$322.17
\$335
\$350

12. What is the cost of goods sold under FIFO? (Points: 5)
\$770
\$800
\$900
\$930

13. What is net profit under LIFO? (Points: 5)
\$250
\$270
\$300
\$330

14. Please use the following information for questions 14-15.
Mahalyk's Water Fun Shoppe specializes in jet skis. Mahalyk's inventory records showed the following for the past year.

Purchase Date Number of Jet Skis Cost Per Jet Ski
February 10 30 \$4,000
May 12 80 \$3,000
June 15 20 \$3,500
July 20 15 \$2,500

Use the LIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70 jet skis left in inventory.

(Points: 5)
\$230,625
\$240,000
\$255,000
\$212,500

15. Use the FIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70.5 jet skis left in inventory. (Points: 5)
\$230,625
\$210,000
\$255,000
\$212,500

16. Estimate the cost of ending inventory based on the retail method using the following information:

Cost Retail
Beginning Inventory \$ 600,000 \$ 800,000
Purchases \$ 450,000 \$ 600,000
Net Sales \$1,000,000

(Points: 5)
\$150,000
\$262,500
\$300,000
\$750,000

17.
A firm has beginning inventory of \$50,000 and purchases of \$290,000 for an accounting period. Sales totaled \$400,000, and typical gross margin as a percentage of sales has been 30%. Using the gross margin method, what is the estimated ending inventory?
(Points: 5)
\$60,000
\$75,000
\$90,000
\$120,000

18. Determine the cost ratio (retail method) for Twilight Games and Comics Store if the cost of goods available for sale is \$36,000 and the retail value of goods available for sale is \$90,000 (round to the nearest one-thousandth). (Points: 5)
2.500
0.667
0.400
2.000

19. Estimate the cost of ending inventory for August for Roman's Jewelry Store using the retail method on the following data:
Cost Retail
Beginning inventory for August \$180,000 \$288,000
Purchases during August \$70,000 \$112,000
Net sales during August \$80,000

(Points: 5)
\$50,000
\$156,250
\$200,000
\$128,000

20. Herman's Confectionery Shoppe has a beginning inventory at cost of \$22,000, and purchases at cost of \$5,000 during the month of February. Retail sales for February were \$8,000 and the gross margin for the month was assumed to be 45%. Estimate the value of ending inventory for February. (Points: 5)
\$4,400
\$3,600
\$22,600
\$18,400