business math

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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


9. Please use the following information to answer questions 9-10.
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.


11. Please use the following information to answer questions 11-13.
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

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