1) The following data concerning the retail inventory method are taken from the financial records...
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Accounting
1) The following data concerning the retail inventory method are taken from the financial records of Welch Company.
Cost
Retail
Beginning inventory
$ 196,000
$ 280,000
Purchases
896,000
1,280,000
Freight-in
24,000
Net markups
80,000
Net markdowns
56,000
Sales
1,344,000
If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $144,000 at retail, the business has
realized a windfall gain.
sustained a loss.
no gain or loss as there is close coincidence of the inventories.
none of these answer choices are correct.
2) A machine cost $1213000, has annual depreciation of $201000, and has accumulated depreciation of $947000 on December 31, 2017. On April 1, 2018, when the machine has a fair value of $276000, it is exchanged for a machine with a fair value of $1352000 and the proper amount of cash is paid. The exchange had commercial substance. The gain to be recorded on the exchange is
$60250
$65000
$139000
$0
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