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Question 1

Kraft Enterprises owns the following assets at December 31, 2012.

Cash in banksavings account	66,644	Checking account balance	25,204
Cash on hand	9,576	Postdated checks	839
Cash refund due from IRS	33,676	Certificates of deposit (180-day)	92,344

What amount should be reported as cash?

$

Question 2

Presented below is information related to Rembrandt Inc.'s inventory.

(per unit)	Skis		Boots		Parkas
Historical cost	$240.73		$134.30		$67.15
Selling price	274.94		183.72		93.44
Cost to distribute	24.07		10.14		3.17
Current replacement cost	257.20		133.04		64.62
Normal profit margin	40.54		36.74		26.92

Determine the following:

(a)	the two limits to market value (e.g., the ceiling and the floor) that should be used in the lower of cost or market computation for skis; Ceiling: $ Floor: $

(b)	the cost amount that should be used in the lower of cost or market comparison of boots;
	Cost amount: $

(c)	the market amount that should be used to value parkas on the basis of the lower of cost or market. Market amount: $
Question 2

Presented below is information related to Rembrandt Inc.'s inventory.

	(per unit)	Skis		Boots		Parkas
	Historical cost	$240.73		$134.30		$67.15
	Selling price	274.94		183.72		93.44
	Cost to distribute	24.07		10.14		3.17
	Current replacement cost	257.20		133.04		64.62
	Normal profit margin	40.54		36.74		26.92

Determine the following:

(a)	the two limits to market value (e.g., the ceiling and the floor) that should be used in the lower of cost or market computation for skis; Ceiling: $ Floor: $

(b)	the cost amount that should be used in the lower of cost or market comparison of boots; Cost amount: $

(c)	the market amount that should be used to value parkas on the basis of the lower of cost or market. Market amount: $
Question 3 Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 59 units that cost $35 each. During June, the company purchased 177 units at $35 each, returned 7 units for credit, and sold 148 units at $59 each. Journalize the June transactions. Question 4

Amsterdam Company uses a periodic inventory system. For April, when the company sold 700 units, the following information is available.

		Units		Unit Cost		Total Cost
	April 1 inventory	250		$12		$3,000
	April 15 purchase	400		15		6,000
	April 23 purchase	350		16		5,600
		1,000				$14,600

Compute the April 30 inventory and the April cost of goods sold using the average cost method.

Inventory: $

Cost of goods sold: $

Question 5

Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.

		Units		Unit Cost		Total Cost
	April 1 inventory	250		$12		$3,000
	April 15 purchase	400		15		6,000
	April 23 purchase	350		16		5,600
		1,000				$14,600

Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

Inventory: $

Cost of goods sold: $

Question 6

(FIFO, LIFO, Average Cost Inventory)

Esplanade Company was formed on December 1, 2011. The following information is available from Esplanade's inventory records for Product BAP.

		Units		Unit Cost
	January 1, 2012 (beginning inventory)	786		$8.00
	Purchases:
	January 5, 2012	1,572		9.00
	January 25, 2012	1,703		10.00
	February 16, 2012	1,048		11.00
	March 26, 2012	786		12.00

A physical inventory on March 31, 2012, shows 2,096 units on hand.

Prepare schedules to compute the ending inventory at March 31, 2012, under each of the following inventory methods. Assume Esplanade Company uses the periodic inventory method.

(a)

FIFO

	ESPLANADE COMPANY
	Computation of Inventory for Product BAP
	BAP under FIFO Inventory Method
	March 31, 2012
		Units	Unit Cost	Total Cost
	March 26, 2012
	February 16, 2012
	January 25, 2012
	March 31, 2012, inventory

(b)

LIFO

	ESPLANADE COMPANY
	Computation of Inventory for Product BAP
	BAP under LIFO Inventory Method
	March 31, 2012
		Units	Unit Cost	Total Cost
	Beginning inventory
	January 5, 2012
	March 31, 2012, inventory

(c)	Weighted average

	ESPLANADE COMPANY
	Computation of Inventory for Product BAP
	BAP under Weighted Average Inventory Method
	March 31, 2012
		Units	Unit Cost	Total Cost
	Beginning inventory
	January 5, 2012
	January 25, 2012
	February 16, 2012
	March 26, 2012 Weighted Average cost: $ March 31,2012, inventory:

Question 7

Floyd Corporation has the following four items in its ending inventory.

	Item	Cost		Replacement Cost		Net Realizable Value (NRV)		NRV Less Normal Profit Margin
	Jokers	$2,062		$2,114		$2,165		$1,650
	Penguins	5,155		5,258		5,103		4,227
	Riddlers	4,536		4,691		4,768		3,815
	Scarecrows	3,299		3,083		3,949		3,165

Determine the final lower of cost or market inventory value for each item.

Jokers:

Penguins:

Riddlers:

Scarecrows:

Question 9

Boyne Inc. had beginning inventory of $15,720 at cost and $26,200 at retail. Net purchases were $157,200 at cost and $222,700 at retail. Net markups were $13,100; net markdowns were $9,170; and sales were $205,670. Compute ending inventory at cost using the conventional retail method. (Round computation for cost-to-retail ratio percentage and answer to 0 decimal places, e.g. 25,250.)

Ending inventory: $

Question 10

(Gross Profit Method)

Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

	Inventory, May 1	$196,800
	Purchases (gross)	787,200
	Freight-in	36,900
	Sales	1,230,000
	Sales returns	86,100
	Purchase discounts	14,760

(a)	Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales. Inventory: $

(b)	Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. Inventory: $

Question 11

Previn Brothers Inc. purchased land at a price of $32,090. Closing costs were $1,550. An old building was removed at a cost of $12,240. What amount should be recorded as the cost of the land?

$

Question 12

Garcia Corporation purchased a truck by issuing an $83,200, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.

Question 13

Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $321,300. The estimated fair values of the assets are land $61,200, building $224,400, and equipment $81,600. At what amounts should each of the three assets be recorded? (Note: Do not round the computation of the % of total.)

Recorded amount

Land:

Building

Equipment

Question 14

Fielder Company obtained land by issuing 2,000 shares of its $12 par value common stock. The land was recently appraised at $103,700. The common stock is actively traded at $50 per share. Prepare the journal entry to record the acquisition of the land.

Question 15

Navajo Corporation traded a used truck (cost $27,800, accumulated depreciation $25,020) for a small computer worth $5,143. Navajo also paid $1,390 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

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