CLICK TO GET ANSWERS Question 1 Kraft Enterprises owns the following assets at December 31, 2012. Cash in bankâ&#x20AC;&#x201C;savings account 67, 516 Checking account balance Cash on Hand 9,478 Postdated checks Cash refund due from IRS 40,324 Certificates of deposit(180 day) What amount should be reported as cash?

26,445 753 94,754

Question 2 Presented below is information related to Rembrandt Inc.'s inventory. Per Units Skis Boots Parkas Historical Cost \$254.22 \$141.83 \$70.91 Selling Price 290.35 194.01 98.68 Cost to distribute 25.42 10.70 3.35 Current replacement cost 271.61 140.49 68.24 Normal profit margin 42.82 38.80 28.43 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; (Round answers to 2 decimal places, e.g. 20.25.) b). the cost amount that should be used in the lower of cost or market comparison of boots; (Round answer to 2 decimal places, e.g. 20.25.) c). the market amount that should be used to value parkas on the basis of the lower of cost or market. (Round answer to 2 decimal places, e.g. 20.25.) Question 3 Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 74 units that cost \$44 each. During June, the company purchased 222 units at \$44 each, returned 9 units for credit, and sold 185 units at \$74 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 \$16 \$4,000 April 15 purchase 400 19 7,600 April 23 purchase 350 21 7,350

1,000 \$18,950 Compute the April 30 inventory and the April cost of goods sold using the average cost method. (Round computations for cost per unit to 2 decimal places, e.g. 10.25 and answers to 0 decimal places, e.g. 2,250.) 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 \$13 \$3,250 April 15 purchase 400 16 6,400 April 23 purchase 350 17 5,950 1,000 \$15,600 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. 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) 768 \$8.00 Purchases: January 5, 2012 1,536 9.00 January 25, 2012 1,664 10.00 February 16, 2012 1,024 11.00 March 26, 2012 768 12.00 A physical inventory on March 31, 2012, shows 2,048 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. Question 7 Floyd Corporation has the following four items in its ending inventory Item Cost Replacement Cost (NRV) NRV- Normal Profit Marging Jokers \$2,236 \$2,292 \$2,348 \$1,789 Penguins 5,590 5,702 5,534 4,584 Riddlers 4,919 5,087 4,282 4,137 Scarecrows 3,578 3,343 4,282 3,432 Question 8

Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was \$241,606 at both cost and market value. At December 31, 2013, the inventory was \$322,894 at cost and \$303,701 at market value. Prepare the necessary December 31 entry under: (a) the cost of goods sold method (b) the loss method Question 9 Boyne Inc. had beginning inventory of \$15,000 at cost and \$25,000 at retail. Net purchases were \$150,000 at cost and \$212,500 at retail. Net markups were \$12,500; net markdowns were \$8,750; and sales were \$196,250. 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.) Question 10 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 \$184,000 Purchases (gross) 736, 000 Freight-in 34, 500 Sales 1,150,000 Sales returns 80,500 Purchase discounts 13,800 Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost Question 11 Previn Brothers Inc. purchased land at a price of \$27,400. Closing costs were \$2,550. An old building was removed at a cost of \$10,530. What amount should be recorded as the cost of the land? Question 12 Garcia Corporation purchased a truck by issuing an \$90,400, 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. (Round answers to 0 decimal places, e.g. 15,510. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2. Hint: Use tables in text.) Question 13 Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of \$431,550. The estimated fair values of the assets are land \$82,200, building

\$301,400, and equipment \$109,600. At what amounts should each of the three assets be recorded? (Note: Do not round the computation of the % of total.) Question 14 Fielder Company obtained land by issuing 2,000 shares of its \$11 par value common stock. The land was recently appraised at \$91,800. The common stock is actively traded at \$44 per share. Prepare the journal entry to record the acquisition of the land. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.) Question 15 Navajo Corporation traded a used truck (cost \$22,600, accumulated depreciation \$20,340) for a small computer worth \$4,181. Navajo also paid \$1,130 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.) Question 16 Mehta Company traded a used welding machine (cost \$12,330, accumulated depreciation \$4,110) for office equipment with an estimated fair value of \$6,850. Mehta also paid \$4,110 cash 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.) Question 17 Depreciation is normally computed on the basis of the nearest a). Full month and to the nearest cent. b). Full month and to the nearest dollar c). Day and to the nearest cent. d). Day and to the nearest dollar Question 18 Fernandez Corporation purchased a truck at the beginning of 2012 for \$43,260. The truck is estimated to have a salvage value of \$2,060 and a useful life of 164,800 miles. It was driven 23,690 miles in 2012 and 31,930 miles in 2013. Compute depreciation expense for 2012 and 2013.(Round answers to 0 decimal places, i.e. 2,250.) Question 19 Lockhard Company purchased machinery on January 1, 2012, for \$77,400. The machinery is estimated to have a salvage value of \$7,740 after a useful life of 8 years. (a). Compute 2012 depreciation expense using the double-declining balance method

(b). Compute 2012 depreciation expense using the double-declining balance method assuming the machinery was purchased on October 1, 2012.(Round answer to 0 decimal places, i.e. 2,250.) Question 20 Jurassic Company owns machinery that cost \$955,800 and has accumulated depreciation of \$382,320. The expected future net cash flows from the use of the asset are expected to be \$531,000. The fair value of the equipment is \$424,800. Prepare the journal entry, if any, to record the impairment loss. Question 21 Everly Corporation acquires a coal mine at a cost of \$496,800. Intangible development costs total \$124,200. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is \$99,360), after which it can be sold for \$198,720. Everly estimates that 4,968 tons of coal can be extracted. If 869 tons are extracted the first year, prepare the journal entry to record depletion. Question 22 Francis Corporation purchased an asset at a cost of \$42,800 on March 1, 2012. The asset has a useful life of 8 years and a salvage value of \$4,280. For tax purposes, the MACRS class life is 5 years. Compute tax depreciation for each year 2012â&#x20AC;&#x201C;2017. (Round answers to 0 decimal places.) Question 23 Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for \$54,600. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion's journal entries to record the purchase of the patent and 2012 amortization. Question 24 Karen Austin Corporation has capitalized software costs of \$757,100, and sales of this product the first year totaled \$400,710. Karen Austin anticipates earning \$934,990 in additional future revenues from this product, which is estimated to have an economic life of 4 years. Compute the amount of software cost amortization for the first year. (a) Compute the amount of software cost amortization for the first year using the percent of revenue approach. (b) Compute the amount of software cost amortization for the first year using the straight-line approach. Question 25 Jeff Beck is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2012, due to the admitted negligence of the Railroad, hay on the farm was set on