See attached
1. Mario Brothers Company adopted the dollar-value LIFO inventory method on January 1, 2015. In applying the LIFO method, Mario Brothers uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO: Ending Inventory At Current At Base Year Cost Year Cost Cost Index 1/1/2015 $300,000 $300,000 1.00 12/31/2015 345,600 320,000 1.08 12/31/2016 420,000 350,000 1.20 Under the dollar-value LIFO method, the inventory at December 31, 2016, should be: A. $357,600. B. $350,000. C. $351,600. D. $600,120. 2. When using the gross profit method to estimate ending inventory, it's not necessary to know A. cost of goods sold. B. beginning inventory. C. net sales. D. net purchases. 3. On January 1, 2015, Ferret, Inc., adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The 2015 ending inventory, valued at year-end costs, was $126,000. The relative cost index for this inventory in 2015 was 1.05. Suppose that Ferret's 2016 ending inventory, valued at year-end costs, was $143,000 and that the relative cost index for this inventory in 2016 was 1.10. Also suppose that Ferret's 2017 ending inventory, valued at year-end costs, was $153,600 and that the relative cost index for this inventory in 2017 was 1.20. What inventory balance would Ferret report on its 12/31/17 balance sheet? A. $153,600 B. $128,900 C. $128,000 D. $129,800 4. On April 1 of the current year, Twin Peaks Company factored receivables with a carrying value of $85,000 for $60,000 in cash from Fenders Lenders. The transfer was made without recourse. On April 1, Twin Peaks would A. credit factored accounts receivable for $85,000. B. credit deferred interest expense for $25,000. C. debit discount on liability for $25,000. D. debit loss on sale of receivables for $25,000. 5. Pi Company reported the following pretax data for its first year of operations. Net sales 2,800 Cost of goods available for sale 2,500 Operating expenses 880 Effective tax rate 40% Ending inventories: If LIFO is elected 820 If FIFO is elected 1,060 What's Pi's net income if it elects LIFO? A. $288 B. $144 C. $240 D. $480 6. Boeing acquired equipment from the manufacturer on 6/30/15 and gave a noninterest-bearing note in exchange. Boeing is obligated to pay $550,000 on 4/30/16 to satisfy the obligation in full. If Boeing accrued interest of $15,000 on the note in its 2015 year-end financial statements, what would the manufacturer record in its 2015 income statement for this transaction? A. $550,000 of sales revenue B. $25,000 of interest revenue C. $15,000 of interest revenue D. $15,000 of interest revenue and $525,000 of sales revenue 7. At December 31, 2014, Flossy Co. reported accounts receivable of $216,000 and an allowance for uncollectible accounts of $8,400. During 2015, accounts receivable increased by $22,000, and $7,800 of bad debts were written off. An analysis of Flossy Co.'s December 31, 2015, accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for 2015 would be A. $6,540 B. $600 C. $7,140 D. $7,800 8. Under the dollar-value LIFO retail method, to determine the value of a LIFO layer, A. divide the LIFO layer by the layer-year cost-to-retail percentage and multiply by the layer-year price index. B. multiply the LIFO layer by the base year price index and the current year cost-to-retail percentage. C. divide the LIFO layer by the layer-year price index and multiply by the layer-year cost-to-retail percentage. D. multiply the LIFO layer by the layer-year price index and by the layer-year cost-to-retail percentage. 9. Cloverdale, Inc., uses the conventional retail inventory method to account for inventory. The following information relates to current year's operations: Cost Retail Beginning inventory and purchases $313,500 $540,000 Net markups 30,000 Net markdowns 20,000 Net sales 480,000 What amount should be reported as cost of goods sold for the year? A. $275,000. B. $272,861. C. $273,600. D. $325,000. 10. Two Eyed Jack Company had the following cash balance items listed in its trial balance at 12/31/15: Peterson Savings and Loan: $50,000 Right Bank: (5,000) Clinton County Trust Bank: 10,000 If Two Eyed Jack reports under IFRS, its 12/31/15 balance sheet would show what cash balance? A. $60,000 B. ($1,000) C. $55,000 D. ($5,000) 11. Lingua Company reported the following pretax data for its first year of operations. Net sales 7,340 Cost of goods available for sale 5,790 Operating expenses 1,728 Effective tax rate 40% Ending inventories: If LIFO is elected 618 If FIFO is elected 798 What's Lingua's net income if it elects FIFO? A. $372 B. $264 C. $620 D. $440 12. Alaska Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2015. In preparing their insurance claim on the inventory loss, they developed the following data: Inventory January 1, 2015, $300,000; sales and purchases from January 1, 2015, to May 1, 2015, $1,300,000 and $875,000, respectively. Alaska consistently reports a 40% gross profit. The estimated inventory on May 1, 2015, is A. $360,000. B. $302,500. C. $395,000. D. $455,000. 13. Clay and Glaze, Inc., uses LIFO. Clay and Glaze disclosed that if FIFO had been used, inventory at the end of 2015 would have been $15 million higher than the difference between LIFO and FIFO at the end of 2014. Assuming Clay and Glaze has a 40% income tax rate, its reported A. net income for 2015 would have been $9 million higher if it had used FIFO rather than LIFO for its financial statements. B. net income for 2015 would have been $15 million higher if it had used FIFO rather than LIFO for its financial statements. C. cost of goods sold for 2015 would have been $9 million higher if it had used FIFO rather than LIFO for its financial statements. D. cost of goods sold for 2015 would have been $15 million higher if it had used FIFO rather than LIFO for its financial statements. 14. Bobby Corporation has determined its year-end inventory on a FIFO basis to be $500,000. Information pertaining to that inventory is as follows: Selling price $520,000 Disposal costs 30,000 Normal profit margin 60,000 Replacement cost 440,000 What should be the carrying value of Bobby's inventory? A. $490,000 B. $440,000 C. $430,000 D. $500,000 15. Pi Company reported the following pretax data for its first year of operations. Net sales 2,800 Cost of goods available for sale 2,500 Operating expenses 880 Effective tax rate 40% Ending inventories: If LIFO is elected 820 If FIFO is elected 1,060 What's Pi's gross profit ratio if it elects LIFO? A. 40% B. 5% C. 80% D. 49% 16. Data below for the year ended December 31, 2015, relates to Bamboo Inc. Bamboo started business January 1, 2015, and uses the LIFO retail method to estimate ending inventory. Cost Retail Beginning inventory $66,000 $104,000 Net purchases 280,000 420,000 Net markups 20,000 Net markdowns 40,000 Net sales 375,000 Estimated ending inventory at cost is A. $91,600. B. $83,500. C. $67,650. D. $90,720. 17. The Do-It-Yourself Hardware began 2015 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. The Do-It-Yourself estimates that 6% of all sales will be returned. During 2015, customers returned merchandise for credit of $28,000 to their accounts. What's the balance in the allowance for sales returns account at the end of 2015? A. $11,000 B. $21,000 C. $39,000 D. $43,000 18. Candles and Wicks estimates the allowance for uncollectible accounts at 3% of the ending balance of accounts receivable. During 2015, Candles' credit sales and collections were $125,000 and $131,000, respectively. What was the balance of accounts receivable on January 1, 2015, if $180 in accounts receivable were written off during 2015 and if the allowance account had a balance of $750 on 12/31/15? A. $5,820 B. $31,180 C. 138,000 D. $31,000 19. Data below for the year ended December 31, 2015, relates to Bamboo Inc. Bamboo started business January 1, 2015, and uses the LIFO retail method to estimate ending inventory. Cost Retail Beginning inventory $66,000 $104,000 Net purchases 280,000 420,000 Net markups 20,000 Net markdowns 40,000 Net sales 375,000 Estimated ending inventory at retail is A. $65,000 B. $25,000 C. $129,000 D. $169,600