Kraft Enterprises owns the following assets at December 31, 2014.
Cash in bank—savings account
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68,000
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Checking account balance
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17,000
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Cash on hand
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9,300
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Postdated checks
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750
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Cash refund due from IRS
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31,400
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Certificates of deposit (180-day)
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90,000
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What amount should be reported as cash?
Cash to be Reported $
Question 2
Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $50,000 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale.
Prepare the required journal entries for Restin Co.
(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date
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Account Titles and Explanation
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Debit
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Credit
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June 1
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June 12
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Question 3
Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 50 units that cost $34 each. During June, (1) the company purchased 150 units at $34 each, (2) returned 6 units for credit, and (3) sold 125 units at $50 each.
Question 1 Kraft Enterprises owns the following assets at December 31, 2014. Cash in bank—savings account 68,000 Checking account balance 17,000 Cash on hand 9,300 Postdated checks 750 Cash refund due from IRS 31,400 Certificates of deposit (180-day) 90,000 What amount should be reported as cash? Cash to be Reported $ Question 2 Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $50,000 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale. Prepare the required journal entries for Restin Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 1 June 12 Question 3 Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 50 units that cost $34 each. During June, (1) the company purchased 150 units at $34 each, (2) returned 6 units for credit, and (3) sold 125 units at $50 each. Journalize the June transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) (To record sales) (To record cost of goods sold) Question 4 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 $10 $ 2,500 April 15 purchase 400 12 4,800 April 23 purchase 350 13 4,550 1,000 $11,850 Calculate weighted average cost per unit. (Round answer to 2 decimal places, e.g. 2.76.) Weighted average cost per unit $ Compute the April 30 inventory and the April cost of goods sold using the average-cost method. (Round answers to 0 decimal places, e.g. 2,760.) Ending 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 $10 $ 2,500 April 15 purchase 400 12 4,800 April 23 purchase 350 13 4,550 1,000 $11,850 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. Ending inventory $ Cost of goods sold $ Question 6 Shania Twain Company was formed on December 1, 2013. The following information is available from Twain’s inventory records for Product BAP. Units Unit Cost January 1, 2014 (beginning inventory) 600 $ 8 Purchases: January 5, 2014 1,200 9 January 25, 2014 1,300 10 February 16, 2014 800 11 March 26, 2014 600 12 A physical inventory on March 31, 2014, shows 1,600 units on hand. Prepare schedules to compute the ending inventory at March 31, 2014, under FIFO inventory methods. (Round answer to 0 decimal places, e.g. 2,760.) FIFO Ending Inventory at March 31, 2014 $ Prepare schedules to compute the ending inventory at March 31, 2014, under LIFO inventory methods. (Round answer to 0 decimal places, e.g. 2,760.) LIFO Ending Inventory at March 31, 2014 $ Calculate average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.) Weighted average-cost per unit $ Prepare schedules to compute the ending inventory at March 31, 2014, under Weighted-average inventory methods. (Round answer to 0 decimal places, e.g. 2,760.) Weighted-Average Ending Inventory at March 31, 2014 $ Question 7 Presented below is information related to Rembrandt Inc.’s inventory. (per unit) Skis Boots Parkas Historical cost $190.00 $106.00 $53.00 Selling price 212.00 145.00 73.75 Cost to distribute 19.00 8.00 2.50 Current replacement cost 203.00 105.00 51.00 Normal profit margin 32.00 29.00 21.25 Determine the following: (a) the two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis. Ceiling Limit $ Floor Limit $ (b) the cost amount that should be used in the lower-of-cost-or-market comparison of boots. The cost amount $ (c) the market amount that should be used to value parkas on the basis of the lower-of-cost-or-market. The market amount $ Question 8 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 $2,000 $2,050 $2,100 $1,600 Penguins 5,000 5,100 4,950 4,100 Riddlers 4,400 4,550 4,625 3,700 Scarecrows 3,200 2,990 3,830 3,070 Determine the final lower-of-cost-or-market inventory value for each item. Jokers $ Penguins Riddlers Scarecrows Question 9 Kumar Inc. uses a perpetual inventory system. At January 1, 2014, inventory was $214,000 at both cost and market value. At December 31, 2014, the inventory was $286,000 at cost and $265,000 at market value. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) (b) Question 10 Boyne Inc. had beginning inventory of $12,000 at cost and $20,000 at retail. Net purchases were $120,000 at cost and $170,000 at retail. Net markups were $10,000; net markdowns were $7,000; and sales revenue was $147,000. Compute ending inventory at cost using the conventional retail method.(Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using the conventional retail method $ Question 11 Mark Price 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 $ 160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales revenue 1,000,000 Sales returns 70,000 Purchase discounts 12,000 (a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. The estimated inventory at May 31 $ (b) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.) The estimated inventory at May 31 $ Question 12 Previn Brothers Inc. purchased land at a price of $27,000. Closing costs were $1,400. An old building was removed at a cost of $10,200. What amount should be recorded as the cost of the land? The cost of land to be recorded $ Question 13 Garcia Corporation purchased a truck by issuing an $80,000, 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. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Question 14 Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land $60,000, building $220,000, and equipment $80,000. At what amounts should each of the three assets be recorded? (Round final answers to 0 decimal places, e.g. 5,275.) Recorded Amount Land $ Building $ Equipment $ Question 15 Fielder Company obtained land by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at $85,000. The common stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of the land. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Question 16 Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer worth $3,300. Navajo also paid $500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Question 17 Mehta Company traded a used welding machine (cost $9,000, accumulated depreciation $3,000) for office equipment with an estimated fair value of $5,000. Mehta also paid $3,000 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit