question archive George Washington UniversityACCY 2001 1) Carter Co
George Washington UniversityACCY 2001 1) Carter Co
Subject:AccountingPrice:3.87 Bought7
George Washington UniversityACCY 2001
1) Carter Co. disposed of an asset at the end of year 8 of the asset's life originally estimated to be 10 years. The original cost was $50,000 with an estimated residual value of $5,000 and it was being depreciated under the straight-line method. It was sold for $10,000 cash. What was the gain or loss on the disposal at the end of year 8?
2) Company GHI needs to figure out the inventory ending balance on December 31, 2014. The company knows the following information: B.B. Inventory: $1,300; Purchases: $1,700; Cost-of-goods sold in 2014: $2,000.What is the ending inventory on December 31, 2014?
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Answer:
1.
Cash Received 10,000
Net Book Value Disposed 14,000 = 50,000 – (50,000 – 5,000)*8/10
Loss $4,000
2.
COGS = B.B. Inventory + Purchases – E.B. Inventory
E.B. Inventory = B.B. Inventory + Purchases – COGS
E.B. Inventory = 1,300 + 1,700 – 2,000
= $1,000.
