George Washington UniversityACCY 2001 Carter Co

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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?

3. Kube Corporation uses the periodic inventory system and has provided the following information about one model of its laptop computers:

 

Date	Transaction	Number of Units	Cost per Unit
01/1	Beginning Inventory	100	$600
05/5	Purchase	200	$900
08/10	Purchase	300	$1,100

 

During the year, Kube sold 400 laptop computers.

What was end of year inventory value using the FIFO cost flow assumption?

4. Falafel Inc. had the following information on its balance sheet regarding an issued bond:

Beginning of period bonds payable, net............................... 72,729

End of period bonds payable, net......................................... 73,466

Was the bond issued at a discount or a premium? Explain.