Baker Company purchases a new delivery truck for $20,000. The truck is expected to have a useful life of 90,000 miles before replacement, and a salvage value of $2,000. In its first year the truck was driven 22,000 miles, and a further 19,000 miles in year two. What is the depreciation expense and book value at the end of year two? (Points: 5)

Question

Baker Company purchases a new delivery truck for $20,000. The truck is expected to have a useful life of 90,000 miles before replacement, and a salvage value of $2,000. In its first year the truck was driven 22,000 miles, and a further 19,000 miles in year two. What is the depreciation expense and book value at the end of year two? (Points: 5)
      	  $3,800; $11,800 
      	  $4,400; $11,200 
      	  $4,222.22; $10,888.88 
      	  $8,200; $9,800

7. A delivery truck is purchased for $38,000, has a salvage value of $6,000 and is depreciated using MACRS. What is the first-year depreciation expense? (Points: 5)
      	  $4,578.80 
      	  $5,430.20 
      	  $7,600.00 
      	  $15,200.00

8. Dennison Property Company purchases a new office space for lease to small businesses for $2,400,000, including a land value of $400,000. The property is placed in service on March 15, 1999. Using MACRS, what is the depreciation on this property at the end of its first year? (Points: 5)
      	  $40,660 
      	  $43,656 
      	  $50,260 
      	  $57,850

9. Please use the following information to answer questions 9-10.
Beginning Inventory	600 units @ $3.50 per unit
Purchases:	 
January 20th	1,200 units @ $4.00 per unit
February 20th	1,500 units @ $3.76 per unit
March 20th	1,000 units @ $3.80 per unit
Ending Inventory	800 units

Using the average cost method, what is ending inventory valued at?

(Points: 5)
      	  $2,976.42 
      	  $3,040.00 
      	  $3,999.00 
      	  $4,694.12

10. If the current market value of the good was $3.75 per unit on March 30 (when ending inventory for the quarter was recorded), and the lower-of-cost-or-market method is used, then the value of ending inventory: (Points: 5)
      	  would not change. 
      	  would increase by $40. 
      	  would decrease by $40. 
      	  would decrease by $400.

11. Please use the following information to answer questions 11-13.
A firm has the following inventory information for the first quarter:

01/01	Beginning Inventory	50 units @ $5
01/15	Purchases	80 units @ $5.50
02/15	Purchases	60 units @ $5.25
02/15	Purchases	40 units @ $5.75
 	Sales	170 units @ $10
 	Total operating expenses	$500

What is ending inventory under FIFO?

(Points: 5)
      	  $305 
      	  $322.17 
      	  $335 
      	  $350

12. What is the cost of goods sold under FIFO? (Points: 5)
      	  $770 
      	  $800 
      	  $900 
      	  $930

13. What is net profit under LIFO? (Points: 5)
      	  $250 
      	  $270 
      	  $300 
      	  $330

14. Please use the following information for questions 14-15.
Mahalyk's Water Fun Shoppe specializes in jet skis.  Mahalyk's inventory records showed the following for the past year.

Purchase Date	Number of Jet Skis	Cost Per Jet Ski
February 10	30	$4,000
May 12	80	$3,000
June 15	20	$3,500
July 20	15	$2,500

Use the LIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70 jet skis left in inventory.

(Points: 5)
      	  $230,625 
      	  $240,000 
      	  $255,000 
      	  $212,500

15. Use the FIFO method to determine Mahalyk's value of ending inventory at the end of July if they had 70.5 jet skis left in inventory. (Points: 5)
      	  $230,625 
      	  $210,000 
      	  $255,000 
      	  $212,500

16. Estimate the cost of ending inventory based on the retail method using the following information:

Cost	Retail
Beginning Inventory	$ 600,000	$ 800,000
Purchases	$ 450,000	$ 600,000
Net Sales	 	$1,000,000

(Points: 5)
      	  $150,000 
      	  $262,500 
      	  $300,000 
      	  $750,000

17. 
A firm has beginning inventory of $50,000 and purchases of $290,000 for an accounting period. Sales totaled $400,000, and typical gross margin as a percentage of sales has been 30%. Using the gross margin method, what is the estimated ending inventory?
(Points: 5)
      	  $60,000 
      	  $75,000 
      	  $90,000 
      	  $120,000

18. Determine the cost ratio (retail method) for Twilight Games and Comics Store if the cost of goods available for sale is $36,000 and the retail value of goods available for sale is $90,000 (round to the nearest one-thousandth). (Points: 5)
      	  2.500 
      	  0.667 
      	  0.400 
      	  2.000

19. Estimate the cost of ending inventory for August for Roman's Jewelry Store using the retail method on the following data:
 	Cost	Retail
Beginning inventory for August	$180,000	$288,000
Purchases during August	$70,000	$112,000
Net sales during August	 	$80,000

(Points: 5)
      	  $50,000 
      	  $156,250 
      	  $200,000 
      	  $128,000

20. Herman's Confectionery Shoppe has a beginning inventory at cost of $22,000, and purchases at cost of $5,000 during the month of February.  Retail sales for February were $8,000 and the gross margin for the month was assumed to be 45%.  Estimate the value of ending inventory for February. (Points: 5)
      	  $4,400 
      	  $3,600 
      	  $22,600 
      	  $18,400