1. | Question : | (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. | | | Student Answer: | | : Historical cost principle | | 1 : Earnings process completed and realized or realizable | | | | : Going concern principle | | 2 : Cost of providing financial information versus the benefits derived from its use | | | | : Matching principle | | 3 : Accruals and deferrals in adjusting and closing process | | | | : Monetary unit | | 4 : Business enterprise assumed to have a long life | | | | : Revenue recognition principle | | 5 : Stable dollar assumption | | | | : Full disclosure
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| Question : | (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $2,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors: | 9 Periods | 10 Periods | 11 Periods | Future Value of 1 | 1.99900 | 2.15892 | 2.33164 | Present Value of 1 | .50025 | .46319 | .42888 | Future Value of | | 12.48756 | 14.48656 | Ordinary Annuity of 1 | | | | Present Value of | 6.24689 | 6.71008 | 7.13896 | Ordinary Annuity of 1 | | | | Present Value of | 6.74664 | 7.24689 | 7.71008 | Annuity Due of 1 | | | |
(a) Assuming the computer has an eleven-year life and will have no salvage value at the expiration of the lease, what was the original cost of the copier to John?
(b) What amount would each payment be if the 11 annual payments are to be made at the beginning of each period? | …show more content…
Instructions
Prepare schedules to compute the ending inventory at March 31, 2011, under each of the following inventory methods:
(a) FIFO.
(b) LIFO.
(c) Weighted-average.
Show supporting computations in good form. | | | Student Answer: | | a)Under FIFO the most recent purchases are in inventory: 2,100 @ 25= 52,500 900 @ 22= 19,800 Inventory= 72,300 b) Under LIFO the oldest purchases are in inventory: 1,700 @ 17= 28,900 1,300 @ 20= 26,000 Inventory = 54,900 c) Weighted average: 1700* 17 +2600*20 +2400*21+1,000*22 +2100*25= 205,800 205,800/9,800= 21 Inventory is 3,000*21= 63,000 | | | | Comments: | Very Good | | | 8. | Question : | (TCO H) A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected life is eight years.
Instructions
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.
(a) Straight-line for 2010
(b) Double-declining balance for 2011
(c) Sum-of-the-years'-digits for 2011 |
| Question : | (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $2,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors: | 9 Periods | 10 Periods | 11 Periods | Future Value of 1 | 1.99900 | 2.15892 | 2.33164 | Present Value of 1 | .50025 | .46319 | .42888 | Future Value of | | 12.48756 | 14.48656 | Ordinary Annuity of 1 | | | | Present Value of | 6.24689 | 6.71008 | 7.13896 | Ordinary Annuity of 1 | | | | Present Value of | 6.74664 | 7.24689 | 7.71008 | Annuity Due of 1 | | | |
(a) Assuming the computer has an eleven-year life and will have no salvage value at the expiration of the lease, what was the original cost of the copier to John?
(b) What amount would each payment be if the 11 annual payments are to be made at the beginning of each period? | …show more content…
Instructions
Prepare schedules to compute the ending inventory at March 31, 2011, under each of the following inventory methods:
(a) FIFO.
(b) LIFO.
(c) Weighted-average.
Show supporting computations in good form. | | | Student Answer: | | a)Under FIFO the most recent purchases are in inventory: 2,100 @ 25= 52,500 900 @ 22= 19,800 Inventory= 72,300 b) Under LIFO the oldest purchases are in inventory: 1,700 @ 17= 28,900 1,300 @ 20= 26,000 Inventory = 54,900 c) Weighted average: 1700* 17 +2600*20 +2400*21+1,000*22 +2100*25= 205,800 205,800/9,800= 21 Inventory is 3,000*21= 63,000 | | | | Comments: | Very Good | | | 8. | Question : | (TCO H) A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected life is eight years.
Instructions
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.
(a) Straight-line for 2010
(b) Double-declining balance for 2011
(c) Sum-of-the-years'-digits for 2011 |