Q 1.

Unit Purchase Cost per Unit Total Cost

1-Jan 100 $22 $2,200
15-Mar 100 $22.40 2240
15-Jun 100 $22.80 2280
15-Dec 100 $23.20 2320
400 9040

Total unit Sold during the year = 400+25-40=385 units

Beginning inventory =25 units @ $500= $12500
Ending inventory =40 units

i FIFO
385 units sold throughout the year, 25 unit @500 per unit ,100 unit @22 per unit, 100 unit @22.40, 100

COGS= 25*500+100*22+100*22.40+100*22.80+60*23.20
= $ 20,612
Since,
COGS= Beginning inventory +Purchase-Ending inventory

Ending inventory = Beginning Inventory +Purchase-COGS

EI= 12500+9040-20612
EI= $ 928.00

ii LIFO
Here we Know 100 unit sold @23.20,100unit @22.80 per unit, 100 unoit @22.40 per unit,85 unit @$22

COGS= 100*23.20+100*22.80+100*22.40+85*22
$ 8,710
Since
COGS= Beginning inventory +Purchase-Ending inventory
Ending inventory = Beginning Inventory +Purchase-COGS

EI= 12500+9040-8710
EI= $ 12,830

iii Weighted Average

The Total cost of all units purchased and all units in inventory at the beginning of the year is

Total Cost= 12500+9040 21540

Total Unit= 400+25 425
 Weighted Average= Total Cost/ Total Unit
= 50.68

As we know ending inventory is 40 unit

Ending inventory= $ 2,027.29

FIFO LIFO Weighted Average

Beginning Inventory $ 12,500 $ 12,500 $ 12,500
+ Purchase $ 9,040 $ 9,040 $ 9,040
Total available for sale $ 21,540 $ 21,540 $ 21,540
Less Ending Inventory $ 928 $ 12,830 $ 2,027
Cost of Goods Sold $ 20,612 $ 8,710 $ 19,513

A Highest Net income is in FIFO

B
C LIFO RESERVE
Value of Ending inventory in FIFO- Value of Ending inventory in LIFO
= 928-12830
$ (11,902)

LIFO RESERVE= $ (11902)

 Student ID-1246358

er unit, 100 unit @22.40, 100 unit @22.80,60 units @23.20

@22.40 per unit,85 unit @$22 per unit

ning of the year is

Q2

Purchase Equipment on 1st April ,2013= $175000

Useful Life= 8 years
Salvage Value= $10000
Unit of Production=110000 units
Company produced in 2014=11000 units

i Straight Line Method

Derpreciation = ( Cost - Salvage Value)/Nos of Estimated Life

= $175000-$10000
8
= $ 20,625

ii Sum-of - the Year 's Digit Method

Depreciation = Cost -Salvage

= $175000-$10000
= $ 165,000

Sum of the digit with 8 year= 8(8+1)

2
= 36

BV at the end 2013 $175000-$27500

$ 147,500
BV at the end 2014 147500-33229.15
$ 114,271
Depreciation for 2013
2013 1st April-31 Dec= 9/12
= $165000*8/36*9/12
= $ 27,500
Depreciation for 2014
Jan- March2014 + April to Dec 2014
= ($165000*8/36*3/12) +($165000*7/36*9/12)
= $ 33,229.15

iii
 DOUBLE DECLINING METHOD
Depreciation= Cost- Salvage
= 175000-10000
= $ 165,000

Double- Declining Balance Method

Years Book Value Depreciation Depreciation Ending Book Value
Rate Expense
April-Dec13 175000 25% 32812.50 142187.50
2014 142187.5 25% 35546.88 106640.63
2015 106640.625 25% 26660.16 79980.47
2016 79980.46875 25% 19995.12 59985.35
2017 59985.351563 25% 14996.34 44989.01
2018 44989.013672 25% 11247.25 33741.76
2019 33741.760254 25% 8435.44 25306.32
2020 25306.32019 25% 15306.22 10000.10
165000

iv Unit of Production Method

Depreciation Per unit Cost -Salvage

Total unit Produce
= 175000-10000
110,000
= $ 1.50

Depreciation Expense 2014

= $1.5*11000 units BV at the end 2014
= $ 16,500

v
BV at end of 2044
Staright line method $138,906.30
sumof the year digit $114,270.90
Double Declining $106,640.60
Unit of pro method $ 158,500.00

Lowest BV of 2014 is of Double Declining Method

vi
BV at the end of the life
SLM 10,000
SYD 10,000
DDM 9999.99
UPM 10,000
 Beginning
Dep amt Book Value Ending Bv
(APRIL-DEC)2013 15468.75 175000 159531.25
2014 20625 159531.25 138906.25
2015 20625 138906.25 118281.25
2016 20625 118281.25 97656.25
2017 20625 97656.25 77031.25
2018 20625 77031.25 56406.25
2019 20625 56406.25 35781.25
2020 20625 35781.25 15156.25
(JAN-MAR)2021 5156.25 15156.25 10000
165000

Second half of Depreciation

First half of year Fraction year Fraction Amt
2013 0.75 0.2222222222 $ 165,000.00
2014 0.25 0.222222 0.75 0.1944444444 $ 165,000.00
2015 0.25 0.194444 0.75 0.1666666667 $ 165,000.00
2016 0.25 0.166667 0.75 0.1388888889 $ 165,000.00
2017 0.25 0.138889 0.75 0.1111111111 $ 165,000.00
2018 0.25 0.111111 0.75 0.0833333333 $ 165,000.00
2019 0.25 0.083333 0.75 0.3333333333 $ 165,000.00
2020 0.25 0.333333 0.75 0.0277777778 $ 165,000.00
2021 0.25 0.027778 $ 165,000.00

*7/36*9/12)
=$175000-$16500
$ 158,500
BV at Beg. Dep Exp BV at the end
175,000 $27,499.99 $147,500.01
$147,500.01 $ 33,229.17 $114,270.84
$114,270.84 $ 28,645.83 $85,625.01
$85,625.01 $ 24,062.50 $61,562.51
$61,562.51 $ 19,479.17 $42,083.34
$42,083.34 $ 14,895.83 $27,187.51
$27,187.51 $ 17,187.51 $10,000.00
$10,000.00 $ - $10,000.00
$10,000.00 $ - $10,000.00
$165,000.00
Fv of patent $5,896
CF next 4 year $2000 per year
CF next 5 year $2500 per year
Patent $6,500

Step 1
Determine wether we have impairement Loss

Year BV CF FV
2013 6500 2500 5896

CF is less than BOOK Value , So definitely it hasimpairement Loss

Step 2:
What will be the amount

Impairement Loss= BV-FV

$ 604

YEAR 2013
Loss of Imapirement $604
Amortization Exp $5,292
Patent $5,896
 ABC CORP
Comprehensive Income
For the Year Ended 31 st December 2014

Sales Revenue $350,000

Add Other Revenue interest $12,000
add Gain on sale of collectibiles-infrequent but not usual $12,000
Less COGS $120,000
Gross Profit $254,000

Less Operating Expense 230,000

Less Loss from hurricane-unusual and infrequent 8,000

Net Income $16,000

Less Income Tax 6400

Net Income $9,600

EPS $9.60

Statement of other comprehensive Income

Net Income 9600
Add Sales Secruities 15000
Total Comprehensive income 24600