Name:_________________________________ Time Allowed: 30 minutes NOTE: * CUTTING AND OVERWRITING WILL BE CONSIDERED AS WRONG. * SHOW ALL SUPPORTING CALCULATIONS.

Marks: 20

i.

Larry Warton Company uses the periodic inventory system. Calculate the ending inventory value if the following information is available: Sales $50,000 Cost of Sales 30,000 Purchases 28,000 Beginning Inventory 15,000 A) B) C) D) $13,000 $12,000 $10,000 $25,000

ii.

Jill Abbott Company uses the periodic inventory system. Calculate the ending inventory value if the following information is available: Sales $80,000 Gross Profit Margin 40% Purchases $100,000 Beginning Inventory $20,000 A) B) C) D) $84,000 $70,000 $72,000 $74,000

iii.

Nikky Newman Company's sales during the year were $450,000; purchases were $200,000; and, inventories increased by $10,000 during the year. What is the value of cost of sales for the year?

A) B) C) D)

$240,000 $260,000 $210,000 $190,000

iv.

Crimson Lights uses the periodic inventory method. The inventory records for January are as follows: Beginning inventory 100 units @ $1.00 each January 12 purchase 200 units @ $1.10 each January 17 purchase 150 units @ $1.20 each January 25 sold 175 units for $5.00 each Using the FIFO inventory valuation method, what is the value of the January 31 inventory? A) B) C) D) $292.50 $207.50 $182.50 $317.50

v.

Crimson Lights uses the periodic inventory method. The inventory records for January are as follows: Beginning inventory 100 units @ $1.00 each January 12 purchase 200 units @ $1.10 each January 17 purchase 150 units @ $1.20 each January 25 sold 175 units for $5.00 each Using the LIFO inventory valuation method, what is the value of the January 31 inventory? A) B) C) D) $292.50 $207.50 $182.50 $317.50

vi.

If sales for the year were $200,000 and cost of sales were $120,000. What would the inventory turnover be, if the average inventory for the year was $40,000? A) B) C) D) 0.2 3 1.67 5

vi.

During the current year, Audio Shop purchased 6 units at the following dates and acquisition costs: Date Units purchased unit cost total cost Aug. 4 2 $100 $200 Sept. 23. 2 110 220 Oct. 2. 2 120 240 Available for sale during the year 6 660 On September 25, the company sold three of these units and the other three remained in inventory at December 31. Assume that the company uses a periodic inventory system; compute the ending inventory at December 31 and the related cost of good sold under each of the following: Ending inventory Cost of Goods Sold Average cost ________________ _______________

FIF

________________

_______________

LIFO

_________________

_______________

The following information relates to questions 1 through 4. An asset cost $100,000 and is expected to have an economic life of 10 years with a residual value of $10,000. What is the depreciation expense in the first full year if the double-declining balance method of depreciation is used? A) $10,000 B) $9,000 C) $20,000

D) $18,000 2 What is the book value of the asset after the first full year if the double-declining balance method of depreciation is used? A) $90,000 B) $91,000 C) $80,000 D) $82,000 3 What is the book value of the asset after the second full year if the double-declining balance method of depreciation is used? A) $72,000 B) $64,000 C) $68,000 D) Some other amount 4 What is the book value of the asset after the tenth full year if the double-declining balance method of depreciation is used? A) 0 B) 8,000 C) 10,000 D) Some other amount 5 In the first full year of depreciating an asset, which method will yield the greatest depreciation expense? A) Straight-line B) Double-declining balance C) Units-of-output D) More information is need to determine the answer 6 Intangible assets are: A) Depleted B) Amortized C) Depreciated D) Declined

7 What is the legal life of a copyright? A) 10 years B) 17 years C) 28 years D) The life of the creator plus 50 years 8 What is the legal life of a patent? A) 10 years B) 17 years C) 28 years D) The life of the creator plus 50 years 9 What is the maximum period of time allowed to amortize an intangible according to the FASB? A) The economic life of the asset B) 50 years C) 40 years D) The FASB made no pronouncement 10 Capital expenditures are: A) Always financed through capital stock B) Are expensed as incurred C) Are for the purchase or expansion of plant assets D) Are also known as revenue expenditures