Financial & Managerial Accting MBA-560 test 3

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Description

Problem 1. Maple Company started the year with no inventory.
During the year, it purchased two identical inventory items at different times.
The first unit cost $800 and the second, $700. One of the items was sold during
the year.

Required:

Based
on this information, how much product cost would be allocated to cost of goods
sold and ending inventory, assuming use of:

a. LIFO
b. FIFO
c. Weighted average

Cost of goods sold

Ending inventory

LIFO

FIFO

Weighted Average

Problem 2. Teague Company purchased a new machine on January 1,
2012, at a cost of $150,000. The machine is expected to have an eight-year life
and a $15,000 salvage value. The machine is expected to produce 675,000
finished products during its eight-year life. Smith produced 70,000 units in
2012 and 110,000 units during 2013.

Required:

1) Determine the amount of depreciation expense to be recorded on the machine
for the years 2012 and 2013 under each of the following methods:

2012

2013

a) Straight-line method

b) Units of production method

c) Double-declining balance method

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