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2006-Win-test_2(solution)

2006-Win-test_2(solution) - 1,000(1,000 x 1 Cash 19,000 Aug...

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MGT120 Winter 2006 Term Test #2 Thursday March 30 th , 2006 Part A (15 marks) 1. b 2. d 3. d 4. c 5. c 6. a 7. b 8. d 9. b 10. d 11. c 12. c 13. d 14. a 15. b Part B (7 marks) a. $400,000 x 0.95 = $380,000 amortizable amount $380,000/25 = $15,200 annual amortization $400,000 - $217,600 = $182,400 balance in accumulated amortization $182,400/$15,200 = 12 years old b. $80,500 x 0.90 = $72,450 amortizable amount $72,450/5 = $14,490 annual amortization $80,500 - $51,520 = $28,980 balance in accumulated amortization $28,980/$14,490 = 2 years old c. $21,875/0.4375 = $50,000 original cost $50,000 x 0.25 = $12,500 first year’s amortization expense $37,500 x 0.25 = $9,375 second year’s amortization expense $12,500 + $9,375 = $21,875 = balance in accumulated amortization Furniture is 2 years old
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Part C ( 11 marks) Jan. 1 Cash 270,000 Common Shares 270,00 0 (15,000 x $18) June 15 Common Shares 18,000 (1,000 x $18) Retained Earnings
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Unformatted text preview: 1,000 (1,000 x 1) Cash 19,000 Aug. 10 Cash 12,000 Common Shares 12,000 (600 x 20) Sept. 30 Retained Earnings 30,660 Common shares 30,660 (14,600 x 10% x $21) Nov. 30 Retained Earnings ([14,600 + 1,460] x $0.55) 8,833 Dividends Payable 8,833 Dec. 15 Dividends Payable 8,833 Cash 8,833 Part D (7 marks) 1. a) Ending inventory – Print X Opening - 4 units Purchases – 10 units Purchases 15 units Goods available for sale - 29 units Less units sold - 23 units Ending inventory 6 units x $330 = $1,980 b) Cost of Goods sold – Print Y (Average Basis) $5,500 + $12,000 + 15,300 = $497 (11 + 25 + 30 units) 38 units x $497 = $18,886 2. ending inventory -opening 11 units-purchases 25 units-purchases 30 units-sales (38 units)-ENDING INVENTORY - 28 UNITS X $100 = $2,800- use the lower of cost or market...
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