2007-Sum-test_2(solution)

# 2007-Sum-test_2(solution) - MGT120 Test#2 Summer 2007 Part...

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Unformatted text preview: MGT120 Test #2 Summer 2007 Part A (10 Marks) 1. b 2. b 3. b 4. a 5. c 6. b 7. b 8. b 9. b 10.b Part B (10 Marks) The store uses FIFO. This is apparent from the flow of costs out of inventory. For example, the March 8 sale shows a unit cost of \$19, which came from the beginning inventory. This is how FIFO, and only FIFO, works. Req. 2 Cost of goods sold: 27 × \$19 = \$ 513 23 × 19 = 437 1 × 20 = 20 25 × 20 = 500 \$1,470 Sales 27 + 23 = 50 units × \$37 = \$1,850 1 + 25 = 26 units × \$38 = 988 \$2,838 Cost of goods sold……………………………………. (1,470 ) Gross profit……………………………………………... \$1,368 Req. 3 Cost of March 31 inventory (24 × \$22) + (10 × \$20) \$ 728 Part C ( 8 marks) Equipment Cost 18,000 Amortization 9,075 \$18,000- \$1,500/ 10 years 5.5 years Book Value 8,925 Selling Price \$ 10000 Gain on Sale 1075 Cash 10,000 Accumulated Depreciation 9,075 Equipment 18,000 Gain on Sale 1,075 b) Capital Asset - New W ing 90,000 Cash 90,000 c) W arehouse:...
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2007-Sum-test_2(solution) - MGT120 Test#2 Summer 2007 Part...

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