2007-Win-test_2(solution) - MGT120 Term Test#2 Winter 2007...

MGT120
Term Test #2
Winter 2007
Part A (10 marks)
1. a
2. c
3. c
4. c
5. b
6. d
7. c
8. a
9. a
10. b
Part B (12 marks)
a). Accumulated amortization 28,560
Loss on sale of capital asset 7,140
Computer 35,700
$35,700 x 80% = $28,560
b) Book value - old truck
Cost $50,800
Less: accum am ( 30,480)
Book value 20,320
Accumulated amortization $30,480
Smaller truck $24,320
Older automotive (large truck) $50,800
Cash $ 4,000

c)
Cost - residual Value =
50,000-
10,000
useful life 8 years
= 5,000
Amortization
(3years) =
15,00
0
Base 7,000
22,00
0
Original cost 50,000
special Base 7,000
57,000
Accumulated Amortization $22,000
Cash $45,000
Gain on Capital Assets $10,000
Capital Asset $57,000
d)
Trademark amortized = 50,000/5 years = $10,000 per year
Cash $86,000
Gain on Sale of Capital Asset $56,000
Trademark 30,000

Part C (10 marks)
1a)
Units Cost
Sale - March 3 -75
Sale - March 15 -2000
Sale - Mar 18 -500
Sale - March 26 -5000
-7575 units
Cost of Goods Available for Sale
Opening Inventory 180 $14 2,520 $
Purchase
Purchase - March 5 2700 14.2 38,340 $
Purchase - March 13 1050 15.2 15,960 $
Purchase - March 21 4700 15.8 74,260 $
Purchase - March 28 2800 16 44,800 $
Total Purchases 11250 173,360 $
Goods Available for Sale 11430 175,880 $
Less: Ending Inventory
2800 units x $16 2800 16 44,800 $
1055 units x $15.80 1055 15.8 16,669 $
Total Ending Inventory 3855 61,469 $
Cost of Goods Sold 7575 114,411 $
1b)
Units Cost Inventory
Opening Inventory 180 $14 2,520 $
Purchase - March 5 2,700 14.2 38,340 $
Purchase - March 13 1,050 15.2