Question 1 Multiple Choice (24 marks; 44 minutes)
For each of the following, choose the letter that corresponds to the
write the letter in
your examination booklet, not on this examination paper
Each correct answer is worth 1.5 marks.
Ramstetter, Inc. purchased a piece of land with a new building on January 1, 2006.
was valued at $40,000 and the building was valued at $120,000 with a 40 year life and a zero
How would the land and building appear in the plant, property and equipment
section of the December 31, 2006, balance sheet, assuming straight-line amortization?
Land at $40,000 less accumulated amortization of $1,000; Building at $120,000 less
accumulated amortization of $3,000.
Land at $40,000; Building at $120,000.
Land at $30,000; Building at $120,000.
Land at $40,000; Building at $120,000 less accumulated amortization of $3,000.
HD Motorcycles has an inventory turnover ratio of 10.1 in 2006 compared to their competitor
TT Motorcycle with a 2.6 ratio in 2006.
Which of the following is the most likely cause of TT
Co's lower ratio?
Lower levels of inventory compared to HD
It takes TT Co. fewer days to sell their inventory
TT Co's smaller size makes it difficult for them to achieve the economies of scale in
comparison to HD's scale of operations
None of these causes their ratio to be lower
In 2006, Landings Inc. provided the following items in their footnotes.
Their cost of goods
available for sale was $6.2 billion under FIFO costing and their ending inventory value under
FIFO costing was $2.1 billion.
Their opening inventory was $2.5 billion.
What were their