Prelim 2 Practice Test - Name: _ Date: _ 1. Lauer...

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Name: __________________________ Date: _____________ 1. Lauer Corporation uses the periodic inventory system and the following information about their laptop computer is available: Date 1/1 Beginning Invent 5/5 Purchase 8/10 Purchase 10/15 Purchase During the year, 743 laptop computers were sold. What was ending inventory and cost of goods sold on 12/31 under the LIFO cost flow assumption? A) $53,395 and $716,180. B) $46,610 and $722,965. C) None of the answers is correct. D) $61,950 and $707,625. 2. The Mickey Company reported revenue of $31,621 million for 2009. Their accounts receivable balance was $5,230 million in 2009 and $4,928 million in 2008. Cash collected from customers equals A) $26,693 million B) None of the answers is correct C) $26,391 million D) $31,319 million 3. Warren Company plans to depreciate a new building using double declining-balance depreciation. The building cost $900,000. The estimated residual value of the building is $47,000 and it has an expected useful life of 25 years. Assuming the first year's depreciation expense was recorded properly, what would be the amount of depreciation expense for the second year? A) $36,000. B) $72,000. C) $64,240. D) $66,240. Version 1 Page 1
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4. At year end, Chief Company has a balance of $12,000 in accounts receivable of which $1,200 is more than 30 days overdue. Chief has a credit balance of $95 in the allowance for doubtful accounts before any year-end adjustments. Chief estimates its bad debts losses at 3% of current accounts and 10% of accounts over thirty days. What adjustment should Chief make to the allowance for doubtful accounts? A) No adjustment as the current balance is correct.
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Prelim 2 Practice Test - Name: _ Date: _ 1. Lauer...

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