Quiz 3a - A $83,500 B $84,300 C $85,300 D $75,000 $75,000...

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Quiz 3 Key 1. Baker Fine Foods has beginning inventory for the year of $12,000. During the year, Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. Baker will report cost of goods sold equal to: A. $150,000. B. $158,000. C. $142,000. D. $170,000. Cost of goods sold = beginning inventory ($12,000) + purchases ($150,000) - ending inventory ($20,000) = $142,000. 2. Inventory records for Marvin Company revealed the following: Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be: A. $5,040. B. $5,055. C. $5,075. D. $5,135. Ending inventory = 700 x $7.20 = $5,040.
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3. Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real Angus on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should Real Angus Steakhouse record the land?
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Unformatted text preview: A. $83,500. B. $84,300. C. $85,300. D. $75,000. $75,000 + $4,500 + $4,000 + $800 = $84,300. 4. The purchase of a new cooling system for $150,000 to upgrade an office building owned by the company would be accounted for as: A. Goodwill. B. An addition in the Buildings account. C. An expense in the period incurred. D. A patent. 5. Kansas Enterprises purchased equipment for $60,000 on January 1, 2012. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, depreciation expense for 2012 would be: A. $12,000. B. $11,000. C. $60,000. D. None of the other answers are correct. Depreciation expense = (($60,000 - $5,000)/5 years) = $11,000. 6. The return on assets is equal to the: A. Profit margin plus asset turnover. B. Profit margin minus asset turnover. C. Profit margin times asset turnover. D. Profit margin divided by asset turnover....
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Quiz 3a - A $83,500 B $84,300 C $85,300 D $75,000 $75,000...

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