Quiz 3a

# 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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## This note was uploaded on 02/23/2012 for the course MGMT 200 taught by Professor Greigg during the Summer '08 term at Purdue.

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

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