Practice final BBUS3211_SW2_PE_10JUL12

Tru open learning bbus 3211 practice examination 13

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Unformatted text preview: ebited an expense account for this purchase. Ling uses straight‐line depreciation for its trucks. TRU Open Learning BBUS 3211 • PRACTICE EXAMINATION 12 of 13 4. Ling, in reviewing its allowance for doubtful accounts during 2012, has determined that 1% is the appropriate amount of bad debt expense to be recorded. The company had used 1.5% as its rate in 2011 and 2010 when the expense had been $14,000 and $10,000, respectively. Ling would have recorded $24,000 in bad debt expense for 2012 if they had used the old rate. 5. At the beginning of 2012, Ling decided to change from the average cost method of valuing inventories to FIFO, and used FIFO all during 2012 (perpetual system). They have determined that the opening inventory at January 1, 2012, which was $55,500 using average cost, would have been $52,500 using FIFO. Assume this change will make their financial statements as reliable and more relevant. TRU Open Learning BBUS 3211 • PRACTICE EXAMINATION 13 of 13 Question 6 (14 marks) Sta...
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This note was uploaded on 02/05/2014 for the course BUS 370 taught by Professor Andreathomas during the Spring '13 term at Capital University.

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