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Unformatted text preview: evenue for goods shipped out to distributors under agreements
allowing price protection and/or right of return on merchandise unsold by the
None of the above 2 ACCT201
Q4. 10,000 units of raw material “A” which are used to make a finished product
“F” were purchased at a cost $20 per unit by Innovation Ltd. The costs to complete
the raw materials into finished goods are as follows:
Factory overheads $12
$8 The estimated selling price of the finished product “F” is $ 55 per unit and
commission of half of one percent based on sales price is payable for every unit sold.
If the current replacement cost of raw material “A” falls to $17 per unit, Innovation
Ltd should a.
d. Write down the cost of raw material “A” to $17 per unit
Write down the cost of raw material “A” to $15 per unit
Leave the cost of raw material “A” at $20 per unit
None of the above Q5. Oakwell Plastics Company incurred the following transactions in the year
2002 in connection with their new plant facility:
Purchase price of land
Legal fees on land purchase
Cost to demolish old building
Cost to drainage around the new building
Cost of air-conditioning unit
Cost to construct new building $5,500,000
4,500,000 What amounts should be reported in Oakwell’s 31 December 2002 balance sheet...
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This document was uploaded on 04/07/2014.
- Spring '14