Rubin Inc uses the FIFO and lower of cost market methods to account for its

Rubin inc uses the fifo and lower of cost market

This preview shows page 6 - 8 out of 24 pages.

Rubin Inc. uses the FIFO and lower of cost market methods to account for its inventory. Information 47. regarding inventories is as follows. Product Cost Market X $1,200 $1,400 Y 900 600 Z 1,900 1,700 Total$4,000$3,700Rubin Inc’s ending inventory will be valued at: $3,500 a. $3,700 b. $4,000 c. $4,200 d. none of the above e. Mallie Co. uses the dollar-value LIFO inventory method. Inventory of January 1, 2010 was $100,000 at 48. base year prices. Inventory on December 31, 2010 was $160,000 at base year prices and was $200,000 at actual prices. What is the value of Mallie Co.’s ending inventory? e. Hock Brothers uses the simplified dollar-value LIFO method to account for its inventory. Ending inventory at 49. actual prices in 2010 and 2011 was $80,000 and $120,000, respectively. The Consumer Price Index for 2010 and 2011 was 102% and 107%, respectively. The value of Hock Brothers’ ending inventory in 2011 is: e. Campbell Co. incurred a variety of costs associated with its long-term construction contract. Which of the 50. following costs must be capitalized and deducted as profits are recognized? construction period interest 51. $30,000 in 2010 and is to receive $15,000 per year (plus interest) for 2011 through 2014. How much gain must Peter recognize in 2010?
Image of page 6
615 Testbank ©2010 CCH. All Rights Reserved. Chapter 13 e. Hal sold a rare automobile in 2010 for $110,000. Hal bought the automobile in 1986 for $25,000. Hal 52. received $50,000 in 2010 and will receive $60,000 (plus interest) in 2011. Hal elects not to use the installment method for this sale. The $60,000 note is worth $57,000 at the time of the sale. What gain (not including interest income) will Hal recognize in 2011 when he receives the $60,000? $-0¬ e. Gyan sold an oriental rug in 2010 for $25,000. He acquired the rug in 2000 for $17,000. He received 53. $6,000 in 2010 and $10,000 in 2011. Gyan sold the installment obligation on January 3, 2012 for $8,500. Gyan’s long-term capital gain on the sale of the installment obligation is: In 2010, Rankin sold real estate he aquired in 1993 under an installment contract and used the installment 54. method for tax purposes. In 2011, the buyer defaulted on the installment obligation and Rankin repossessed the property. Rankin sustained a $30,000 loss on the repossession. Rankin’s recognized position in 2011 as a result of the repossession is: $-0¬ a. $30,000 long-term capital gain b. $30,000 ordinary income c. none of the above
Image of page 7
Image of page 8

You've reached the end of your free preview.

Want to read all 24 pages?

  • Fall '12
  • ANYONE
  • Accounting, Method, FIFO and LIFO accounting

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture