WileyPlus WEEK2 Exercise Problems E9-3 E9-12 E9-19 E10-2 E10-23 E10-24 E9-3Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market on an individual-item basis. Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit 1320 1 200 $3.20 $3.00 $4.50 $0.35 $1.25 1333 900 2.70 2.30 3.50 0.50 0.50 1426 800 4.50 3.70 5.00 0.40 1.00 1437 1 000 3.60 3.10 3.20 0.25 0.90 1510 700 2.25 2.00 3.25 0.80 0.60 1522 500 3.00 2.70 3.80 0.40 0.50 1573 3 000 1.80 1.60 2.50 0.75 0.50 1626 1 000 4.70 5.20 6.00 0.50 1.00 From the information above determine the amount of Bolton Company inventory. The amount of Bolton Company’s inventory $ E9-12Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory May 1 $ 160 000 Purchases (gross) 640 000 Freight-in 30 000 Sales revenue 1 000 000 Sales returns 70 000 Purchase discounts 12 000 (a) Compute the estimated inventory at May 31 assuming that the gross profit is 30% of sales. The estimated inventory at May 31 $ (b) Compute the estimated inventory at May 31 assuming that the gross profit is 30% of cost. The estimated inventory at May 31 $ E9-19Presented below is information related to Ricky Henderson Company. Cost Retail Beginning inventory $ 200 000 $ 280 000 Purchases 1 375 000 2 140 000 Markups 95 000 Markup cancellations 15 000 Markdowns 35 000 Markdown cancellations 5 000 Sales revenue 2 200 000 Compute the inventory by the conventional retail inventory method. Ending inventory using conventional retail inventory method $ E10-2Martin Buber Co. purchased land as a factory site for $400 000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $42 000 to raze the old buildings and sold salvaged lumber and brick for $6 300. Legal fees of $1 850 were paid for title investigation and drawing the purchase contract. Martin Buber paid $2 200 to an engineering firm for a land survey and $68 000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1 500 and a liability insurance premium paid during construction was $900. The contractor’s charge for construction was $2 740 000. The company paid the contractor in two installments: $1 200 000 at the end of 3 months and $1 540 000 upon completion. Interest costs of $170 000 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buberk Co. Assume that the land survey was for the building. Cost of the Land $.wiley.com/edugen/art2/common/pixel.gif” src=”file:///C:/Users/Lenovo/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif”> Cost of the Building $.wiley.com/edugen/art2/common/pixel.gif” src=”file:///C:/Users/Lenovo/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif”> E10-23Plant assets often require expenditures subsequent to acquisition. It is important that they be accounted for properly. Any errors will affect both the balance sheets and income statements for a number of years. For each of the following items indicate whether the expenditure should be capitalized or expensed in the period incurred. Items (a)Improvement. (b)Replacement of a minor broken part on a machine. (c)Expenditure that increases the useful life of an existing asset. (d)Expenditure that increases the efficiency and effectiveness of a productive asset but does not increase its salvage value. (e)Expenditure that increases the efficiency and effectiveness of a productive asset and increases the asset’s salvage value. (f)Expenditure that increases the quality of the output of the productive asset. (g)Improvement to a machine that increased its fair market value and its production capacity by 30% without extending the machine’s useful life. (h)Ordinary repairs. E10-24On December 31 2014 Travis Tritt Inc. has a machine with a book value of $940 000. The original cost and related accumulated depreciation at this date are as follows. Machine $1 300 000 Less: Accumulated depreciation 360 000 Book value $940 000 Depreciation is computed at $60 000 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. A fire completely destroys the machine on August 31 2015. An insurance settlement of $430 000 was received for this casualty. Assume the settlement was received immediately. Date Account Titles and Explanation Debit Credit August 31 2015 (To record current depreciation.) August 31 2015 (To record loss of the machine.) On April 1 2015 Tritt sold the machine for $1 040 000 to Dwight Yoakam Company. Date Account Titles and Explanation Debit Credit April 1 2015 (To record current depreciation.) April 1 2015 (To record sale of the machine.) On July 31 2015 the company donated this machine to the Mountain King City Council. The fair value of the machine at the time of the donation was estimated to be $1 100 000. Date Account Titles and Explanation Debit Credit July 31 2015 (To record current depreciation.) July 31 2015 (To record donation of the machine.)
