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UMUC Intermediate Accounting I Final Exam, Part 2




Question;Intermediate Accounting I Final Exam, Part 2;INSTRUCTIONS;You may use your textbook to answer the;questions. You may not use any other writtenmaterial. You may not discuss the exam;questions or your answers with your classmates or anyother person.;Save your answers as a PDF and;submit your work in your Leo Assignment folder.Show all computations for credit.;1. Tablin Company has determined its;December 31, 2013 inventory on a FIFO basis at$250,000. Information pertaining to that;inventory follows;Estimated selling price;$255,000;Estimated cost of disposal;10,000;Normal profit margin;30,000;Current replacement cost;225,000;Tablin records losses that result from;applying the lower-of-cost-or-market rule. What is the amount of the loss that;Tablin should recognize for 2013?;2.;Westford Corporation acquired two inventory items at a lump-sum cost of;$40,000. Theacquisition;included 3,000 units of product CF, and 7,000 units of product 3B. CF normally;sellsfor $12 per;unit, and 3B for $4 per unit. If Westford sells 1,000 units of CF, what amount;ofgross profitshould it recognize?;3.;On January 1, 2005, Helena Corporation purchased for $152,000, equipment;having a usefullife of ten;years and an estimated salvage value of $8,000. Helena has recorded monthlydepreciation of the equipment on the;straight-line method. On December 31, 2013, theequipment was sold for $28,000. Prepare the;journal entry to record the sale.;4.;Kelvin Company traded machinery with a book value of $285,000 and a fair;value of $270,000. It received in exchange from Marlin Company a machine with a;fair value of$300,000.;Kelvin also paid cash of $30,000 in the exchange. Marlin's machine has a book;valueof $285,000.;What amount of gain or loss should Kelvin recognize on the exchange? (Note:The exchange lacks commercial substance.);5. Savin Co. purchased land as a factory;site for $600,000. Savin paid $60,000 to tear down twobuildings on the land. Salvage was sold for $5,400. Legal fees of;$3,480 were paid for title investigation and;making the purchase. Title insurance (for the land purchase) cost $2,400.Architect's fees were $31,200. Liability insurance;during construction cost $2,600. Excavationcost $10,440. The contractor was paid $2,200,000. Interest costs during;construction were$170,000.;a);Calculate the cost of the land.;b);Calculate the cost of the building.;6. In January 2013, Jason Mining Corporation;purchased a mineral mine for $4,200,000 withremovable ore estimated by geological surveys;at 2,500,000 tons. The property has an estimatedvalue of $400,000 after the ore has been;extracted. Jason incurred $1,150,000 of developmentcosts preparing the property for the extraction of ore. During;2013, 340,000 tons were removed and 300,000;tons were sold. For the year ended December 31, 2013, Jason should include what;amount of depletion in its cost of goods sold?;7. Sumner, Inc. purchased equipment in 2011;at a cost of $600,000. Two years later it became apparent to Sumner, Inc. that;this equipment had suffered an impairment of value. In early 2013,the book value of the asset is $360,000 and it;is estimated that the fair value is now only$240,000. Prepare the journal entry to record the impairment.;8. Gray Corporation purchased a depreciable;asset for $420,000 on January 1, 2010. Theestimated salvage value is $42,000, and the;estimated total useful life is 9 years. The straight-linemethod is used for depreciation. In 2013;Garrison changed its estimates to a useful life of 5 years (from the original;date of purchase) with a salvage value of $70,000. What is 2013depreciation expense?;9. Tunlaw;Company's 12/31/13 balance sheet reports assets of $6,000,000 and liabilities;of$2,500,000.;All of Tunlaw's assets' book values approximate their fair value, except for;land, which has a fair value that is $400,000 greater than its book value. On;12/31/13, Benedict Corporation paid $6,100,000 to acquire Tunlaw. What amount;of goodwill should Benedictrecord as a;result of this purchase?;10. Dallas Corp.'s trial balance of;income statement;2013 included the following;Sales;accounts for the year ended;December 31,Debit Credit;$280,000;Cost of goods sold;$100,000;Administrative expenses;50,000;Loss on sale of equipment;18,000;Commissions to salespersons;16,000;Interest revenue;10,000;Freight-out;4,000;Loss due to earthquake damage;24,000;Bad debt expense;6,000;Other;information;Dallas Corp's income tax rate is 30%.;Instructions: Prepare a multiple-step income statement in good form.


Paper#48448 | Written in 18-Jul-2015

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