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ACC 422 Week 3 WileyPlus Assignment - Exercises

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E9-1 (Lower-of-Cost-or-Market) The inventory of Oheto Company on December 31, 2011, consistsofthe following items.;Part No. Quantity Cost per Unit Cost to Replace per Unit;110 600 $95 $100;111 1,000 60 52;112 500 80 76;113 200 170 180;120 400 205 208;121a 1,600 16 14;122 300 240 235;aPart No. 121 is obsolete and has a realizable value of $0.50 each as scrap.;Instructions;(a) Determine the inventory as of December 31, 2011, by the lower-of-cost-or-market method, applying;this method directly to each item.;(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the;total of the inventory.;E9-12 (Gross Profit Method) Astaire 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 1,000,000;Sales returns 70,000;Purchase discounts 12,000;Instructions;(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.;(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.;E10-5 (Treatment of Various Costs) Allegro Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment.;Abstract company?s fee for title search $ 520;Architect?s fees 3,170;Cash paid for land and dilapidated building thereon 92,000;Removal of old building $20,000;Less: Salvage 5,500 14,500;Interest on short-term loans during construction 7,400;Excavation before construction for basement 19,000;Machinery purchased (subject to 2% cash discount, which was not taken) 65,000;Freight on machinery purchased 1,340;Storage charges on machinery, necessitated by noncompletion of;building when machinery was delivered 2,180;New building constructed (building construction took 6 months from;date of purchase of land and old building) 485,000;Assessment by city for drainage project 1,600;Hauling charges for delivery of machinery from storage to new building 620;Installation of machinery 2,000;Trees, shrubs, and other landscaping after completion of building;(permanent in nature) 5,400;Instructions;Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment.;Assume the benefits of capitalizing interest during construction exceed the cost of implementation. Indicate how any costs not debited to these accounts should be recorded.;E10-12 (Entries for Asset Acquisition, Including Self-Construction) Below are transactions related to Impala Company.;(a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The market value of;this land is determined to be $81,000.;(b) 14,000 shares of common stock with a par value of $50 per share are issued in exchange for land;and buildings. The property has been appraised at a fair market value of $810,000, of which;$180,000 has been allocated to land and $630,000 to buildings. The stock of Impala Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago;at $65 per share, and a block of 200 shares was sold by another stockholder 18 months ago at;$58 per share.;(c) No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead;the amounts properly chargeable to plant asset accounts for machinery constructed during the;year. The following information is given relative to costs of the machinery constructed.;Materials used $12,500;Factory supplies used 900;Direct labor incurred 16,000;Additional overhead (over regular) caused by construction 2,700;of machinery, excluding factory supplies used;Fixed overhead rate applied to regular manufacturing operations 60% of direct labor cost;Cost of similar machinery if it had been purchased from;outside suppliers 44,000;Instructions;Prepare journal entries on the books of Impala Company to record these transactions

 

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