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Problem 1. Maple Company started the year with no inventory. During the year, it purchased two identical inventory items at different times. The first unit cost $800 and the second, $700. One of the items was sold during the year. Required: Based on this information, how much product cost would be allocated to cost of goods sold and ending inventory, assuming use of: a. LIFO b. FIFO c. Weighted average Cost of goods sold LIFO FIFO Weighted Average Ending inventory Problem 2. Teague Company purchased a new machine on January 1, 2012, at a cost of $150,000. The machine is expected to have an eight-year life and a $15,000 salvage value. The machine is expected to produce 675,000 finished products during its eight-year life. Smith produced 70,000 units in 2012 and 110,000 units during 2013. Required: 1) Determine the amount of depreciation expense to be recorded on the machine for the years 2012 and 2013 under each of the following methods: 2012 a) Straight-line method b) Units of production method c) Double-declining balance method 1. What documentation issued by a bank increases a company’s checking account balance at the bank? A) An account invoice B) A debit memo C) A credit memo D) A certified check 2. Martin Company has no beginning inventory. Martin purchased 500 units of inventory that cost $5.00 each. At a later date the company purchased an additional 700 units of inventory that cost $6.00 each. Martin sold 900 units of inventory for $8.00. If Martin uses FIFO cost flow method, the amount of gross margin appearing on the income statement will be: A) $2,300 B) $6,200 C) $1,800 D) $2,000

Problem 1. Maple Company started the year with no inventory. During the year, it purchased
two identical inventory items at different times. The first unit cost $800 and the second, $700.
One of the items was sold during the year.
Required:
Based on this information, how much product cost would be allocated to cost of goods sold and
ending inventory, assuming use of:
a. LIFO
b. FIFO
c. Weighted average

Cost of goods sold
LIFO
FIFO
Weighted Average

Ending inventory

Problem 2. Teague Company purchased a new machine on January 1, 2012, at a cost of
$150,000. The machine is expected to have an eight-year life and a $15,000 salvage value. The
machine is expected to produce 675,000 finished products during its eight-year life. Smith
produced 70,000 units in 2012 and 110,000 units during 2013.
Required:
1) Determine the amount of depreciation expense to be recorded on the machine for the years
2012 and 2013 under each of the following methods:

2012
a) Straight-line method
b) Units of production method
c) Double-declining balance method

 

1. What documentation issued by a bank increases a company’s checking account balance at the bank?

A) An account invoice
B) A debit memo
C) A credit memo
D) A certified check

2. Martin Company has no beginning inventory. Martin purchased 500 units of inventory that cost $5.00 each. At a later date the company purchased an additional 700 units of inventory that cost $6.00 each. Martin sold 900 units of inventory for $8.00. If Martin uses FIFO cost flow method, the amount of gross margin appearing on the income statement will be:
A) $2,300
B) $6,200
C) $1,800
D) $2,000

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