Accounting Problems

Accounting Problems

Question
	
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
















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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