Question

5) Janus Corp. had the following information for the year.

Beginning Inventory at January 1       20 units @ $16 per unit

Inventory Purchase, March                40 units @ $18 per unit

Inventory Purchase, August                30 units @ $20 per unit

Inventory Purchase, October              25 units @ $21 per unit

Ending Inventory at December 31      35 units

What is Janus Corp’s ending inventory at December 31, using Average Cost?

A) $541

B) $611

C) $659

D) $729

6) How might the gross profit percentage be used to help run a business?

A) To determine how quickly inventory is sold

B) To determine whether the value of inventory is increasing or decreasing

C) To determine the profitability of individual products

D) To determine how much inventory is left in stock

7) Ending inventory for Modern Inc. has a cost of $378. However, fluctuating market trends have resulted in a selling price for this inventory of $352. How will this information impact the financial statements for the year?

A) No impact on the financial statements

B) Net income is lowered by $26

C)Inventory is lowered by $26

D) Both b and c

8) New equipment was purchased for $97,000. Additionally, the company had to pay shipping costs of $7,000 and installation fees of $200. During the first year of use, the company paid $5,800 for repairs and maintenance on the equipment. What is the total cost of the equipment?

A) $97,000

B) $97,200

C) $104,000

D) $104,20

9) Which method of depreciation generally results in the highest amount of depreciation expense in an asset’s first year of use?

A) Straight-line

B)Units of production

C) Double declining balance

D) No method consistently has higher depreciation

10) Vanguard Corp. purchased machinery with a cost of $470,000 on January 1, 2020. The machinery had a useful life of 5 years and a residual value of $30,000.

The machinery was expected to produce 150,000 units over its life. In 2020 and 2021, it produced 24,000 and 60,000 units, respectively.

What is the net book value of the machinery at December 31, 2021, using the straight-line method?

A) $88,000

B) $176,000

C) $294,000

D)$470,000

Answer 1

Units 320 Jan mar Aug Oct Unit cost Total value 20 $ 16.00 40 $ 18.00 720 30 $ 20.00 600 25 $ 21.00 525 115 2165 Average Cost 2165/115 $ 18.83 Ending Inventory = 35*18.83 $ 659 Answer