had beginning inventory of $15,000 at cost and $25,000 at retail. Net
purchases were $150,000 at cost and $212,500 at retail. Net markups
were $12,500; net markdowns were $8,750; and sales were $196,250.
Compute ending inventory at cost using the conventional retail method.
Question 10 (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. Question 11
Previn Brothers Inc. purchased land at a price of $30,400. Closing costs
were $1,820. An old building was removed at a cost of $14,850. What
amount should be recorded as the cost of the land? Question 12 Garcia
Corporation purchased a truck by issuing an $108,000, 4-year, zero-
interest-bearing note to Equinox Inc. The market rate of interest for
obligations of this nature is 10%. Prepare the journal entry to record the
purchase of this truck. Question 13 Mohave Inc. purchased land,
building, and equipment from Laguna Corporation for a cash payment of
$352,800. The estimated fair values of the assets are land $67,200,
building $246,400, and equipment $89,600. At what amounts should
each of the three assets be recorded? Question 14 Fielder Company
obtained land by issuing 2,000 shares of its $12 par value common
stock. The land was recently appraised at $103,700. The common stock
is actively traded at $50 per share. Prepare the journal entry to record the
acquisition of the land. Question 15 Navajo Corporation traded a used
truck (cost $23,600, accumulated depreciation $21,240) for a small
computer worth $4,366. Navajo also paid $1,180 in the transaction.
Prepare the journal entry to record the exchange. Question 16 Mehta
Company traded a used welding machine (cost $10,080, accumulated
depreciation $3,360) for office equipment with an estimated fair value of
$5,600. Mehta also paid $3,360 cash in the transaction. Prepare the
journal entry to record the exchange. Question 17 Depreciation is
normally computed on the basis of the nearest A). full month and to the
nearest dollar. B). day and to the nearest cent. C). day and to the nearest
dollar. D). full month and to the nearest cent. Question 18 Fernandez
Corporation purchased a truck at the beginning of 2012 for $54,180. The
truck is estimated to have a salvage value of $2,580 and a useful life of
206,400 miles. It was driven 29,670 miles in 2012 and 39,990 miles in