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35
$ 60
$ 2,100
Purchase
20
$ 65
$ 1,300
Available for Sale
70
$ 4,225
Inventory 12/31/11
35
Quantity Sold
35
Compute cost of goods sold for each of the following methods:
i. Average cost
ii. First-in, first-out (FIFO)
iii. Last-in, first-out (LIFO) (Points : 26)
Question 4. 4. (TCO 8) On January 3, 2014, Robby’s Excavating Compa
ny purchased a bulldozer for $140,000. In addition to the basic purchase
price, the company paid sales tax of $6,000 and freight charges of $8,00
0. The bulldozer will be used for 36,000 machine hours. Robby estimate
s that the bulldozer will have a useful life of 5 years and no residual valu
e.
Required:
I. Compute the cost of the asset.
II. Compute the depreciation expense for 2014 and 2015 using the
i. straight-line method;
ii. Units-
of production method assuming the bulldozer was used 5,000 machine h
ours in 2014 and 20,000 machine hours in 2015; and
iii. Double declining balance method.
(Points : 26)
Question 5. 5. (TCO 9) In the most recent year of operations, Bertha’s G
ames sold merchandise costing $104,000 for $194,000. All merchandise