Question

1. During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods?

Average Cost

LIFO

A.            Yes                          No
B.           Yes                          Yes
C.            No                            No
D.            No Yes

2. For Sandhill Co., the following information is available:

Capitalized leases			$570,000
Copyrights			244,000
Long-term receivables			216,000

In Sandhill’s balance sheet, intangible assets should be reported at

A. $786,000
B. $814,000
C. $216,000
D. $244,000

3. Presented below are data for Wildhorse Co.

		2017			2018
Assets, January 1			$8,855			$9,717
Liabilities, January 1			4,870			?
Stockholders' Equity, Jan. 1			?			?
Dividends			1,611			1,219
Common Stock			1,456			1,304
Stockholders' Equity, Dec. 31			?			?
Net Income			1,910			1,306

Stockholders' Equity at January 1, 2018 is

A. $5,740
B. $3,985
C. $4,284
D. $5,895

Answer 1

Ans.1	C	No     No
		During periods of rising prices, a perpetual inventory system would result in the same dollar amount
		of ending inventory as a periodic inventory system under only FIFO cost flow method.
Ans.2	D $244000
		Asssets	Type of assets
		Capitalized leases	Tangible fixed assets
		Copyrights	Intangible fixed
		Long term receivales	Long term asssets
Ans.3	A   $5740
		*Caluclation:
		Beginning stockholder's equity of 2018 will equal to the ending stockholder's equity of 2017
		So we will calculate the stockholder's equity dec 31 2017
		Stockholder's equity (ending) = Net income + Beginning stockholder's equity + Common stock - Dividend
				1910 + 3985 + 1456 - 1611
				5740
		*Beginning stockholder's equity = Assets - Liabilities
				8855 - 4870
				3985