Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:

During the year, Natalie rented out the condo for 79 days, receiving $26,000 of gross income. She personally used the condo for 43 days during her vacation. Natalie's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property.

Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. Assume 366 days in the current year. (Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount.)

a. What is the total amount of for AGI (rental) deductions Natalie may deduct in the current year related to the condo (assuming she itemizes deductions before considering deductions associated with the condo)?

b. What is the total amount of itemized deductions Natalie may deduct in the current year related to the condo?

c. If Natalie’s basis in the condo at the beginning of the year was $192,000, what is her basis in the condo at the end of the year?

d. Assume that gross rental revenue was $3,200 (rather than $26,000). What amount of for AGI deductions may Natalie deduct in the current year related to the condo?

Alexa owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:

During the year, Alexa rented out the condo for 130 days. Alexa’s AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income.

Assume that in addition to renting the condo for 130 days, Alexa uses the condo for eight days of personal use. Also assume that Alexa receives $38,750 of gross rental receipts and her itemized deductions exceed the standard deduction before considering expenses associated with the condo. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

Note that the home is considered to be a nonresidence with rental use.

a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

b. What is the total amount of from AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

Weighted Average Cost Method with Perpetual Inventory

The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows:

Required:

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary. Round all total cost amounts to the nearest dollar.

2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.

3. Determine the ending inventory cost as of March 31.
$fill in the blank 75

Feedback

1. When the perpetual inventory system is used, revenue is recorded each time a sale is made along with an entry to record the cost of the goods sold. Under the weighted average method the average unit cost must be determined after each purchase by dividing the total of cost of goods on hand by the total units on hand. The cost of goods sold is computed multiplying the average unit cost on the date of sales by the units sold. The inventory balance after a sale is computed by multiplying the average unit cost by the units on hand.

2. Total sales are obtained by taking the number of units sold times their sale prices for all sales and adding these amounts together. The total cost of goods sold can be obtained by adding the costs in the perpetual inventory record. Sales minus cost of goods sold equals gross profit.

3. The ending inventory cost can be taken from the perpetual inventory record in Part (1).

Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 19,000 hours for production:

Tannin has available 24,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 21,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows:

Required:

Factory Overhead Cost Variance Report

Shaded cells have feedback.

Construct a factory overhead cost variance report for the Trim Department for July. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Score: 102/174

A company has the following data:

• Revenue (Price x Quantity) = $750,000

• Variable cost per unit = $65

• Units sold (Quantity) = 5,000

• Total costs = $625,000

• The company has no semi-variable costs

The company will open a new branch that will increase its fixed costs by $125,000.

Determine the following:

a) Price of each unit.

b) Total variable cost.

c) Total fixed costs before the new branch.

d) Total fixed costs after the new branch.

e) Total costs after the new branch. f) Breakeven quantity after the new branch.

Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for portable DVD players are as follows:

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3.

a. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory 45 units @ $50 10 Sale 32 units 15 Purchase 60 units @ $53 20 Sale 33 units 24 Sale 10 units 30 Purchase 24 units @ $56 The business maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Schedule of Cost of Merchandise Sold LIFO Method Portable Game Players Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Apr. 1 $ $ Apr. 10 $ $ Apr. 15 $ $ Apr. 20 Apr. 24 Apr. 30 Apr. 30 Balance $ $

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales data for portable game players are as follows:

The business maintains a perpetual inventory system, costing by the last-in, first-out method.

Determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4.

Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

1. Perpetual Inventory Using LIFO

   Beginning inventory, purchases, and sales data for prepaid cell phones for December are as follows:

   Inventory		Purchases		Sales
   Dec. 1	3,100 units at $33	Dec. 10	1,550 units at $35	Dec. 12	2,170 units
   		Dec. 20	1,395 units at $37	Dec. 14	1,860 units
   				Dec. 31	930 units

   a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

   Schedule of Cost of Goods Sold
   LIFO Method
   Prepaid Cell Phones
   Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Goods Sold Unit Cost	Cost of Goods Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
   Dec. 1								$	$
   Dec. 10		$	$
   Dec. 12					$	$
   Dec. 14
   Dec. 20
   Dec. 31
   Dec. 31	Balances					$			$