> > 1. Stein Corp. acquired two inventory items at a lump-sum cost of $50,000.

1. Stein Corp. acquired two inventory items at a lump-sum cost of $50,000.

The acquisition included 3,000 units of product LF, and 7,000 units...

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1. Stein Corp. acquired two inventory items at a lump-sum cost of $50,000.

The acquisition included 3,000 units of product LF, and 7,000 units of product 1B.
LF normally sells for $15 per unit, and 1B for $5 per unit.
If Stein Corp. sells 1,000 units of LF, what amount of gross profit should it recognize?
2. Rose and Company traded machinery with a book value of $120,000 and a fair value of $200,000.
It received in exchange from Ardra and Company a machine with a fair value of $180,000 and cash of $20,000.
Ardra's machine has a book value of $190,000.
What amount of gain should Rose recognize on the exchange?
3. Michelle Company purchased a new machine on May 1, 1998 for $176,000.
At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $8,000.
The company has recorded monthly depreciation using the straight line method.
On March 1, 2007, the machine was sold for $24,000.
What should be the loss recognized from the sale of the machine?
4. During 2007, Bagel Co. incurred average accumulated expenditures of $400,000 during construction of assets that qualified for capitalization of interest.
The only debt outstanding during 2007 was a $500,000, 10%, 5-yr note payable dated Jan. 1, 2005.
What is the amount of interest that should be capitalized by Bagel Co. during 2007?
5. During 2007, Aber Corp. constructed assets costing $1,000,000.
The weighted-average accumulated expenditures on these assets during 2007 was $600,000.
To help pay for construction, $440,000 was borrowed at 10% on Jan 1, 2007, and funds not needed for construction were temporarily invested in short term securities, yielding $9,000 in interest revenue.
Other than the construction funds borrowed, the only other debt outstanding during the year was a $500,000, 10-yr, 9% note payable dated Jan. 1, 2001.
What is the amount of interest that should be capitalized by Aber during 2007?

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Virtual Teaching Assistant: Colleen R.
Question Level: Basic
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Upload Date: 5/31/2017

This 326 words question was answered by Colleen R. on StudySoup on 5/31/2017. The question contains content related to Business Since its upload, it has received 112 views.

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