Question

    Use the following information for this question:                    June 1          &

    Use the following information for this question:

                   June 1                 Inventory 100 @ $1.00

                            6                 Purchased 150 @ $1.10

                          13                 Purchased   50 @ $1.20

                          20                 Purchased 100 @ $1.30

                          25                 Purchased   25 @ $1.40                                                              

                           Total Units Sold in June: 300 units

Using the first-in, first-out (FIFO) method, the cost assigned to the ENDING INVENTORY (not Cost of Goods Sold) would be

a. $325

b. $362.50

c. $227.50

d. $165

19.

King Co. received a $3,000 advance payment for legal services to be performed in the future. King should record a

a. credit to Unearned Service Revenue for $3,000

b. debit to Unearned Service Revenue for $3,000

c. credit to Cash for $3,000

d. credit to Accounts Receivable for $3,000

20. Hughes Co. purchased land to be used for the manufacture of a new factory. Which of the following construction costs would not be included in the land account?

a. the cost of constructing a parking lot on the property

b. the cost of demolishing an old shack on the property

c. the cost of clearing trees from the land

d. the cost of grading (leveling) the land

21.

The proper way to account for the cost of adding a new wing to a building would be to debit

a. the building's Accumulated Depreciation account.

b. the Building account.

c. the Repairs Expense account.

d. none of the above.
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Homework Answers

Answer #1
Q1.
Answer is d. $ 165
Ending inventory under FIFO:
Ending inventory units = 425-300 = 125 units
Inventory from Purchase of June 25 (25*1.40) 35
Inventory from Purchase of June20 (100*1.30) 130
Ending inventory 165
Q19.
Answer is a. credit to Unearned service revenue $ 3000
Q20.
Answer is a. the cost of contructing a parking lots on the property
It will be debited to Land Improvements account.
Q21.
Answer is b. Building account
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