Question

1. Compute the value of the ending inventory using FIFO (First-in/First-out)'

   Beginning Inventory    40 units @ $20

   First Purchase 50 units @ $21

Second Purchase    50 units @ 22

Third Purchase 50 units @ $23

Ending Inventory 38 units

2. Compute the value of the ending inventory using LIFO (Last-in/First-out)

First purchase    60 units @ $44

Second Purchase 30 units @ $48

Third Purchase    25 units @ $42

Fourth Purchase    40 units @ $40

Ending Inventory    72 units

3. The straight-line depreciation on an asset costing $108,000, 15 year useful life and a salvage value of $6,000.

(a) Compute the annual depreciation    (b) Compute the annual rate of depreciation.

4. Compute the double-declining depreciation on an asset which costs $17,500, useful life of 4 years and a salvage value of $1,500.

Compute the book value at the end of the second year.

Answer 1