Question

Please tell me how to do the problems. Thanks!

1. Use the following information relating to Company X to answer questions below.

	Cost	Retail
Beginning Inventory	$25,000	$40,000
Net Purchases	$50,000	$85,000
Net Markups	-	$15,000
Net Markdowns	-	($5,000)
Net Sales	-	$100,000

What is the estimate of cost of goods sold under the average cost retail method?

		$19,444
		$35,632
		$45,784
		$55,556

2.

On January 1, 2016, Company X acquires inventory for $200. On January 1, 2017, Company X estimates that it could sell the good for $250, with $20 for shipping and $20 to dispose of the product. What should Company X value the inventory at on its books?

		$200
		$210
		$230
		$250

3.

I know the correct answer, but please show the work as to how the answer was chosen. Thanks!

Use the following information to answer questions below.

Company X traded old equipment with Company Y for new equipment. The old equipment was originally purchased for $200,000 and had accumulated depreciation of $150,000. The fair value of the old equipment is $60,000. In order to equalize the fair values, Company X also paid $200,000 in cash.

What is the fair value of the new equipment?

Selected Answer:	$260,000
Answers:	$200,000
	$250,000
	$260,000
	$400,000

4. I know this one is wrong, but please show me how to get the correct answer!

Company X purchased equipment on January 1, 2017, and signed a non-interest bearing note for $30,000 to be paid in two years. If Company X would have borrowed cash to make the purchase, the interest rate would have been 8%. What should be the value of the debit to equipment on January 1, 2017?

Selected Answer:	$26,297
Answers:	$24,000
	$25,720
	$26,297
	$30,000

Answer 1

Please find the handwritten solution for first question: