1. On June 1, 2004, Noll Corp. sold merchandise with a list price of 30,000 to Linn on account.

Noll
allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sales was made
F.O.B. shipping point. Noll prepaid 600 of delivery costs for Linn as an accommodation. On June 12,
2004, Noll received from Linn a remittance in full payment amounting to …?
2. Miller Company needs an estimate of its ending inventory balance. The following information is
available:

Cost Retail
Sales revenue 180,000
Beginning inventory 35,000 62,000
Net purchases 100,000 135,000
Gross margin percentage 30%

Given this information, when using the gross margin estimation method, ending inventory is
approximately…?
3. The following information is available for the Becca Company for the three months ended June 30 of
this year:

Inventory, April 1 of this year 1,200,000

Purchases 4,500,000
Freight-in 300,000
Sales 6,400,000

The gross margin was 25 percent of sales. What is the estimated inventory balance at June 30?
4. Petersen Menswear, Inc. maintains a markup of 60 percent based on cost. The company’s selling and
administrative expenses average 30% of sales. Annual sales were 1,440,000. Petersen’s cost of goods
sold and operating profit for the year are…?
5. On October 31, a flood at Payne Company’s only warehouse caused severe damage to its entire
inventory. Based on recent history, Payne has a gross profit of 25% of net sales. The following
information is available from Payne’s records for the ten months ended October 31:

Inventory, January 520,000

Purchases 4,120,000
Purchase returns 60,000
Sales 5,600,000
Sales discounts 400,000

A physical inventory disclosed usable damaged goods which Payne estimates can be sold for 70,000.
Using the gross profit method, the estimated cost of goods sold for the ten months ended October
31 should be…?
6. Davis Company’s accounting records indicated the following information:

Inventory, 1/1/02 1,000,000

Purchases during 2002 5,000,000
Sales during 2002 6,400,000
 A physical inventory taken on December 31, 2002, revealed actual ending inventory at cost was
1,150,000. Davis’ gross profit on sales has regularly been about 25 percent in recent years. The
company believes some inventory may have been stolen during the year. What is the estimated
amount of missing inventory at December 31, 2002?
7. On June 19, 2002, a fire destroyed the entire uninsured merchandise inventory of the Allen
Merchandising Company. The following data are available:

Inventory, January 1 80,000

Purchases, January 1 through June 19 560,000
Sales, January 1 through June 19 776,000
Markup percentage on cost 25%

What is the approximate inventory loss as a result of the fire?

8. Product X sells for 12.00; selling expenses are 2.40; normal profit is 3.00. If the cost of Product X is
7.80, lower of cost or NRV is…?
9. The following information is available for Torino Corp. for its most recent year:

Net sales 3,600,000

Freight-in 90,000
Purchase discounts 50,000
Ending Inventory 240,000
10. Brandy Company took a physical inventory at the end of the year and determined that 2,600,000 of
goods were on hand. In addition, the entity determined that 200,000 of goods purchased in transit
shipped FOB shipping point were actually received two days after the physical count and that the
entity had 300,000 of goods out on consignment. What amount should be reported as inventory at
year-end?
11. Corolla Company incurred the following costs:

Materials 700,000
Storage costs of finished goods 180,000
Delivery to customers 40,000
Irrecoverable purchase taxes 60,000

What amount should the inventory be measured?

Use the following information for the next two questions:

Joan Company provided the following data:

Value of biological asset at acquisition cost on December 31, 2013 600,000

Fair valuation surplus on initial recognition at fair value on December 31, 700,000
2013
Change in fair value to December 31, 2014 due to growth and price 100,000
fluctuation
Decrease in fair value due to harvest 90,000

12. What is the carrying amount of the biological asset on December 31, 2014? (
13. What is the gain from change in fair value of biological asset that should be reported in the 2014
income statement?
14. Forester Company has reclassified certain assets as biological assets. The total value of the forest
assets is 6,000,000 which comprises
Freestanding trees 5,100,000
Land under trees 600,000
Roads in forests 300,000
6,000,000
What amount should the inventory be measured?
15. Based on a physical inventory taken on December 31, 2013, Chewy Company determined its
chocolate inventory on a FIFO basis at 5,200,000 with a replacement cost of 4,000,000. The entity
estimated that, after further processing costs of 2,400,000, the chocolate could be sold as finished
candy bars for 8,000,000. The normal profit margin is 10% of sale. Using the measurement at the
lower of cost or net realizable value, what amount should be reported as chocolate inventory on
December 31, 2013?
16. Tonette Company provided the following information for the current year:

Net sales 3,600,000

Freight in 90,000
Purchase discounts 50,000
Ending inventory 240,000

The gross margin is 40% of sales. What is the cost of goods available?

Use the following information for the nest two questions:

On January 1, 20x1, Gina Co. acquired 10%, 4,000,000 bonds for 3,807,853. The principal is due on
January 1, 20x4 but interest is due annually every January 1. The yield rate on the bonds in 12%.
17. How much is the interest income recognized in 20x1?
18. How much is the carrying amount of the investment on December 31, 20x1?
19. On January 1, 20x1, Entity A acquires 30% interest in Entity B for 600,000. Entity B reports profit of
200,000 and declares dividends of 50,000 in 20x1. How much is the carrying amount of the
investment in associate on December 31, 20x1?
20. Young Co. acquired a 60% interest in Tomlin Corp. on December 31, 2003 for 630,000. During 2004,
Tomlin had net income of 400,000 and paid cash dividends of 100,000. At December 31, 2004, the
balance in the investment account should be…
21. On January 1, 2004, Sloane Co. purchased 25% of Orr Corp.’s common stock; no goodwill resulted
from the purchase. Sloane appropriately carries this investment at equity and the balance in Sloane’s
investment account was 480,000 at December 31, 2004. Orr reported net income of 300,000 for the
year ended December 31, 2004, and paid common stocks dividends totaling 120,000 during 2004.
How much did Sloane pay for its 25% interest in Orr?
22. Martin Co. purchased the following portfolio of held for trading securities during 2002 and reported
the following balances at December 31, 2002. No sales occurred during 2002. All declines are
considered to be temporary.

Security Cost Fair Value at 12/31/02

 X 80,000 82,000
Y 140,000 132,000
E 32,000 28,000

The carrying value of the portfolio at December 31, 2002, on Martin Co.’s balance sheet would be…

The next two questions are based on the following information.

The following data pertains to Tyne Co.’s investments in marketable equity securities

Security Cost Fair Value at 12/31/03 Fair Value at 12/31/02

FVPL 150,000 155,000 100,000
FVOCI 150,000 130,000 120,000

23. What amount should Tyne report as unrealized gain in its 2003 income statement?
24. What amount should Tyne report as unrealized loss on marketable equity securities at December 31,
2003, in accumulated other comprehensive income in stockholders’ equity?
25. Walsh, Inc. began business on January 1, 2002, and at December 31, 2002, Walsh had the following
investment portfolios of equity securities:

FVPL FVOCI
Aggregate cost 150,000 225,000
Aggregate fair value 120,000 185,000

None of the declines is judged to be other than temporary. Unrealized losses at December 31, 2002,
should be recorded with corresponding charges against…
26. On October 1, Dennis Company purchased 200,000 face value 12% bonds for 98 plus accrued
interest and brokerage fees and classified them as amortized cost assets. Interest is paid
semiannually on January 1 and July 1. Brokerage fees for this transaction were 700. At what amount
should this acquisition of bonds be recorded?
27. On July 1, 2003, East Co. purchased as a long-term investment 500,000 face amount, 8% bonds of
Rand Corp. for 461,500 to yield 10% per year. The bonds pay interest semiannually on January 1 and
July 1. In its December 31, 2003 balance sheet, East should report interest receivable of…
28. On July 1, 2003, York Co. purchased as investment measured at amortized cost 1,000,000 of Park
Inc.’s 8% bonds for 946,000, including accrued interest of 40,000. The bonds were purchased to yield
10% interest. The bonds mature on January 1, 2010, and pay interest annually on January 1. York
uses the effective interest method of amortization. In its December 31, 2003 balance sheet, what
amount should York report as investment in bonds?
29. Crosswind Company owned a single investment property which had an original cost of 5,800,000 on
January 1, 2011. On December 31, 2013, the fair value was 6,000,000 and on December 31, 2014,
the fair value was 5,900,000. On acquisition, the property had a useful life of 40 years. What is the
expense to be recognized in profit or loss for year ended December 31, 2014 under the fair value
model and cost model?
30. Mikha Company acquired a building on January 1, 2013 for 9,000,000. At that date, the building had
a useful life of 30 years. On December 31, 2013, the fair value of the building was 9,600,000 and on
December 31, 2014, the fair value is 9,800,000. The building was classified as an investment
 property and accounted for under the cost model. What amount should be carried in the statement
of financial position December 31, 2014 and recognized in profit or loss for 2014?

The next two questions are based on the following information

Brooks Company purchased the following portfolio of equity instruments during 2018 and reported the
following balances at December 31, 2018. No sales occurred during 2018. All declines are considered to
be temporary:

Security Cost Fair Value at 12/31/18

A 800,000 820,000
B 1,400,000 1,500,000
C 1,320,000 1,300,000

31. If the securities were designated as investment in profit or loss, how much should Brooks Company
report as unrealized gain or loss related to the securities in its 2018 statement of comprehensive
income?
32. If the securities were designated as investment to other comprehensive income, how much should
Brooks Company report as unrealized gain or loss related to the securities in its 2018 P/L?