Questions from Financial Accounting

Q: You are a tutor for introductory financial accounting. You tell the

You are a tutor for introductory financial accounting. You tell the students, “Recording adjusting entries is a critical step in the accounting cycle, and the two major classifications of adjusting en...

Q: For each item below, indicate whether FIFO or LIFO will generally

For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount when inventory costs are rising versus falling. The first answer is provided as an example.

Q: Fresh Veggies, Inc. (FVI), purchases land and a

Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the following expenditures related to the acquisition: broker’s commission, $29,000...

Q: Hawaiian Specialty Foods purchased equipment for $30,000. Residual

Hawaiian Specialty Foods purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is expected to be $3,000. The machine operated for 3,100 hours in the first y...

Q: Omaha Beef Co. purchased a delivery truck for $50,

Omaha Beef Co. purchased a delivery truck for $50,000. The residual value at the end of an estimated eight-year service life is expected to be $10,000. The company uses straight-line depreciation for...

Q: In early January, Burger Mania acquired 100% of the common

In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $4 million, patent; $5 million, tradem...

Q: Granite Stone Creamery sold ice cream equipment for $16,000

Granite Stone Creamery sold ice cream equipment for $16,000. Granite Stone originally purchased the equipment for $90,000, and depreciation through the date of sale totaled $71,000. What was the gain...

Q: Piper’s Pizza sold baking equipment for $25,000. The

Piper’s Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and depreciation through the date of sale totaled $51,000. What was the gain or loss on the sale of...

Q: Masterson Supply purchased a small storage building for $20,000

Masterson Supply purchased a small storage building for $20,000 to be used over a five-year period. The building has no residual value. Early in the fourth year, the storage building burned down. Reco...

Q: China Inn and Midwest Chicken exchanged assets. China Inn received a

China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave equipment. The fair value and book value of the equipment were $22,000 and $12,000 (original cost of $45,00...