Questions from Intermediate Accounting

Q: Phil Collins Realty Corporation purchased a tract of unimproved land for $

Phil Collins Realty Corporation purchased a tract of unimproved land for $55,000. This land was improved and subdivided into building lots at an additional cost of $34,460. These building lots were al...

Q: Marvin Gaye Company has been having difficulty obtaining key raw materials for

Marvin Gaye Company has been having difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term non-cancelable purchase commitment with its largest s...

Q: What approaches may be employed in applying the lower-of-

What approaches may be employed in applying the lower-of-cost-or-market procedure? Which approach is normally used and why?

Q: At December 31, 2014, Indigo Girls Company has outstanding non

At December 31, 2014, Indigo Girls Company has outstanding non-cancelable purchase commitments for 36,000 gallons, at $3.00 per gallon, of raw material to be used in its manufacturing process. The com...

Q: Each of the following gross profit percentages is expressed in terms of

Each of the following gross profit percentages is expressed in terms of cost. 1. 20%. 2. 25%. 3. 331/3%. 4. 50%. Instructions Indicate the gross profit percentage in terms of sales for each of...

Q: Mark Price Company uses the gross profit method to estimate inventory for

Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Instructions (a) Compute the estimated inv...

Q: Tim Legler requires an estimate of the cost of goods lost by

Tim Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $72,000; freight-in, $3,400; purchase returns...

Q: Rasheed Wallace Company lost most of its inventory in a fire in December

Rasheed Wallace Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following. Merchandise wi...

Q: You are called by Tim Duncan of Spurs Co. on July

You are called by Tim Duncan of Spurs Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediat...

Q: Gheorghe Moresan Lumber Company handles three principal lines of merchandise with these

Gheorghe Moresan Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost. On August 18, a fire destroyed the office, lumber shed, and a consider...