1. List and describe the three types of inventory of a manufacturing company. 2. What is...

 

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1. List and describe the three types of inventory of a manufacturing company. 2. What is the differences between a perpetual inventory system and a periodic inventory system? 3. Explain the cost and net realizable value approach in valuing inventory. 4. Beaverton Lumber, purchased a milling machine for $35,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $1,500; installation, $3,000; testing, $2,000; personal property tax on the machine for the first year, $500. What is the initial cost of the machine? 5. Lawler Clothing sold manufacturing equipment for $16,000. Lawler purchased the equipment for $80,000, and depreciation through the date of sale totaled $71,000. What was the gain or loss on the sale of the equipment? 6. On January 1, 2016 Canseco Plumbing Fixtures, purchased equipment for $30,000. Residual value at the end of an estimated four-year life is expected to be $2,000. The company expects the machine to operate for 10,000 hours. Calculate the depreciation expense for 2016 and 2017 using each of the following depreciation methods: a. Straight line b. Sum of the year digits C. Double declining balance, and d. Units of production using the machine hours. The machine operated for 2,200 hours and 3,000 hours in 2016 and 2017 respectively. 7. Balance sheets of corporations usually have an item called "Investments". Briefly define investments. 8. On November 1, 2016 Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommittal short-term line of credit arrangement. Quantum issued nine-month, 12% promissory note. Interest was payable at maturity. Quantum's fiscal year is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Quantum Technology. 2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2016. 3. Prepare the journal entry for the payment of the note at maturity. 9. The basic concept of "substance over form" influences lease accounting. Explain. 1. List and describe the three types of inventory of a manufacturing company. 2. What is the differences between a perpetual inventory system and a periodic inventory system? 3. Explain the cost and net realizable value approach in valuing inventory. 4. Beaverton Lumber, purchased a milling machine for $35,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $1,500; installation, $3,000; testing, $2,000; personal property tax on the machine for the first year, $500. What is the initial cost of the machine? 5. Lawler Clothing sold manufacturing equipment for $16,000. Lawler purchased the equipment for $80,000, and depreciation through the date of sale totaled $71,000. What was the gain or loss on the sale of the equipment? 6. On January 1, 2016 Canseco Plumbing Fixtures, purchased equipment for $30,000. Residual value at the end of an estimated four-year life is expected to be $2,000. The company expects the machine to operate for 10,000 hours. Calculate the depreciation expense for 2016 and 2017 using each of the following depreciation methods: a. Straight line b. Sum of the year digits C. Double declining balance, and d. Units of production using the machine hours. The machine operated for 2,200 hours and 3,000 hours in 2016 and 2017 respectively. 7. Balance sheets of corporations usually have an item called "Investments". Briefly define investments. 8. On November 1, 2016 Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommittal short-term line of credit arrangement. Quantum issued nine-month, 12% promissory note. Interest was payable at maturity. Quantum's fiscal year is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Quantum Technology. 2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2016. 3. Prepare the journal entry for the payment of the note at maturity. 9. The basic concept of "substance over form" influences lease accounting. Explain.

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1 The three types of inventory in a manufacturing company are a Raw Materials These are the basic materials that are used in the production process but have not yet been transformed or processed Examp... View the full answer