Data related to the inventories of Noel Medical Supply Company is presented below. The company applies lower of cost or net realizable value (LCNRV) and lower of cost or market (LCM) on an item by item basis.

	Surgical	Surgical	Rehab	Rehab
	Equipment	Supplies	Equipment	Supplies
Selling price	$ 260	$ 120	$ 340	$ 165
Cost	$ 170	$ 90	$ 250	$ 162
Replacement cost	$ 240	$ 80	$ 210	$ 158
Selling cost	$ 30	$ 5	$ 25	$ 10
Normal profit margin	$ 78	$ 36	$ 102	$ 33

In applying the LCNRV rule, the inventory of surgical equipment would be valued at:

Group of answer choices

$230

$240

$170

In applying the LCNRV rule, the inventory of surgical supplies would be valued at:

Group of answer choices

$115

$90

$80

$69

In applying the LCM rule, the inventory of rehab equipment would be valued at:

Group of answer choices

$315

$250

$213

$210

In applying the LCM rule, the inventory of rehab supplies would be valued at:

Group of answer choices

$122

$158

$162

$155

French Hens Manufacturing Co. purchased a ten-ton draw press at a cost of $180,000 with terms of 5/15, n/45. Payment was made within the discount period. Shipping costs were $4,600, which included $200 for insurance in transit. Installation costs totaled $12,000, which included $4,000 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the ten-ton draw press is:

Group of answer choices

$171,000

$187,400

$187,600

$185,760

On January 1, 2024, Grinch Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows:

January 1, 2024	$200,000
September 1, 2024	$300,000
December 31, 2024	$300,000
March 31, 2025	$300,000
September 30, 2025	$200,000

Grinch borrowed $750,000 at 12% interest on January 1, 2024 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2024 and 2025. The company uses the specific interest method to capitalize interest, and their year ends on December 31^st.

Interest capitalized by Grinch Inc. for 2024 was:

Group of answer choices

$48,000

$42,000

$60,000

$36,000

Interest capitalized by Grinch Inc. for 2025 was:

Group of answer choices

$115,740

$86,805

$97,875

$67,500

Interest expense reported by Grinch Inc. on its 2024 income statement was:

Group of answer choices

$495,000

$459,000

$405,000

$90,000

The total cost of the cattle feeder system in Grinch's accounting records is:

Group of answer choices

$1,300,000

$1,386,805

$1,451,740

$1,422,805

Snoopy Incorporated purchased all of the outstanding stock of Red Baron Company for $950,000 cash. Snoopy assumed all of the liabilities. The book and fair values of Red Baron's assets and liabilities at the date of acquisition were:

	Book Value	Fair Value
Current Assets	$130,000	$125,000
Property & Equipment	$600,000	$750,000
Liabilities	$150,000	$175,000

Snoopy Incorporated would record goodwill of:

Group of answer choices

$250,000

$75,000

$445,000

$0

Little Cindy-Lou Who Incorporated exchanged land and paid $22,000 cash for new equipment. The book value of the land was $82,000 and the fair value of the land was $95,000 at the time of the exchange. The exchange has commercial substance. The amount at which Little Cindy-Lou would record the new equipment in her accounting records is:

Group of answer choices

$117,000

$104,000

$95,000

$82,000

Clark Griswold Mining Company paid $2,000,000 to obtain the rights to operate a coal mine. Costs of exploring for the coal deposit totaled $1,500,000 and development costs of $5,000,000 were incurred in preparing the mine for extraction activities. Griswold also purchased some new mining equipment for $200,000 to be used for extracting coal from the mine. After the coal is extracted in approximately five years, Clark Griswold is obligated to restore the land to its original condition. Griswold's credit-adjusted, risk-free rate of interest is 7%. The company's engineer has provided the following three cash flow possibilities for the future restoration costs:

Cash Flow Probability

$1,000,000 10%

1,400,000 60%

1,800,000 30%

The total capitalized cost of the coal mine is closest to:

Group of answer choices

$8,500,000

$9,555,225

$8,700,000

$9,980,000

Total accretion expense recognized over the five year mining period is closest to:

Group of answer choices

$1,480,000

$424,775

$624,775

$0

The inventory records for Tiny Tim Creations Inc. indicate the following activity for the month of January:

January 1 balance, 1000 units @ $7.20 each

Purchases:

January 10: 600 units @ $7.25 each

January 16: 800 units @ $7.30 each

January 23: 600 units @ $7.35 each

Sales:

January 5: 400 units

January 14: 700 units

January 20: 500 units

January 26: 700 units

Flag question: Question 14

Question 14 1 pts

January 31st ending inventory using unit LIFO in a periodic inventory system is:

Group of answer choices

$5,040

$5,055

$5,075

$5,135

January 31st ending inventory using unit LIFO in a perpetual inventory system is:

Group of answer choices

$4,960

$5,060

$5,080

$5,140

January 31st ending inventory using FIFO in a perpetual inventory system is:

Group of answer choices

$5,140

$5,080

$5,060

$5,050

January 31st ending inventory using average cost (rounding unit cost to three decimal places) in a periodic inventory system is:

Group of answer choices

$5,087

$5,107

$5,077

$5,005

The Rudolph Corporation's inventory on December 31, 2024, was $325,000 based on a physical count before considering the following transactions:

• Merchandise costing $30,000, shipped f.o.b. shipping point from a supplier on December 30, 2024, was received by Rudolph on January 5, 2025.
• Merchandise costing $22,000, shipped f.o.b. destination from a supplier on December 28, 2024, was received by Rudolph on January 3, 2025.
• Merchandise costing $38,000 was shipped f.o.b. destination by Rudolph to a customer on December 28, 2024. The goods arrived at the customer's location on January 6, 2025.
• Merchandise costing $12,000 was being held on consignment by Prancer Company. This merchandise was not included in the physical count on December 31, 2024.

What amount should Rudolph Corporation report as inventory in its December 31, 2024 balance sheet?

Group of answer choices

$367,000

$427,000

$405,000

$325,000

On January 1, 2024, Jacob Marley Company adopted the dollar-value LIFO method for its inventory. The inventory value on this date was $590 million. The December 31, 2024 and 2025 ending inventory valued at year-end costs were $702 million and $810 million, respectively. The appropriate cost indexes are 1.08 for 12/31/2024 and 1.20 for 12/31/2025.

Using the dollar-value LIFO method, ending inventory on Jacob Marley's balance sheet at December 31, 2024 is:

Group of answer choices

$637.2 million

$637.2 million

$650.0 million

$654.8 million

Using the dollar-value LIFO method, ending inventory on Jacob Marley's balance sheet at December 31, 2025 is:

Group of answer choices

$692.0 million

$810.0 million

$675.0 million

$684.8 million

Answer rating: 100% (QA)

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