1. Data below for the year ended December 31, 2013, relates to Houdini Inc. Houdini started business January 1, 2013, and uses the LIFO retail method to estimate ending inventory.

	Cost	Retail
Beginning inventory	$90,000	$122,000
Net purchases	416,440	600,000
Net markups		38,000
Net markdowns		58,000
Net sales		537,000

Estimated ending inventory at retail is:

	$165,000.
	$101,000.
	$215,260.
	$43,000.

2. On January 1, 2013, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2014. Expenditures on the project were as follows:

January 1,2013	$307,000
September 1,2013	$459,000
December 31,2013	$459,000
March 31,2014	$459,000
September 30,2014	$307,000

Dreamworld had $5,300,000 in 13% bonds outstanding through both years.

Dreamworld's capitalized interest in 2013 was:

	$39,910.
	$79,820.
	$69,778.
	$59,800.

3. Cutter Enterprises purchased equipment for $51,000 on January 1, 2013. The equipment is expected to have a five-year life and a residual value of $9,000.

Using the double-declining balance method, depreciation for 2013 and the book value at December 31, 2013, would be:

	$20,400 and $30,600.
	$16,800 and $34,200.
	$20,400 and $21,600.
	$16,800 and $25,200.

4. In January of 2013, Vega Corporation purchased a patent at a cost of $218,000. Legal and filing fees of $65,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In 2016, Vega spent $23,000 in legal fees for an unsuccessful defense of the patent. The amount charged to income (expense and loss) in 2016 related to the patent should be:

	$ 23,000.
	$221,100.
	$218,000.
	$ 51,300.

5. Cutter Enterprises purchased equipment for $54,000 on January 1, 2013. The equipment is expected to have a five-year life and a residual value of $6,000.

Using the double-declining balance method, the book value at December 31, 2014 would be:

	$19,440.
	$20,640.
	$10,800.
	$18,540.

6. In 2012, Antle Inc. had acquired Demski Co. and recorded goodwill of $260 million as a result. The net assets (including goodwill) from Antle's acquisition of Demski Co. had a 2013 year-end book value of $595 million. Antle assessed the fair value of Demski at this date to be $715 million, while the fair value of all of Demski's identifiable tangible and intangible assets (excluding goodwill) was $570 million. The amount of the impairment loss that Antle would record for goodwill at the end of 2013 is:

	$145 million.
	$115 million.
	$0.
	None of the above is correct.

7. Assume that, on January 1, 2013, Matsui Co. paid $1,142,400 for its investment in 40,800 shares of Yankee Inc. Further, assume that Yankee has 170,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $340,000 at January 1, 2013. The following information pertains to Yankee during 2013:

Net income	$170,000
Dividends declared and paid	$51,000
Market price of common stock on 12/31/2013	$30/share

What amount would Matsui report in its year-end 2013 balance sheet for its investment in Yankee?

	$1,363,400.
	$1,193,400.
	$1,170,960.
	None of the above is correct.