Reference no: EM131290375
TASK 1
The following data are known on about the inventory of the company:
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Date
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Transaction Qty (pcs.)
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Price for piece (EEK)
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1 January
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Starting inventory
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100 |
20
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15 March
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Purchase
|
300 |
24
|
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20 July
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Purchase
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200 |
25
|
|
4 Sept.
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Purchase
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300 |
28
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15 Dec.
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Purchase
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100 |
30
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During the year 800 products were sold.
To be found:
- Cost of the potential sale for the period.
- Ending inventory by FIFO, LIFO and by the method of weighted average cost
- The cost of goods sold by FIFO, LIFO and by the method of weighted average cost TASK 2.
The acquisition cost (historical cost) of the equipment is 60000. Upon a tentative estimate its period of use is 8 years and liquidation cost is 4000. After 5 years of use it was found that the total period of use of the machine must be 12 years, instead of 8 years and the liquidation cost is 4600. The straight line depreciation method is used.
To be done: to calculate annual depreciation expense starting from the 6th year of use and to make the respective bookkeeping entry.
TASK 3
The equipment was acquired on 1 April 2005 at acquisition cost 67000. Liquidation cost is 4000 and period of use is 7 years. It is presumed that during the period of use the equipment will work 42000 hours and will put out 525000 units of production. In 2005 the equipment worked 6000 hrs and put out 55000 units. During 2006 the machine worked 5500 hrs and produced 48000 units.
To calculate: Depreciation expense at end 2005 and at end 2006, using the following methods: 1) Straight line method; 2) Method of units produced; 3) Working hours' method; 4) The years' number sum method; 5) Double declining method.
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Examine legal and professional ethical standards
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: Calculate annual depreciation expense starting from the 6th year of use and to make the respective bookkeeping entry - Cost of the potential sale for the period.
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