Reference no: EM132553512

Problem 1: Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows:

Jan. 14: Sales, 375 @ $14
Jan. 17: Purchases, 250 @ $10
Jan. 25: Purchases, 250 @ $11
Jan. 29: Sales, 260 @ $16
Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31.

The cost of the inventory at January 31, under the LIFO method is $.

Problem 2: Penny Company made an inventory count on December 31, 2018. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2018, the effects of this error are

A. Assets: understated

Liabilities: no effect

Stockholders' Equity: understated

B. Assets: overstated

Liabilities: overstated

Stockholders' Equity: understated

C. Assets: overstated

Liabilities: no effect

Stockholders' Equity: overstated

D. Assets: overstated

Liabilities: understated

Stockholders' Equity: overstated

Problem 3: Salem Company hired Kirk Construction to construct an office building for $6,400,000 on land costing $1,600,000, which Salem Company owned. The building was complete and ready to be used on January 1, 2018, and it has a useful life of 40 years. The price of the building included land improvements costing $480,000 and personal property costing $600,000. The useful lives of the land improvements and the personal property are 10 years and 5 years, respectively. Salem Company uses component depreciation, and the company uses straight-line depreciation for other similar assets. What total amount of depreciation expense would Salem Company report on its income statement for the year ended December 31, 2018?

Group of answer choices

A. $301,000

B. $268,000

C. $341,000

D. $160,000