1. Calculate the total number of Squat Racks available for sale and the cost of goods from the following inventory figures for Sienna’s Health and Fitness, LLC.
| Date | Units Purchased | Cost per Unit | Total Cost | ||
| Beginning Inventory, March 1 | 24 | $525 | |||
| Purchase, May 19 | 12 | 479 | |||
| Purchase, August 26 | 18 | 540 | |||
| Purchase, November 27 | 27 | 488 | |||
| Squat Racks Available for Sale | Cost of Goods Available for Sale | ||||
2. When the Sienna took physical inventory (above problem) on December 31, 48 Squat Racks remained in inventory.
A. Calculate the dollar value of the 48 Squat Racks by using FIFO.
Answer: ___________
B. Calculate the dollar value of the 48 Squat Racks by using LIFO.
Answer: ___________
C. Calculate the dollar value of the 48 Squat Racks by using the average cost method.
Answer: ___________
Chapter 17 Check-in Questions:
1. Calculate the total cost, depreciation, and annual depreciation for 25 Blenders and an Industrial refrigerator using the straight-line method.
| Cost | Shipping Charges | Setup Charge | Total Cost | Salvage Value | Estimated Useful Life (years) | Depreciation | ||
| Total | Annual | |||||||
| A | $5,600 | $210 | $54 | $600 | 6 | |||
| B | $16,900 | $310 | 0 | $1900 | 4 |
2. Mikes Bikes decided on a new fleet of new delivery vans totaling $148,000. Delivery charges were $2,200, and installation of their high-capacity refrigerators amounted to $1,800. The equipment is expected to last four years and has a residual value of $3,000. If the company elects to use the straight-line depreciation method, prepare a depreciation schedule for these assets.
| Sienna’s Health & Fitness | |||
| Straight-Line Depreciation Schedule | |||
| Manufacturing Equipment | |||
| End of Year | Annual Depreciation | Accumulated Depreciation | Book Value |
| 1 | |||
| 2 | |||
| 3 | |||
| 4 | |||
- Sienna’s Healthy bought a computerized engraving machine for personalized weight belts for $33,800. It is expected to have a 5-year useful life and a trade-in value of $2,700. Prepare a depreciation schedule for the first three years using the machine’s 150% declining balance method.
| Sienna’s Health & Fitness | |||||
| Declining Balance Schedule | |||||
| End of Year | Beginning Book Value | Depreciation Rate | Depreciation for the year | Accumulate Depreciation | Ending Book Value |
| 1 | |||||
| 2 | |||||
| 3 | |||||
4. Complete the following as they relate to the units-of-production method of depreciation. For two pieces of equipment Sienna needed for her business office. Round answers to the nearest 100th of a cent.
| Asset | Cost | Salvage Value | Units of Useful Life | Depreciation per Unit | |
| A | Irrigation Pump | $8,900 | $250 | 500,000 Gallons | |
| B | Copier | $3,900 | 0 | 160,000 copies |