Antlers Company adopted the dollar-value LIFO retail method at…
7. Antlers Company adopted the dollar-value LIFO retail method at the beginning of 20Y1 (base year). The retail price index at the end of 20Y1 was 10%. The following data applies to Antlers inventory:
| Cost | Retail | |
| Beginning Inventory | $36,000 | $72,000 |
| Plus: Net Purchases | $60,000 | $90,000 |
| Plus: Net Markups | $30,000 | |
| Less: Net Markdowns | . . | (20,000) |
| Less: Net Sales | (62,000) | |
| Estimated Ending Inventory | $110,000 |
What is the inventory balance that Antlers would report in its 12/31/20Y1 balance sheet?
8. Johnson Corporation acquired all of the outstanding common stock of Smith Corporation for $11,000,000 in cash. The book value of Smith’s net assets was $7,800,000. The fair values of all Smith’s assets and liabilities were equal to their book values with the following exceptions:
| Book Value | Fair Value | ||
| Receivables | $1,300,000 | $1,100,000 | |
| Building | $8,000,000 | $9,400,000 | |
| Intangible Assets | $200,000 | $1,200,000 |
Calculate the amount Johnson should record as goodwill as a result of the transaction.
9. On January 1, 20Y1, Myner Corporation purchased a used machine. Myner paid $50,000 down and signed a noninterest-bearing note requiring $250,000 to be paid on 12/31/20Y3. The fair value of the machine is not determinable. An interest rate of 8% properly reflects the time-value of money for this type of loan agreement. At what amount should Myner record the acquisit?
11. On June 1, 20Y1, Cricket Company began construction of a new factory. The factory was completed on October 31, 20Y2. Expenditures on the project were as follows:
| July 1, 20Y1 | $54,000 |
| October 1, 20Y1 | $22,000 |
| February 1, 20Y2 | $30,000 |
| April 1, 20Y2 | $21,000 |
| September 1, 20Y2 | $20,000 |
| October 1, 20Y2 | $6,000 |
On July 1, 20Y1, Cricket obtained a $700,000 construction loan with a 6% interest rate. The loan was outstanding through the end of October, 20Y2. The company’s only other interest-bearing debt was a long-term note for $100,000 with an interest rate of 8%. This note was outstanding during all of 20Y1 and 20Y2. The company’s fiscal year-end is December 31. What is the amount of interest that Cricket should capitalize in 20Y1, using the specific interest method?
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