ABC Furniture Company sells unique, antique furniture. ABC will most likely use
ID: 2722111 • Letter: A
Question
ABC Furniture Company sells unique, antique furniture. ABC will most likely use the method to cost its ending inventory. First-in, first-out Last-in. first-out Specific-unit-cost Weighted-average A method that produces highest profit margin. The following data are for lessee's Candy Store for January: What is the company's estimated cost of goods sold for the month? $165,000 $176,000 $225,000 $264,000 My answer is $ Major Company purchased a piece of equipment. All of the following costs should be included in the cost of the equipment EXCEPT for insurance while in transit. wages of workers who test the equipment before it is placed in service. employee training costs before the equipment is placed in service. transportation costs for shipment to Major Company. All of the above costs should be included, no exception. On January 1.2015. Roadway Delivery Company purchased a truck for $10,000. Depreciation Expense is $1,000 per year. During the first year of use. the company pair $1,000 to repaint the truck and $2,000 for new tires. What amount is expensed in the year of use of the truck? 51.000 $2.000 $3,000 $4,000 None of the above answers is correct Pit's Pets recently paid to have the engine in its delivery van overhauled. The estimated useful life of the van was originally estimated to be 4 years. The overhaul is expected to extend the useful life of the van to 10 years. The overhaul is regarded as a(n): revenue expenditure. capital expenditure. equity expenditure. matching expenditure. expense managementExplanation / Answer
Solution for question 5
If a company produces unique antique furniture, then the company must use “Specific unit cost” method for valuation of its inventory. This is because, in production of unique furniture it will take more raw material and time than normal furniture production.
Hence, Option (C) is correct answer.
Solution for question 6
Sale = $440,000
Gross profit rate = 40%
Cost of goods sold = 60% of sales
So COGS = 60% × $440,000
= $264,000
Cost of goods sold for company is $264,000.
Hence, option (D) is correct answer.