1- FIFO and LIFO inventory methods. During June, the following changes in inventory item 27 took place: June 1 Balance 1,400 units @ $36 14 Purchased 800 units @ $54 24 Purchased 700 units @ $45 8 Sold 400 units @ $75 10 Sold 1,000 units @ $60 29 Sold 500 units @ $66 Perpetual inventories are maintained. Instructions What is the cost of the ending inventory for item 27 under the following methods? (show calculations) (a) FIFO. (b) LIFO. 1- Lower-of-cost-or-market. Determine the proper unit inventory price in the following independent cases by applying the lower of cost or market rule. Circle your choice. 1 2 3 4 5 $7.80 $10.50 $11.80 $6.00 $7.20 8.85 10.00 12.20 4.25 6.90 8.15 9.00 11.40 3.75 6.50 7.90 10.10 12.50 4.00 5.40 Cost Net realizable value Net realizable value less normal profit Market replacement cost 2- Lower-of-cost-or-market The December 31, 2017 inventory of Gwynn Company consisted of four products, for which certain information is provided below. Replacement Estimated Expected Normal Profit Product Original Cost Cost Disposal Cost Selling Price on Sales A $24.00 $22.00 $6.50 $40.00 20% B $42.00 $40.00 $10.00 $48.00 25% C $120.00 $115.00 $25.00 $190.00 30% D $19.00 $15.80 $4.00 $26.00 10% Instructions Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2017. 1- Relative sales value method. Doran Realty Company purchased a plot of ground for $1,900,000 and spent $4,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and Lowland grades, to sell at $120,000, $90,000, and $60,000 each, respectively. Instructions Complete the table below to allocate the cost of the lots using a relative sales value method. No. of Selling Total % of Apportioned cost Grade Lots Price Revenue Total Sales Total Per Lot Highland 20 $ $ $ $ Midland 40 $ $ Lowland 100 $ _______ _______ $ 160 $_______ $_______ 2- A major difference between GAAP and IFRS with respect to accounting for inventories pertains to: a. Guidelines on ownerships of goods. b. Costs to include in inventories. c. The use of LIFO cost flow assumption. d. The use of LCNRV. 1- Calculate depreciation. A machine which cost $500,000 is acquired on October 1, 2017. Its estimated salvage value is $40,000 and its expected life is eight years. Instructions (1) Calculate depreciation expense for 2017 and 2018 by each of the following methods, showing the figures used. (a) Double-declining balance (b) Sum-of-the-years’-digits (2) At the end of 2018, which method results in the larger accumulated depreciation amount? 2- Calculate depreciation. A machine cost $900,000 on April 1, 2017. Its estimated salvage value is $90,000 and its expected life is eight years. I.

1. 1-
FIFO and LIFO inventory methods.
During June, the following changes in inventory item 27 took
place:
June
1
Balance
1,400 units @ $36
14
Purchased
800 units @ $54
24
Purchased
700 units @ $45
8
Sold

2. 400 units @ $75
10
Sold
1,000 units @ $60
29
Sold
500 units @ $66
Perpetual inventories are maintained.
Instructions
What is the cost of the ending inventory for item 27 under the
following methods? (show calculations)
(a)
FIFO.
(b)
LIFO.
1-
Lower-of-cost-or-market.
Determine the proper unit inventory price in the following
independent cases by applying the
lower of cost or market rule.

3. Circle your choice.
1
2
3
4
5
$7.80
$10.50
$11.80
$6.00
$7.20
8.85
10.00
12.20
4.25
6.90
8.15
9.00

4. 11.40
3.75
6.50
7.90
10.10
12.50
4.00
5.40
Cost
Net realizable value
Net realizable value less normal profit
Market replacement cost
2-
Lower-of-cost-or-market
The December 31, 2017 inventory of Gwynn Company consisted
of four products, for which certain information is provided
below.
Replacement

5. Estimated
Expected
Normal Profit
Product
Original Cost
Cost
Disposal Cost
Selling Price
on Sales
A
$24.00
$22.00
$6.50
$40.00

6. 20%
B
$42.00
$40.00
$10.00
$48.00
25%
C
$120.00
$115.00
$25.00
$190.00
30%
D
$19.00

7. $15.80
$4.00
$26.00
10%
Instructions
Using the lower-of-cost-or-market approach applied on an
individual-item basis, compute the inventory valuation that
should be reported for each product on December 31, 2017.
1-
Relative sales value method.
Doran Realty Company purchased a plot of ground for
$1,900,000 and spent $4,100,000 in developing it for building
lots. The lots were classified into Highland, Midland, and
Lowland grades, to sell at $120,000, $90,000, and $60,000 each,
respectively.
Instructions
Complete the table below to allocate the cost of the lots using a
relative sales value method.
No. of
Selling

8. Total
% of
Apportioned cost
Grade
Lots
Price
Revenue
Total Sales
Total
Per Lot
Highland
20
$
$
$
$
Midland
40
$

9. $
Lowland
100
$
_______
_______
$
160
$_______
$_______
2-
A major difference between GAAP and IFRS with respect to
accounting for inventories pertains to:
a.
Guidelines on ownerships of goods.
b.
Costs to include in inventories.
c.

10. The use of LIFO cost flow assumption.
d.
The use of LCNRV.
1-
Calculate depreciation.
A machine which cost $500,000 is acquired on October 1, 2017.
Its estimated salvage value is $40,000 and its expected life is
eight years.
Instructions
(1)
Calculate depreciation expense for 2017 and 2018 by each of
the following methods, showing the figures used.
(a)
Double-declining balance
(b)
Sum-of-the-years’-digits
(2)
At the end of 2018, which method results in the larger
accumulated depreciation amount?
2-
Calculate depreciation.

11. A machine cost $900,000 on April 1, 2017. Its estimated
salvage value is $90,000 and its expected life is eight years.
Instructions
(1)
calculate the depreciation expense (to the nearest dollar) by
each of the following methods, showing the figures used.
(a)
Straight-line for 2017
(b)
Double-declining balance for 2018
(c)
sum-of-the-years’-digits for 2018
(2)
which method would result in the smallest income amount for
2018?
1-
The following costs are incurred during the research and
development phases of a laser bone scanner
Laboratory research aimed at discovery of new knowledge

12. $800,000
Search for application of new research findings
400,000
Salaries of research staff designing new laser bone scanner
1,200,000
Material, labor and overhead costs of prototype laser scanner
850,000
Costs of testing prototype and design modifications
450,000
Engineering costs incurred to advance the laser scanner to full
700,000
Production stage (technological feasibility reached)
Identify which of these are development phase item and will be
immediately expensed under GAAP and IFRS
GAAP
IFRS

13. a.
$1,200,000
$1,200,000
b.
$2,400,000
$1,400,000
c.
$2,400,000
$2,500,000
d.
$3,200,000
$2,500,000