The document outlines various accounting exercises related to inventory assessment, capitalization of costs for land and buildings, and recording asset transactions for different companies. It includes specific exercises for calculating inventory values using methods like lower-of-cost-or-market and gross profit estimation, as well as entries for accounting transactions involving land, buildings, and equipment. Additionally, it provides scenarios for journal entries related to asset construction and stock issuance in exchange for property.

1. ACC 422 Week 3 WileyPLUS Assignment
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ACC 422 Week 3 WileyPLUS Assignment
Exercise 9-1
The inventory of Oheto Company on December 31, 2013, consists of the following items.
Part No. Quantity Cost per Unit Cost to Replace per Unit
110 620 $126 $133
111 1,140 80 69
112 580 106 101
113 230 226 239
120 450 273 277
121 1,650 21 19
122 330 319 313
Part No. 121 is obsolete and has a realizable value of $0.7 each as scrap.
(a) Determine the inventory as of December 31, 2013,by the lower-of-cost-or-market method, applying this
method directly to each item.
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the
inventory.
Exercise 9-12

2. Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes.
Presentedbelow is information for the month of May.
Inventory, May 1 $ 171,000
Purchases (gross) 655,400
Freight-in 31,400
Sales 1,057,500
Sales returns 82,500
Purchase discounts 12,990
(a) Compute the estimatedinventory at May 31, assuming that the gross profit is 25% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
Exercise 10-5
Allegro Supply Company, a newly formed corporation, incurred the following expenditures relatedto Land, to Buildings,
and to Machinery and Equipment.
Abstract company’s fee for title search $1,752
Architect’s fees 10,683
Cash paid for land and dilapidated building thereon 310,040
Removal of old building $67,400
Less: Salvage 18,535 48,865
Interest on short-term loans during construction 24,938
Excavation before construction for basement 64,030
Machinery purchased (subject to 2% cash discount, which was not taken) 219,050
Freight on machinery purchased 4,516
Storage charges on machinery, necessitatedby noncompletion of
building when machinery was delivered 7,347

3. New building constructed(building construction took 6 months from
date of purchase of landand old building) 1,634,450
Assessment by city for drainage project 5,392
Hauling charges for delivery of machinery from storage to newbuilding 2,089
Installation of machinery 6,740
Trees, shrubs, and otherlandscaping after completion of building
(permanent in nature) 18,198
Determine the amounts that should be debited to Land, to Buildings, and to Machinery and Equipment.
Assume the benefits of capitalizing interest during construction exceedthe cost of implementation.
Exercise 10-12
Below are transactions relatedto Impala Company.
(a)
The City of Pebble Beach gives the company 5 acres of landas a plant site. The fairvalue of this land is determined
to be $90,900.
(b)
14,000 shares of common stock with a par value of $52 per share are issuedin exchange for landand buildings. The
property has been appraised at a fair value of $909,000, of which $186,500 has been allocatedto landand $722,500 to
buildings. The stock of Impala Company is not listedon any exchange, but a block of 100 shares was sold by a
stockholder 12 months ago at $68 per share, and a block of 200 shares was sold by anotherstockholder 18 months
ago at $60 per share.
(c)
No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts
properly chargeable to plant asset accounts for machinery constructed during the year. The following information is
given relative to costs of the machinery constructed.
Materials used $12,880
Factory supplies used 970
Direct labor incurred 17,030
Additional overhead (over regular) causedby construction of
machinery, excluding factory supplies used
2,570
Fixed overhead rate applied to regularmanufacturing operations 60% of direct labor cost
Cost of similarmachinery if it had been purchased from
45,020

4. outside suppliers
Prepare journal entries on the books of Impala Company to record these transactions. (Credit account titles
are automatically indented when amount is entered. Do not indent manually.)