Question

QUESTION 34 Klinc Company Klinc Company uses a perpetual inventory system and had the following inventory transactions for the month of June June 1 On hand, 50 units at $14.00 each $700 4 Purchased 115 units at $15 each $1,725 Sold 100 units 10 Purchased 75 units at $16 each $1,200 24 Sold 50 units Total cost of goods available for sale $3,625 On hand, 90 units The June 30th inventory included 45 units from the June 4th purchase and 45 units from the June 10th purchase. 30 Refer to the information provided for Klinc Company. What is the cost of ending inventory at June 30th under the specificientification method? 1. $1,395 2. $1,375 3. $1,350 4. $1,359

Answer 1

Question 34:

1.$1395

Solution -

cost of ending inventory under specific identification method = (45 units × $15 ) + (45 units × $16)

= $675 + $720

= $1395.

Question 38:

4. Medicare tax payable will be credited in the amount of $145.

Solution -

Medicare tax = $10000 × 1.45% = $145.

Medicare tax payable is a liability to the company, so it is credited. All the taxes that are deducted from employees wages need to be paid to the government, so they are liabilities of the company.

In the first two options it is said that respected tax amounts payable will be debited. This is incorrect as taxes payable will be credited. The third option says that the federal income tax payable will be $2100. This is also incorrect as federal and state income taxes can't be added.

Question 39:

2. 1.6 years

Solution :

Average life of PPE = accumulated depreciation / depreciation expense.

Average life of PPE for 2020 = $100000/$62500 = 1.6

Question 40:

4.$260

Solution -

Weighted average cost = ($150+$214)/(30+40) units.

= $364/70

= $5.2 per unit

Cost of goods sold = $5.2 × 50 = $260.