Beginning inventory of 50 units, purchased at $550 units purchased at $1035 units purchased at $925 units sold at $1570 units sold at $12Tax rate = 40%Beginning LIFO reserve = $300Given the above, the LIFO reserve at the end of the period is ________.
Answer(s): D
COGS = Beginning inventory - Ending inventory + Purchases.FIFO COGS = 50*5 + 45*10 = $700. LIFO COGS = 35*9 + 50*10 + 10*5 = $865. Beginning inventory = 50*5 = $250. Purchases = 50*10 + 35*9 = $815.Therefore, FIFO ending inventory = 250 + 815 - 700 = 365 and LIFO ending inventory = 250 + 815 - 865 = 200.The LIFO Reserve is defined as the difference between the values of the inventory under FIFO and under LIFO. Therefore, LIFO reserve = 365 - 200 = 165.
Investments in available-for-sale securities should be valued on the balance sheet at ________.
Available-for-sale securities are investments in debt securities that are not classified as held-to- maturity or trading securities and in equity securities with readily determinable fair values that are not classified as trading securities. They are measured at fair value on the balance sheet.
A firm has 1,000 common shares valued at 30 each outstanding. It has also issued 500 preferred shares of face value 100 and a coupon of 5% and a debt of 50,000 with a coupon rate of 6%. The firm's net income after taxes is 14,300. Then, the EPS reported by the firm is ________.
Answer(s): B
For a simple capital structure, Basic EPS = (Net Income - Preferred dividends)/weighted # of common shares Therefore, Basic EPS = (14,300 - 500*100*5%)/1,000 = 11.8.
Use the following financial data on Enterprise:
Answer(s): C
Items f, g, h and i are operating events.
Which of the following best describes the distinction between expenses and losses?
Answer(s): A
Expenses are outflows or other using up of assets or incurrence of liabilities from delivering or producing goods, services or key operations. Losses are defined as decreases in equity (net assets) except those that result from expenses or distributions to owners.
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