Geogia State University Intermediate Accounting Questions

TRADITIONAL HOMEWORK ITEMS – Spring 2024 – ACT 3391General Instructions for the Traditional Homework – refer to the instructions for traditional item nos. 1 to 3.
27. (4 points) Hartley’s accounting records included the following information:
Inventory, 01-01-19
Purchases during 2019 (excluding shipping)
Purchase returns during 2019
Freight-in on 2019 purchases
Freight-out on 2019 sales
Sales during 2019
$90,000
$880,000
$25,000
$10,000
$45,000
$1,300,000
Hartley completed a physical inventory on 12-31-19 and calculated an ending inventory of $90,000, at cost. In recent years, Hartley’s
gross profit equaled 34% of Hartley’s sales. Hartley suspects some inventory may have been shoplifted. How much is the estimated
loss from shoplifted items?
28. (6 points) On 12-31-15, Acme purchased a machine. Acme signed a $750,000 zero-interest bearing note. The note is payable in
full on 12-31-18. Assume an acceptable interest rate on similar notes was 2%. Also on 12-31-15, Acme incurred and paid $12,000 to
have the machine installed in its sales office. In this problem, you can ignore depreciation. Prepare the entries Acme should make
related to this machine on:
a. 12-31-15.
b. 12-31-16.
c. 12-31-17.
d. 12-31-18.
29. (7 points) B constructed a warehouse for its own use. B started construction on January 1 and completed construction on
December 31. Construction expenditures were as follows:
•
$750,000 on January 1
•
$210,000 on March 1
•
$300,000 on July 31
•
$480,000 on November 1
•
$240,000 on December 1
During the entire year B had the following outstanding notes payable, none of which were construction-related:
•
A 4%, 5-year $9,000,000 note payable
•
A 6%, 7-year $2,000,000 note payable
•
A 5%, 4-year $4,000,000 note payable
a)
b)
c)
What were B’s total interest costs for the year?
What amount of interest should B capitalize on this construction project?
What was B’s interest expense for the year?
When necessary, round any interest rate as follows: 4.873% = 4.9% while 3.314% = 3.3%.
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