Cash, Receivables

Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans.
S
31. d 40. d 49. a 58. d 67. b 76. c *85. b
P
32. b 41. d 50. d 59. c 68. c 77. a *86. c
33. d 42. d 51. a 60. d 69. c 78. d
P
34. d 43. d 52. c 61. a 70. c 79. c
35. b 44. d 53. d 62. b 71. b 80. a
S
36. a 45. c 54. a 63. a 72. c 81. d
S
37. b 46. d 55. b 64. c 73. a *82. b
P
38. d 47. d 56. c 65. b 74. b *83. c
39. b 48. d 57. a 66. d 75. d *84. c
DERIVATIONS — Computational
No. Answer Derivation
87 b €13,500 + €500 = €14,000.

88. d $2,000,000 × .11 = $220,000

$200,000 × (.11 – .05) = 12,000
Interest $232,000
$232,000 ÷ $2,000,000 = .116 = 11.6%.

89. b

90. c €20,000 + €300 + €5,500 = €25,800.

91. b

92. c $30,000 + $500 + $8,200 = $38,700.

93. c .01 × 360 ÷ 20 = 18%.

94. b €10,000 × (1 – .01) = €9,900.

95. c €10,000 × 100% = €10,000.

96. a €10,000 × (1 – .02) = €9,800.

97. b $100,000 × 1/2 = $50,000.

98. d €125,000 – [(€700,000 × .02) + €1,200] = €109,800.

99. b €125,000 – (€125,000 × .02) = €122,500.

100. a [($1,000,000 – $80,000 – $100,000) × .02] + $40,000 + $100,000 =

$156,400.

101. c [($480,000 + $440,000) × .05] + $160,000 + $200,000 = $406,000.

102. c (€12,800,000 × .01) – €6,000 = €122,000.

103. d (€6,500,000 × .08) – €12,000 = €508,000.

104. c €3,000,000 × .08 = €240,000.

105. b $540,000 + ($90,000 – $40,000) = $590,000.

106. b $600,000 – $62,500 = $537,500.

107. d (€50,000 – €4,000) – (€4,500 – €4,000) = €45,500.

108. c $8,000 – $9,000 + X = $5,500; X = $6,500.

109. b (€425,000 – €14,000) × .02 = €8,220.

110. a (€43,000 × .10) – €760 = €3,540.

111. b $60,000 – $3,600 = $56,400.

112. b ($240,000 × .05) – [$10,000 – ($7,200 – $2,100)] = $7,100.

113. d $288,000 × .05 = $14,400.

114. b €80,000 – €4,800 = €75,200.

115. b $480,000 × .05 – [$20,000 – ($14,400 – $4,200)] = $14,200.

116. d $360,000 × .05 = $18,000.

117. b 7% and 7%.

118. a €30,000 × 1.75911 = €52,773.

119. a ($800,000 × .90) = $720,000.

120. b

121. c €50,000 × .10 × 6/12 = €2,500.

122. c €50,000 – €46,000 = €4,000.

123. d $60,000 × .82645 = $49,587.

124. a $2,000,000 × .05 = $100,000.

125. d

126. d

127. c $1,000,000 – [$1,000,000 × (.04 + .08)] = $880,000.

128. a €1,000,000 × .03 = €30,000; €1,000,000 – €30,000 = €970,000.

129. c €335,000 – €6,700 = €328,300.

130. c

131. b €300,000 × .03 = €9,000.

132. b €300,000 – (€300,000 × .08) = €276,000.

133. c $100,000 – ($100,000 × .08) = $92,000.

134. c $400,000 – ($400,000 × .08) = $368,000.

135. c $600,000 ÷ [($100,000 + $150,000) ÷ 2] = 4.8.

136. c €900,000 ÷ [(€100,000 + €150,000) ÷ 2] = 7.2.

*137. d $250 – $150 = $100.

*138. b $36,000 – $12,000 + $4,000 + $500 = $28,500.

*139. b €39,140 + €5,000 – €5,200 = €38,940.

*140. c $21,200 + $450 – $900 + $1,450 = $22,200.

*141. b $45,000 + $940 – $320 – $90 + $18 = $45,548.

*142. c €30,000 + €5,400 – €4,900 = €30,500.

143. a $75,000 – $2,000 + $3,000 = $76,000.

144. d Allowance for Doubtful Acct. balance $34,000 + $5,000 – $23,000 =

$16,000 (before bad debt expense)
$325,000 – $300,000 – $16,000 = $9,000 (bad debt expense).

145. d €69,000 – €56,000 + €46,000 = €59,000.

146. b $90,000 + $13,000 – $95,000 = $8,000.

147. c Conceptual.

148. d €750,000 × .02 = €15,000.

149. c $400,000 × .75 = $300,000 present value

$300,000 × .10 = $30,000 (2014 interest)
($300,000 + $30,000) × .10 = $33,000 (2015 interest).

150. c $300,000 × 12% × 2 ÷ 12 = $6,000.

151. b Conceptual.

*152. a €21,650 + €3,900 – €2,750 = €22,800.

*153. a $37,200 + $46,700 – $49,700 = $34,200 (4/30 balance per bank)

$34,200 – $6,000 = $28,200.

Inventories cost basis

Multiple Choice Answers—Conceptual

Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item An
21. c 31. a 41. a 51. b 61. b 71. a 81. c
s.
22. b 32. d 42. c 52. a 62. d 72. b 82. b
23. b 33. b 43. b 53. b 63. b 73. a 83. b
24. b 34. b 44. b 54. c 64. d 74. b *84. a
25. c 35. c 45. d 55. c 65. a 75. a
26. c 36. d 46. b 56. c 66. a 76. b
27. b 37. b 47. a 57. c 67. c 77. c
28. b 38. a 48. a 58. d 68. a 78. c
29. a 39. d 49. d 59. d 69. b 79. c
30. c 40. d 50. b 60. a 70. b 80. b
Solutions to those Multiple Choice questions for which the answer is “none of these answers is
correct.”
DERIVATIONS — Computational
No. Answer Derivation
85. c $27,000 + $59,000 + $72,000 = $158,000.

86. c $27,000 + $59,000 + $92,000 = $178,000.

87. d [($10,000 – $1,000) × .02] = $180.

88. d [($30,000 – $3,000) × .02] = $540.

89. d $650,000 + $50,000 + $75,000 = $775,000.

90. c $475,000 + $25,000 = $500,000.

91. b $1,200,000 and ($135,000 + $10,000) = $145,000.

92. c ($1,600,000 + $10,000) and ($85,000 – $23,000 + $10,000) = $72,000.

93. d $3,000 + $2,000 = $5,000.

94. a $6,000 – ($3,000 + $2,000) = $1,000.

 95. a The effect of the errors in ending inventories reverse themselves in the
following year.

96. d $260,000 + (4 × $150,000) = $860,000.

97. d $1,200 – ($1,200 × .02) = $1,176.

98. d ($16,000 – $1,200) × .02 = $296.

99. b ($29,310 + $20,600 + $28,917) ÷ (3,000 + 2,000 + 2,700) = $10.237/unit

$10.237 × 1,200 = $12,284.

100. d Avg. on 1/6 $49,910 ÷ 5,000 = $9.982/unit

1/26 $53,872 ÷ 5,200 = $10.36/unit
$10.36 × 1,200 = $12,432.

101. d 100 + 350 + 70 – 130 = 390 units

(100 × $4.20) + (290 × $4.40) = $1,696.

*102. b (100 × $4.20) + (30 × $4.40) = $552.

103. c ($60,000 – $40,000) = $20,000.

104. d (500 × $3.5) + (800 × $3.4) = $4,470.

105. b $21,210 ÷ 6,500 units = $3.26

$3.26 × 1,300 = $4,238.

106. c (400 × $10) – $1,600 = $2,400 COGS

[(500 × $4) + $2,800] – $2,400 = $2,400 E.I.
($4,800 ÷ 800) × 400 units = $2,400 E.I. under weighted avg.

107. a (600 × $10) – $2,700 = $3,300 COGS

[(500 × $5) + $2,400] – $3,300 = $1,600 E.I.
200 × $8 = $1,600 E.I. under FIFO.

108. c 10 + 60 – 45 = 25 units.

109. b 45 × $20/unit = $900.

110. a [(1,200 × $12) + (500 × $13) + (2,000 × $13.50]  (1,200 + 500 + 2,000) =
$12.95; $12.95 × 2,150 = $27,843.

111. d [(200 × $65) + (300 × $68) + (150 × $70)]  (200 + 300 + 150) = $67.54;
$67.54 × (650 – 500) = $10,131.

112. c (1,200 + 500 + 2,000) – 2,150 = 1,550; 1,550 × $13.50 = $20,925.

113. d (200 × $65) + [(500 – 200) × $68] = $33,400.

*114. d (1,200 + 500 + 2,000) – 2,150 = 1,550;
(1,200 × $12) + [(1,550 – 1,200) × $13] = $18,950.

* 115. a Available (purchases) = 6,500 units

Sales = 5,200 units
EI = 6,500 – 5,200 = 1,300 units
(800 × $3.20) + (500 × $3.10) = $4,110.

*116. c (200 × $3.2) + (400 × $3.1) + (400 × $3.4) + (300 × $3.5) = $4,290.

Date Purchase Sold Balance

6/1 (800 @ 3.2) 2,560 (800 @ 3.2) 2,560
6/2 (600 @ 3.2) 1,920 (200 @ 3.2) 640
6/3 (2,200 @ 3.1) 6,820 (200 @ 3.2)
(2,200 @ 3.1) 7,460
6/6 (1,600 @ 3.1) 4,960 (200 @ 3.2)
(600 @ 3.1) 2,500
6/7 (1,200 @ 3.3) 3,960 (200 @ 3.2)
(600 @ 3.1)
(1,200 @ 3.3) 6,460
6/9 (1,000 @ 3.3) 3,300 (200 @ 3.2)
(600 @ 3.1)
(200 @ 3.3) 3,160
6/10 (200 @ 3.3) (200 @ 3.2)
(200 @ 3.1) 1,280 (400 @ 3.1) 1,880
6/15 (1,800 @ 3.4) 6,120 (200 @ 3.2)
(400 @ 3.1)
(1,800 @ 3.4) 8,000
6/18 (1,400 @ 3.4) 4,760 (200 @ 3.2)
(400 @ 3.1) 3,240
(400 @ 3.4)
6/22 (500 @ 3.5) 1,750 (500 @ 3.5) 4,990
6/25 (200 @ 3.5) 700 (200 @ 3.2)
(400 @ 3.1)
(400 @ 3.4)
(300 @ 3.5) 4,290

*117. c (150 × $70) + (300 × $68) + (50 × $65) = $34,150.

118. a Conceptual.

119. c $300,000 + $8,000 – $2,000 = $306,000.

120. c $130,000 + $14,000 + $575,000 + $70,000 + $10,000 –

$145,000 – $20,000 = $634,000.

121. b $800,000 + $350,000 + $147,000 = $1,297,000.

122. d $700,000 + $40,000 + $30,000 = $770,000.

123. a $1,500,000 + $70,000 + $50,000 = $1,620,000.

124. b $50,000 × .8 × .9 = $36,000.

125. c $20,000 × .7 × .8 = $11,200

($11,200 × .98) + 400 = $11,376.

126. c [(1,600 × $8.00) + (4,000 × $9.40)] ÷ 5,600 = $9.00.

127. a Conceptual.

128. c Conceptual.

129. c (300 × $48) + (300 × $46) = $28,200.

INVENTORIES – ADDITIONAL VALUATION ISSUES

Multiple Choice Answers—Conceptual
Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans.
31. a 38. b 45. a 52. c 59. a 66. b 73. a
32. c 39. d 46. b 53. a 60. d 67. d 74. d
33. d 40. c 47. d 54. d 61. b 68. a
34. a 41. b 48. a 55. d 62. a 69. b
35. c 42. b 49. a 56. b 63. a 70. b
36. a 43. a 50. b 57. d 64. d 71. a
37. d 44. c 51. d 58. c 65. a 72. c
Solutions to those Multiple Choice questions for which the answer is “none of these choices are
correct.”
55. The gross profit percentage applicable to the goods in ending inventory is different from
the percentage applicable to the goods sold during the period.
60. Many answers are possible.

DERIVATIONS — Computational (cont.)

No. Answer Derivation
87. c $216,000 – $200,000 = $16,000.

88. d $1,176,000 + $365,000 – $42,000= $1,499,000.

89. c $365,000 – $42,000 = $323,000.

90. c $54,000.

91. c $242,000 – $28,000 = $214,000.

92. c $36,200.

93. a $148,000 + $9,400 – $1,150 = $156,250.

 94. d $9,400 – $1,150 = $8,250.

95. a $222,000 + $14,100 – $1,750= $234,350.

96. d $14,100 - $1,750 = $12,350.

97. b LF 3,000 × $15 = ($45,000 ÷ $80,000) × $50,000 = $28,125

1B 7,000 × $5 = $35,000; $35,000 + $45,000 = $80,000
(1,000 × $15) – ($28,125 × 1,000/3,000) = $5,625.

98. b CF 3,000 × $12 = ($36,000 ÷ $64,000) × $40,000 = $22,500

3B 7,000 × $4 = $28,000; $28,000 + $36,000 = $64,000
(1,000 × $12) – ($22,500 × 1,000/3,000) = $4,500.

99. c Item # of Items × Price

M 4,000 × $2.50 = 10,000 10 ÷ 50 × $48,000 = $9,600 ÷ 4,000 = $2.40
N 2,000 × $8.00 = 16,000 16 ÷ 50 × $48,000 = $15,360 ÷ 2,000 =
$7.68
O 6,000 × $4.00 = 24,000 24 ÷ 50 × $48,000 = $23,040 ÷ 6,000 =
$3.84
50,000

100. b (2,500 × $0.25) + (5,500 × $0.60) + (500 × $1.20) = $4,525;

[(2,500 × $0.25) ÷ $4,525] × $3,000 = $414 ÷ 2,500 = $0.166.

101. d (2,500 × $0.25) + (5,500 × $0.60) + (500 × $1.20) = $4,525;

[(5,500 × $0.60) ÷ $4,525] × $3,000 = $2,188 ÷ 5,500 = $0.398.

102. a (2,500 × $0.25) + (5,500 × $0.60) + (500 × $1.20) = $4,525;

[(500 × $1.20) ÷ $4,525] × $3,000 = $398 ÷ 500 = $0.796.

103. a $2.5 million – $2.3 million = $200,000.

104. c $2.5 million – $2.2 million = $300,000.

105. c ($4.00 – $3.10) × 100,000 = $90,000.

106. c No gain or loss since 12/31 price ($5.60) > contract price ($5,00).

107. b ($5.00 – $4.60) × 1,000 = $400.

108. a ($50,000 + $150,000) – ($300,000 ÷ 5/3) – $3,000 = $17,000.

109. a ($100,000 + $300,000) – ($600,000 ÷ 5/3) – $6,000 = $34,000.

110. d (1 + .2)C = 1,980,000; C = $1,650,000.

111. d COGS: July = $2,040,000 ÷ 1.2 = $1,700,000

Aug. = $2,160,000 ÷ 1.2 = $1,800,000
July’s purchase = ($1,700,000 × .7) + ($1,800,000 × .3) = $1,730,000.
112. a $360,000 + ($420,000 – $240,000) = $540,000.
.40
113. a  .2857  29%
1  .40

114. b COGS = $300,000 ÷ 1.25 = $240,000

($220,000 + $172,000 – $8,000) – $240,000 = $144,000.

115. c COGS = $2,000,000 × .75 = $1,500,000

$800,000 + $1,600,000 – $1,500,000 = $900,000.

116. b $900,000 – ($800,000 × .80) = $260,000.

$300,000
117. a $50,000 + $250,000 – ————— = $60,000.
1.25

118. c 25% ÷ (100% – 25%) = 33%.

119. c $650,000 – ($650,000 ÷ 1.20) = $108,333.

120. d ($320,000 + $85,000) – [$250,000 × (1 – .40)] = $255,000.

121. d ($680,000 + $165,000) – [$360,000 × (1 – .40)] = $629,000.

122. c $1,650,000 + $683,000 + $78,000 – [$1,210,000 × (1 – .30)] = $1,564,000.

123. a $198,000 + $1,100,000 + $24,000 – $1,050,000 – $36,000 = $236,000;

($130,000 + $685,000 + $43,000) ÷ ($198,000 + $1,100,000 + $24,000) =
.649;
$236,000 × .649 = $153,164.

124. c $99,000 + $865,600 + $69,000 – $811,000 = $222,600;

($65,500 + $568,000 + $26,500) ÷ ($99,000 + $865,600 + $69,000) = 63.9%;
$222,600 × .639 = $142,241.

125. b $326,900 + $1,386,100 + $2,000 – $1,302,000 – $96,300 = $316,700;

($265,600 + $1,068,600 + $63,900) ÷ ($326,900 + $1,386,100 + $2,000) =
81.5%;
$316,700 × .815 = $258,111.

126. b Cost: $30,000 + $145,000 + $2,500 = $177,500.

Retail: $50,000 + $200,000 + $8,500 = $258,500.

127. b $70,000 + $320,000 + $20,000 – $14,000 – $336,000 = $60,000.

128. a Cost: $49,000 + $224,000 + $6,000 = $279,000.

Retail: $70,000 + $320,000 + $20,000 = $410,000.

129. b Conceptual.
130. a $3,600 + $114,000 + $18,000 – $4,000 – $70,200 – $1,600 – $2,800 – $2,600
= $54,400.

131. a $3,600 + $94,000 + $18,000 – $4,000 – $70,200 – $1,600 – $2,800 – $2,600

= $34,400.

132. d Cost: $78,000 + $295,000 + $5,000 = $378,000.

Retail: $122,000 + $415,000 + $15,000 = $552,000.

133. d $122,000 + $415,000 – $2,000 + $15,000 – $20,000 – $390,000 = $140,000.

134. a $140,000 × .685 = $95,900.

135. c $375,000 ÷ [($60,000 + $90,000) ÷ 2] = 5; 365 ÷ 5 = 73.0.

136. c $385,000 ÷ [($60,000 + $80,000) ÷ 2] = 5.5; 365 ÷ 5.5 = 66.4.

137. b $600,000 ÷ [($80,000 + $120,000) ÷ 2] = 6 times

138. d $1,879,400 ÷ [($360,000 + $411,000) ÷ 2] = 4.88.

139. d $250,000 – $255,000 – $10,000 – $30,000 = $35,000.

140. a $3,800,000 × .75 = $2,850,000 (COGS)

$600,000 + $3,000,000 – $2,850,000 – $700,000 = $50,000.

141. a ($200,000 + $1,000,000) ÷ ($250,000 + $1,575,000 + $175,000) = 0.6

($250,000 + $1,575,000 + $175,000 – $20,000 – $110,000 –
$1,750,000) × 0.6 = $72,000.

142. d $980,000 ÷ $1,400,000 = 0.7

($1,400,000 – $10,000 – $1,050,000) × 0.7 = $238,000.

Property, Plant and Equipment – Acquisition, valuation and disposition issues

Multiple Choice Answers—Conceptual
Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans.
26. d 33. a 40. a 47. a 54. c 61. d 68. d
27. b 34. b 41. b 48. c 55. c 62. a 69. d
28. d 35. d 42. b 49. b 56. a 63. c 70. c
29. c 36. d 43. a 50. b 57. a 64. c
30. c 37. d 44. d 51. a 58. b 65. d
31. c 38. a 45. c 52. d 59. c 66. a
32. d 39. c 46. a 53. c 60. d 67. c
Solutions to those Multiple Choice questions for which the answer is “none of these.”
26. Assets used in normal business operations.
44. Capitalized interest is depreciated over the related asset’s useful life.
 65. Capital expenditures include additions, betterments, improvements, and major repairs.

DERIVATIONS — Computational
No. Answer Derivation
71. b $600,000 + $60,000 – $5,400 + $3,480 + $2,400 + $6,400 = $666,880.

72. d $31,200 + $2,600 + $10,440 + $2,200,000 + $170,000 = $2,414,240.

73. d Land: $200,000 + $20,000 + $5,000 − $10,000 = $215,000.

Building: $35,000 + $1,090,000 = $1,125,000.

74. c $10,000 + $500 + $200 + $225 = $10,925.

75. c $12,000 + $600 + $240 + $270 = $13,110.

76. b €1,100,000 + €70,000 − €10,500 + €4,500 + €6,500 + €7,500 = €1,178,000.

77. c €40,500 + €13,500 + €12,000 + €1,357,000 = €1,423,000.

78. b €11,000 (lighting and signage).

79. a [(TL24,000,000 + TL1,600,000) − TL4,600,000] ÷ 30 = TL700,000.

80. d $40,000 + $35,000 = $75,000.

81. d $60,000 + $55,000 = $115,000.

82. a [($10,000,000 + $300,000) – $800,000] ÷ 40 = $237,500.

83. b ($1,000,000 × 6/12) + ($2,100,000 × 4/12) = $1,200,000.

84. a [($20,000,000 + $600,000) – $1,600,000] ÷ 40 = $475,000.

85. b ($1,500,000 × 6/12) + ($3,300,000 × 4/12) = $1,850,000.

86. a ($120,000 × 4/12) + ($120,000 × 3/12) + ($120,000 × 2/12) + ($120,000 ×

1/12)
= $100,000.

87. c $400,000 × .10 = $40,000.

88. b $120,000 (3/12 + 2/12 + 1/12) = $60,000.

89. a $180,000 (3/12 + 2/12 + 1/12) = $90,000.

90. d ($900,000 × 4/12) + ($504,000 × 3/12) + ($900,000 × 2/12) +

($1,440,000 × 1/12) = $696,000.

91. a ($720,000 × 9% × 10/12) + ($300,000 × 12%) = $90,000.

 92. b ($720,000 × .09) + ($150,000 × .12) = $82,800 x 4/12 = $27,600.

93. d ($440,000 × .1) + ($160,000 × .09) – $9,000 = $49,400.

94. c ($200,000 × 12/12) + ($600,000 × 4/12) + ($600,000 × 0/12) = $400,000.

95. b $400,000 (from # 94) × 12% = $48,000.

96. d [($200,000 + $600,000 + $600,000 + $48,000) × 9/12] + ($600,000 × 6/12) +

($400,000 × 0/12) = $1,386,000.

97. b $1,100,000 × 12% × 9/12 = $99,000;

($1,448,000 × 9/12) + ($600,000 × 6/12) = $1,386,000;
[($1,386,000 – $1,100,000) × 9% × 9/12] + $99,000 = $118,305.

98. b ($2,400,000 × 10/12) + ($1,980,000 × 7/12) + ($3,000,000 × 0/12) = $3,155,000.

99. d [($2,400,000 × .10) + ($4,500,000 × .11)] ÷ ($2,400,000 + $4,500,000) = 10.65%.

100. d $1,200,000 × 12% = $144,000;

($2,400,000 × 10/12) + ($1,980,000 × 7/12) = $3,155,000;
[($3,155,000 – $1,200,000) × 10.65%] + $144,000 = $352,208.

101. a ($1,200,000 × .12) + ($2,400,000 × .10) + ($4,500,000 × .11) = $879,000.

102. c ($1,200,000 × .12) + ($2,400,000 × .10) + ($4,500,000 × .11) = $879,000;

[($3,155,000 – $1,200,000) × 10.65%] + ($1,200,000 × .12) = $352,208.
$879,000 – $352,208 = $526,792.

103. c HK$3,200,000 × 7.5% = HK240,000.

104. a (₤2,600,000 × 7%) – ₤30,000 = ₤152,000.

105. b (CHF1,500,000 × 9.5%) + (CHF400,000 × 12%) – CHF79,000 = CHF111,500.

106. d (CHF1,500,000 × 10%) + (CHF1,000,000 × 8%) = CHF230,000;

CHF230,000 ÷ CHF2,500,000 = 9.2%.
[(CHF2,000,000 ×7.5%) + (CHF1,900,000 × 9.2%)] – CHF59,000 =
CHF265,800.

107. a ¥3,120,000 BV – ¥2,960,000 FV = ¥160,000 Loss.

108. c €200,000 – (€135,000 – €120,000)= €185,000.

109. d €220,000 BV – €200,000 FV = €20,000.

110. b HK$1,800,000 ÷ 6 = HK$300,000.

111. d HK$3,000,000 ÷ 6= HK$500,000.

112. b (HK$3,000,000 – HK$1,800,000) ÷ 6= HK$200,000.

113. a (HK$3,000,000 – HK$1,800,000) – (HK$200,000 x 2) = HK$800,000.
114. a (HK$500,000 – HK$300,000) = $200,000 decrease

115. b (€6,000,000 – €4,507,800) = €1,492,200 dr.(cr.) to Cash (Deferred Grant Rev.).

116. b €4,507,800 × 10%= €450,780.

117. b €1,492,200 – (€4,507,800 × 10%) = €1,041,420.

118. a Equipment = $60,000 + $8,000; Loss: $71,000 – $60,000 = 11,000.

119. a $75,000 + $15,000 = $90,000.

120. c $45,000 + $7,000 = $52,000; $45,000 – $50,000 = $5,000.

121. b $12,000 + $4,000 = $16,000.

122. a $15,000 (fair value).

123. c $160,000 – $150,000 = $10,000; $120,000 (fair value).

124. a [$850,000 ÷ ($475,000 + $700,000 + $525,000 + $850,000)] × $1,400,000 = $466,667.

125. d [$700,000 ÷ ($475,000 + $700,000 + $525,000 + $850,000)] × $1,400,000 = $384,314.

126. c (2,000 × $50) – $6,000 = $94,000.

127. c $11,600 + $200 = $11,800.

128. c ($30,000 × .85 × .98) + $400 + $300 = $25,690.

129. b $12,000 + $500 = $12,500.

130. d Land: 30/90 × $855,000 = $285,000.

Warehouse: 20/90 × $855,000 = $190,000.
Office Building: 40/90 × $855,000 = $380,000.

131. b $23,000 + $800 = $23,800.

132. d $23,200 – $20,000 = $3,200 (gain).

133. b Fair value of new truck = $36,000.

Loss: ($36,000 – $30,000) – $8,000 = ($2,000).
New Machine: $8,000 + $30,000 – $2,000 = $36,000.

134. b $13,300 + $45,500 = $58,800.

135. b $27,500 – ($120,000 – $95,000) = $2,500.

 DERIVATIONS — Computational (cont.)
No. Answer Derivation
136. d $107,500 + $27,500 = $135,000.

137. a [($48,000 + $12,000) – (81,000 – $30,000)]= $9,000.

138. d $48,000 fair value.

139. b $220,000 – $192,000 = $28,000.

140. a $210,000 fair value.

141. b 220,000 fair value.

142. b $200,000 – $185,000 = $15,000.

143. d $180,000 – $190,000 = ($10,000).

144. b ($300,000 – $280,000) = $20,000.

145. d $270,000 – $285,000 = ($15,000).

146. c [($160,000 – $10,000) ÷ 5] × 4 1/3 = $130,000

($160,000 – $130,000) + $3,000 = $33,000.

147. c [($320,000 – $20,000) ÷ 5] × 4 1/3 = $260,000

($320,000 – $260,000) + $6,000 = $66,000.

148. b ($176,000 – $8,000) ÷ (10 × 12) = $1,400 per month

$24,000 – [$176,000 – ($1,400 × 106 mo.)] = –$3,600.

149. b ($152,000 – $8,000) ÷ (10 × 12) = $1,200/mo.;

$28,000 – [$152,000 – ($1,200 × 108)] = $5,600.

150. c $800,000 + $70,000 + $10,000 + $16,000 – $8,000 = $888,000.

151. b Conceptual.

152. b Conceptual.

153. a ($5,400,000 – $450,000) – $3,600,000 = $1,350,000 (deferred gain)

$5,400,000 – $1,350,000 = $4,050,000 (Basis).

154. a Conceptual.

155. d $55,000 + $5,000 + $18,000 + $7,000 = $85,000.

156. a $150,000 + $20,000 = $170,000.