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Total inventory accounting

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1. What should be the toal amount of inventory reported in the consolidated balancce sheet as of Dec. 31, 20X?
a) 360,000 b) 374,000 c) 375,200 d) 380,000

2. What amound of cost of goods sole should be reported in the 20X6 consolidate income statement?
a) 288,000 b) 294,000 c) 296,000 d) 360,000

3. What amount of interest income did Blackwood Enterprises record from its investment in Grange Corp. bonds during 20X6?
a) 7,400 b) 7,720 c) 9,000 d) 10,600

4. What amount of interest expense should be reported in the 20X6 consolidated income statement?
a) 24,000 b) 296,700 c) 32,100 d) 34,500

5. What is the unamortized balance of the purchase differential as of January 1, 20X6?
a) 19,200 b) 29,700 c) 32,100 d) 34,500

6. What amount of depreciation and amortization should be reported in the 20X6 consolidated income statement?
a) 77,600 b) 80,000 c) 82.400 D) 83,450

7. What amount of gain or loss on bond retirement should be included in the 20X6 consolidated income statement?
a) 2,400 b) 3,000 c) 4,000 d) 6,400

8. What amounf of income shold be assigned to the noncontrolling interest in the 20X6 consolidated income statement?
a) 6,720 b) 7,200 c) 8,000 d) 8,400

9. What amount should be assigned to the noncontrolling interest in the consolidated balnce wsheet as of Dec. 31, 20X6?
a) 63,200 b) 63,320 c) 63,800 d) 65,000

10) What amount of goodwill, if any, shouyld be reported in the consolidated balance sheet as of Dec. 31, 20X6?
a) 0 b) 3,000 c) 10,500 d) 27,000

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Solution Summary

The accounting questions cover bond interest, income statements and inventories.

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Cost Accounting for Beginning Inventory

Consider the following information:

Q1 Q2 Q3
Beginning inventory (units) 0 300 300
Actual units produced 1,000 800 1,250
Budgeted units to be produced 1,000 1,000 1,000
Units sold 700 800 1,500
Manufacturing costs per unit produced $900 $900 $900
Marketing costs per unit sold $600 $600 $600
Fixed manufacturing costs $400,000 $400,000 $400,000
Fixed marketing costs $140,000 $140,000 $140,000
Selling price per unit $2,500 $2,500 $2,500

There are no price, efficiency, or spending variances, and any production-volume variance is directly written off to cost of goods in the quarter in which it occurs.

a) Prepare income statements for Q1, Q2, and Q3 using variable costing and absorption costing.
b) Explain the differences in operating income between the two costing systems for each quarter. Be specific!

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