Name: Sanjeey NAYAIL MANAC QUIZ-4, TERM ID: \pay Roles Time: 25 minutes, MM: 20 IPMX-11, 11M Lucknow Course Instructor: Prof Prakash Singh | 9.2. On December3i, 2006, the records of Benson Company showed the following information about one of the company’s delivery trucks: Delivery trucks $21,500 Accumulated depreciation —-12/31/06 $14,250 2 Depreciation is based on a four-year useful life, a $2,500 residual value, and straight-line depreciation. On February 1, 2007, the truck is sold for $7,900 cash. Required: 1. How old was the truck on January 1, 2007? Show your computations. (sm) Used Gee = 4 Yeung Residvud volue = f asee Depreciation pen yeun = 25°" 259 _ ugcy pen youn Aciumutabed Geprectatton = $1425 0 a uso Age ab truck on Sonu, Qont = aaeC 3 ee The bruce Wes 3 Yeuns oth on See 2004 2. How much gain or loss would be recognized when the truck is sold? (sm) | Book value on 31-12-2006 = Grom value - Auumutulead cepmecation Book value on 3112-262 -BISUD - 142502 4250. Re truce! wun Som! on ot-02+ 20091)! Ss | anellimorel eye Maametcee ante is to be deducted frm Bole value Me Geek value on of: 02: aunt 2] “OME 8M] | Yeunly deprevab Sata a 2 Gwe value on ol-o2 27 = Faso- 45° 2 0102, 2007 fox $44 Cink poesvue The Yue was Sold on prot = if PS uses) - Come) aaa arene een Guin ob $ 1045.84 woud fe vesagaiset when the bu Sa SadName: sAnjeet wvayai, MANAC QUIZ-4, TERM. Wr pms tieaw Time: 25 minutes, MM: 20 |PMX-14,IIM Lucknow Course Instructor: Prof Prakash Singh Q.2. The following data are from the 20X1 Income Statement of the Oriental Rug Emporium ($ in thousands): Sales $1,700 aan ovenshubed Deduct Cost Of Goods Sold Goong sion " Beginning Inventory $390 AGhat = 340-20 = aye [ Ending saved Purchases 820- S. eso Cost of goods available for sale $1,210 — COloocheal EIEIO pS OT Deduct: Ending Inventory 370626 35> prointokas = (Fod- #60 = SHO Cost Of Goods Sold 840 (762 pM TeToaw + 840-610 = 230 Gross Profit $860 (eu}) OS ead Other Expenses 610— Tex ots: Woef 230 5 92 Income before income tax $250-(230 Lncome ne = O-aeas Eee Income tax expense @ 40% 100 = (42) hn i ae Net Income ___|$150~ cise) A team of internal auditors discovered that the ending inventory was overstated by $20,000 because of errors in physical count. Which items in the Income Statement are incorrect and by how much? Use “O” for overstated, “U” for understated, and “N” for not affected. (10m) Items 2 Overstated/ Understated (Amount) Beginning Inventory LEniot Abtedbeal Cry) _ HCO) Ovenstubet hy $ 20,000" S{(U)___Undenstoted by £ 20,000 | Ending Inventory Cost Of Goods Sold Gross Profit (0) ___Ovenstutesd by 20,000. CO) Ovenstatet by + 20,000 Income tax expense @ 40% AM overstate by $ £000 | Netincome JO) ovenstabea by $ 12 600 Income before income tax 2 fo