Assignment Exercise 8-1

AssignmentExercise 8-1

a1.

Assumptions

FIFO Inventory Effect

Sales (Revenue)

$90,000

Cost of Sales

Beginning Inventory

500 units @ $50

$25,000

Plus Purchases

400 units @$50=$20,000

100 units @$65=$6,500

400 units @$80=$32,000

$58,500

Subtotal

$83,500

Less: Ending Inventory

400 units @$80

$(32,000)

Cost of goods sold

$51,500

a2.

Costof Goods sold/Sales*100

=51,500/90,000*100

=57.22%

b1.

Assumptions

LIFO Inventory Effect

Sales (Revenue)

$90,000

Cost of Sales

Beginning Inventory

500 units @ $50

$25,000

Plus Purchases

400 units @$50=$20,000

100 units @$65=$6,500

400 units @$80=$32,000

$58,500

Subtotal

$83,500

Less : Ending Inventory

400 units @$50

$(20,000)

Cost of goods sold

$63,500

b2.

Costof Goods sold/Sales*100

=63,500/90,000*100

=70.56%

c.

Thereis a difference in values calculated for the FIFO and LIFO. WhereasFIFO assigns the final value of the goods purchased to the firstunits purchased, LIFO assigns the value of the initial goodspurchased to the last units purchased.

AssignmentExercise 8-2

  1. Using the FIFO information

Beginning Inventory

$25,000

Plus: Ending inventory

$32,000

Average Inventory

$28,500

Cost of Goods Sold

$51,500

Inventory Turnover

1.81

  1. Using the LIFO information

Beginning Inventory

$25,000

Plus: Ending inventory

$20,000

Average Inventory

$22,500

Cost of Goods Sold

$63,500

Inventory Turnover

2.82

AssignmentExercise 8-3

  1. Straight line Depreciation.

Laboratoryequipment: =300,000-(5%*300,000)

=285,000

=285,000/5

=57,000

Radiologyequipment: =800,000-(10%*800,000)

=720,000

=720,000/7

=102,857.14

  1. Double-declining balance depreciation

Laboratoryequipment:

Straightline rate: 1/5=20%

Doublethe rate: 20%*2=40%

Firstyear depreciation expense: 300,000*40%=120,000

Secondyear depreciation expense: 180,000*40%=72,000

Thirdyear depreciation expense: 108,000*40%=43,200

Fourthyear depreciation expense: 64,800*40%=25,920

Fifthyear depreciation expense: 38,880*40%=15,552

Radiologyequipment:

Straightline rate: 1/7=14.29%

Doublethe rate: 14.29*2=28.58%

Firstyear depreciation expense: 800,000*28.58%=228,640

Secondyear depreciation expense: 571,360*28.58%=163,294.69

Thirdyear depreciation expense: 408,065.31*28.58%=116,625.07

Fourthyear depreciation expense: 291,440.24*28.58%=83,293.62

Fifthyear depreciation expense: 208,146.62*28.58%=59,488.30

Sixthyear depreciation expense: 148,658.32*28.58%=42,486.55

Seventhyear depreciation expense 106,171.77*28.58%=30,343.89

AssignmentExercise 8-4

  1. Company X purchases a machine at cost $100,000. The machine has a life expectancy of 5 years and no salvage value.

Year#

Annual depreciation

Remaining balance

Beginning balance

100,000

1

20,000

80,000

2

20,000

60,000

3

20,000

40,000

4

20,000

20,000

5

20,000

0

  1. Assume the machine has a salvage value of $20,000

Year#

Annual depreciation

Remaining balance

Beginning balance

100,000

1

20,000

80,000

2

20,000

80,000

3

20,000

60,000

4

20,000

40,000

5

20,000

20,000

AssignmentExercise 8-5

1.

Year

Cost(to be depreciated)=

$10,000

Units of service per year

*Depreciation

Per unit

Annual

Depreciation

Expense

Accumulated Depreciation Reserve For Depreciation

Net Remaining Undepreciated Cost(Net Book Value)

1

1,000

2

2,000

2,000

8,000

2

900

2

1,800

3,800

6,200

3

800

2

1,600

5,400

4,600

4

1,100

2

2,200

7,000

2,400

5

1,200

2

2,400

10,000

0

Total Units

5,000

AssignmentExercise 9-1

Abusiness year = 364 days

Workingdays= 5 days

2*52=104 non paid days

364-104=260 paid days

Netpaid days worked: RN= 260 – (35+5) = 220 days

LPN=260-(35+3)=222 days

NA=260-(35+2)=223 days

2.

RN=364/220=1.6545LPN=364/222=1.6396NA=364/223=1.6323

AssignmentExercise 9-2

1.

Position

Shift 1 Day

Shift 2 Evening

Shift 3 Night

24-Hour Scheduling Total

Emergency Room Intake

1

1

1

3 8-hour shifts

To cover position 7 days per week equals FTEs of:

1.4

1.4

1.4

4.2 FTEs

2.

1employee = 40 hrs. per week

18-hr shift*7 days per week=56 hrs. On duty

Tocover 7 days per week requires: 56/40= 1.4

=1.4FTEs