Reference no: EM131132656

Accounting Problems The Marmon Car and Foundry Company was working on a contract calling for 210 railway cars, all of the same type. The price on these cars was fixed in the contract at $21,000 each. On December 31, 1990, you find that the company had incurred costs of $2,700,000 on this contract, that 160 cars had been delivered to the purchaser, that 25 were in the process of construction, and 25 were yet to be built. The 25 cars in process were estimated by management to be about 80 percent complete. All costs were charged to a single work order calling for the construction of 210 cars.

At what value should the 160 cars be costed in the statement of income? $2,000,000 $2,500,000 $2,400,000 $2,200,000 In the above problem, at what value should the 25 cars in process be carried in the balance sheet of December 31, 1990? $700,000 $200,000 $300,000 $500,000 Questions 17 through 19 are based on the following information. The John Doe Company has the following information available for preparing a statement of profit and loss.

Gross Sales $330,000 Loss From Bad Debts $ 750 Sales Returns & Allowances 8,000 Purchases Discount 1,350 Merchandise Inventory, June 30, 1990 148,325 Interest on Notes Receivable 150 Merchandise Inventory, July 1, 1989 76,800 Sales Discount 545 Purchases 348,700 Interest on Notes Payable 4,125 Selling Expense 36,145 The Net Profit is: $5,060 $4,760 $4,460 $5,560 $5,850 The cost of goods sold is: $275,825 $420,225 $123,575 $348,700 $200,375 The total amount to be classified as Other Income is: $695 $2,045 $150 $4,670 $2,795