Discuss what depreciation method was used

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1. International Paper Inc. uses the conventional retail inventory method to account for inventory. The following information related to 2016 operations:

 

Average

 

Cost

Retail

Beginning inventory and purchases

$787,500

$1,750,000

Net markups

 

95,000

Net markdowns

 

82,000

Sales

 

1,000,000

Required: What amount should be reported as cost of sales for 2016?

2. A machine was purchased on January 1, 2012 for $870,000, estimated salvage value $125,000 and estimated service life of 10 years.

Required: If the annual depreciation expense for 2015 was $94,818; what depreciation method was used? Round all answers to the nearest whole dollar.

Reference no: EM131773860

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