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.