Curt Owns the Following Assets Which He Gives to His

question 32

Multiple Choice

Curt owns the following assets which he gives to his daughter Carla in 2009 (no gift tax results) . Both items have been held by Curt as an investment for more than one year. If Carla immediately sells these assets for $1 million ($400,000 + $600,000) , she recognizes:

• A) No gain or loss.
• B) A $200,000 LTCG and no loss.
• C) A $200,000 STCG and $200,000 STCL.
• D) A $200,000 STCG and no loss.
• E) A $200,000 LTCG and $200,000 LTCL.

Recognize and allocate underapplied or overapplied manufacturing overhead.

Determine the adjusted cost of goods sold and manufactured.

Compute the cost of goods manufactured and its adjustments.

Understand the impact of manufacturing overhead on finished goods and work in process inventories.

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Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or purchased items are the first to be expensed.

Cost Flow Assumption

An accounting principle that determines how costs are allocated to inventory and cost of goods sold, examples include FIFO, LIFO, and average cost methods.

Cost of Goods Sold

The immediate expenses related to the creation of products that a company sells.

Merchandise on Credit

Goods that have been sold but not yet paid for, implying that the buyer owes the seller money.