【正文】 C．$622 D．$1,17242． Refer to Table 2. What is Reed Company’s gross profit percentage (rounded) for the year, assuming that ending inventory totaled $685?A．56% B．27% C．40% D．44%43． During a period of rising prices, the inventory method that yields the highest net ine and the lowest inventory value, respectively, will be:A． LIFO and FIFO.B． Weightedaverage and LIFO.C． LIFO and LIFO.D． FIFO and LIFO.44． Pittman Company management omitted $65,000 of inventory when calculating their 20X8 ending inventory. As a result of this error,A． 20X9 total assets will be overstated.B． 20X9 cost of goods sold will be understated.C． 20X8 stockholders’ equity will be overstated.D． 20X9 net ine will be understated.45． Which of these statements regarding GAAP as applied to inventories is true?A． The disclosure principle requires that a pany disclose the inventories method(s) used.B． According to the consistency principle, the inventory method can never be changed.C． The lowerofcostormarket rule states that, in order to be conservative, declines in inventory prices should be recognized in the period in which the goods are actually sold.D． The materiality principle allows GAAP to be ignored when the result is material in amount.46． The items below represent expenditures related to the construction of a new office building:Cost of land$210,000Legal fees relating to land purchase$2,000Cost of removing old building1,000Payment of delinquent property taxes 4,500Grading the site5,000Payment to contractor1,000,000Cost of building permits4,500Interest cost incurred during construction40,000Cost of paving parking lot20,000Cost of fencing5,000The proper balances for the Land account and the Building account should be: LandBuildingA.$217,000$1,000,000B..$213,500$1,001,000C$222,500$1,044,500D.$220,500$1,041,00047． Which of the following statements is false?A. Accelerated depreciation methods record more depreciation expense over the life of an asset than either the straightline method or the unitsofproduction method.B. The cost of an asset, its residual value, and its estimated useful life are all used in puting depreciation.C. The unitsofproduction method is most appropriate for an asset that wears out due to physical use.D. Land is never depreciated.Table 3On January 1, 20X8, Guard Security Service purchased an alarm monitoring system for $80,000. The system is expected to be used for 4 years, after which it can be sold for $16,000.48． Refer to Table 3. What is the book value of the equipment of December 31, 20X9, if Guard uses the straightline method of depreciation?A. $64,000 B. $60,000 C. $40,000 D. $48,00049． Refer to Table 3. If guard uses the doubledecliningbalance method of depreciation, what is depreciation expense for 20X9? A. $40,000 B. $32,000 C. $20,000 D. $16,00050． Refer to Table 3. If Guard sells the equipment for $20,000 at the end of the four years, the journal entry to record the sale will include all of the following except a A． $20,000 debit to Cash.B． $4,000 credit to Gain on Sale of Equipment.C． $20,000 credit to Equipment.D． $64,000 debit to Accumulated Depreciation.51． Which of the following statements is false?A． Straightline depreciation can be used for financial reporting or for ine tax purposes.B． Doubledecliningbalance depreciation is the most monly used method of depreciation in financial reporting.C． The unitsofproduction method results in higher depreciation in the years when an asset is more productive and lower depreciation in the years when an asset is less productive.D． Accelerated depreciation creates a cash advantage over straightline because higher amounts of depreciation are deducted on the tax return in the earlier years of an asset’s life resulting in lower taxes paid.52． Which of the following is not accounted for as an intangible asset?A. Franchises B. Goodwill C. Trademark D. Research and development53． Which of the following statements about the statement of cash flows is false?A． Financing activities are not affected by plant asset transactions.B． Depreciation is not a cash flow.C． Amortization of intangibles is added to net ine when calculating cash provided by operations.D． The sale of equipment at a loss is recorded as a cash outflow from investing activities.54． From the following list of account balances, calculate the correct amount of current liabilities:CAccounts receivable$5,000Accounts payable6,300Unearned revenues900Rent expense1,200Sales revenue46,300Sales tax payable3,700Estimated warranty payable800Note payable, due in 90 days1,300Accumulated depreciation700A. $12,100 B. $61,200 C. $13,000 D. $59,30055． If Roman pany issues their $500,000, 10% bonds payable at a premium,A. the debit to Cash is greater than the credit to Bonds Payable.B. The maturity value is greater than the present value of the interest and principal payments.C. the market rate of interest must be less than the contrac