1. A company reported that its bonds with a par value of $45,000 and a carrying value of $56,000 are retired for $60,000 cash, resulting in a loss of $4,000. The amount to be reported under cash flows from financing activities is:

2.

Lusy Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Lusy customers' credit card sales receipts. The credit card company receives 3% of card sales as its fee. If Lusy has $5,000 in credit card sales, which of the following statements are true?

	Lusy debits Accounts Receivable %u2212 Credit Card Co $5,000
	Lusy debits Accounts Receivable %u2212 Credit Card Co $4,850
	Lusy credits Sales $4,850
	Lusy debits Cash $4,850
	Lusy debits Cash $5,000

3. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that check number 4231 for September's rent was correctly written and drawn for $3,555 but was erroneously entered in the accounting records as $7,380. When preparing the September bank statement, the company should:

Add $7,380 to the book balance of cash

Add $3,825 to the book balance of cash

Deduct $3,825 from the book balance of cash

Deduct $3,825 from the bank statement balance

Add $3,925 to the bank statement balance 4. A company purchased merchandise inventory at a cost of $8,900 with credit terms 2/10, net 60. If the company borrows $8,722 to pay for the purchase on the last day of the discount period and pays the loan plus interest in the amount of $8,853.43 on the last day of the credit period, what is the net savings? (Do not round your intermediate calculations.)

$131.43

$46.57

There is no savings to the company

$-46.57

$178.00 5. Given the following information, determine the cost of goods sold for December 31 using the FIFO periodic inventory method.

December 2: 22 units were purchased at $8.70 per unit.
December 9: 27 units were purchased at $11.10 per unit.
December 11: 29 units were sold at $36.70 per unit.
December 15: 37 units were purchased at $11.85 per unit.
December 22: 35 units were sold at $36.70 per unit.

	$691.76
	$929.55
	$894.55
	$668.85
	$738.15

6. Of the following errors, which one by itself will cause the trial balance to be out of balance?

A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense.

A $300 cash receipt from a customer in payment of his account posted as a $300 debit to Cash and a $30 credit to Accounts Receivable.

A $80 cash purchase of office supplies posted as a $80 debit to Office Equipment and a $80 credit to Cash.

An $400 prepayment from a customer for services to be rendered in the future was posted as an $400 debit to Unearned Revenue and an $400 credit to Cash.

A $25 cash receipt from a customer in payment of his account posted as a $25 debit to Cash and a $25 credit to Cash. 7. A company's balance sheet shows: cash $28,000, accounts receivable $20,000, office equipment $54,000, and accounts payable $12,000. What is the amount of equity?

	$12,000.
	$36,000.
	$70,000.
	$90,000.
	$114,000.

8. A company had a beginning balance in retained earnings of $55,000. It had net income of $4,000 and paid out cash dividends of $5,500 in the current period. The ending balance in retained earnings equals:

$56,500

$(45,500)

$64,500

$53,500

$(56,500) 9. A company borrowed $60000 cash from the bank and signed a 3-year note at 6%. The present value factor for an annuity for 3 years at 6% is 2.673. The annual annuity payments equal $12588. The present value of the loan is(rounded):

	$131,463.
	$18,000.
	$11,463.
	$33,648.
	$71,463.

10. A company borrowed $600000 cash from the bank by signing a 3-year 10% installment note. The present value factor for an annuity at 10% for 3 years is 2.487. Each annuity payment equals $150274. The present value of the note is (rounded):

$6,798,616.

$789,616.

$198,616.

$60,000.

$373,731. 11. A company's cost of goods sold was $4,000. Determine net purchases and ending inventory given goods available for sale were $12,000 and beginning inventory was $7,000.

Net Purchases: $8,000; Ending Inventory: $5,000.

Net Purchases: $5,000; Ending Inventory: $8,000.

Net Purchases: $19,000; Ending Inventory: $16,000.

Net Purchases: $16,000; Ending Inventory: $8,000.

Net Purchases: $11,000; Ending Inventory: $19,000 12. A company had revenue of $750,000, rent expense of $120,000, utility expense of $12,000, salary expense of $145,500, depreciation expense of $41,000, advertising expense of $42,200, dividends in the amount of $203,000, and an ending balance in retained earnings of $422,300. What is the beginning retained earnings for the period?

$360,700

$547,000

$530,700

$389,300

$236,000 13. On December 1, Katrina Company signed a $6,500 3-month 6% note payable, with the principal plus interest due on March 1 of the following year. What amount of interest expense is accrued at December 31 on the note? Use a 360-day year for interest calculation. Round your answer to the nearest dollar.

$33

$65

$98

$0

$390 14. A company's Office Supplies account shows a beginning balance of $500 and an ending balance of $500. If office supplies expense for the year is $3,400, what amount of office supplies was purchased during the period?

$3,400.

$2,900.

$2,900.

$3,400.

$3,100. 15. A machine with a cost of $130,000 and accumulated depreciation of $89,000 is sold for $35,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

$35,000.

Zero. This is an operating activity.

Zero. This is a financing activity.

$41,000.

$6,000. 16.A company reported that its bonds with a par value of $45,000 and a carrying value of $56,000 are retired for $60,000 cash, resulting in a loss of $4,000. The amount to be reported under cash flows from financing activities is:

	Zero. This is an operating activity.
	Zero. This is an investing activity.
	$(60,000).
	$(4,000).
	$(56,000).