1. A company uses the 'Percent of Sales' method to calculate the Allowance for Doubtful Accounts.

Use the information provided below to calculate the company's Accounts Receivable, Net.

Age of Account Receivables Balance

Current $85,000

1 to 60 days past due $57,500

61 - 120 days past due $28,600

Over 120 days past due $12,500

Assume Sales of $215,000 and a percent of sales of 1.8%

Enter you answer as a whole number with no currency sign, no commas, and no decimal places.

2. Suppose a company produces it product in batches of 50 units. The cost of producing the product is:

Batch 1: $10/unit

Batch 2: $12/unit

Batch 3: $14/unit

Batch 4: $16/unit.

The company receives orders totaling 120 units after producing its 4th batch.

How much will this company report for its Cost of Goods Sold if it uses the LIFO inventory costing method?

Enter your answer as a whole numbers with no commas and no dollar sign.

3. The income statement reports profit or loss of a business entity over a period of time.

True

False

4. Lulu Company reported total sales revenue of $55,000, total expenses of $45,000, and net income of $10,000 on its income statement for the year ended December 31, 2020. During 2020, accounts receivable decreased by $4,000, merchandise inventory increased by $6,000, accounts payable decreased by $2,000, and depreciation of $18,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities using the indirect method for 2020 was:

Enter your answer as a whole number with no currency signs, no commas and no decimal places.

5. Which of the following statements is true regarding the impact of using different inventory costing methods?

	a.	During periods of inflation, using the LIFO inventory costing approach results in higher taxes and a lower net worth (all else being equal).
	b.	None of the other answer options are true.
	c.	During periods of inflation, the use of FIFO inventory costing method reduces a company's net worth (all else being equal).
	d.	Accounting regulatory bodies place no restrictions on the use of LIFO inventory costing.
	e.	During periods of deflation, using the FIFO inventory costing method leads to a lower tax liability (all else equal).

6. Which of the following statements regarding the indirect statement of cash flow is true?

		An increase in accounts receivables (from year 1 to year 2) is considered a source of cash.
		A decrease in accrued wages is considered a source of cash.
		None of the other options given are correct.
		An increase in equity is considered a use of cash.
		The investing section contains cash flows from the company's transactions that relate to normal operations.

7. A company purchases an asset with a 5-year depreciable life for $65,000 with no expected salvage value.

The company uses straight line depreciation for financial statements and uses double-declining for tax accounting. Assume a tax rate of 34%.

Assume the company has an EBITDA of $28,500 and pays an annual interest expense of $200.

What is the value of the company's cumulative deferred tax account at the end of the third year?

Enter your answer as a whole number with no commas and no dollar sign. Do not use the half-year convention.