1. At December 31, 2019, Montana Mining Equipment has gross accounts receivable of $127,000. There is a $10,000 credit balance in the Allowance for Doubtful Accounts account ( before adjustment ). Bad debts are estimated to be 15% of gross accounts receivable. The Allowance for Doubtful Accounts account ( after adjustment ) at December 31, 2019 is:

a) $9,050

b) $19,050

c) $29,050

d) $10,000

2. During the current year, City Wok Co. determined that Ming Lee's $ 2,600 accounts receivable was uncollectible and should be written off. Which of the following best describes the impact of this write off on the current year's income statement and balance sheet?

a) decrease in profit and no effect on total assets

b) decrease in profit and decrease in total assets

c) no effect on profit and decrease in total assets

d) no effect on profit and no effect on total assets

3. In 2019, Keliso Co. has credit sales of $ 1,800,000 and sales returns related to these sales of $150,000. Its comparative balance sheet at December 31, 2019 shows the following:

20192018

Accounts Receivable$ 800,000$ 675,000

Less: Allowance for Doubtful Accounts 72,00065,000

Carrying Amount$ 728,000$ 610,000

The company's average collection period for 2019 is:

a) 136 days

b) 148 days

c) 163 days

d) 150 days

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4. Yani Company purchased land for $115,000 with the intention of constructing a new operating facility. The land purchase included an old building that was removed at a cost of $16,000. The only salvage value from this old building was some materials which were sold for cash of $4,000. Yani had paid surveying costs of $1,800 and legal fees related to land purchase of $6,700. The new building was quickly constructed at a total cost of $422,000. Building permits for the construction of this new facility were $18,000. Insurance premiums during construction were $9,200. What capital cost is assigned to the land and building?

a) Land = $135,500 and Building = $449,200

b) Land = $123,500 and Building = $449,200

c) Land = $135,500 and Building = $440,000

d) Land = $123,500 and Building = $440,000

5. Beaches Ltd. reviews its assets every fiscal year for potential asset impairments. Beaches realized at the end of the current fiscal year through its impairment assessment that a machine has a recoverable amount (i.e. Fair market value) of $ 360,500. This asset has a cost of $ 890,000 and up-to-date accumulated depreciation of $ 549,200 in the books. What amount would be reported as an impairment loss on Beaches Ltd. income statement at year end?

a) $0

b) $340,800

c) $360,500

d) $19,700

6. The cost of successfully defending a patent in an infringement lawsuit would be:

a) recorded as Legal Expenses

b) deducted from the carrying amount of the Patent

c) added to the cost of the Patent

d) recognized as a loss in the current period

7. On October 1, 2019 Asus Computers borrows $ 75,000 from Small Town Bank on a $ 75,000, 3-month, 6% note (interest is paid at maturity of the note). Assuming interest was accrued at year end on December 31, 2019, the journal entry by Asus Computers to record payment of the note andinterest on January 1, 2020 is:

a)Notes Payable............................................................................................... 76,125

Cash................................................................................................................ 76,125

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b)Notes Payable............................................................................................... 75,000

Interest Payable.............................................................................................. 1,125

Cash................................................................................................................ 76,125

c)Notes Payable............................................................................................... 75,000

Interest Payable.............................................................................................. 4,500

Cash................................................................................................................ 79,500

d)Notes Payable............................................................................................... 75,000

Interest Expense............................................................................................. 1,125

Cash................................................................................................................ 76,125

8. Fees accepted in advance from a client:

a) are considered earned revenues

b) increase profit

c) are recorded as liabilities

d) have no impact on assets

9. If it is likely that a company will lose a lawsuit and the amount can be reasonably estimated, then the company must:

a) record the estimate an asset

b) disclose only in the notes to the financial statements

c) not record or disclose any information

d) record the loss and the liability

10. Bright Bulb Solutions purchases $ 5,000 worth of new office furniture (plus HST of 13%). The journal entry to record the purchase would include:

a) a debit of $650 to HST Payable

b) a debit of $650 to HST Recoverable

c) a credit of $650 to HST Payable

d) a credit of $650 to HST Recoverable