1: Candance owns a small candy store that sells one type of candy. Her beginning inventory of candy was made up of 10,000 boxes costing $1.50 per box ($15,000), and she made the following purchases of candy during the year:

March 1	10,000 boxes at $1.60	$16,000
August 15	20,000 boxes at $1.70	34,000
November 20	10,000 boxes at $1.80	18,000

At the end of the year, Candance's inventory consisted of 15,000 boxes of candy.

Her Sales for the year is $53,500.

What is her cost of goods sold using the FIFO inventory valuation method?

2: Multiple Choice

Which of the following would be a business bad debt if it were uncollectible?

a) A taxpayer loans his father $10,000 to start a business

b) A tax payer loans his son $1,000 to purchase a rental house.

c) A dentist, using the accrual basis of accounting, records income when it is earned and extends credit to a patient for services provided.

d) None of these answers is correct

3: Bonnie owns a hardware store. During the year, Bonnie gives business gifts having the indicated costs to the following individuals:

Mrs. Johnson (a customer) $37 plus $3 for shipping.

Mr. Johnson, (non client husband of Mrs. Johnson) $10

Ms. Doncan (a customer) $22

What is the amount of Bonnie's deduction for business gifts?

4: Johnny is an accountant who uses a portion of his home as his office. His home is 2,500 square feet and his office space occupies 1,500 square feet. Rent expense is $18,000 a year; utilities expense is $2,000 a year; and maintenance is $3,000 a year.

What is the total amount of these expenses that can be allocated to his home office?

$13,800

$10,800

$9,280

$9,200

$23,000

5: Microsoft Corporation had inventory of $300,000 on 12-31-2009. Other information is as follows:

Sales are $1,800,000

Beginning inventory is $500,000

Cost of Goods sold is $1,700,000

What is the cost of purchases during the year?

$1,800,000

$2,000,000

$1,600,000

$1,500,000

6: Sam and Jane were divorced in 2010. He agreed to pay Jane $2,000 per month until their child reaches 18 years old. The payments would then be reduced to $1,200 per month.

How much of the payment will be considered alimony each year?

none of these answers

$14,400

$24,000

$9,600