1. Nate is investing in a partnership with David. Nate contributes as part of his initial investment, Accounts Receivable of $60,000; an Allowance for Doubtful Accounts of $9,000; and $6,000 cash. The entry that the partnership makes to record Nate's initial contribution includes a a. debit to Allowance for Doubtful Accounts for $9,000 b. credit to Nate, Capital for $57,000 c. debit to Accounts Receivable for $51,000 d. credit to Nate, Capital for $66,000. 2. In the liquidation of a partnership, it is necessary to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners, and (4) pay liabilities. These steps should be performed in the following order 3. When preferred stock is cumulative, preferred dividends not declared in a period are distributions of earnings. a. b. considered a liability called dividends in arrears. c. d. never paid. 4. Mozart Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively. If total manufacturing costs are $680,000, what is the total cost of goods manufactured? a. $810,000. b. $825,000. c. $665,000. d. $695,000 5. The purchase of treasury stock a. decreases common stock outstanding. b. decreases common stock authorized c. decreases common stock issued d. has no effect on common stock outstanding. 6. A corporation recognizes a gain or loss a. when bonds are converted into common stock and when they are redeemed before maturity b. only when bonds are converted into common stock c. only when bonds are redeemed before maturity d. when bonds are redeemed at or before maturity. Which one of the following is not a cost element in manufacturing a product? a. Manufacturing overhead b. Direct materials c. Office salaries d. Direct labor 7