1.

Sales reported on the income statement were $90,000. The account receivable balance decreased $8,000 over the year. The cost of merchandise sold account shows $50,000 debit balance. Under the direct method determine the amount of cash received from customers.

2.

At a total cost of $860,000 Acorn Corporation purchased 40% of the outstanding shares of First Corp. common stock as a long-term investment. Acorn Corporation uses the equity method of accounting for this investment. First Corp. reports net income of $640,000 for the current period. Prepare (journalize) the entry for Acorn Corporation for the share of First Corp. income.

	DR	CR

3.

Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.

Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the material and conversion cost per unit (to the nearest penny), respectively.

a.	$5.94 and $5.86
b.	$5.94 and $6.38
c.	$8.00 and $8.68
d.	$9.84 and $9.58