1. The balance in Treasury shares on January 1, 20X7 and December 31, 20X7 is, respectively, $55,500 and $81,700. During the year, $58,500 of treasury shares was purchased. During the year, treasury shares was sold for $1,300 over its cost. The proceeds from the sale of treasury shares amounted to: A) $32,300. B) $31,000. C) $33,600. D) $27,500.

2. An investor company with a 40% interest in an investee debited the Investment account for $70,000 and credited the account for $55,000. Based on this information, the investee must have paid dividends to all its shareholders of: A) $22,000. B) $6,000. C) $137,500. D) $28,000.

3.A company had a beginning balance in long-term investments of $350,000. During the year, the company sold $80,000 of investments and recorded a loss on the sale of $5,000. The ending balance in long-term investments was $300,000. The amount of cash received from the sale of long-term investments was: A) $80,000. B) $85,000. C) $75,000. D) none of the above.