1. What is the impact on the accounting equation of recording the issuance of a short-term note payable relating to the borrowing of money from a bank? a. Assets and liabilities both increase, b. Assets and shareholders' equity both decrease. c. Assets and shareholders' equity both increase. d. Liabilities increase and shareholders' equity decreases. 2. Lemke Corp. had the following information is available for the month of April: Apr. 1 15 On hand, 30 units at $5.00 euch $150 Purchased 40 units at $5.35 each 214 Sold 50 units Purchased 40 units at $5.50 each 220 On hand. 60 units 30 The company uses a perpetual inventory system, with the weighted average cost inventory costing method. How much is ending inventory on April 30? a. S265.45 b. $312.00 c. $318.55 d. S324.00 3. Future Foundations purchased equipment on January 1, Year 1, for $50,000, with an estimated useful life of five years and an estimated residual value of $5,000. On July 1 Year 3, the equipment was sold for S17,500 cash. The company uses the straight line method of depreciation. What is the amount of gain (loss) to be recorded on disposal of the equipment in Year 3? a. S5.000 gain b. $7,500 gain c. $10,000 loss d. S14,500 loss 4. When is the inventory account updated? a. after every sale and after every merchandise purchase under the periodic inventory system b, only at the end of the accounting period under the perpetual inventory system c. after every sale and after every merchandise purchase under the perpetual inventory system d. only at the beginning of the accounting period under the periodic inventory system 5. During Year 3, Great Adventures sold 150 dune buggies for $4,000 cach. The dune buggies carry a five-year warranty for detects. Estimates are that repair costs will average 4% of the total selling price. The warranty liubility at the beginning of the yeur was $14,000, and S20,000 in claims was actually incurred during Year 3 to honour warranties. What was the warranty expense for Year 3? a $8,000 b. S14,000 c. $20.000 d. $24,000