1. Which of the following is not a deductible business expense for income tax purposes?

A. Cost of goods sold B. Interest C. Dividends D. Depreciation

2. DEF Company is expected to have net income of $250,000 this year. The company traditionally pays out 40 percent of its net income as a dividend. DEF started the year with retained earnings of $490,500. What is their expected retained earnings at the end of the year?

A. 820,500 B. 880,500 C. 340,500 D. 640,500

3. ABC ended the year with accounts payable of 23,050. During the year, the firm purchased 126,812 of goods from their suppliers and paid 126,268 for those purchases. What was ABC's accounts payable at the beginning of the year?