____ 11. Fancy Fashions bought machinery at a cost of $80,000 on January 1, 2000. On January 1, 2002, they decided to switch from the straight-line to the double declining- balance method of amortization. The machinery has no salvage value and an eight- year useful life. The cumulative effect of this change in accounting principle before income taxes is

a. $10,000.

b. $20,000.

c. $35,000.

d. $15,000.

____ 12. Patterson Corporation issued 3,000, no par value common shares at $2 per share in exchange for a truck. The truck had a fair market value of $20,000. The entry to record this transaction includes a credit to Common Shares for

a. $14,000.

b. $3,000.

c. $20,000.

d. $6,000.

____ 13. Modine Manufacturing declared an 8% stock dividend when it had 150,000, no par value common shares, issued at $3 per share. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

a. Retained Earnings for $36,000.

b. Stock DividendsCommon for $144,000.

c. Common Shares for $36,000.

d. Common Stock Dividends Distributable for $144,000.

____ 14. As a result of a stock dividend,

a. total shareholders' equity remains the same.

b. total shareholders' equity increases.

c. total shareholders' equity decreases.

d. retained earnings remain unchanged.

____ 15. Callable preferred shares

a. are paid a fixed interest rate.

b. may be called by their issuer at a specified price.

c. are a liability.

d. may be exchanged for common shares by their owner.

____ 16. Kaline Corporation issued 150 of $25 convertible preferred shares for $3,750. Each preferred share was convertible into one, par value common share, issued at $10 per share. The entry to record the conversion of sixteen convertible preferred shares into common shares includes a credit to

a. Common Shares.

b. Preferred Shares.

c. Retained Earnings.

d. Dividends Declared.

____ 17. Zowkeway Industries sold exercise equipment costing $300,000 on the instalment basis for $500,000. Collections from customers were $100,000 in 2000, $250,000 in 2001, and $150,000 in 2002. The amount of gross profit that should be recognized in 2002 using the instalment method is

a. $250,000.

b. $150,000.

c. $60,000.

d. zero.