1.On June 30, 2011 Monroe Co. purchased 75,000 shares of its $.50 par common stock in the market for $60 per share. Monroe later sold the shares on Dec. 1, 2011 when the market price was $65 per share. How will the sale on Dec. 1 affect Monroes stockholders equity?

A. Common Stock will Increase $37,500 and Additional Paid-in Capital Common Stock will increase

$4,837,500.

B. Treasury Stock will decrease $4,500,000 and Additional Paid-in Capital Treasury Stock will increase by

$375,000.

C. Treasury Stock will decrease $4,500,000 and Gain on Treasury Stock will increase $375,000.

D. Treasury Stock will decrease $4,875,000 and Revenue from Treasury Stock will increase $4,875,000.

2.Daisy Corp. uses the aging method to record bad debt expense. Information about Daisys accounts receivable is given below:

Age of Receivables	1-30 Days	31 60 Days	> 60 Days
Amount of Receivables	$650,000	$100,000	$20,000
Est. % Uncollectible	2%	18%	45%

On Dec. 31, 2011 the unadjusted balance in the Allowance for Doubtful Accounts was $8,000 credit. How

much bad debt expense should Daisy record?

A. $48,000

B. $40,000

C. $32,000

D. $19,000

3.On Jan. 1, 2011 Finkbine Corp. had $495,000 of retained earnings. Finkbine reported $893,000 of net

income for 2011. On Dec. 31, 2011 the balance in retained earnings was $1,137,000. What amount of

dividends were declared during 2011?

A. $251,000

B. $244,000

C. $398,000

D. $642,000

4.On Jan. 1, 2011 Donald Co. issued $3,000,000 of 8%, 10-year bonds. The bonds pay interest annually on

Dec. 31. The market rate of interest on Jan. 1 was 6%, and the selling price of the bonds was $3,441,624.

How much interest expense will Donald report for 2011 using the effective interest method?

A. $240,000

B. $206,497

C. $275,330

D. $180,000

5.The Board of Directors of Jules Corp. approved a 60% stock dividend on Nov. 15, 2011. Before the

dividend Jules had 200,000 shares of its $.25 par common stock outstanding. The market price of Jules

stock on Nov. 15 was $80. How did the stock dividend affect Jules accounting equation?

A.. Cash increased $9,600,000 and Retained Earnings decreased $9,600,000.

B. Common Stock increased $9,600,000 and Retained Earnings decreased $9,600,000.

C. Common Stock increased $30,000 and Retained Earnings decreased $30,000.

D. Retained Earnings decreased $30,000 and Dividend Expense increased $30,000.

6.On the statement of cash flows which one of the following items should not appear in the operating

section?

A Cash received from customers

B. Cash paid for employees salaries and wages.

C. Cash paid for dividends

D. Cash paid for income taxes

7.Which one of the following statements regarding LIFO and FIFO is true when prices are rising?

A. LIFO will result in the highest ending inventory.

B. LIFO will result in the lowest amount of net income.

C. FIFO will result in the highest cost of goods sold.

D. FIFO will result in lower income tax expense.

8.During August of 2011 Nickle Publishing received $24,000 for 1-year subscriptions to a new magazine.

Magazines are mailed to subscribers each month, starting in September of 2011. What adjusting entry

should Nickle make on Dec. 31, 2011?

A. No adjusting entry is needed.

B. Decrease Unearned Revenue $8,000 and increase Magazine Revenue $8,000.

C. Increase Cash $8,000 and decrease Unearned Revenue $8,000.

D. Decrease Unearned Revenue $16,000 and increase Magazine Revenue $16,000.

9.On Jan. 1, 2011 the balance in the Allowance for Doubtful Accounts was $12,000 credit. On Dec. 31, 2011

$19,000 of bad debt expense was recorded, which resulted in an adjusted balance of $16,000 credit in the

Allowance account. How much were accounts receivable writeoffs during 2011?

A. $3,000

B. $7,000

C. $15,000

D. $23,000

10.On Dec. 1, 2011 the Board of Directors of Jackson Corp. approved a 3 for 1 stock split. Prior to the split

there were 300,000 shares of its $.15 par common stock outstanding. The market price of the stock on

Dec. 1 was $135. Which one of the following statements is true?

A. Retained Earnings will decrease $45,000 as a result of the split.

B. After the split there will be 900,000 shares outstanding with a par value of $.05.

C. Additional Paid-in Capital on Common Stock will increase $13,485,000.

D. The market price of the stock will drop to approximately $33.00 as a result of the split.