1.....Which income statement line item will appear if the "Gross" method of accounting for discounts is used, but not the "Net" method?

Select one:

a. Sales Discounts Forfeited

b. Gross Profit

c. Sales Discounts

d. Cost of Goods Sold

e. Freight-Out

2....Sharon Walsh has developed an educational software package. She agrees to sell the patent to Pensca for four annual payments of $50,000 each. The payments are to begin five years from today. Given an annual rate of 5%, what is the approximate present value of the four payments?

Select one:

a. $145,863

b. $138,917

c. $281,420

d. $275,046

e. $289,319

3.......

On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $500,000 and a due date of December 31, 2017. The stated rate of interest is 10% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 5% is implicit in the agreed-upon price. The effective amortization method is used

Oxfords journal entry on 1/1/15 will record approximately what amount of service revenue?

Select one:

a. $500,000

b. $450,000

c. $562,171

d. $437,829

e. $568,081

4.........

On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's interest revenue to be reported on the 2015 income statement is:

Select one:

a. $30,000

b. $60,000

c. $52,540

d. $164,603

e. $175,321

5......

Given: Net Income is:

Select one:

a. Overstated 4

b. Overstated 24

c. Overstated 6

d. Overstated 34

e. Understated 18