39. Thompson Co. has 75,000 shares of $4 par value stock outstanding (total legal capital of $300,000). If Thompson splits the stock 2-for-1, what will be the par value of each share after the split?

		a. $2
		b. $4
		c. $8
		d. $16

A practical decision to expense the cost of a trash can, rather than to record it as a plant asset and depreciate it, would be made on the basis of the convention of

		a. full disclosure.
		b. materiality.
		c. conservation.
		d. consistency.

The following Income Statement and account balance changes apply to this question:

Income Statement for the year:

Sales $1,400,000

Cost of Goods Sold 810,000

Gross Profit $590,000

Operating Expenses 360,000

Net Income before Taxes $230,000

Taxes 34,000

Net Income $196,000

Account Balance Changes during the year:

Accounts Payable increase $6,000

Prepaid expenses decrease $4,500

Taxes Payable increase $8,200

Accounts Receivable decrease $24,000

Additions to Accumulated Depreciation $76,000

Inventory increase $12,000

Accrued liabilities (e.g., Wages Payable) decrease $5,000

What were cash receipts from sales for the year, using the direct method?

		a. $1,412,000.
		b. $1,388,000.
		c. $1,424,000.
		d. $1,376,000.

Use the following table for this question:

Periods P.V. Single at 7% P.V. Annuity at 7%

1 0.935 0.935

2 0.873 1.808

3 0.816 2.624

What amount must be deposited in the bank today, at 7% compounded annually, so that $500 may be withdrawn at the end of each year over the next three years?

		a. $1,312
		b. $571.65
		c. $1,224
		d. $408