Alex, Bob, and Ciara are partners, sharing income 2:1:2 respectively. After selling all of the assets for cash, dividing gains and losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Alex, $10,000 Cr; Bob, $10,000 Cr; and Ciara, $30,000 Cr. How much cash should be distributed to Alex?

a.

$20,000

b.

$10,000

c.

$6,000

d.

$16,667

2.

On 1/11/10, Carpet Company borrows $60,000 from National Bank on a 3-month, 8% note. The amount of interest to be accrued on 31/12/10 is:

a.

$4,800

b.

$800

c.

$400

d.

1,200

3.

Jackson is admitted to a partnership with a 25% capital interest by a cash investment of $360,000. If total capital of the partnership is $1,560,000 before admitting Jackson, the bonus to Jackson is

a.

$180,000

b.

$240,000

c.

$120,000

d.

$60,000

4.

Mackenzie Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should Mackenzie report as a current liability for Unearned Insurance Revenue at December 31?

a.

$0

b.

$5,000

c.

$10,000

d.

$15,000

5.

Lulzbot.com sells 6,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $6,000. What amount should Lulzbot.com accrue on December 31 for estimated warranty liability?

a.

$45,000

b.

$9,000

c.

$3,000

d.

$6,000