Part A: Multiple-Choice Questions (50 points-90 minutes) and total 1. At the end of last year, Ace Company had total assets in the amount of $60,000 liabilities in the amount of $40,000. During the current year, shareholders contributed S10,000 cash in exchange for the company's shares. As a direct result of this transaction, the A) debt-to-assets ratio will increase. B) asset turnover ratio will increase. C) earnings per share will decrease. D) current ratio will decrease. Aimco writes-off $10,000 of customer accounts during the year. At the end of the year, immediately before year-end adjustments, the Allowance for Doubtful Accounts shows a debit balance of $8,000. Aimco estimates uncollectible accounts at the end of the year, using the aging of receivables method, to be $17,000. What should be the adjustment to the Allowance for Doubtful Accounts account balance? A) record a credit of $9,000 B) record a credit of $25,000 C) record a credit of $35,000 D) none of the above 2. 3. If a company uses the specific identification method, its cost of ending inventory would be $750. If the net realizable value of that inventory is determined to be $690, which of the following is true? A) Inventory would be reported on the balance sheet at $750. B) The possible gain on selling the inventory would be disclosed in the notes to the financial statements as non-operating income Inventory would be decreased by S60 to $690 and accompanied by a S60 decrease in net income and shareholders' equity. None of the above. C) D) 4. The following cost information is given for a company's inventory during July: July 1 Inventory July 3 Purchase July 4 Purchase July 8 Purchase July 9 Purchase Units Unit Cost 200 100 150 200 250 $22 23 24 25 During the third week of July, 550 units were sold at a price of S42 per unit. If the company uses the weighted average cost method, what is its gross profit? A) $10,230 B) $10,175 C) $ 9,130 D) $ 9,075