PLEASE ANSWER ALL THE QUESTIONS, OR I WILL SUBMIT AS INCOMPLETE

21. When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is subtracted from net income.

True or False

22. Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 20,000 shares authorized, 9,000 shares issued, and 8,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:

Multiple Choice

a. Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000.

b. Debit Common Dividends Payable $4,000; credit Cash $4,000.

c. Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500.

d. Debit Common Dividends Payable $4,500; credit Cash $4,500.

e. Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.

23. Beginning inventory plus net purchases equals merchandise available for sale. True or False?

24. The units-of-production method of depreciation charges a constant amount of expense for each unit produced during an assets useful life. True or False?

25. Sellers allow customers to use credit cards for all of the following reasons except:

Multiple Choice

a. To be able to charge more due to fees and interest.

b. To lessen the risk of extending credit to customers who cannot pay.

c. To speed up receipt of cash from the credit sale.

d. To increase total sales volume.

e. To avoid having to evaluate a customer's credit standing for each sale.

26. Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?

Multiple Choice

a. $4,845

b. $4,180

c. $3,515

d. $3,700

e. $3,850

27. Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:

• The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor.

• The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

Based on this information, the correct balance for ending inventory on December 31 is:

Multiple Choice

a. $412,000

b. $340,000

c. $318,000

d. $362,000

e. $390,000

28. On May 1, Anders Company purchased merchandise in the amount of $5,800 from Shilling, with credit terms of 2/10, n/30. Anders uses the perpetual inventory system and the gross method. The journal entry or entries that Anders will make on May 1 is:

Multiple Choice

a.

Sales	5,800
Accounts receivable		5,800

b.

Merchandise Inventory	5,800
Accounts payable		5,800

c.

Accounts payable	5,800
Sales		5,800

d.

Merchandise Inventory	5,800
Cash		5,800

e.

Purchases	5,800
Accounts payable		5,800

29. In applying the lower of cost or market method to inventory valuation, market is defined as the current selling price. True or False?

30. A company has sales of $403,800 and its gross profit is $170,300. Its cost of goods sold equals:

Multiple Choice

a. $403,800.

b. $231,700.

c. $233,500.

d. $574,100.

e. $170,300.

31. Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $35,000, a building appraised at $105,000, and paddleboats appraised at $210,000. Compute the cost that should be allocated to the land.

Multiple Choice

a. $93,000.

b. $140,000.

c. $32,500.

d. $31,000.

e. $97,500.

32. Sandoval needs to determine its year-end inventory. The warehouse contains 20,000 units, of which 3,000 were damaged by flood and are not sellable. Another 2,000 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 4,000 units at a consignee's location. How many units should Sandoval include in its year-end inventory?

Multiple Choice

a. 29,000

b. 21,000

c. 23,000

d. 19,000

e. 26,000

33. A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:

Multiple Choice

a. Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $46,800.

b. Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.

c. Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $45,000.

d. Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.

e. Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.

34. Organization expenses of a corporation often include legal fees and promoter fees. True or False?

35. Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:

Multiple Choice

a. $36,000

b. $42,000

c. $54,000

d. $16,000

e. $90,000

36. Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:

Multiple Choice

a. Debit Merchandise Inventory $8,250; credit Cash $8,250.

b. Debit Cash $8,250; credit Accounts Payable $8,250.

c. Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50.

d. Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50.

e. Debit Accounts Payable $8,167.50; credit Cash $8,167.50.

37. If a company resells treasury stock below the acquisition cost, a loss from the sale of treasury stock is recorded. True or False?

38. A loss on disposal of a plant asset occurs if the cash proceeds received from the asset sale is less than the asset's book value. True or False?

39. Which of the following is not true regarding a credit card expense?

Multiple Choice

a. Credit card expense may be classified as a "discount" deducted from sales in the calculation of net sales.

b. Credit card expense may be classified as a selling expense.

c. Credit card expense may be classified as an administrative expense.

d. Credit card expense is not recorded by the seller.

e. Credit card expense is a fee the seller pays for services provided by the card company.

40. When using the allowance method of accounting for uncollectible accounts, the entry to record the estimated bad debts expense is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts. True or False?