1. On November 1, 2012, Farber Incorporated purchased 25% of the stock of Abba Industries for $100,000, and used the equity-method to account for its investment. On November 15, Abba declared total dividends of $20,000 for the year. At December 31, 2012, Abba reported total net income of $36,000 for the year. After Farber recorded its share of dividend and income from Abba, what was the balance in its Investment account?
$100,000
$114,000
$109,000
$104,000
2. Beginning inventory is $28,000. Purchases for the year are $110,000. Sales revenues are $180,000. The company's normal gross profit percent is 60%. How much is Estimated ending inventory?
$72,000
$246,000
$30,000
$66,000
3. Which of the following means that the shipment is free on board at the point of shipment and the buyer pays all shipping costs?
FOB destination
FOB shipping point
COD
4/10, EOM
4. A petty cash fund was established with a $250 balance. It currently has cash of $31 and petty cash tickets totaling $219. Which of the following would be included in the entry to replenish the fund?
A credit to petty cash for $219
A debit to petty cash for $31
A credit to cash in bank for $31
A credit to cash in bank for $219
5. FOB destination means that the:
seller normally pays the transportation costs.
buyer normally pays the transportation costs.
buyer and the seller split the shipping costs.
shipping costs are billed to the buyer.