A business issued a $10,000, 60-day note to a supplier who discounted the note at 12%. The proceeds are:
A. $10,200
B. $9,800
C. $10,000
D. $8,800
ii. A company uses the perpetual inventory system. Inventory and purchases data for a certain inventory item are as follows:
Number of Units Unit Cost ($)
Beginning inventory 10 5.00
Purchases: March 8 15 6.00
November 6 8 7.00
Sales: July 18 8
October 7 9
Ending inventory 16
If this company uses the moving weighted average cost flow method, the moving weighted average cost per unit after the March 8 purchase would be:
A. $5.00
B. $6.00
C. $5.60
D. None of the above
iii. A company financed a land purchase by paying $120,000 cash and assuming a $100,000 mortgage payable. County fees to record the transfer of the land to the buyer amounted to $150; the cost to clear the land of rocks and trees amounted to $850. The recorded cost of the land is:
A. $120,000
B. $220,000
C. $220,850
D. $221,000
iv. If ABC Partnership agrees to share profits and losses equally, then A, B and C's investments in the partnership must be:
A. Equal in total
B. Recorded at book value
C. Recorded at fair market value
D. Made in equal amounts of cash
v. Charles Candy Corporation reported stockholders' equity on its balance sheet at December 31, 2004 as follows:
Common stock, 20,000 shares, $10 par $ 200,000
Additional paid-in capital 100,000
Retained earnings 200,000
Total contributed capital $500,000
In 2005, the company earned income of $25,000 and declared cash dividends of $15,000. At the end of 2005, the additional paid-in capital and retained earnings should have the following balances:
Additional Retained
paid-in capital earnings
A. $ 90,000 $200,000
B. $100,000 $210,000
C. $ 80,000 $ 80,000
D. $ 0 $210,000