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1) shaffer company acquires land for $56,000 cash. additional costs are as follows.
shaffer will record the acquisition cost of the land as
a.$56,000
b.$57,690
c.$59,610
d.$59,370
2) the two ways that a corporation can be classified by ownership are
a.publicly held and privately held
b.stock and non-stock
c.inside and outside
d.majority and minority
3) a company purchased factory equipment on april 1, 2012, for $72,000. it is estimated
that the equipment will have a $9,000 salvage value at the end of its 10-year useful life.
using the straight-line method of depreciation, the amount to be recorded as
depreciation expense at december 31, 2012, is
a.$7,200
b.$6,300
c.$4,725
d.$5,400
4) of the four dividends types, the two most common types in practice are
a.cash and scrip
b.cash and property
c.cash and stock
d.property and stock
5) the interest on a $6,000, 9%, 90-day note receivable is
a.$135
b.$540
c.$45
d.$90
6) indicate which one of the following would not appear on both a single-step income
statement and a multiple-step income statement.
a.gross profit
b.operating expenses
c.sales revenues
d.cost of goods sold
7) thayer company purchased a building on january 2 by signing a long-term
$4,200,000 mortgage with monthly payments of $38,500. the mortgage carries an
interest rate of 10 percent. the entry to record the first monthly payment will include a
a.debit to the cash account for $38,500
b.credit to the cash account for $35,000
c.debit to the interest expense account for $35,000
d.credit to the mortgage payable account for $38,500
8) research and development costs
a.are classified as intangible assets
b.must be expensed when incurred under generally accepted accounting principles
c.should be included in the cost of the patent they relate to
d.are capitalized and then amortized over a period not to exceed 20 years
9) use the following data to determine the total amount of working capital.
a.$410,000
b.$250,000
c.$100,000
d.$160,000
10) the following information pertains to lance company. assume that all balance sheet
amounts represent both average and ending balance figures. assume that all sales were
on credit.
what is the return on assets for this company?
a.7.0%
b.14.0%
c.8.0%
d.16.0%
11) a plant asset with a cost of $360,000 and accumulated depreciation of $342,000 is
sold for $42,000. what is the amount of the gain or loss on disposal of the plant asset?
a.$42,000 loss
b.$24,000 loss
c.$24,000 gain
d.$42,000 gain
