SECTION I - MULTIPLE CHOICE
(50 points - 2 points each) - Please choose the
answer for each
question and record your answer on the Scantron answer sheet.
Assume that each question supplies all the
information that you need to determine the correct answer (unless otherwise stated).
Pella Company purchased a machine that cost $50,000 and had an estimated useful life of
10 years (no residual value) on January 1, 2006.
The company used straight-line
depreciation and recorded $5,000 of depreciation expense each year.
The book value
end of 2009
, would be
None of the above is correct
Sarah, Inc. had the following accounting information at the end of 2008:
Cash received from customers
Cost of goods sold
Cash paid out for operations
What amount should be reported for net income for 2008?
E) none of the above
Which of the following would
cause stockholders’ equity to change?
A) collection of an account receivable
B) providing a product or service to customers (cash not yet collected)
C) sale of additional stock to investors
D) payment of a cash dividend to stockholders
Assume the 2009 income statement reported total sales revenue of $1,200,000.
2009, comparative balance sheets showed that accounts receivable increased by $25,000
and the unearned revenue account decreased $15,000.
The cash inflow from customers for