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40. Hamilton Company sells $400,000 of products with warranties. Hamilton estimates that warranty repair costs will equal 2% of sales. What amount of Warranty Expense should Hamilton record? 1. $4,000 2. $6,000 3. $8,000 4. $20,000 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

4. River City Hardware uses a perpetual inventory system and FIFO. At the beginning of the month, River City had 50 units that cost $8 each. River City then purchased 30 additional units that cost $10 each. After the purchase, River City sold 60 units. Under perpetual FIFO, the 50 beginning units are sold first. The remaining 10 units sold come from the later purchase. What is River City’s cost of goods sold? 1. $480 2. $500 3. $560 4. $600 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

22. On June 1, Green Company accepts a $12,000, 90-day, 8% note from a customer. Use a 360-day year. What is the maturity value of the note? 1. $12,160 2. $12,240 3. $12,720 4. $12,960 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

38. An employer has a total payroll of $30,000. All $30,000 is subject to a 6% employer Social Security tax and a 1.5% employer Medicare tax. Of the total payroll, $12,000 is also subject to a 5% state unemployment tax and a 1% federal unemployment tax. Use the following calculation: Employer payroll tax expense = Employer Social Security tax + Employer Medicare tax + State unemployment tax + Federal unemployment tax What is the employer’s total payroll tax expense? 1. $2,250 2. $2,700 3. $2,850 4. $2,970 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

47. Monroe Company issues $150,000 of 8%, ten-year bonds for $156,000. Interest is paid every six months. Monroe uses straight-line amortization. The total bond premium is $6,000. Because interest is paid semiannually for ten years, there are 20 interest periods. Use the following calculations: Semiannual cash interest = $150,000 × 8% × 6 ÷ 12Semiannual premium amortization = $6,000 ÷ 20 periodsInterest Expense = Cash interest − Premium amortization What is Interest Expense for each six-month period? 1. $5,700 2. $6,000 3. $6,300 4. $6,600 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

41. Franklin Company reports the following amounts: Cash: $20,000Short-term investments: $10,000Accounts Receivable: $30,000Inventory: $50,000Current liabilities: $40,000 For this question, quick assets include cash, short-term investments, and Accounts Receivable. Inventory is excluded. Use the following formula: Quick ratio = Quick assets ÷ Current liabilities What is Franklin Company’s quick ratio? 1. 1.00 2. 1.25 3. 1.50 4. 2.75 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

42. A company is involved in a lawsuit. Based on the available evidence, the company’s attorney believes that the company will probably lose the lawsuit. The amount of the expected loss can be reasonably estimated. How should the company account for the expected loss? 1. Record an expense and a liability and provide appropriate disclosure 2. Disclose the lawsuit without recording an expense or liability 3. Ignore the lawsuit until the company pays cash 4. Record an asset and revenue Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

35. Carson Company issues a $30,000, 90-day discounted note at an 8% annual discount rate. Use a 360-day year. For a discounted note, the bank deducts the interest in advance. Use the following formulas: Discount = Face amount × Discount rate × 90 ÷ 360Cash proceeds = Face amount − Discount How much cash does Carson receive from the bank? 1. $28,800 2. $29,400 3. $30,000 4. $30,600 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

26. Adams Company purchases equipment for $30,000. Adams pays $1,200 to transport the equipment to its location. Adams also pays $2,000 for installation. The $2,000 installation cost includes $500 spent correcting an installation mistake. Costs required to place the equipment into service are included in the equipment’s cost. Costs caused by mistakes are recorded as expenses. What amount should Adams record as the cost of the equipment? 1. $30,000 2. $31,200 3. $32,700 4. $33,200 Instructions to students: Type in the correct number. Do not type in a decimal after inputting the number.

At standard temperature and pressure, the temperature is , the pressure is , and one mole of an ideal gas occupies approximately .