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     *73.     Assuming that the company does use reversing entries, what entry should be made on April 1, 2007 when the annual interest payment is received?
          a.     Cash           600
                    Interest Revenue                600
          b.     Cash           1,800
                    Interest Receivable                1,800
          c.     Cash                2,400
                    Interest Receivable                1,800
                    Interest Revenue                600
          d.     Cash           2,400
                     Interest Revenue               2,400

74.     Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a
          a.     debit of $50,000.
          b.     debit of $80,000.
          c.     credit of $50,000.
          d.     credit of $80,000.

     *75.     Lane Corporation has an incentive commission plan for its salesmen, entitling them to an additional sales commission when actual quarterly sales exceed budgeted estimates. An analysis of the account "incentive commission expense" for the year ended December 31, 2007, follows:
      Amount       For Quarter Ended       Date Paid           
     $40,000     December 31, 2006     January 23, 2007
     36,000     March 31, 2007     April 24, 2007
     39,000     June 30, 2007     July 19, 2007
     43,000     September 30, 2007     October 22, 2007
          The incentive commission for the quarter ended December 31, 2007, was $42,000. This amount was recorded and paid in January 2008. What amount should Lane report as incentive commission expense for 2007?
          a.     $158,000.
          b.     $118,000.
          c.     $160,000.
          d.     $200,000.

Use the following information for questions 76 through 78:
     The income statement of Dolan Corporation for 2007 included the following items:
          Interest revenue     $65,500
          Salaries expense     85,000
          Insurance expense     7,600
     The following balances have been excerpted from Dolan Corporation's balance sheets:
                    December 31, 2007     December 31, 2006
          Accrued interest receivable     $9,100     $7,500     
          Accrued salaries payable     8,900     4,200
          Prepaid insurance     1,100     1,500

     *76.     The cash received for interest during 2007 was
          a.     $56,400.
          b.     $63,900.
          c.     $65,500.
          d.     $67,100.

     *77.     The cash paid for salaries during 2007 was
          a.     $89,700.
          b.     $80,300.
          c.     $80,800.
          d.     $93,900.

     *78.     The cash paid for insurance premiums during 2007 was
          a.     $6,500.
          b.     $6,100.
          c.     $8,000.
          d.     $7,200.

Use the following information for questions 79 through 81:
     Olsen Company paid or collected during 2007 the following items:
               Insurance premiums paid     $ 10,400
               Interest collected     33,900
               Salaries paid     120,200

     The following balances have been excerpted from Olsen's balance sheets:
                    December 31, 2007     December 31, 2006
               Prepaid insurance     $ 1,200     $ 1,500
               Interest receivable     3,700     2,900
               Salaries payable     12,300     10,600

     *79.     The insurance expense on the income statement for 2007 was
          a.     $7,700.
          b.     $10,100.
          c.     $10,700.
          d.     $13,100.

     *80.     The interest revenue on the income statement for 2007 was
          a.     $27,300.
          b.     $33,100.
          c.     $34,700.
          d.     $40,500.

     *81.     The salary expense on the income statement for 2007 was
          a.     $97,300.
          b.     $118,500.
          c.     $121,900.
          d.     $143,100.

     *82.     At the end of 2007, Drew Company made four adjusting entries for the following items:
          1.     Depreciation expense, $25,000.
               2.     Expired insurance, $2,200 (originally recorded as prepaid insurance).
               3.     Interest payable, $6,000.
               4.     Rental revenue receivable, $10,000.
          In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed is (are)
          a.     Entry No. 3.
          b.     Entry No. 4.
          c.     Entries No. 3 and No. 4.
          d.     Entries No. 2, No. 3, and No. 4.

     *83.     The following information is available concerning the accounts of Franz Company:
               Accounts payable, January 1, 2007     $18,000
               Cash payments on account during 2007     58,000
               Purchase discounts taken during 2007 on 2007 purchases     1,200
               Accounts payable, December 31, 2007     10,000
          Assuming the company records purchases at the gross amounts, the total purchases for 2007 would be
          a.     $65,200.
          b.     $48,800.
          c.     $51,200.
          d.     $50,000.

     *84.     The following information is available for Carr Company:
               Payment for goods during 2007     $92,000
               Accounts payable, January 1, 2007     9,000
               Inventory, January 1, 2007     10,400
               Accounts payable, December 31, 2007     7,200
               Inventory, December 31, 2007     9,700
          Cost of goods sold for 2007 is
          a.     $89,500.
          b.     $90,900.
          c.     $97,100.
          d.     $98,500.

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