Multiple Choice Answers

Allen Company acquired a building valued at $155,000 for property tax purposes in exchange for 10,000 shares of its $10 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Allen Company?

a. $100,000
b. $150,000
c. $155,000
d. $250,000
Allowance for Doubtful Accounts is listed on the balance sheet under the caption:

a. stockholders’ equity
b. investments
c. fixed assets
d. current assets
The cost of materials entering directly into the manufacturing process is classified as:

a. direct labor cost
b. factory overhead cost
c. burden cost
d. direct materials cost

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is:

a. fifo
b. lifo
c. average cost
d. weighted average

For which of the following taxes is there a ceiling on the amount of employee annual earnings subject to the tax?

a. social security, federal and state unemployment tax
b. only federal unemployment tax
c. only state unemployment tax
d. only social security