Problem 1: Multiple Choice Questions (24 points) Circle the letter of the one best answer to each question. 1. A gain or loss on disposal of a plant asset is determined by comparing the a. replacement cost of the asset with the asset's original cost. b. book value of the asset with the asset's original cost. c. original cost of the asset with the proceeds received from its sale. d. book value of the asset with the proceeds received from its sale. 2. Goodwill can be recorded a. when customers keep returning because they are satisfied with the company's products b. when the company acquires a good location for its business. c. when the company has exceptional management. d. only when there is an exchange transaction involving the purchase of an entire business. The interest charged on a $50,000 note payable, at the rate of 6%, on a 90-day note would be a. $3,000. b. $1,500. c. $750. d. $500. 4. Sales taxes collected by a retailer are reported as a. contingent liabilities. b. revenues. c. expenses. d. current liabilities