ACC211 Chapter 1 MC

If assets are $299,000 and liabilities are $191,000, then equity equals:

$108,000 Assets = Liabilities + Stockholder's Equity Equity = $299,000 - $191,000 = $108,000

A company's balance sheet shows: cash $60,000, accounts receivable $35,000, office equipment $69,000, and accounts payable $36,000. What is the amount of stockholders' equity?

$128,000 Assets = Liabilities + Stockholders' Equity Cash + Accounts Receivable + Office Equipment = Accounts Payable + Stockholders' Equity $60,000 + $35,000 + $69,000 = $36,000 + Stockholders' Equity $164,000 = $36,000 + Stockholders' Equity; Stockholders' Equity = $128,000

Savvy Sightseeing had beginning equity of $87,000; revenues of $135,000, expenses of $80,000, and dividends to stockholders of $10,500; there were no stock issuances. Calculate the ending equity.

$131,500 Ending Equity = Beginning Equity + Revenues − Expenses + Stock issuances − Dividends Ending Equity = $87,000 + $135,000 − $80,000 + 0 − $10,500 Ending Equity = $131,500

If a company is considering the purchase of a parcel of land that was acquired by the seller for $103,000 is offered for sale at $186,000, is assessed for tax purposes at $113,000, is considered by the purchaser as easily being worth $176,000, and is purchased for $173,000, the land should be recorded in the purchaser's books at:

$173,000

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense $ 184,000 Interest expense 14,000 Rent expense 24,000 Consulting revenue 416,000

$194,000 Net Income = Revenues - Expenses Net Income = Consulting Revenue - Employee Salaries Expense - Interest Expense - Rent Expense Net Income = $416,000 - $184,000 - $14,000 - $24,000; Net Income = $194,000

If assets are $385,000 and equity is $130,000, then liabilities are:

$255,000 Assets = Liabilities + Stockholders' Equity $385,000 = Liabilities + $130,000 Liabilities = $255,000

Rico's Taqueria had cash inflows from operating activities of $46,000; cash outflows from investing activities of $41,000, and cash outflows from financing activities of $31,000. Calculate the net increase or decrease in cash.

$26,000 decrease. Net Increase/(Decrease) in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities Net Increase/(Decrease) in Cash = $46,000 + ($41,000) + ($31,000) Net Increase/(Decrease) in Cash = ($26,000)

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $17,300; Accounts Receivable, $7,100; Supplies, $650; Equipment, $11,800; Accounts Payable, $9,100. What is the amount of stockholders' equity as of May 31 of the current year?

$27,750 Assets = Liabilities + Stockholders' Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Stockholders' Equity $17,300 + $7,100 + $650 + $11,800 = $9,100 + Stockholders' Equity $36,850 = $9,100 + Stockholders' Equity; Stockholders' Equity = $27,750

Charlie's Chocolates' had stock issuances of $72,000 and dividends of $31,000. The company has revenues of $105,000 and expenses of $75,000. Calculate its net income.

$30,000 Net Income = Revenues − Expenses Net Income = $105,000 − $75,000; Net Income = $30,000

Use the following information for Meeker Corp. to determine the amount of equity to report. Cash $ 84,000 Buildings 132,500 Land 224,200 Liabilities 139,000

$301,700 Assets - Liabilities = Stockholders' Equity Cash + Buildings + Land - Liabilities = Stockholders' Equity $84,000 + $132,500 + $224,200 − $139,000 = $301,700

Zapper has beginning equity of $277,000, net income of $61,000, dividends paid of $50,000 and stockholder investments of $16,000. Its ending equity is:

$304,000 Ending Equity = Beginning Equity + Stockholder Investments + Net Income − Dividends Ending Equity = $277,000 +$16,000 + $61,000 − $50,000; Ending Equity = $304,000

Use the following information as of December 31 to determine equity. Cash $ 62,000 Buildings 180,000 Equipment 211,000 Liabilities 146,000

$307,000 Assets = Liabilities + Stockholders' Equity Cash + Equipment + Buildings = Liabilities + Stockholders' Equity $62,000 + $211,000 + $180,000 = $146,000 + Stockholders' Equity $453,000 = $146,000 + Stockholders' Equity; Stockholders' Equity = $307,000

A company reported total equity of $161,000 at the beginning of the year. The company reported $226,000 in revenues and $173,000 in expenses for the year. Liabilities at the end of the year totaled $100,000. What are the total assets of the company at the end of the year?

$314,000 Assets = Liabilities + Stockholders' Equity Assets = $100,000 + (Beginning Equity + Revenues − Expenses) Assets = $100,000 + ($161,000 + $226,000 − $173,000) Assets = $100,000 + $214,000; Assets = $314,000

On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $31,350; Supplies, $710; Equipment, $10,900; Accounts Payable, $9,700. What is the amount of stockholders' equity as of August 31 of the current year?

$33,260 Assets - Liabilities = Stockholders' Equity Cash + Supplies + Equipment − Accounts Payable = Stockholders' Equity $31,350 + $710 + $10,900 − $9,700 =$33,260

The assets of a company total $704,000; the liabilities, $202,000. What is the amount of equity?

$502,000 Assets = Liabilities + Stockholders' Equity $704,000 = $202,000 + Stockholders' Equity (or Claims of the Owners); Stockholders' Equity = $502,000

Zippy had cash inflows from operations of $82,500; cash outflows from investing activities of $67,000; and cash inflows from financing of $45,000. The net change in cash was

$60,500 increase Net Change in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities Net Change in Cash = $82,500 + ($67,000) + $45,000; Net Change in Cash = $60,500

If equity is $420,000 and liabilities are $200,000, then assets equal:

$620,000 Assets = Liabilities + Equity Assets = $200,000 + $420,000 = $620,000.

If assets are $111,000 and liabilities are $38,000, then equity equals:

$73,000. Assets = Liabilities + Stockholders' Equity $111,000 = $38,000 + Stockholders' Equity; Stockholders' Equity = $73,000

A company's balance sheet shows: cash $44,000, accounts receivable $50,000, equipment $90,000, and equity $92,000. What is the amount of liabilities?

$92,000 Assets − Equity = Liabilities Cash + Accounts Receivable + Equipment − Equity = Liabilities $44,000 + $50,000 + $90,000 − $92,000 = $92,000

Speedy has net income of $31,955, and assets at the beginning of the year of $213,000. Assets at the end of the year total $259,000. Compute its return on assets.

13.5% Return on Assets = Net Income/Average Total Assets Return on Assets = $31,955/[($213,000 + $259,000)/2] Return on Assets = $31,955/$236,000 = 0.135 = 13.5%

Cage Company had income of $396 million and average total assets of $2,120 million. Its return on assets (ROA) is:

18.7% Return on Assets = Net Income/Average Total Assets Return on Assets = $396 million/$2,120 million = 0.187 = 18.7%

Chou Co. has a net income of $57,000, assets at the beginning of the year are $264,000 and assets at the end of the year are $314,000. Compute its return on assets

19.7% Return on Assets = Net Income/Average Assets Return on Assets = $57,000/[($264,000 + $314,000)/2] Return on Assets = $57,000/$289,000 = 0.197 = 19.7%

Dawson Electronic Services had revenues of $90,000 and expenses of $55,000 for the year. Its assets at the beginning of the year were $405,000. At the end of the year assets were worth $455,000. Calculate its return on assets.

8.1% Return on Assets = Net Income/Average Total Assets Return on Assets = (Revenues − Expenses)/Average Total Assets Return on Assets = ($90,000 − $55,000)/[($405,000 + $455,000)/2] Return on Assets = $35,000/$430,000 = 0.0814 = 8.1%

Rushing had income of $174 million and average total assets of $1,890 million. Its return on assets is:

9.2% Return on Assets = Net Income/Average Total Assets Return on Assets = $174 million/$1,890 million = 0.092 = 9.2%

Flitter reported net income of $26,000 for the past year. At the beginning of the year the company had $217,000 in assets and $67,000 in liabilities. By the end of the year, assets had increased to $317,000 and liabilities were $92,000. Calculate its return on assets:

9.7% Return on Assets = Net Income/Average Total Assets Return on Assets = $26,000/[($217,000 + $317,000)/2] Return on Assets = $26,000/$267,000 = 0.097 = 9.7%

If a company receives $10,800 from a stockholder, the effect on the accounting equation would be:

Assets increase $10,800 and equity increases $10,800.

If a company purchases equipment costing $6,200 on credit, the effect on the accounting equation would be:

Assets increase $6,200 and liabilities increase $6,200.

Alpha Company has assets of $630,000, liabilities of $265,000, and equity of $365,000. It buys office equipment on credit for $90,000. What would be the effects of this transaction on the accounting equation?

Assets increase by $90,000 and liabilities increase by $90,000 Assets = Liabilities + Stockholders' Equity $630,000 = $265,000 + $365,000 Assets increase by $90,000 (Equipment) due to the purchase. Liabilities also increase by $90,000 (Accounts Payable) due to the purchase on credit.

If the liabilities of a company increased $80,000 during a period of time and equity in the company decreased $22,000 during the same period, what was the effect on the assets?

Assets would have increased $58,000 Assets = Liabilities + Stockholders' Equity Change in Assets = Change in Liabilities + Change in Stockholders' Equity Change in Assets = + $80,000 − $22,000 Change in Assets = + $58,000

Saddleback Company paid off $31,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Assets, $31,000 decrease; liabilities, $31,000 decrease. Assets = Liabilities + Stockholders' Equity Assets would decrease by $31,000 in Cash due to the payment of the accounts payable. Liabilities would also decrease by $31,000 in Accounts Payable due to the payment of an obligation. There is no effect on Stockholders' Equity.

If the assets of a business increased $121,000 during a period of time and its liabilities increased $83,000 during the same period, equity in the business must have:

Increased $38,000 Assets = Liabilities + Stockholders' Equity Change in Assets = Change in Liabilities + Change in Stockholders' Equity Increase of $121,000 = Increase of $83,000 + Change in Stockholders' Equity Change in Owner's Equity = Increase of $38,000

If the liabilities of a business increased $109,000 during a period of time and the stockholders' equity in the business decreased $47,000 during the same period, the assets of the business must have:

Increased $62,000 Assets = Liabilities + Stockholders' Equity Change in Assets = Change in Liabilities + Change in Stockholders' Equity Change in Assets = + $109,000 − $47,000 Change in Assets = Increase of $62,000

If a company uses $1,320 of its cash to purchase supplies, the effect on the accounting equation would be:

One asset increases $1,320 and another asset decreases $1,320, causing no effect.

If Houston Company billed a client for $24,000 of consulting work completed, the accounts receivable asset increases by $24,000 and:

Revenue increases $24,000