ACC Notes

Use the following to determine the total Gross Profit for this company during the year 2016: Beginning Inventory $ 125,000 Ending Inventory $ 250,000 2016 Total Revenue $1,400,000 Inventory Purchases $1,225,000 2016 Cost of Goods Sold $1,100,000 The Accounts Receivable balance increased $800,000 from 1/1/2016 to 12/31/2016.

$ 300,000

CBA Company reported total stockholders' equity of $85,000 on its balance sheet dated December 31, 2016. During the year 2017, CBA reported net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional common stock for $20,000. What is total stockholders' equity as of December 31, 2017? ADD EVERYTHING EXCEPT THE DIVIDEND

$113,000

Big Bend Company has provided the following information:Operating revenues were $100,000.Operating expenses were $45,000.Cash dividend payments to Big Bend's stockholders were $5,000.Income tax expense was $20,000. How much was Big Bend Company's net income?

$35,000

On December 31, 2017, Vandelay Industries reported total liabilities of $75,000 prior to the following adjusting entries: Depreciation expense: $45,000 Wages incurred but not yet paid: $12,000 Rent expense: $9,000; the rent was initially recorded as prepaid Revenue earned for goods delivered: $27,000; the amount was initially paid in advance by the customer and booked to unearned sales revenue How much are Vandelay's total liabilities after the adjusting entries?

$60,000

What is the effect on the financial statements when a company fails to adjust the unearned revenue account for revenues earned at year-end?

Net income is understated and liabilities are overstated.

During 2016, Sensa Corporation incurred operating expenses amounting to $100,000 of which $75,000 was paid in cash; the balance will be paid during 2017. Which of the following is correct for the 2016 year-end balance sheet?

Stockholders' equity decreases $100,000, assets decrease $75,000, and liabilities increase $25,000

Which of the following correctly describes the closing entry process?

The closing entry process creates a zero balance in all temporary accounts at the end of each period

The Scott Company provided the following information for the full month of January: Total expenses for the month were $100,000 Scott Company declared, but did not pay, $200,000 worth of dividends during January Their January 1st Retained Earnings balance was $500,000 (credit balance) Total revenues for the month were $500,000 but only collected $300,000 of these revenues in cash. Based only on this information what is Scott's ending January balance in Retained Earnings?

$700,000.

Which of the following transactions results in a decrease in both total assets and net income?

Adjustment of the prepaid rent account for rent which was used during the period

What is the effect on the financial statements when a company fails to adjust the prepaid insurance account at year-end for insurance coverage for the year?

Assets are overstated and net income is overstated

Which of the following statements is false? - The declaration of a cash dividend creates a liability as of the date of record. - The date of record is irrelevant with respect to recording a liability for a cash dividend. - The dividend payment date is when the dividend liability is reduced. - The dividend liability for a cash dividend is created on the declaration date. - The payment of a cash dividend does NOT impact expenses on the income statement.

The declaration of a cash dividend creates a liability as of the date of record.

When a firm purchases its own shares as treasury stock:

total stockholders' equity is decreased

Strickland Propane reports the following information: Accounts payable $8,000 Accounts receivable $4,200 Cash 9,000 Notes payable 7,400 Retained earnings 9,700 Inventory 11,000 Buildings 12,500 Office Supplies 1,800 What is the amount of Strickland Propane's noncurrent (long-lived) assets?

$12,500

Assume California Consulting Corp recorded the following adjusting entry at year-end, December 31, 2015: Debit: Unearned Consulting Revenue $6,000 Credit: Consulting Revenue $6,000 Their January 1st, 2015 balance in Unearned Consulting Revenue was $12,000 and $7,000 in cash was received during 2015 as an advanced payment for consulting work. Based on the above information California Consulting Corp's ending 2015 Unearned Consulting Revenue account (after the above adjusting entry) would be:

$13,000 Credit

On December 31, 2015, Smith Company reported total liabilities of $120,000 before the following adjusting entries: Expenses incurred but not yet paid: $22,000. Used insurance: $11,000; the insurance was initially recorded as prepaid. Incurred Depreciation expense: $37,000. Rent revenue earned: $9,000; the rent was initially paid in advance by the tenant and booked to unearned rent revenue. How much are Smith Company's total liabilities after adjusting entries?

$133,000

At the beginning of 2013, Yellowstone Corp had assets of $540,000 and liabilities of $320,000. During 2013, assets increased $50,000 and liabilities increased $10,000. What was stockholders' equity on December 31, 2013?

$260,000

On January 1, 2013, Craig Company paid the premium on a four-year insurance policy in the amount of $12,000. At that time, the full amount paid was recorded as prepaid insurance. After recording the correct adjusting entry for the insurance policy on December 31, 2015, Craig Company's records would reflect what balance in the prepaid insurance account?

$3,000

On May 1, 2014, Adams Company borrowed $100,000 by signing a one-year, 9 percent note payable. The principal and interest will be paid on May 1, 2015. How much interest expense should be reported on the income statement for the year ended December 31, 2015?

$3,000

Queen Corporation reports the following information: Accounts payable $10,000 Accounts receivable $3,000 Cash 25,000 Notes payable 5,000 Retained earnings 100,000 Inventory 4,000 Buildings 250,000 Office Supplies 2,000 What is the amount of Queen's current assets? (current assets = liquid cash)

$34,000

Hat Creek Cattle Company has provided the following information for 2017: Revenues were $85,000, of which $11,000 were uncollected at the end of the year. Operating expenses were $35,000 at the end of the year. Hat Creek paid $25,000 for 2018 rent Dividends declared were $9,000, of which $3,000 were unpaid at the end of the year. Income tax expense was $15,000. What is Hat Creek's net income reported on the income statement?

$35,000

Which of the following are the components of stockholders' equity on the balance sheet?

Common Stock and Retained Earnings

The Longhorn Company has provided the following information related to its stockholders' equity section: 200,000 shares of $5 par value common stock are authorized• 140,000 shares of common stock were issued for $11 per share• 130,000 shares are outstanding Based on the information given, which of the following statements is false?

Common stock decreased $50,000 when the treasury stock was purchased.

Jordan Corporation buys T-shirts from a supplier for $6 and sells them for $12. Recently, they sold 10 T-shirts to a customer. The T-shirts were delivered and the customer promised to pay in 60 days (no cash was immediately received). Their accountant forgot to book this ENTIRE transaction. Given this information which of the following would be correct at the end of the year after?

Expenses would be understated and Retained earnings would be understated.

Idaho Spud Corporation has provided the following data (ignore income taxes): 2014 revenues were $77,500. 2014 net income was $38,200. Dividends declared and paid during 2014 totaled $5,700. Total assets at December 31, 2014 were $217,000. Total stockholders' equity at December 31, 2014 was $123,000. Retained earnings at December 31, 2014 were $83,000. Which of the following is correct?

None of the answers are correct

Which of the following best describes the balance sheet?

Provides information pertaining to a company's assets and the claims against those assets.

Which of the following transactions will cause both the left and right side of the accounting equation to increase?

Purchasing inventory on account

During 2017 the Snell Consulting Company experienced the following three events: The balance in their Unearned Consulting Revenue account decreased $90,000 from January 1st to December 31st. No additional Unearned Revenue was booked in 2017. The balance in their Prepaid Rent account decreased $70,000 from January 1st to December 31st. No additional rent was paid in advance in 2017. They declared and paid $5,000 worth of cash dividends (both occurred in 2017) and paid their bank $5,000 cash to repay the principal borrowed with a note payable from 2016. Ignoring interest expense and income tax expense which of the following is Correct for 2017?

Retained Earnings Increased by $15,000

Queso Company has provided the following data (ignore income taxes): 2014 revenues were $99,000. 2014 expenses were $47,800. Dividends declared and paid during 2014 totaled $9,500. Total assets at December 31, 2014 were $177,000. Total liabilities at December 31, 2014 were $109,000. Common stock at December 31, 2014 was $28,500. Which of the following is correct?

Retained earnings at December 31, 2014 were $39,500

Madrid Company has provided the following data (ignore income taxes): 2014 revenues were $77,500.2014 net income was $33,900. Dividends declared and paid during 2014 totaled $5,700. Total assets at December 31, 2014 were $217,000. Total stockholders' equity at December 31, 2014 was $123,000. Retained earnings at December 31, 2014 were $83,000. Which of the following is correct?

Retained earnings increased $28,200 during 2014.

WJM Corporation reported the following amounts: Beginning Retained Earnings $100,000; Ending Retained Earnings $200,000: expenses $110,000; dividends declared $50,000; and total liabilities $400,000. What was WJM's amount of revenue during the year?

Revenues totaled $260,000

Blue Ridge Inc. purchased $250,000 of inventory during February and will pay for it during March. Which of the following statements is false assuming the inventory was sold and delivered, by Blue Ridge, during March?

The income statement will report cost of goods sold of $250,000 during February.

The number of shares that are outstanding of a class of stock is:

the number of shares issued minus the number of shares held as treasury stock

Wayne Enterprises purchased $75,000 of inventory during August and will pay for it during September. Which of the following statements is true assuming the inventory was sold and delivered by Wayne Enterprises, during September?

Wayne's income statement will report cost of goods sold of $75,000 during September