Acct final review: exam 1

A/Pay: 120 A/Rec: 250 Cash: 100 Contributed Capital: 900 COGS: 1,250 Dividends: 60 Equipment: 900 Insurance Expense: 220 Inventory: 800 Long-term Debt: 1,260 Prepaid Insurance Expense: 50 Rent Revenue: 100 Retained Earnings (beginning): 225 Sales revenue: 1,000 Unearned Rent Revenue: 25 Which ONE of the following would appear in the closing entries for the year (assuming temporary accounts are closed directly to retained earnings instead of to an income summary account)? (A) CREDIT to Cost of Goods Sold for $1,250 (B) CREDIT to Sales Revenue for $1,000 (C) DEBIT to Accounts Payable for $120 (D) DEBIT to Dividends for $60 (E) DEBIT to Contributed Capital for $900 (F) CREDIT to Prepaid Insurance Expense for $50 (G) DEBIT to Unearned Rent Revenue for $25

A

Everything You Need Warehouse Company recognizes membership fee revenues over the term of the membership, which is 12 months. If their Unearned Membership Fee Revenue account had a balance of $2,400 million on January 31, 2016, and $2,200 million on January 31, 2017 and the company received membership fees in cash of $4,400 million during the year, what amount was recognized as Membership Fee Revenue for the fiscal year? (A) $4,600 million (B) $4,280 million (C) $4,216 million (D) $8,560 million

A

Mel's Mechanical Repair Shop started the year with total assets of $60,000, total liabilities of $40,000, and retained earnings of $18,000. During the year, the business recorded $100,000 in auto repair revenues, $70,000 in expenses, and the company paid dividends of $15,000. If Mel's Mechanical Repair Shop ends the year with total assets of $80,000, and total liabilities of $35,000, what is the amount of common stock issued during the year? (A) $ 10,000 (B) $ 14,000 (C) $ 5,000 (D) $ 3,000 (E) None of the above

A

When Honest Abe received his paycheck, he realized that his employer had made an error in computing his wages, and overpaid him by $2,600. So Honest Abe promptly returned the excess amount. When the employer receives a check from him for the amount of the overpayment, which of the following journal entries will be made by the employer? (A) Debit Cash $2,600 and credit Wages Expense $2,600 (B) Debit Wages Expense $2,600 and credit Cash $2,600 (C) Debit Cash $2,600 and credit Wages Payable $2,600 (D) Debit Wages Payable $2,600 and credit Wages Expense $2,600

A

As of December 31, 2015, Lincolnshire Company had assets of $1,850,000 and liabilities of $570,000. During 2016, the stockholders invested an additional $100,000 and received dividends of $60,000 from the business. What is the company's net income during 2016, assuming that as of December 31, 2016, assets were $1,960,000, and liabilities were $510,000? (A) $ 170,000 (B) $ 130,000 (C) $ 210,000 (D) $ 40,000

B

At the beginning of the month, a company purchased a new truck for $45,000, paying a $21,000 cash down payment and agreeing to pay the balance over 12 months through a no-interest financing offer provided by the car dealer. Assume this transaction is recorded on the first day of the month. The company paid the first finance payment for the truck at the end of the month. What is the effect of these transactions on the company's current month-end accounting equation? (Hint: Assume the first financing payment was made on the last day of the month just before closing the books.) (A) No effect on Assets; $45,000 decrease in Liabilities; $45,000 increase in Stockholders' Equity (B) $22,000 increase in Assets; $22,000 increase in Liabilities; No effect on Stockholders' Equity (C) $45,000 increase in Assets; No effect on Liabilities; $45,000 increase in Stockholders' Equity (D) No effect on Assets; $24,000 increase in Liabilities; $24,000 decrease in Stockholders' Equity

B

Lily Company was started last year when the shareholders invested $70 cash into the company. At that time, Lily also borrowed $30 cash from a local bank. Lily used $80 cash to purchase inventory for $80. This year Lily Company sold all of the inventory for $55 cash. This is NOT a typographical error... the amount received for all of the inventory was only $55 cash. Which ONE of the following statements is TRUE with respect to Lily Company's balance sheet AFTER the sale of the inventory? Note: Assume that there is no interest on the loan. (A) Cash is $55. (B) Total Owners' Equity is $45. (C) Total Owners' Equity is $95. (D) Total Owners' Equity is $70. (E) Inventory is $25.

B

Which ONE of the following companies has a large liability recorded in its balance sheet that relates to services for which customers have paid but that the company has not yet delivered? (A) Zions Bank (B) United Airlines (C) Hewlett-Packard (D) McDonalds (E) Caterpillar

B

Allison, a bank customer, received a loan for $26,000 in exchange for a 7-month, 9% note on October 1, 2016. The note is due on April 30, 2017. If the bank's accounting period ends on December 31 each year, how much interest revenue from this note should be recognized by the bank in the years 2016 and 2017? 2016 2017 (A) $ 585 $1,365 (B) $ 780 $ 585 (C) $ 585 $780 (D) $1,365 $0

C

At the beginning of the year, Suzanne Company had total assets of $1,200,000 and total stockholders' equity of $460,000. During the year, total assets increased by $180,000, and total liabilities increased by $84,000. The company also paid $14,000 in dividends. How much was the net income for the year? (A) $ 96,000 (B) $130,000 (C) $ 62,000 (D) $110.000

D

Delta Queen Company had $4,800 of supplies on hand on January 1. During the year, the company purchased $7,800 of supplies, and on December 31, determined that only $1,600 of supplies were still on hand. The adjusting entry for Delta Queen Company on December 31, will include (A) Credit Supplies Expense $11,000 (B) Debit Supplies Expense $4,600 (C) Debit Supplies $7,800 (D) Debit Supplies Expense $11,000

D

During its first month of operations, Pluto Company (1) borrowed $200,000 from a bank, and then (2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account, (5) paid $30,000 cash for accounts payable, and (6) paid $60,000 cash for utilities. What is the amount of total assets at the end of the month? (A) $190,000 (B) $270,000 (C) $250,000 (D) $330,000

D

Mouser Pet Supplies had the following transactions during December 2016: -Paid a note of $34,000, owed since March, plus $850 for interest. -Sold $73,050 of merchandise to customers on account. Cost of goods sold was $42,500. [Hint: Cost of goods sold is an expense related to the reduction of inventory (merchandise sold).] -Paid accounts payable of $4,100. As a result of these transactions, at year-end, liabilities and stockholders' equity would show a combined total: (A) Decrease by $ 9,600 (B) Increase by $ 26,850 (C) Decrease by $ 9,150 (D) Decrease by $ 8,400

D

The following information was taken from the records of Valentine Corporation for the year ended December 31, 2016. Advertising expense: $40,000 Income tax expense: 26,000 Accounts payable: 26,900 Dividends paid: 30,000 Retained earnings (Jan 1, 2016): 115,720 Consulting fees revenue: 200,000 Rent expense: 23,400 Supplies expense: 33,800 The retained earnings reported by Valentine Corporation as of December 31, 2016 is: (A) $158,490 (B) $158,090 (C) $111,590 (D) $162,520

D

On June 1, the company paid $1,200 in advance for 12 months of rent, with the rental period beginning on June 1. This $1,200 was recorded as Rent Expense. [Yes, they did it wrong, but we have to work with what they did.] As of the end of the year, no entry has yet been made to adjust the amount initially (incorrectly) recorded. -- Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31? (A) DEBIT to Prepaid Rent for $700 (B) DEBIT to Cash for $700 (C) DEBIT to Rent Expense for $700 (D) CREDIT to Prepaid Rent for $500 (E) DEBIT to Prepaid Rent for $500 (F) DEBIT to Rent Expense for $500

E