AIS 300 Quiz 1

A company's balance sheet shows cash of $24,000, accounts receivable of $30,000, equipment of $50,000, and equity of $72,000. What is the amount of liabilities?

Assets - Equity = Liabilities Cash + Accounts Receivable + Equipment - Equity = Liabilities $24,000 + 30,000 + 50,000 - 72,000 =$32,000

a. Total assets of Charter Company equal $890,000 and its equity is $515,000. What is the amount of its liabilities? b. Total assets of Martin Marine equal $690,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

Assets = Liabilities + Equity a. $890,000 = (a) 375,000 + 515,000 b. $690,000 = (b) 345,000 + (b) 345,000

On August 31 of the current year, the assets and liabilities of Gladstone, Incorporated are as follows: Cash $30,750; Supplies, $660; Equipment, $10,500; Accounts Payable, $9,200. What is the amount of equity as of August 31 of the current year?

Assets − Liabilities = Equity Cash + Supplies + Equipment − Accounts Payable = Equity $30,750 + $660 + $10,500 − $9,200 = $32,710

Return on assets for Deutsche Auto for each of the last three years follows. Over the three-year period shown, did the company's return on assets improve or worsen? Return on assets Current Year 13.7% 1 Year Ago 11.46% 2 Years Ago 9.16%

Company's return on assets = Improved

Zinc has beginning equity of $291,000, total revenues of $91,000, and total expenses of $61,000. The company has no other transactions impacting equity. Its ending equity is:

Ending Equity = Beginning Equity + Total Revenues + Total Expenses Ending Equity = $291,000 + $91,000 − $61,000 Ending Equity = $321,000

Zinc has beginning equity of $257,000, total revenues of $57,000, and total expenses of $40,000. The company has no other transactions impacting equity. Its ending equity is:

Ending Equity = Beginning Equity + Total Revenues - Total Expense Ending Equity = $257,000 + 57,000 - 40,000 Ending Equity = $274,000

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Measurement (Cost) Principle

Charlie's Chocolates' has accounts receivable of $50,000 and accounts payable of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate its net income

Net Income = Revenues - Expenses Net Income = $83,000 - 64,000 Net Income = $19,000

Flitter reported net income of $25,500 for the past year. At the beginning of the year the company had $216,000 in assets and $66,000 in liabilities. By year end, assets had increased to $316,000 and liabilities were $91,000. Calculate its return on assets:

Return on Assets = Net Income/Average Total Assets Return on Assets = $25,500/[216,000 + 316,000)/2] Return on Assets = $25,500/266,000 =0.096 or 9.6%

Cage Company had net income of $160 million and average total assets of $2,000 million. Its return on assets (ROA) is:

Return on Assets = Net income/Average Total Assets Return on Assets = $160 million/2,000 million =0.08 or 8%

Determine the net income of a company for which the following information is available for the month of September. Service Revenue - $300,000 Rent Expense - $48,000 Utilities Expense - $3,200 Salaries Expense - $81,000

Revenue - Expenses = Net income Services Revenue - Rent Expense - Utilities Expense - Salaries Expense $300,000 - 48,000 - 3,200 - 81,000 =$167,800

On December 15 of the current year, Conrad Accounting Services received $40,000 from a client to provide bookkeeping services for the client in the following year. Which accounting principle would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not in the year the cash was received?

Revenue recognition principle

Determine whether each of the following transactions increases or decreases equity. a. Incurred advertising expenses b. Acquired and used supplies c. Provided consulting services to a business d. Incurred maintenance expenses

a. Decreases b. Decreases c. Increases d. Decreases