ACCT 201 Final
Using a perpetual inventory system, which of the following entries would record the sale of merchandise on account?
Debit Accounts Receivable and Cost of Goods Sold; Credit Sales Revenue and Inventory
Treating a capital expenditure as an immediate expense ______.
overstates expenses and understates net income
A loss is ______. (Select all that apply.)
reduction in income recorded with a debit
The debit side of the Retained Earnings T-Account will include which of the following after recording the closing entries? (Select all that apply.)
Dividends for the month Expenses for the month
On November 1, Nim Com Soup, Inc., borrowed $23,000 by issuing a 9-month note at 6%. Interest Payable at December 31, equals ______.
230 P*R*T 23,000*0.06*2/12
Using the information found in the financial statements for the month ended May 31 and the Accounts Receivable T-account, determine its May 31 balance found on the balance sheet. Assume all sales are on account. Balance Sheet at April 30: Accounts Receivable = $2,000 Statement of Cash Flows: Cash Collected from Customers on the Statement of Cash Flows = $6,000 Income Statement: Sales = $7,000 Balance Sheet at May 31: Accounts Receivable = ______?
3000 2000+7000-6000=3000
During December, Acme, Inc., performed and billed its customers $31,000 for services on account of which it collected $2,000. How much revenue should Acme record in December?
31,000
At December 31, Year 1, Lord of the Fries, Inc.'s assets were $50,000 and liabilities were $40,000. At December 31, Year 2, its assets are $120,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.
50,000-40,000=10,000 120,000-50,000=70,000 70,000+10,000 =80,000 Answer: 80,000
Robbin, Inc., issued $200,000 of 9%, 10-year bonds for $213,419 given a market rate of interest of 8%. The bonds pay interest once a year. Did Robbin, Inc.'s, bonds sell at a par, premium or discount and why?
A premium; the market rate of interest is lower than the stated rate of interest.
Revenue for the year totaled $900. Record the entry to close revenues at the end of the year. DO NOT INCLUDE $ SIGNS IN YOUR ANSWER.
Revenue 900 Retained Earnings 900
Determine the missing amounts in the following multi-step income statement: Sales $1,000 Cost of Goods Sold ? Gross Profit 300 Operating Expenses 100 Operating Income ? Interest Expense 10 Net Income ?
700 and 190 COGS: 1000-300=700 Net Income: 1000-700-100-10= 190
The Sweet Dairy Air, Inc., had Salary Expense of $800 on its adjusted trial balance. Record the entry to close this expense at the end of the accounting period. DO NOT INCLUDE $ SIGNS IN YOUR ANSWER.
Retained Earnings 800 Salary Expense 800
On January 1, Sew What, Inc., purchased $2,000 of supplies on account. The entry includes a debit to _______.
Supplies and credit to Supplies Payable
A $100,000 truck was depreciated using straight-line and assuming a 5-year life and $10,000 salvage value. After 3 years, it was sold for $40,000 cash. The sale of the truck appears under A.___________ activities on the Statement of Cash Flows in the amount of B. $______________.
Investing, $40,000
Select the financing activities from the list below. (Select all that apply.)
Issued a Stock Issued a Notes Payable
The date, which follows the date of declaration, and determines which shareholders will receive the dividend is the ______.
Date of Record
The entry to write off an account under the allowance method for estimating doubtful accounts ______.
has no effect on total assets or net income
The Merchant of Tennis, Inc., had $10,000 of inventory at the beginning of the period. During the period it purchased $40,000. Based on a physical count of inventory at the end of the accounting period, it had $4,000 in inventory. Based on this information, calculate Cost of Goods Sold for the period.
46,000 10,000+40,000-4,000 = 46,000
During the year, Proffitts, Inc., had revenue of $93,000 and expenses of $33,000. During the year, it collected $14,000 from its customers and paid $3,000 of its expenses and $20,000 of dividends to its owners. Net income for the year equals ______.
60,000 93,000-33,000= 60,000
Accounts Receivable $60,000 Allowance for Doubtful Accounts $800 credit balance Net Sales $600,000 Doubtful Accounts Expense $0 Management estimates that 10% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, what is the total Allowance for Doubtful Accounts on the balance sheet at year end?
6000
Shareholders' Equity: Common Stock, $2 par value, 1,000,000 authorized, 50,000 shares issued $100,000 Paid-in Capital in Excess of Par 160,000 Retained Earnings 20,000 Assuming all of the shares were sold at the same time, at what price was each share sold? Round your answer to the nearest whole penny.
5.20 (Common Stock+ paid in cap)/shares issued
Purses, Inc., sold 4 purse(s) that cost $40 each to its customers for a price of $70 each. The Gross Profit amount on the income statement will equal $______. Do not include $ in your answer
$120
Prior to writing off a specific account, Lettuce Eat, Inc. had the following balances: Accounts Receivable $27,000 Allowance for Doubtful Accounts (credit) 3,000 Lettuce Eat, Inc., writes off a bankrupt customer's account receivable in the amount of $700. After the write-off of this customer's account has been recorded, what is Accounts Receivable, Net balance?
24,000 27,000-3,000= 24,000
How many of the following accounts have a normal credit balance? Unearned Revenue Sales Revenue Accounts Receivable Accumulated Depreciation Cost of Goods Sold Inventory Prepaid Expenses
3- Unearned Revenue, Sales Revenue, Accumulated Depreciation
Jurassic Pork, Inc., had $100 of supplies on May 1. It purchased $800 of supplies on account during May. Jurassic Pork paid $300 of the $800 it owed for its supplies. At May 31, Jurassic Pork only had $150 of supplies left. Supplies Expense on the May 31 income statement will equal ______.
750 100+800-150= 750 BB+Purchases-EB
Thistle Do Nicely had $200 of supplies on May 1. During May, it purchased $500 of supplies on account. It paid $250 of the $500 it owed for its supplies. At May 31, Thistle Do Nicely only had $85 of supplies left. Supplies on the balance sheet equals ______.
$85
If a bond is sold at a premium, Cash Paid for Interest reported on the Statement of Cash Flows in subsequent years __________.
stays the same each year
How many of the following accounts have a normal debit balance? Accounts Receivable Unearned Revenue Wages Expense Wages Payable Depreciation Expense Sales Revenue
3- Accounts receivable, wages expense, depreciation expense
Using the accounts receivable method, Thistle Do Nicely, Inc. estimates that $4,000 of its receivables will be uncollectible. Prior to adjustment, the Allowance for Doubtful Accounts has a $400 debit balance. Determine the amount and on which year-end financial statement the line items appear.
Doubtful Accounts Expense of $4,400 on the Income Statement and Allowance for Doubtful Accounts of $4,000 on the Balance Sheet
The adjusting entry to record interest owed on obligations at the end of the accounting period includes a debit to ______.
Interest Expense and credit to Interest Payable
On November 1, Year 1, Bondage, Inc., issued $30,000 of 10-year, 6% bonds at 100.000. The bonds pay interest annually on November 1. Which of the following will appear on Bondages balance sheet at December 31, Year 1?
Interest Payable 300
Up-a-Creek, Inc., needed some long-term financing and arranged for a 6-year, $60,000, 12% mortgage loan on January 1, Year 1. Annual payments of $14,594 will be made on December 31 each year. For each item, select the amount as of or for the Year Ended December 31, Year 1, in the column of the one financial statement where each amount is found.
Notes Payable - 52,606 Balance Sheet Int Expense- (7,200) Income Payment of Notes- (7,349) Statement of Cash Payment of Int- (7,200) Statement of Cash
The issuance of common stock in exchange for cash will ______.
affect the financing activities section of the statement of cash flows
On January 1, Year 1, Wok of Fame, Inc., borrowed $700,000 at 5%. The loan will be repaid with equal annual installment payments of $50,000 made on the last day of each year, which is the company's yearend. The second installment payment journal entry will include a larger ______ than in the first installment payment journal entry.
Debit to Notes Payable
The adjusting entry to record the estimated doubtful accounts causes a(n) ______. (Select all that apply.)
Decrease in assets Decrease in SE
Land is reported on the balance sheet at its original purchase price. From the list of assumptions and principles, which one best supports this accounting treatment?
Historical Cost Principle
if a bond is sold at a discount, Bonds Payable, Net ________.
Increases each year
A corporation repurchased 1,000 shares of its $1 par value common stock for $8,000. The effect of this transaction on the accounting equation includes a(n) ______. (Select all that apply.)
decrease in assets decrease in SE
The dollar amount shown on the Income Statement for Supplies Expense represents ______.
the cost of supplies used during the period
On May 1, Lord of the Fries, Inc., issued a $10,000, 3-month, 12% note. It also issued another $10,000 6-month, 12% note on the same day. On May 31, the adjusting entry to record the interest owed will be ______.
the same for both notes
Sock Market's corporate charter allows it to issue 9,000,000 shares of common stock. In its first year of business, Sock Market sold 700,000 shares of common stock in January, Year 1. Sock Market bought back 5,000 shares of its stock during December, Year 1. At December 31, Year 1, how many shares of common stock are outstanding?
695,000
At December 31, Year 1, Sea the World Cruises, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $150,000 and liabilities are $50,000. During the year, it did not issue new stock, and it declared and paid $100 dividend. Calculate net income for Year 2.
80,100 150,000-50,000-20,000+100=80,100
Microhard, Inc., issued a $85,000, 10-year, 10% bonds dated January 1, at 100.000. By what amount should the Cash account be debited when the bonds are issued? DO NOT INCLUDE $ IN YOUR ANSWER
85,000
Which item would be reported as a cash flow from investing activities?
Cash paid to buy equipment
On the maturity date, the bondholders of $1,000,000 of bonds that pay 10% annually that were issued at $990,000 will be paid ______.
$1,000,000 plus the last year's interest of $100,000
Dilution Solutions, Inc., repurchased 500 shares of its $2 par value common stock for $10,000. The journal entry to record this transaction includes a ______. (Select all that apply.)
$10,000 credit to Cash $10,000 debit to Treasury Stock
If a company credited Revenues, the debit may have been to ______. (Select all that apply.)
Cash Unearned Revenue Accounts Receivable
On June 30, the board of directors of Dive Inn, Inc., declared a cash dividend of $0.20 per share on its $2 par value, 100,000 common shares outstanding. The date of record is the close of business on July 7, payable July 31. The entry to record the declaration of the dividend on June 30 includes ______. (Select all that apply.)
Credit Dividends Payable 20,000 Debit Dividends $20,000
The entry to record cash collected from customers in advance includes a ______. (Select all that apply.)
Debit to Cash Credit to Unearned Revenue
If a company incorrectly records cash received for services to be provided in the future by increasing Cash and increasing Sales Revenue, how will this error affect net income for the current period?
Liabilities will be too low
For which reconciling items on a bank reconciliation must the company record an entry to adjust its balance to the true cash balance? (Select all that apply.)
NSF check from a customer Bank Service Charge
f a company incorrectly records cash received from customers by increasing Cash and Service Revenue for services that were previously recorded as sales on account, how will this error affect net income for the current period?
Net income will be too high
Which statement below best explains credit terms of 2/10, n/30?
The buyer will receive a 2 percent discount if it pays within 10 days.
The date, which follows the date of declaration, and determines which shareholders will receive the dividend is the ______.
date of record
A capital expenditure _________.
is debited to a long-term asset account
How many of the following accounts are assets? Supplies Expense Retained Earnings Notes Payable Depreciation Expense Common Stock Equipment
1 - Equipment is the only Asset
In Year 1, Stock to the Hand, Inc., issued 10,000 shares of the 100,000 shares of $0.30 par value common stock it is allowed to sell. The total received from issuing its common stock is $100,000. Stock to the Hand bought back 1,000 shares of its stock at a cost of $11 each. It also declared and paid a $0.10 per share dividend to its common shareholders. Stock to the Hand has no preferred stock. What is the number of shares issued?
10,000
Florist Gump, Inc., purchased a truck on January 1, Year 1, at a cost of $89,000. The truck has an estimated useful life of 5 years or 112,000 miles. The estimated salvage value is $16,000. In Year 1, the truck was driven 20,000 miles. In Year 2, the truck was driven 25,000 miles. Accumulated Depreciation using straight-line depreciation at December 31, Year 2, after two years of use, equals (rounded to the nearest dollar) ______.
29,200 89,000-16,000/5= 14,600 14,600 * 2 ( 2 years of use) = 29,200
Which of the following accounts are closed at the end of the accounting period? Allowance for Doubtful Accounts Accumulated Depreciation Depreciation Expense Doubtful Accounts Expense Gain on Sale of Equipment
All of these are closed except for Allowance for Doubtful Accounts and Accumulated Depreciation.
The adjusting entry to record the estimated doubtful accounts includes a credit to ______.
Allowance for Doubtful Accounts
FILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each
Assets- 180 Inventory Liabilities - 180 Accounts Payable SE- No effect
Landon Mars, the company bookkeeper, recorded the $10,000 purchase of land as Rent Expense by decreasing Cash and decreasing Shareholders' Equity. What is the effect of this error on the accounting equation?
Assets- too low Liabilities- correct SE- too low
When Pizza Company sells three $100 gift cards at the beginning of the month, it should record a $300 debit to ______ and a $300 credit to ______.
Cash; Unearned Revenue
Miss Krupt, accountant of Dewey, Cheatum and Howe, increased the company's long-term assets to their fair market values on the balance sheet. Which of the following assumptions/principles did she violate?
Historical Cost
Indicate the financial statement where you would expect to find each line item: Wages Expense Wages Paid to Employees Wages Payable
Wages Expense- Income Statement Wages Paid to Employees- Statement of Cash Wages Payable- Balance Sheet
Goldilocks is the bookkeeper for Three Bears Company. She prepared the company's bank reconciliation at the end of the year and found only two reconciling items: deposits in transit of $3,500 and outstanding checks of $2,850. She then recorded the entry to decrease the company's cash balance for the deposits in transit and increase the company's cash balance for the outstanding checks. Now the company's cash balance is exactly the same as the bank statement balance. As a result of the adjusting entry, the cash shown on Three Bears Company's year-end Balance Sheet will be ______.
too low
If a bond is sold at a premium, Bonds Payable, Net ________.
Decreases each year
Lox, Stock & Bagel, Inc.'s, balance sheet reported the following amounts on its year-end balance sheet: Common Stock, $0.40 par value, 2,000,000 authorized, ___?____ issued $ 50,000 Paid-in Capital in Excess of Par 80,000 Retained Earnings 500,000 How many shares of stock were issued?
125,000 50,000/0.40= 125,000
Dewey, Cheatem & Howe, Inc., received cash from selling 500 shares of its $0.50 par value common stock at $12 per share. Show the effect of issuing stock on the accounting equation:
Assets- 6000 Cash Liabilities - No effect SE- 250 Common Stock, 5,750 Paid in Capital excess of par Common Stock = par value * shares issued Paid in Cap- = (price-par)*shares issued
Match the definition with each element of the accounting equation. Assets Liabilities SE Revenues Expenses
Assets- economic resources that will provide future benefit Liabilities- Creditors' claims to economic resources SE- Owners' claims to economic resources Revenues- Amounts earned by selling goods and services Expenses- Amounts used to generate profits
Given the Accounts Payable T-account, match the correct description with each number. For the beginning (1. or 2.) and ending balances (5. or 6.), select "Blank" for the side that is opposite the account's normal balance.
1- Blank 2- Beginning Balance 3- Payments to Merchandisers 4- Purchases on Account 5- Blank 6- Ending Balance
The following information is available for Speaker City for January: Balance per bank statement at January 31 $10,500 Outstanding checks $2,700 Deposits in transit $1,200 NSF check from customer $150 Bank service charge $8 Determine the true cash balance on the bank reconciliation for Speaker City.
9000 10,500+1,200-2,700
Identify the normal balance of each account below. A) Service Revenue B) Notes Payable C)Interest Expense D)Dividends E)Inventory F)Accumulated Depreciation G)Unearned Revenue
A) credit B) credit C) debit D) debit E)debit F) credit G) credit
On December 1, Garden of Eat'n, Inc., declared a $0.25 per share dividend to its common shareholders to be paid to those on record at the close of business December 31. The dividend is to be paid on January 7 of the following year. On which date should Dividends Payable be credited?
December 1
If a bond is sold at a discount, Interest Expense reported on the Income Statement in subsequent years __________.
Increases each year
Booked Solid Co. received $1,000,000 for the issuance of its stock on January 1. The credit to the Common Stock account was $100,000. Which of the following is true?
Paid-in Capital in Excess of Par is credited for $900,000.
If the market rate of interest is less than the bond's contract (stated) rate of interest, the bonds will sell at _________.
Premium
Paid-in Capital in Excess of Par of $1,000,000 is found in the ______ section of the ______.
shareholders' equity; balance sheet
In Year 1, Stock to the Hand, Inc., issued 60,000 shares of the 400,000 shares of $0.20 par value common stock it is allowed to sell. The total received from issuing its common stock is $200,000. Stock to the Hand bought back 6,000 shares of its stock at a cost of $16 each. On December 31, the last day of Year 1, Stock to the Hand declared and paid a $0.40 per share dividend to its common shareholders. Stock to the Hand has no preferred stock. Paid in Capital in Excess of Par on the balance sheet at December 31, Year 1, equals ______.
188,000
Using the following information for Morris Lest Co. for the year ended December 31, Year 2 and assuming no new stock was issued during the year, Total Assets at December 31, Year 2 equals _______. Revenues for the year ended December 31, Year 2 $850 Net Income for the year ended December 31, Year 2 $370 Retained Earnings, December 31, Year 1 $280 Retained Earnings, December 31, Year 2 $360 Total Shareholders' Equity at December 31, Year 2 $725 Total Liabilities at December 31, Year 1 $605 Total Liabilities at December 31, Year 2 $40
765 Assets = Liabilities + SE = (725+40)= 765
Wok On Water, Inc.'s employees had worked during the first month of May and earned $9,000. Wok on Water had paid $1,000 of the amount owed. How much will be reported as Wages Payable on its May 31 balance sheet?
8,000 9,000-1,000=8,000
Select those statements below that are true about cash dividends. (Select all that apply.)
On the payment date, total assets are decreased On the declaration date, liabilities are increased
Land is purchased at a cost of $7,000. At year end, based on appraised values, the land's value increased to $23,000. At what amount should the land be reported on the year-end balance sheet?
$7000
In Year 1, Stock to the Hand, Inc., issued 100,000 shares of its 1,000,000 shares of $0.50 par value common stock it is allowed to sell. The total received from issuing its common stock is $500,000. Stock to the Hand bought back 2,000 shares of its stock at a cost of $7 each. On December 31, the last day of Year 1, Sock to the Hand declared and paid a $0.70 dividend to its common shareholders. Sock to the Hand has no preferred stock. Treasury stock on the balance sheet at December 31, Year 1 equals ______.
(14,000)
If a company debited an expense, the credit may have been to ______. (Select all that apply.)
1) a payable account such as Supplies Payable, Utilities Payable, Interest Payable 2) an asset such as Prepaid Insurance, Supplies, Inventory, or Accumulated Depreciation 3) Cash
Ditchits, Inc., sold its equipment for $7,000 that cost $600,000 and had accumulated depreciation equal to $594,000 at the time of the sale. Calculate the gain or loss on the sale of this equipment.
1,000 600,000-594,000= 6,000 sold for 7,000 gain of 1000
The statement of shareholders' equity reports the ______.
changes that occurred in shareholders' equity during the accounting period
Booked Solid, Inc., has the following account balances at the end of the year before adjustments: Accounts Receivable $50,000 Allowance for Doubtful Accounts $400 credit balance Sales $500,000 Doubtful Accounts Expense $0 Management estimates that 6% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, what is total Doubtful Accounts Expense on the income statement for the year?
2,600 = answer 50,000*0.06=3000 3000- credit balance (400) = 2,600
On January 1, Year 1, Sew What, Inc., signed a $1,000,000, 7%, 10-year mortgage note to buy a new warehouse. The note will be repaid in 10 equal annual installments of $142,378 beginning on December 31, Year 1. Record the amounts in the Notes Payable T-account below for the year ended December 31, Year 1, given this information: Notes Payable [a] [c] [b] [d] [e] [f] Do not include $ signs in your answers. Use the first row to record the issuance of the note and put 0 on the opposite side. Use the second row to record the installment payment and put 0 on the opposite side. Use the last row to record the ending balance and put 0 on the opposite side.
a - 0 b- 1,000,000 c- 72378 d- 0 e- 0 f- 927622
Par for the Course pays $4,500 cash for T-shirts from a supplier. This transaction ______.
is an operating activity
Melon-Cauli Grocers, Inc. had a $10,000 balance in Accounts Payable at the beginning of the month. During the month, it made $60,000 of purchases on account due within one month and paid $40,000 of the amounts owed. The Accounts Payable balance at the end of the month has a ______ balance.
30,000 credit
Deja Brew, Inc. had Accounts Receivable of $400,000 and an Allowance for Doubtful Accounts with a credit balance of $20,000. Deja Brew then writes off a $5,000 account receivable from Royal Flush Company which went bankrupt. The net realizable values of the accounts receivable before and after this write-off are __________.
380,000 before and 380,000 after
In its first month of business, Sea World Cruises, Inc., collected $38,000 from customers in advance during May. At May 31, it had a balance in its Unearned Revenue of $4,000. What is the amount of Revenue earned that had been collected in advance?
42,000 38,000+4,000 = 42,000
Common Stock, $1 par value, 1,000,000 authorized, 150,000 shares issued $ ? Paid-in Capital in Excess of Par 220,000 Retained Earnings 130,000 Treasury Stock (10,000 shares at $4 each) ? Shareholders' Equity $___?___ Shareholders' Equity equals $_______.
460,000 150,000+220,000+130,000-40,000
The following data was extracted from the records of Shear-Lock Combs, Inc.: Sales Revenue 400 units at $35 per unit Purchases 300 units at $20 per unit Beginning Inventory 150 units at $16 per unit What is the gross profit using the FIFO method?
6,600 Gross Profit = Sales - Cost of Goods Sold =$6,600 (= $14,000 - ((150 x $16) + (250 x $20)).
On December 1, Morris Lest, Inc., borrowed $75,000 by issuing a 6-month note at 12%. Interest Payable at December 31 equals ______. Round your answer to the nearest dollar.
750
Indicate whether each activity for Anudu Hair Salon would be classified as an operating, investing, or financing activity. A) Received $40,000 from its owners in exchange for common stock. B) Purchased a barber's chair and sink for $35,000. C) Paid $100 for advertising in the local paper.
A) Financing B) Investing C) Operating
Florist Gump, Inc., uses the FIFO method and had the following inventory activity for June: Beginning Inventory, June 1 500 units @ $3 each Purchase, June 15 100 units @ $3.50 each Sale, June 25 200 units @ $7 each Record the entry for the sale of inventory on account for June 25.
Assets - Debit Accounts Receivable and Credit Inventory Liabilities - No effect SE- Credit Sales and Debit Cost of Goods Sold
On December 1, the board of directors of Buy & Large, Inc., declared a cash dividend of $2 per share on the 300,000 common shares outstanding on record at December 31, payable January 10 of the following year. No other dividends were declared in either year. Show the effect on the accounting equation of the entry to be recorded on December 31:
Assets - no effect Liabilities- no effect SE- no effect because the payment date isn't until January 10
On January 1, Year 1, Pasta Disasta, Inc., issued a $400,000, 11%, 4-year installment note. On December 31, Year 2, Pasta Disasta made its second annual installment payment of $163,686. The journal entry to record the second installment payment includes:
Cash - credit $163,686 Interest Expense- debit $30,835 Notes Payable- debit $132,851
Doolittle & Dalley, Inc., collected $400 owed from customers for services previously recorded. Record the entry. DO NOT INCLUDE $ SIGNS IN YOUR ANSWER.
Cash 400 Accounts Receivable 400
Select all accounts that are closed at the end of an accounting period. Depreciation Expense Retained Earnings Wages Expense Dividends Unearned Revenues Wages Payable Revenues Accumulated Depreciation
Depreciation Expense Wages Expense Dividends Revenue (temporary accounts)
Shear Lock Combs, Inc., manufactures combs. On January 1, Year 1, it purchased a $400,000 machine with an estimated useful life of 5 years or 500,000 combs and a $50,000 salvage value. The machine actually produced 120,000 combs in Year 1 and 110,000 combs in Year 2. Record the adjusting entry to record depreciation for Year 2 using the straight-line method:
Depreciation Expense 70,000 Accumulated Depreciation 70,000 400,000-50,000/5
Ima Rich purchased 100 shares of Stockits, Inc.'s $1 par value common stock for $5 per share. Which statements are true regarding the effect of this transaction on Stockits' financial statements? (Select all that apply.)
The financing activities section of the statement of cash flows increases. Shareholders' equity on the balance sheet increases.
Wok On Water, Inc.'s employees had worked during the first month of May and earned $5,000. Wok on Water had paid $2,000 of the amount owed. How much will be reported as Wages Payable on its May 31 balance sheet?
3000
In its first month of business, Eel Electronics sold $5,000 of goods to customers of which $3,000 has been collected. Using accrual accounting, Eel Electronics should report revenues of ______.
5,000 amount earned = revenue
An end-of-period adjusting entry that decreases Unearned Revenue most likely will ______.
Increase revenue
Florist Gump, Inc., purchased $10,000 of merchandise on account with discount terms of 2/10, n/30, FOB destination. Using the net method, what is the entry to record the purchase? DO NOT INCLUDE $ IN YOUR ANSWER.
Inventory 9800 Accounts Payable 9800 10,000(0.98) = 9800
Haira Noia, Inc., issued $10,000 of stock to its owners for cash. It recorded the transaction by increasing assets and increasing liabilities. Which of the following statements are correct? (Select all that apply.)
Liabilities will be too high Shareholders equity will be too low
On December 31, Year 1, Accounts Payable had a balance of $10,000. During Year 2, there were $500,000 purchases on account and $490,000 payments of Accounts Payable. The December 31, Year 2, balance must equal $______. Do not include a $ in your answer.
20,000
On a bank reconciliation, which of the following are typical reconciling items the bank would not know about because of time lags? (Select all that apply.)
Outstanding checks Deposits in transit
