ch's 3 and 4

86. Korte Company reported the following information for 2020 Sales revenue $2,500,000 Cost of goods sold 1,750,000 Operating expenses 275,000 Unrealized holding gain on available-for-sale debt securities 85,000 Cash dividends received on the securities 10,000 For 2020, Korte would report comprehensive income of a. $570,000. b. $560,000. c. $485,000. d. $85,000.

a. $570,000.

83. Leonard Corporation reports the following information: Correction of overstatement of depreciation expense in prior years, net of tax $ 645,000 Dividends declared 480,000 Net income 1,500,000 Retained earnings, 1/1/20, as reported 6,000,000 Leonard should report retained earnings, 12/31/20, at a. $5,355,000. b. $6,375,000. c. $7,020,000. d. $7,665,000.

d. $7,665,000.

84. Olmsted Company has the following items: common stock, $950,000; treasury stock, $105,000; deferred income taxes, $125,000 and retained earnings, $454,000. What total amount should Olmsted Company report as stockholders' equity? a. $1,174,000. b. $1,299,000. c. $1,424,000. d. $1,549,000.

b. $1,299,000.

92. Chen Company's account balances at December 31, 2020 for Accounts Receivable and the Allowance for Doubtful Accounts are $800,000 debit and $1,500 credit. Sales during 2020 were $2,750,000. It is estimated that 1% of sales will be uncollectible. The adjusting entry would include a credit to the allowance account for a. $29,000. b. $27,500. c. $26,000. d. $8,000.

b. $27,500.

88. Lohmeyer Corporation reports: Cash provided by operating activities $320,000 Cash used by investing activities 110,000 Cash provided by financing activities 140,000 Beginning cash balance 90,000 What is Lohmeyer's ending cash balance? a. $410,000. b. $440,000. c. $570,000. d. $660,000.

b. $440,000.

81. Moorman Corporation reports the following information: Correction of understatement of depreciation expense in prior years, net of tax $ 1,290,000 Dividends declared 960,000 Net income 3,000,000 Retained earnings, 1/1/20, as reported 6,000,000 Moorman should report retained earnings, 12/31/20, at a. $4,710,000. b. $6,750,000. c. $8,040,000. d. $9,330,000.

b. $6,750,000.

95. Huge Cart Inc. gives you the following information pertaining to the year 2020. Net sales $850,000 Cost of goods sold 500,000 Current assets 500,000 Current liabilities 250,000 Average total assets 1,000,000 Total liabilities 550,000 Net income 150,000 The asset turnover ratio of Huge Cart Inc. is a. 0.50 b. 0.15 c. 0.85 d. 1.18

c. 0.85

85. Madsen Company reported the following information for 2020: Sales revenue $2,040,000 Cost of goods sold 1,400,000 Operating expenses 220,000 Unrealized holding gain on available-for-sale debt securities 120,000 Cash dividends received on the securities 8,000 For 2020, Madsen would report other comprehensive income of a. $428,000. b. $420,000. c. $128,000. d. $120,000.

d. $120,000.

76. In 2020, Linz Corporation reported a discontinued operations loss of $1,200,000, net of tax. It declared and paid preferred stock dividends of $120,000 and common stock dividends of $360,000. During 2020, Linz had a weighted average of 500,000 common shares outstanding. As a result of the discontinued operations loss, net of tax, the earnings per share would decrease by a. $1.44 b. $1.68 c. $2.16 d. $2.40

d. $2.40

*101. The income statement of Dolan Corporation for 2020 included the following items: Interest revenue $141,000 Salaries and wages expense 210,000 Insurance expense 21,200 The following balances have been excerpted from Dolan Corporation's balance sheets: December 31, 2020 December 31, 2019 Interest receivable $18,200 $15,000 Salaries and wages payable 17,800 8,400 Prepaid insurance 2,200 3,000 The cash paid for insurance premiums during 2020 was a. $19,000. b. $18,200. c. $22,000. d. $20,400.

d. $20,400.

96. Huge Cart Inc. gives you the following information pertaining to the year 2020. Net sales $850,000 Cost of goods sold 500,000 Current assets 500,000 Current liabilities 250,000 Average total assets 1,000,000 Total liabilities 550,000 Net income 150,000 The rate of return on assets Huge Cart Inc. is: a. 85.0%. b. 30.0%. c. 17.6%. d. 15.0%.

d. 15.0%.

*109. Gibson Company paid $24,000 on June 1, 2020 for a two-year insurance policy and recorded the entire amount as Insurance Expense. The December 31, 2020 adjusting entry is a. debit Insurance Expense and credit Prepaid Insurance, $7,000. b. debit Insurance Expense and credit Prepaid Insurance, $17,000. c. debit Prepaid Insurance and credit Insurance Expense, $7,000 d. debit Prepaid Insurance and credit Insurance Expense, $17,000.

d. debit Prepaid Insurance and credit Insurance Expense, $17,000.

83. For Randolph Company, the following information is available: Capitalized leases $560,000 Copyrights 240,000 Long-term receivables 210,000 In Randolph's balance sheet, intangible assets should be reported at a. $240,000. b. $210,000. c. $800,000. d. $770,000.

a. $240,000.

80. For Grimmett Company, the following information is available: Capitalized leases $600,000 Trademarks 275,000 Long-term receivables 225,000 In Grimmett's balance sheet, intangible assets should be reported at a. $275,000. b. $500,000. c. $825,000. d. $875,000.

a. $275,000.

73. Palomo Corp has a tax rate of 20 percent and income before non-operating items of $1,785,000. It also has the following items (gross amounts). Unusual gain $ 115,000 Loss from discontinued operations 915,000 Dividend revenue 30,000 Income increasing prior period adjustment 370,000 What is the amount of income tax expense Palomo would report on its income statement? a. $386,000 b. $203,000 c. $277,000 d. $363,000

a. $386,000

80. Moorman Corporation reports the following information: Correction of understatement of depreciation expense in prior years, net of tax $ 1,290,000 Dividends declared 960,000 Net income 3,000,000 Retained earnings, 1/1/20, as reported 6,000,000 Moorman should report retained earnings, 1/1/20, as adjusted at a. $4,710,000. b. $6,000,000. c. $7,290,000. d. $9,330,000.

a. $4,710,000.

62. Ortiz Co. had the following account balances: Sales revenue $ 440,000 Cost of goods sold 220,000 Salaries and wages expense 30,000 Depreciation expense 60,000 Dividend revenue 12,000 Utilities expense 24,000 Rent revenue 60,000 Interest expense 36,000 Sales returns and allow. 33,000 Advertising expense 39,000 What would Ortiz report as total revenues in a single-step income statement? a. $479,000 b. $ 70,000 c. $472,000 d. $440,000

a. $479,000

74. Lantos Company had a 20 percent tax rate. Given the following pre-tax amounts, what would be the income tax expense reported on the face of the income statement? Sales revenue $ 1,000,000 Cost of goods sold 600,000 Salaries and wages expense 80,000 Depreciation expense 110,000 Dividend revenue 90,000 Utilities expense 10,000 Discontinued operations loss 100,000 Interest expense 20,000 a. $54,000 b. $34,000 c. $36,000 d. $16,000

a. $54,000

90. During 2020 the DLD Company had a net income of $85,000. In addition, selected accounts showed the following changes: Accounts Receivable $3,000 increase Accounts Payable 1,000 increase Buildings 4,000 decrease Depreciation Expense 1,500 increase Bonds Payable 8,000 increase What was the amount of cash provided by operating activities? a. $84,500 b. $85,000 c. $86,500 d. $94,500

a. $84,500

89. For the year ended December 31, 2020, Transformers Inc. reported the following: Net income $300,000 Preferred dividends declared 50,000 Common dividend declared 10,000 Unrealized holding loss, net of tax 5,000 Retained earnings, beginning balance 400,000 Common stock 200,000 Accumulated Other Comprehensive Income, Beginning Balance 25,000 What would Transformers report as total stockholders' equity? a. $860,000 b. $840,000 c. $640,000 d. $600,000

a. $860,000

69. At Ruth Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation for 2018 was found to be understated by $150,000. (2) A strike by the employees of a supplier resulted in a loss of $125,000. (3) The inventory at December 31, 2018 was overstated by $200,000. The effect of these events and transactions on 2020 income from continuing operations net of tax would be a. ($100,000). b. ($220,000). c. ($380,000). d. ($280,000).

a. ($100,000).

93. Packard Corporation reports the following information: Net cash provided by operating activities $335,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends declared 60,000 Capital expenditures 110,000 Payments of debt 35,000 Packard's cash debt coverage is a. 1.34. b. 2.23. c. 3.35. d. 3.05.

a. 1.34.

68. If plant assets of a manufacturing company are sold at a gain of $1,800,000 with related taxes of $540,000, and the gain is not considered unusual or infrequent, the income statement for the period would disclose these effects as a. a gain of $1,800,000 and an increase in income tax expense of $540,000. b. operating income net of applicable taxes, $1,260,000. c. a prior period adjustment net of applicable taxes, $1,260,000. d. a discontinued operations gain net of applicable taxes, $1,260,000.

a. a gain of $1,800,000 and an increase in income tax expense of $540,000.

*108. Lopez Company received $18,000 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is a. debit Rent Revenue and credit Unearned Rent Revenue, $4,500. b. debit Rent Revenue and credit Unearned Rent Revenue, $13,500. c. debit Unearned Rent Revenue and credit Rent Revenue, $4,500. d. debit Unearned Rent Revenue and credit Rent Revenue, $13,500.

a. debit Rent Revenue and credit Unearned Rent Revenue, $4,500.

64. For Mortenson Company, the following information is available: Cost of goods sold $390,000 Dividend revenue 15,000 Income tax expense 36,000 Operating expenses 138,000 Sales revenue 600,000 In Mortenson's single-step income statement, gross profit a. should not be reported. b. should be reported at $51,000. c. should be reported at $210,000. d. should be reported at $225,000.

a. should not be reported.

75. In 2020, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of $60,000. During 2020, Esther had a weighted average of 300,000 common shares outstanding. Compute Esther's 2020 earnings per share. a. $1.30 b. $1.50 c. $2.00 d. $2.50

b. $1.50

*99. The income statement of Dolan Corporation for 2020 included the following items: Interest revenue $141,000 Salaries and wages expense 210,000 Insurance expense 21,200 The following balances have been excerpted from Dolan Corporation's balance sheets: December 31, 2020 December 31, 2019 Interest receivable $18,200 $15,000 Salaries and wages payable 17,800 8,400 Prepaid insurance 2,200 3,000 The cash received for interest during 2020 was a. $122,800. b. $137,800. c. $141,000. d. $144,200.

b. $137,800.

94. Packard Corporation reports the following information: Net cash provided by operating activities $335,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends paid 60,000 Capital expenditures 110,000 Payments of debt 35,000 Packard's free cash flow is a. $130,000. b. $165,000. c. $225,000. d. $275,000.

b. $165,000.

81. Houghton Company has the following items: common stock, $1,600,000; treasury stock, $210,000; deferred income taxes, $250,000 and retained earnings, $780,000. What total amount should Houghton Company report as stockholders' equity? a. $1,390,000. b. $2,170,000. c. $2,420,000. d. $2,590,000.

b. $2,170,000.

*100. The income statement of Dolan Corporation for 2020 included the following items: Interest revenue $141,000 Salaries and wages expense 210,000 Insurance expense 21,200 The following balances have been excerpted from Dolan Corporation's balance sheets: December 31, 2020 December 31, 2019 Interest receivable $18,200 $15,000 Salaries and wages payable 17,800 8,400 Prepaid insurance 2,200 3,000 The cash paid for salaries and wages during 2020 was a. $219,400. b. $200,600. c. $201,600. d. $227,800.

b. $200,600.

72. Arreaga Corp. has a tax rate of 20 percent and income before non-operating items of $1,392,000. It also has the following items (gross amounts). Unusual loss $222,000 Discontinued operations loss 606,000 Gain on disposal of equipment 48,000 Change in accounting principle increasing prior year's income 318,000 What is the amount of income tax expense Arreaga would report on its income statement? a. $278,400 b. $243,600 c. $297,600 d. $186,000

b. $243,600

89. Keisler Corporation reports: Cash provided by operating activities $280,000 Cash used by investing activities 110,000 Cash provided by financing activities 140,000 Beginning cash balance 90,000 What is Keisler's ending cash balance? a. $370,000. b. $400,000. c. $530,000. d. $620,000.

b. $400,000.

91. Harding Corporation reports the following information: Net income $530,000 Depreciation expense 140,000 Increase in accounts receivable 60,000 Harding should report cash provided by operating activities of a. $330,000. b. $450,000. c. $610,000. d. $730,000.

c. $610,000.

70. At Ruth Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation for 2018 was found to be understated by $120,000. (2) A strike by the employees of a supplier resulted in a loss of $100,000. (3) The inventory at December 31, 2018 was overstated by $160,000. (4) A disposal of a component of the business resulted in a $2,000,000 loss. The effect of these events and transactions on 2020 net income net of tax would be a. ($47,000). b. ($1,680,000). c. ($1,776,000). d. ($1,904,000).

b. ($1,680,000).

*107. Garcia Corporation received cash of $60,000 on August 1, 2020 for one year's rent in advance and recorded the transaction with a credit to Rent Revenue. The December 31, 2020 adjusting entry is a. debit Rent Revenue and credit Unearned Rent Revenue, $25,000. b. debit Rent Revenue and credit Unearned Rent Revenue, $35,000. c. debit Unearned Rent Revenue and credit Rent Revenue, $25,000. d. debit Cash and credit Unearned Rent Revenue, $35,000.

b. debit Rent Revenue and credit Unearned Rent Revenue, $35,000.

97. During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets. Supplies in the amount of $28,800 were purchased. Actual year-end supplies amounted to $6,600. The adjusting entry for store supplies will a. increase net income by $22,200. b. increase expenses by $22,200. c. decrease supplies by $6,600. d. debit Accounts Payable for $6,600.

b. increase expenses by $22,200.

85. Presented below are data for Antwerp Corp. 2020 2021 Assets, January 1 $4,200 $5,040 Liabilities, January 1 2,520 ? Stockholders' Equity, Jan. 1 ? ? Dividends 840 630 Common Stock 756 672 Stockholders' Equity, Dec. 31 ? ? Net Income 840 672 Stockholders' Equity at January 1, 2020 is a. $1,056. b. $1,140. c. $1,680. d. $2,436.

c. $1,680.

67. Gross billings for merchandise sold by Lang Company to its customers last year amounted to $12,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Lang Company were a. $12,720,000. b. $12,350,000. c. $12,175,000. d. $12,035,000.

c. $12,175,000.

79. Fulton Company owns the following investments: Trading securities (fair value) $160,000 Available-for-sale securities (fair value) 70,000 Held-to-maturity securities (amortized cost) 94,000 Fulton will report investments in its current assets section of a. $0. b. exactly $160,000. c. $160,000 or an amount greater than $160,000, depending on the circumstances. d. exactly $230,000. (ch5)

c. $160,000 or an amount greater than $160,000, depending on the circumstances.

66. The following information was extracted from the 2020 financial statements of Max Company: Income from continuing operations before income tax $705,000 Selling and administrative expenses 480,000 Income from continuing operations 495,000 Gross profit 1,350,000 The amount reported for other expenses and losses is a. $210,000 b. $15,000. c. $165,000. d. $225,000.

c. $165,000.

78. Benedict Corporation reports the following information: Net income $750,000 Dividends on common stock $210,000 Dividends on preferred stock $ 90,000 Weighted average common shares outstanding 250,000 Benedict should report earnings per share of a. $1.80. b. $2.16 c. $2.64. d. $3.00.

c. $2.64.

87. For the year ended December 31, 2020, Transformers Inc. reported the following: Net income $300,000 Preferred dividends declared 50,000 Common dividend declared 10,000 Unrealized holding loss, net of tax 5,000 Retained earnings 400,000 Common stock 200,000 Accumulated Other Comprehensive Income, Beginning Balance 25,000 What would Transformers report as its ending balance of Accumulated Other Comprehensive Income? a. $30,000 b. $25,000 c. $20,000 d. $5,000

c. $20,000

*104. Olsen Company paid or collected during 2020 the following items: Insurance premiums paid $ 30,800 Interest collected 69,800 Salaries and wages paid 280,400 The following balances have been excerpted from Olsen's balance sheets: December 31, 2020 December 31, 2019 Prepaid insurance $ 2,400 $ 3,000 Interest receivable 7,400 5,800 Salaries and wages payable 24,600 21,200 Salaries and wages expense on the income statement for 2020 was

c. $283,800.

79. Norling Corporation reports the following information: Net income $750,000 Dividends on common stock $210,000 Dividends on preferred stock $ 90,000 Weighted average common shares outstanding 200,000 Norling should report earnings per share of a. $2.25. b. $2.70 c. $3.30. d. $3.75.

c. $3.30.

*102. Olsen Company paid or collected during 2020 the following items: Insurance premiums paid $ 30,800 Interest collected 69,800 Salaries paid 280,400 The following balances have been excerpted from Olsen's balance sheets: December 31, 2020 December 31, 2019 Prepaid insurance $ 2,400 $ 3,000 Interest receivable 7,400 5,800 Salaries and wages payable 24,600 21,200 The insurance expense on the income statement for 2020 was a. $25,400. b. $30,200. c. $31,400. d. $36,200.

c. $31,400.

91. Brown Company's account balances at December 31, 2020 for Accounts Receivable and the related Allowance for Doubtful Accounts are $920,000 debit and $2,100 credit, respectively. From an aging of accounts receivable, it is estimated that $39,000 of the December 31 receivables will be uncollectible. The necessary adjusting entry would include a credit to the allowance account for a. $39,000. b. $41,100. c. $36,900. d. $2,100.

c. $36,900.

86. Presented below are data for Bandkok Corp. 2020 2021 Assets, January 1 $8,850 $9,720 Liabilities, January 1 4,860 ? Stockholders' Equity, Jan. 1 ? ? Dividends 1,620 1,215 Common Stock 1,458 1,296 Stockholders' Equity, Dec. 31 ? ? Net Income 1,920 1,296 Stockholders' Equity at January 1, 2021 is a. $5,748. b. $3,990. c. $4,290. d. $5,910.

c. $4,290.

63. Ortiz Co. had the following account balances: Sales revenue $ 440,000 Cost of goods sold 220,000 Salaries and wages expense 30,000 Depreciation expense 60,000 Dividend revenue 12,000 Utilities expense 24,000 Rent revenue 60,000 Interest expense 36,000 Sales returns and allow. 33,000 Advertising expense 39,000 What would Ortiz report as total expenses in a single-step income statement?

c. $409,000

92. Sauder Corporation reports the following information: Net income $380,000 Depreciation expense 70,000 Increase in accounts receivable 30,000 Sauder should report cash provided by operating activities of a. $280,000. b. $340,000. c. $420,000. d. $480,000.

c. $420,000.

82. Leonard Corporation reports the following information: Correction of overstatement of depreciation expense in prior years, net of tax $ 645,000 Dividends declared 480,000 Net income 1,500,000 Retained earnings, 1/1/20, as reported 6,000,000 Leonard should report retained earnings, 1/1/20, as adjusted at a. $5,355,000. b. $6,000,000. c. $6,645,000. d. $7,665,000.

c. $6,645,000.

88. For the year ended December 31, 2020, Transformers Inc. reported the following: Net income $300,000 Preferred dividends declared 50,000 Common dividend declared 10,000 Unrealized holding loss, net of tax 5,000 Retained earnings, beginning balance 400,000 Common stock 200,000 Accumulated Other Comprehensive Income, Beginning Balance 25,000 What would Transformers report as the ending balance of Retained Earnings? a. $695,000 b. $665,000 c. $640,000 d. $635,000

c. $640,000

*103. Olsen Company paid or collected during 2020 the following items: Insurance premiums paid $ 30,800 Interest collected 69,800 Salaries paid 280,400 The following balances have been excerpted from Olsen's balance sheets: December 31, 2020 December 31, 2019 Prepaid insurance $ 2,400 $ 3,000 Interest receivable 7,400 5,800 Salaries and wages payable 24,600 21,200 The interest revenue on the income statement for 2020 was a. $56,600. b. $68,200. c. $71,400. d. $83,000.

c. $71,400.

71. During 2020, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of $3,000,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $3,500,000 in 2020. How should these facts be reported in Lopez's income statement for 2020? Total Amount to be Included in Income from Results of Continuing Operations Discontinued Operations a. $3,500,000 loss $3,000,000 gain b. 500,000 loss 0 c. 0 500,000 loss d. 3,000,000 gain 3,500,000 loss

c. 0, 500,000 loss

94. A company receives interest on a $90,000, 8%, 5-year note receivable each April 1. At December 31, 2020, the following adjusting entry was made to accrue interest receivable: Interest Receivable ............................................................... 5,400 Interest Revenue ...................................................... 5,400 Assuming that the company does not use reversing entries, what entry should be made on April 1, 2021 when the annual interest payment is received? a. Cash ..................................................................................... 1,800 Interest Revenue ...................................................... 1,800 b. Cash ..................................................................................... 5,400 Interest Receivable ................................................... 5,400 c. Cash ..................................................................................... 7,200 Interest Receivable ................................................... 5,400 Interest Revenue ...................................................... 1,800 d. Cash ..................................................................................... 7,200 Interest Revenue ...................................................... 7,200

c. Cash 7,200 Interest Receivable ................................................... 5,400 Interest Revenue ...................................................... 1,800

93. Starr Corporation loaned $600,000 to another corporation on December 1, 2020 and received a 3-month, 8% interest-bearing note with a face value of $600,000. What adjusting entry should Starr make on December 31, 2020? a. Debit Interest Receivable and credit Interest Revenue, $12,000. b. Debit Cash and credit Interest Revenue, $4,000. c. Debit Interest Receivable and credit Interest Revenue, $4,000. d. Debit Cash and credit Interest Receivable, $12,000.

c. Debit Interest Receivable and credit Interest Revenue, $4,000.

87. Mune Company recorded journal entries for the declaration of $250,000 of dividends, the $160,000 increase in accounts receivable for services rendered, and the purchase of equipment for $105,000. What net effect do these entries have on stockholders' equity? a. Decrease of $355,000. b. Decrease of $195,000. c. Decrease of $90,000. d. Increase of $55,000.

c. Decrease of $90,000.

*106. At the end of 2020, Drew Company made four adjusting entries for the following items: 1. Depreciation expense, $25,000. 2. Expired insurance, $2,200 (originally recorded as prepaid insurance.) 3. Interest payable, $6,000. 4. Rent receivable, $10,000. In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed is (are) a. Entry No. 3 only. b. Entry No. 4 only. c. Entry No. 3 and No. 4. d. Entry No. 2, No. 3 and No. 4.

c. Entry No. 3 and No. 4.

86. Maso Company recorded journal entries for the issuance of common stock for $200,000, the payment of $65,000 on accounts payable, and the payment of salaries expense of $105,000. What net effect do these entries have on stockholders' equity? a. Increase of $200,000. b. Increase of $135,000. c. Increase of $95,000. d. Increase of $30,000.

c. Increase of $95,000.

89. Panda Corporation paid cash of $120,000 on June 1, 2020 for one year's rent in advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2020 adjusting entry is a. debit Prepaid Rent and credit Rent Expense, $50,000. b. debit Prepaid Rent and credit Rent Expense, $70,000. c. debit Rent Expense and credit Prepaid Rent, $70,000. d. debit Prepaid Rent and credit Cash, $50,000.

c. debit Rent Expense and credit Prepaid Rent, $70,000.

88. Pappy Corporation received cash of $36,000 on September 1, 2020 for one year's rent in advance and recorded the transaction with a credit to Unearned Rent Revenue. The December 31, 2020 adjusting entry is a. debit Rent Revenue and credit Unearned Rent Revenue, $12,000. b. debit Rent Revenue and credit Unearned Rent Revenue, $24,000. c. debit Unearned Rent Revenue and credit Rent Revenue, $12,000. d. debit Cash and credit Unearned Rent Revenue, $24,000.

c. debit Unearned Rent Revenue and credit Rent Revenue, $12,000.

65. For Mortenson Company, the following information is available: Cost of goods sold $390,000 Dividend revenue 15,000 Income tax expense 36,000 Operating expenses 138,000 Sales revenue 600,000 In Mortenson's multiple-step income statement, gross profit a. should not be reported b. should be reported at $51,000. c. should be reported at $210,000. d. should be reported at $225,000.

c. should be reported at $210,000.

82. Kohler Company owns the following investments: Trading securities (fair value) $120,000 Available-for-sale securities (fair value) 90,000 Held-to-maturity securities (amortized cost) 94,000 Kohler will report securities in its long-term investments section of a. exactly $210,000. b. exactly $214,000. c. exactly $294,000. d. $184,000 or an amount less than $184,000, depending on the circumstances.

d. $184,000 or an amount less than $184,000, depending on the circumstances.

84. The following information was extracted from the accounts of Essex Corporation at December 31, 2020: CR(DR) Total reported income since incorporation $4,800,000 Total cash dividends paid (2,400,000) Unrealized holding loss on available-for-sale debt securities (360,000) Total stock dividends distributed (600,000) Prior period adjustment, recorded January 1, 2020 225,000 What should be the balance of retained earnings at December 31, 2020? a. $1,665,000. b. $1,800,000. c. $2,940,000. d. $2,025,000.

d. $2,025,000.

77. In 2020, Benfer Corporation reported net income of $210,000. It declared and paid common stock dividends of $24,000 and had a weighted average of 100,000 common shares outstanding. Compute the earnings per share to the nearest cent. a. $2.34 b. $0.48 c. $1.86 d. $2.10

d. $2.10

87. Presented below are data for Caracas Corp. 2017 2018 Assets, January 1 $6,840 ? Liabilities, January 1 ? $4,104 Stockholders' Equity, Jan. 1 ? $4,125 Dividends 855 969 Common Stock 912 975 Stockholders' Equity, Dec. 31 ? 3,399 Net Income 1,026 ? Net income for 2021 is a. $726 income. b. $726 loss. c. $243 loss. d. $243 income.

d. $243 income.

*95. A company receives interest on a $90,000, 8%, 5-year note receivable each April 1. At December 31, 2020, the following adjusting entry was made to accrue interest receivable: Interest Receivable ............................................................... 5,400 Interest Revenue ...................................................... 5,400 Assuming that the company does use reversing entries, what entry should be made on April 1, 2021 when the annual interest payment is received? a. Cash ..................................................................................... 1,800 Interest Revenue ...................................................... 1,800 b. Cash ..................................................................................... 5,400 Interest Receivable ................................................... 5,400 c. Cash .................................................................................... 7,200 Interest Receivable ................................................... 5,400 Interest Revenue ...................................................... 1,800 d. Cash ..................................................................................... 7,200 Interest Revenue....................................................... 7,200

d. Cash 7,200 Interest Revenue....................................................... 7,200

*105. The Supplies account had a balance at the beginning of year 3 of $8,000 (before the reversing entry). Payments for purchases of supplies during year 3 amounted to $50,000 and were recorded as expense. A physical count at the end of year 3 revealed supplies costing $14,500 were on hand. Reversing entries are used by this company. The required adjusting entry at the end of year 3 will include a debit to: a. Supplies Expense for $6,500. b. Supplies for $6,500. c. Supplies Expense for $43,500. d. Supplies for $14,500.

d. Supplies for $14,500.

96. Murphy Company sublet a portion of its warehouse for five years at an annual rental of $75,000, beginning on May 1, 2020. The tenant, Sheri Charter, paid one year's rent in advance, which Murphy recorded as a credit to Unearned Rent Revenue. Murphy reports on a calendar-year basis. The adjustment on December 31, 2020 for Murphy should be a. No entry b. Unearned Rent Revenue ..................................................... 25,000 Rent Revenue ........................................................... 25,000 c. Rent Revenue ....................................................................... 25,000 Unearned Rent Revenue ......................................... 25,000 d. Unearned Rent Revenue ..................................................... 50,000 Revenue Revenue..................................................... 50,000

d. Unearned Rent Revenue ..................................................... 50,000 Revenue Revenue..................................................... 50,000

98. Big-Mouth Frog Corporation had revenues of $330,000, expenses of $200,000, and dividends of $45,000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a a. debit of $85,000. b. debit of $130,000. c. credit of $85,000. d. credit of $130,000.

d. credit of $130,000.

90. Tate Company purchased equipment on November 1, 2020 and gave a 3-month, 9% note with a face value of $80,000. The December 31, 2020 adjusting entry is a. debit Interest Expense and credit Interest Payable, $7,200. b. debit Interest Expense and credit Interest Payable, $1,800. c. debit Interest Expense and credit Cash, $1,200. d. debit Interest Expense and credit Interest Payable, $1,200.

d. debit Interest Expense and credit Interest Payable, $1,200.