Exam 1- bus 150

A company reported total equity of $173,000 at the beginning of the year. The company reported $238,000 in revenues and $179,000 in expenses for the year. Liabilities at the end of the year totaled $106,000. What are the total assets of the company at the end of the year?

$338,000 Assets = $106,000 + (Beginning Equity + Revenues − Expenses) Assets = $106,000 + ($173,000 + $238,000 − $179,000) Assets = $106,000 + $232,000; Assets = $338,000

Change in Assets=

Change in liabilities+ Change in equity

High Step Shoes had annual revenues of $193,000, expenses of $107,700, and dividends of $21,200 during the current year. The retained earnings account before closing had a balance of $305,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

Debit Income Summary $85,300; credit Retained Earnings $85,300

Net income =

Revenues - Expenses

debt ratio =

Total Liabilities/Total Assets x 100

On July 1 of the current calendar year, Olive Company paid $8,200 cash for management services to be performed over a two-year period beginning July 1. The adjusting entry on December 31 of the current year for Olive would include:

a debit to an expense and a credit to a prepaid expense for $2,050

if a company receives money from a client for services provided

assets increase and equity increases

if a company purchases equipment on credit

assets increase and liabilities increase

Ending equity=

beginning equity + net income

Ending equity=

beginning equity + total revenues + total expenses

a business receives money from a client billed in a previous month for services provided

cash debit/accounts receivable credit

a business collected cash immediately after providing services to a client

cash debit/consulting revenue credit

Sara's Studio provided $380 of dance instruction and rented out its dance studio to the same client for another $215. The client paid cash immediately. Identify the general journal entry below that Sara's Studio will make to record the transaction.

cash= 595/debit rental revenue= 215/credit instruction revenue= 380/credit

a customer paid for a service in advance

credit to unearned revenue

current ratio=

current assets/current liabilities

a law firm billed a client for work performed in the current month

debit accounts receivable/credit services revenue

a company receives cash for performing services

debit cash/credit revenue

a law firm collected money in advance for work to be performed in 3 months

debit cash/credit unearned revenue

beginning accounts payable balance + purchase on account - payments on accounts =

ending accounts payable balance

beginning cash balance + cash receipts - cash payments =

ending cash balance

beginning retained earnings + revenues - expenses - dividends =

ending retained earnings

Return on Assets=

net income/average total assets

profit margin =

net income/net sales

if a client was billed $15,000 for consulting work the accounts receivable asset increases by $15,000... the revenue increases or decreases by $ ?

revenue increases $15,000

a business purchased supplied and paid cash immediately

supplies debit/cash credit

Calculate equity

total assets - total liabilities

a business paid cash for utilities for the current month

utilities expense debit/cash credit