chapter 1-4 Accounting 201

Collection of a $600 Accounts Receivable

increases an asset $600; decreases an asset $600

which of the following would not be classified as a long term liability?

lease liabilities

On January 1,2016, Leardon Inc Purchased equipment for $25000. The company is depappreciating the equipment at the rate of $1000 per month. A January 31st 2017 the balance in accumulated depreciation is:

$13,000 credit.

if total liabilities decreased by $90,000 and stockholders equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during the same period ?

$60,000 decrease

Jamal Company began the year with $126,000 in its Common Stock account and a debit balance in Retained Earnings of $54,000. During the year, the company earned net income of $27,000 and declared and paid $9,000 of dividends. In addition, the company sold additional common stock amounting to $33,000. Based on this information, what should the transaction analysis show for the ending total of all stockholders' equity accounts?

(common stock+net income)-retained earnings-dividends= ending total of stockholder's equity accounts. (159+27)-54-9=123k

the Trial Balance for greenway appears as follows: Greenway Corporation Trial Balance December 31,2017 cash $300 accounts Receivable 522 prepaid insurance 82 supplies 180 equipment 4,000 accumulated Depreciation equipment $600 accounts payable 384 common stock 1,200 retained earnings 1,400 service revenues 3,000 salaries and wages expense 1,000 rent expense -500 =$6,584

180-40=140 debit to supplies expense for $140.

given the data below For a firm in its 1st year of operation, determine net income under the accrual basis of accounting Revenue recognized $19000 Accounts receivable 3000 Expenses incurred 7250 Accounts payable (related to expenses) 750 Supplies purchased with cash 1800

19,000-7250=11,750.

For 2017 Fielder Corporation reported net income of $32,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2017 earnings per share?

32,000÷16,000=2.00

La More Company had the following transactions during 2016: • Sales of $9,000 on account • Collected $4,000 for services to be performed in 2017 • Paid $2,650 cash in salaries • Purchased airline tickets for $500 in December for a trip to take place in 2017 What is La More's 2016 net income using cash basis accounting?

4,000-2,650-500=$850

Elston Company compiled the following financial information as of December 31, 2012l7: Revenues $840,000 Common stock 180,000 Equipment 240,000 Expenses 750,000 Cash 210,000 Dividends 60,000 Supplies 30,000 Accounts payable 120,000 Accounts receivable 90,000 Retained earnings, 1/1/12 450,000 Elston's assets on December 31, 2017 are: a. $450,000 b. $540,000 c. $480,000 d. $30,000

480,000

In 2017 Grider Corporation had cash receipts of $56,000 and cash disbursements of $32,000. Grider's ending cash balance at December 31, 2017 was $78,000. What was Grider's beginning cash balance?

78-56+32= 54k

La More Company had the following transactions during 2016: • Sales of $9,00 on account • Collected $4,000 for services to be performed in 2017 • Paid $3,750 cash in salaries for 2016 • Purchased airline tickets for $500 in December for a trip to take place in 2017 What is La More's 2016 net income using accrual accounting?

9,000-3,750=5,250.

leyland realty company received a check for $18,000 on july 1, which represents a 6-month advance payment of rent on a building its rents to a client. Unearned rent revenue was credited for the full $18,000. financial statements will be prepared on July 31. Leyland realty should make the following adjusting entry on July 31:

Debit unearned rent revenue ,$3,000; credit Rent Revenue,$3,000.

what is not an advantage of the corporate form of business organization?

Favorable Tax treatment

use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Carne Auto supplies balance sheet Dec, 31, 2017 Cash $70,000 Accounts Receivable $100,000 inventory 140,000 prepaid insurance 80,000 stock investments 180,000 land 190,000 buildings $230,000 less: accumulated Depreciation (60,000)170,000 Trademarks 140,000 total assets $1,070,000

P.P.E: 190+230-60=360k

If total liabilities decreased by $4,000, then

assets must have decreased by $4,000, or stockholders' equity must have increased by $4,000

if a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,

assets will be increased by $40,000.

If expenses are paid in cash, then

assets will decrease

Which of the following represents expanded basic accounting equation?

assets=Liabilities + common stock+ Dividends- Revenues- Expenses

ending retained earnings for a period is equal to...

beginning retained earnings + net income - dividends

Jack and Jill form a partnership. Jack runs the business of New York, while Jill vacations in Hawaii.During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which of the following is true regarding this debt ? a. only Jack is personally liable for the debt. b.only Jill is personally liable for the debt. c.Both Jack and Jill are personally liable for business debt. d. Neither jack nor Jill are personally liable.

c. Both Jack and Jill are personally liable for business debt.

use the following data to determine the total dollar amount of working capital . Carne Auto supplies balance sheet Dec, 31, 2017 Cash $70,000 Accounts Receivable $100,000 inventory 140,000 prepaid insurance 80,000 stock investments 180,000 land 190,000 buildings $230,000 less: accumulated Depreciation (60,000)170,000 Trademarks 140,000 total assets $1,070,000 accounts payable 130,000 salaries and wages payable 20,000 mortgage payable 180,000

current assets: 70+100+140+80=390 current liabilities: 130+20=150 working capital :390-150=240k

use the following to determine the total dollar amount of assets to be classified as current assets. Carne Auto supplies Balance sheet Dec. 31 2017 Cash $70,000 Accounts Receivable $100,000 inventory 140,000 prepaid insurance 80,000 stock investments 180,000 land 190,000 buildings $230,000 less: accumulated Depreciation (60,000)170,000 Trademarks 140,000 total assets $1,070,000

current assets: 70+100+140+80=390k

the balance in the prepaid rent account Before adjustment at the end of the year is $12000 answer presents 3 months rents paid on December 1. The adjusting entry required on December 31 is:

debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.

The Vintage Laundry Company purchased $8,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $1,500 on hand. The adjusting entry that should be made by the company on June 30 is:

debit supplies expense,$7,000; credit supplies, $7,000.

the payment of a liability

decreases assets and liabilities

Crawford company started the year with $60,000 in it's common stock account and a credit balance In retained earnings of $44,000. During the year the company earned net income of $48,000 and declared and paid $20,000 of dividends. In addition the company sold additional common stock accounting to $28,000. As a result the amount of it's a retained earnings at the end of the year would be...

ending retained earnings =retained earnings+ net income -dividends $44,000+$48,000-$20,000=$72,000.

Using the following balance sheet and income statement data, what is the earnings per share ? current assets $21,000 current liabilities 12,000 average assets 132,000 total assets 90,000 average common shares outstanding was 15,000 net income $45,000 stockholders equity 63,000 total liabilities 27,000

net income -preferred dividends/average share outstanding = 45-(0)/15=3 $3.00

Henson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year?

net income : 500k-380k=120k ending retained earnings: 380k+120-40= 460k

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000. During the year the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000. The net income reported by Jimmy's Repair Shop for the year was a. $240,000. b. $300,000. c. $180,000. d. $570,000.

net income: 630-330=300k (B)

Lankston Company began the year by issuing $120,000 of common stock for cash. The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000. What was Lankston's net income for the year? a. $80,000 b. $200,000 c. $140,000 d. $260,000

net income:1,100k-960k=140k (C)

The following is selected information from C corporation for the fiscal year ending October 31st, 2017. Cash received from customers $150k Revenue organize recognized $225k Cash paid for expenses $85k Cash paid for computers on November 1st 2016 that will be used for 3 years $24k Expenses incurred including any depreciation $119k Proceeds from a bank loan part of which was used to pay for the computers $50k

net income= revenues -expenses 225k-119k=106k

These are selected account balances on December 31, 2017. Land $150,000 Land (held for future use) 225,000 Buildings 1,200,000 Inventory 300,000 Equipment 675,000 Furniture 150,000 Accumulated Depreciation 450,000 What is the total amount of property, plant, and equipment that will appear on the balance sheet?

p.p.e:150+ 1,200+675+150-450=$1,725,000

use the following data to calculate the current ratio. Carne Auto supplies balance sheet Dec, 31, 2017 Cash $70,000 Accounts Receivable $100,000 inventory 140,000 prepaid insurance 80,000 stock investments 180,000 land 190,000 buildings $230,000 less: accumulated Depreciation (60,000)170,000 Trademarks 140,000 total assets $1,070,000 accounts payable 130,000 salaries and wages payable 20,000 mortgage payable 180,000

ratio: 390÷150= 2.60:1

the retained earnings statement would not show

revenues and expenses

If services are rendered on account, then

stockholders' equity will increase