mgmt exam ch 1-3

Which of the following would most likely increase retained earnings? An increase in expenses. An increase in revenues. Declaring a cash dividend. Issuing additional common stock.

increase in revenues

At the beginning of April, Warren Corporation's assets totaled $256,000 and liabilities totaled $76,000. During April the following summarized transactions occurred: Additional shares of stock were sold for $28,000 cash. A building costing $111,000 was purchased using $18,000 cash and by signing an $93,000 long-term note payable. Short-term investments costing $10,600 were purchased using cash. $11,600 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan. How much are Warren's total liabilities at the end of April?

$169,000

Willie Company's retained earnings increased $20,000 during the current year. What was Willie's current year net income or loss given that Willie declared $38,000 of dividends during this year?

$58,000. Net income is equal to $58,000, calculated as the increase in retained earnings, $20,000, plus dividends of $38,000.

During 2019, Zigma Company earned service revenue amounting to $830,000, of which $660,000 was collected in cash; the balance will be collected in January 2020. Also in 2019, there were collections of cash prior to the delivery of goods/services totaling $10,600. What amount should the 2019 income statement report for service revenue? $660,000 Incorrect $700,000 $830,000 $170,000

$830,000

At the beginning of 2019, a corporation had assets of $650,000 and liabilities of $500,000. During 2019, assets increased $50,000 and liabilities increased $6,000. What was stockholders' equity at December 31, 2019?

194,000 Assets at December 31, 2019 = Beginning assets ($650,000) + Increase in assets during 2019 ($50,000) = $700000 Liabilities at December 31, 2019 = Beginning liabilities (500,000) + Increase in liabilities ($6000) = $506000 Assets ($458,000) = Liabilities ($309,000) + Stockholders' equity. Solve for Stockholders Equity at December 31, 2019 = $149,000.

Cash $39,100; Short-term investments $5,100; Accounts receivable $7,100; Supplies $53,500; Long-term notes receivable $3,100; Equipment $101,500; Factory Building $191,000; Intangible assets $7,100; Accounts payable $28,900; Accrued liabilities payable $3,450; Short-term notes payable $16,200; Long-term notes payable $97,500; Common stock $191,000; Retained earnings $70,450. What's current ratio?

2.16 assets: libailities:

assets totaled $259,000 and liabilities totaled $79,000. During April the following summarized transactions occurred: Additional shares of stock were sold for $29,500 cash. A building costing $114,000 was purchased using $19,500 cash and by signing an $94,500 long-term note payable. Short-term investments costing $10,900 were purchased using cash. $11,900 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan. How much are Warren's total assets at the end of April?

383,000 Total assets = $383,000 = $259,000 + $29,500 + $114,000 - $19,500 (building payment) dont account for the short term investment not the loan

Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $14,000 and the year-end balance was $17,000. The additional paid-in capital account balance increased $3,900 during the year. The retained earnings balance at the beginning of the year was $80,000 and the year-end balance was $93,000. Net income was $40,000. How much did Superior sell its common stock for during the year?

6900 The increase in the common stock account ($3,000) + increase in add paid-in capital ($3,900) = the selling price of the common stock ($6,900).

During the current fiscal year, a company had revenues of $450,000, cost of goods sold of $300,000, and an income tax rate of 34 percent on income before income taxes. What was the company's current year net income?

99k D. Because R-E=NI:450,000 - 300,000 = 150,000 income before taxes150,000 x (.66) = 99,000

Which of the following is the amount of revenue reported on the income statement of a retail company? The cash collected from customers during the current period. Both cash and credit sales for the period. Cash sales for the period and collections from customers. Cash sales and stockholders' investments.

Both cash and credit sales for the period.

Which of the following statements is correct? Expense accounts result in decreases in net income and stockholders' equity and therefore have credit balances. Revenue accounts result in increases in net income and stockholders' equity and therefore have debit balances. Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances. Gain accounts result in increases in net income and stockholders' equity and therefore have debit balances.

Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances.

Dama June Pizza Company sold land costing $47,000 for $74,000 cash. Which of the following statements concerning the land sale is correct? The land account was credited for $74,000. Operating income increased $27,000. The revenue account was debited for $74,000. Income before income taxes increased $47,000.

Operating income increased $27,000.

Which of the following statements is false? A liability is created when cash is received prior to delivery of the goods or services to a customer. Revenue is recognized at the time of delivery of the goods or services to customers if cash is received. Revenue is not recognized at the time of delivery of goods and services to customers if cash is received after delivery of the goods and services. Collecting cash after delivery of a good or service to a customer does not create revenue on the income statement at the date of collection.

Revenue is not recognized at the time of delivery of goods and services to customers if cash is received after delivery of the goods and services.

During 2019, Zensa Corporation incurred operating expenses amounting to $140,000, of which $90,000 was paid in cash; the balance will be paid during 2020. Which of the following is correct for the 2019 year-end balance sheet? Stockholders' equity decreases $90,000 and assets decrease $90,000. Assets decrease $140,000 and stockholders' equity decreases $140,000. Stockholders' equity decreases $140,000, assets decrease $90,000, and liabilities increase $50,000. Assets decrease $140,000, liabilities increase $50,000, and stockholders' equity decreases $140,000.

Stockholders' equity decreases $140,000, assets decrease $90,000, and liabilities increase $50,000.

Which of the following statements about stockholders' equity is false? Stockholders' equity is the shareholders' residual interest in the company resulting from the difference in assets and liabilities. Stockholders' equity accounts are increased with credits. Stockholders' equity results only from contributions of the owners. The purchase of land for cash has no effect on stockholders' equity.

Stockholders' equity results only from contributions of the owners.

Which of the following statements is false when Dama June Pizza Company paid $52,000 cash on accounts owed to suppliers? The cash account was credited for $52,000. Supplies expense was increased by $52,000. Operating income was not changed by the payment to the suppliers. Accounts payable was debited for $52,000.

Supplies expense was increased by $52,000.

Dama June Pizza Company determined that dough, sauce, cheese and other ingredients costing $8,900 were used to make pizzas during July. Which of the following statements is false with respect to the use of the ingredients? Operating expenses increased $8,900. Cost of goods sold was debited for $8,900. The Supplies account was debited for $8,900. Operating income decreased $8,900.

The Supplies account was debited for $8,900.

The core revenue recognition principle has two requirements for recognizing revenue. Which of the following is one of these requirements? The customer has paid for the goods or services. Delivery of goods or performance of service has been scheduled. The amount the company expects to receive is determinable. The customer has signed a contract.

The amount the company expects to receive is determinable.

A corporation purchased factory equipment using cash. Which of the following statements regarding this purchase is correct? The cost of the factory equipment is an expense at the time of purchase.Incorrect The total assets will not change. The total liabilities will increase. The current stockholders' equity will decrease.

The total assets will not change.

When a company buys equipment for $162,000 and pays for one third in cash and the other two thirds is financed by a note payable, which of the following are the effects on the accounting equation? Total assets increase $108,000. Total assets increase $162,000. Total liabilities increase $162,000. Total liabilities decrease $54,000.

Total assets increase $108,000.

Daring Dolls, Inc. received an order to provide SuperDolls for a big department store. The store paid Daring Dolls in advance for the order of SuperDolls. Which of the following describes what will occur when Daring Dolls recognizes revenue? Cash will be increased. Accounts receivable will be increased. Unearned revenue will be decreased. Unearned revenue will be increased.

Unearned revenue will be decreased.

Which of the following liability accounts does not usually require a future cash payment? Accounts payable. Unearned revenues. Taxes payable. Notes payable.

Unearned revenues.

ABC Company's total stockholders' equity at the beginning of the year was $175,000. During the yearABC reported the following: Net loss of $26,250.Stock issued in exchange for land totaling $70,000. Collections of accounts receivable $35,000. Dividends declared and paid totaling $1,750. What is ABC's total stockholders' equity at the end of the year?

add everything but collections of accounts receivable because it does not affect SE accounts

Toby Toy Store has noticed the following items that need to be considered for its income statement for the year ended December 31, 2019:• Commissions of $3,000 for salespeople who made sales in December will be paid January 3, 2020.• The phone bill of $400 for December was received and will be paid January 20, 2020.• The store rent of $2,000 for January 2020 was paid on December 28, 2019.• At the beginning of November, Toby paid $1,500 for advertising in a monthly magazine that is distributed in November and December of 2019, and January of 2020.What is the proper amount of expenses to be included in the income statement for the year?

commissions: 3,000 phone bill: 400 advertisement: 1,500 4400

Tiger Company's total stockholders' equity at the beginning of the year was $190,000. During the year Tiger reported the following: Net income of $94,000. Dividend declarations totaling $18,500. Issued stock to stockholders in exchange for $49,500 cash. Borrowed $12,500 from a stockholder. What is Tiger's total stockholders' equity at the end of the year?

you add everything but borrowed money from stockholder borrowing money affects both cash and liability accounts