31 Dec Accruing a revenue

Question 1

Use the following information for Equitable, Inc., for the year ended December 31, Year 2. Assume no new common stock was issued during the year.

Revenue for the year ended, December 31, Year 2 $39,000

Expenses for the year ended, December 31, Year 2 15,000

Total Assets at December 31, Year 1 35,000

Total Assets at December 31, Year 2 60,000

Total Shareholders’ Equity at December 31, Year 1 25,000

Dividends for the year ended December 31, Year 2 7,000

What is total Shareholders’ Equity at December 31, Year 2?

Question 2

Sew Chic, Inc., purchased $500 of supplies on account during May. Sew Chic paid $200 of the $500 it owed for its supplies. At May 31, Sew Chic only had $50 of supplies left. Which of the following statements is true about the May financial statements?

Cash Paid for Supplies on the ______.

Question 3

Record the transaction below.

Assets Liabilities

Shareholders’ Equity

February 1: Wursthaus, Inc., paid $600 cash for three months of insurance coverage that begins February 1. $______ $______ $______

TO RECEIVE FULL CREDIT FOR THE QUESTION, AN ANSWER MUST BE SELECTED FOR EACH COLUMN (ASSETS, LIABILITIES, COMMON STOCK, & RETAINED EARNINGS) EVEN IF THERE IS NO EFFECT. IF THERE IS NO EFFECT, SELECT “0 NO EFFECT.”

Question 4

When a business makes a sale on account, the asset created is a(n) ______?

Question 5

During the year, A Salt & Buttery, Inc., had revenue of $89,000 of which $17,000 was collected from customers. It also had expenses of $32,000 of which $3,000 was paid. The owners were paid $20,000 in dividends. Net income for the year equals ______.

Question 6

Match each description with the appropriate financial statement.

Question 7

During November, Florist Grump, Inc. performed $32,000 of services on account and sent bills to its customers. In November, Florist Grump collected $9,000 from these credit customers. How much revenue should Florist Grump record in November?

Question 8

On January 1 of its first month of business, Bags Bunny, Inc., paid $62,000 for eight months rent beginning in January. How much will be reported as Prepaid Rent on its balance sheet at January 31?

Question 9

On January 1 of its first month of business, Bags Bunny, Inc., paid $75,000 for eight months rent beginning in January. How much will be reported as Rent Expense on its income statement for the month ended January 31?

Question 10

In its first month of business, Sea World Cruises, Inc., collected $36,000 from customers in advance during May. At May 31, it had a balance in its Unearned Revenue of $11,000. What is the amount of Revenue earned that had been collected in advance?

Question 11

Indicate the financial statement where you would expect to find each line item:

Question 12

Indicate the financial statement where you would expect to find each line item:

Question 13

Indicate the financial statement where you would expect to find each line item:

Question 14

Jim’s Jungle Gyms reported the following information in its year ended December 31 financials:

Net Income $ 13,000

Sales Revenue 76,000

Retained Earnings – beginning balance 20,000

Dividends 3,000

What were the company’s total Expenses for the current year?

Question 15

Wok On Water, Inc.’s employees had worked during the first month of May and earned $8,000. 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?

Question 16

During its first month of business, Dig the Dogs, Inc. purchased $900 of hotdogs of which it paid $500 and owes the rest. During the month, it sold two thirds of its inventory. What is the amount of Cost of Goods Sold for the month ended?

Question 17

Thistle Do Nicely had $100 of supplies on May 1. During May, it purchased $500 of supplies on account. It paid $150 of the $500 it owed for its supplies. At May 31, Thistle Do Nicely only had $55 of supplies left. Supplies Expense on the income statement equals ______.

Question 18

Accruing a revenue or expense means that the amount ______.

Question 19

In March, Florist Gump, Inc., collected $6,000 of its accounts receivable from February sales. Show the effect on the accounting equation below:

TO RECEIVE FULL CREDIT FOR THE QUESTION, AN ANSWER MUST BE SELECTED FOR EACH (ASSETS, LIABILITIES, SHAREHOLDERS’ EQUITY) EVEN IF THERE IS NO EFFECT. IF THERE IS NO EFFECT, SELECT “0 NO EFFECT.”

Question 20

Florist Gump, Inc. purchased land at a cost of $6,000 on February 2, 2000. At December 31, 2014, the land is worth $27,000 according to an appraiser. At what amount should the land be reported on Florist Gump’s balance sheet at December 31, 2014? DO NOT INCLUDE $ IN ANSWER