31 Dec Purses, Inc., sold 8 purses

Question 1

Faux Sure, Inc., earned $400,000 during its first month of business of which $300,000 was collected during the month. Match the amounts that will be reported on each of the first month’s financial statements listed below.

Question 2

Nim Com Soup, Inc., purchased land at a cost of $8,000 five years ago. Currently, the land is estimated to be worth $45,000. At what amount should the land be reported on Nim Com Soups’ balance sheet at year end?

Question 3

Wok On Water, Inc.’s employees had worked during its first month of May and earned $7,000. Wok on Water had paid $3,000 of the amount owed. How much will be reported as Wages Expense on its May income statement?

Question 4

If a company’s total assets equals $80,000 and its shareholders’ equity equals $20,000, then its liabilities must equal $______.

Question 5

In its first month of business, Brewed Awakenings, Inc., collected $21,000 from customers in advance during May. During May, it performed $13,000 of services. What is the balance of the Unearned Revenue account at the end of the month?

Question 6

On May 1, Lord of the Fries, Inc., issued a $10,000, 3-month, 12% note. It also issued another $10,000 6-month, 12% note on the same day. On May 31, the adjusting entry to record the interest owed will be ______.

Question 7

At December 31, Year 1, Sea the World Cruises, Inc.’s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $130,000 and liabilities are $50,000. During the year, it did not issue new stock, and it declared and paid $100 dividend. Calculate net income for Year 2.

Question 8

The normal balance of Accounts Payable is a ______ because it is a(n) ______.

Question 9

Assume Year 1 is the company’s first year of business and there were $100 dividends in Year 1 and $100 dividends in Year 2. After determining the missing amounts ($______) in the above financial statements, calculate and type in the December 31, Year 2 Retained Earnings 1.$_________.

Question 10

Given the Inventory T-account, match the correct description with each number. For the beginning (1. or 2.) and ending (5. or 6.) balances, select “Blank” for the side that is opposite the account’s normal balance.

Question 11

On December 1, Morris Lest, Inc., borrowed $37,000 by issuing a 6-month note at 6%. Interest Payable at December 31 equals ______.

Question 12

Paying a cash dividend to shareholders is a(n) ______.

Question 13

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

Question 14

Record the entry for the sale and the cost of the sale of merchandise to a customer on account for $800, which cost $500, by selecting which accounts are debited and which are credited.

Question 15

The income statement reports the ______.

Question 16

During December, Acme, Inc., performed and billed its customers $38,000 for services on account of which it collected $8,000. How much revenue should Acme record in December?

Question 17

The adjusting entry to record depreciation on equipment includes a ______. (Select all that apply.)

Question 18

In May, Rec Rooms, Inc., collected $8,000 owed by customers for services performed in April. Show the effect of this collection on the accounting equation.

Question 19

On January 1 of its first month of business, Juan in a Million, Inc., paid $47,000 for four months rent beginning in January. How much will be reported as Prepaid Rent on its balance sheet at January 31?

Question 20

Determine the missing amounts. December 31

Cash $ 10,000 Accounts Payable $ 4,000

Accounts Receivable 10,000 Notes Payable 10,000

Inventory 1. ___?___ Common Stock 47,000

Buildings (net of accumulated depreciation) 24,000 Retained Earnings 5,000

Total Assets $____ Total Liabilities and Shareholders’Equity $66,000

After determining the missing amounts ($______) in the above Balance Sheet, calculate and type in the December 31 amount of Inventory 1.____?_____.

Question 21

When a company pays for advertising in advance, it will record a debit to ______ and a credit to ______.

Question 22

How many of the following accounts are assets?

Question 23

When a company makes a payment for amounts owed from prior purchases of inventory, it will record a debit to ______ and a credit to ______.

Question 24

During the year, A Salt & Buttery, Inc., had revenue of $62,000 of which $10,000 was collected from customers. It also had expenses of $31,000 of which $3,000 was paid. The owners were paid $20,000 in dividends. Net income for the year equals ______.

Question 25

On December 31, Year 1, Cash had a balance of $100,000. During year 2, there were $1,100,000 debits and $950,000 credits posted to Cash. The December 31, Year 2, balance must equal $______. Do not include a $ in your answer.

Question 26

Record the entry to close revenues for the period by selecting the correct accounts from below. (Select all that apply.)

Question 27

Which financial statement reports how much is left to sell at the end of the period?

Question 28

Purses, Inc., sold 8 purses that cost $40 each to its customers for a price of $80 each. The Gross Profit amount on the income statement will equal $______. Do not include $ in your answer.

Question 29

Thistle Do Nicely had $200 of supplies on May 1. During May, it purchased $400 of supplies on account. It paid $250 of the $400 it owed for its supplies. At May 31, Thistle Do Nicely only had $85 of supplies left. Supplies Expense on the income statement equals ______.

Question 30

A transaction may be recorded with an increase in an asset and a decrease in ______.