31 Dec The adjusting entry to

Question 1

Which of the following would be included in the operating activity section of the Statement of Cash Flows? (Select all that apply.)

Question 2

The income statement reports the ______.

Question 3

If a company’s total assets equals $80,000 and its stockholders’ equity equals $20,000, how much are the creditors’ claims to the company’s assets?

Question 4

Classify the Balance Sheet accounts listed below as an Asset, Liability, or Shareholders’ Equity.

Question 5

Which of the following are possible effects on the accounting equation when recording a transaction that increases an asset by $100? (Select all that apply.)

Question 6

Purses, Inc., sold 4 purses that cost $40 each to its customers for a price of $60 each. The Gross Profit amount on the income statement will equal $______. Do not include $ in your answer.

Question 7

How many of the following line items are on the Balance Sheet?

Question 8

Determine the missing amounts:

Question 9

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 $150,000 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 10

For the year ended December 31, Year 2 For the year ended December 31, Year 1

Revenues $ 5,500 $ 500

Expenses $ 1,500 $_________

Net Income $________ $_________

December 31, Year 2 December 31, Year 1

Assets $ 16,500 $ 1,000

Liabilities $_________ $ 500

Common Stock $ 300 $ 300

Retained Earnings 1.$________ $ 200

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 11

Nim Com Soup, Inc., purchased land at a cost of $6,000 five years ago. Currently, the land is estimated to be worth $56,000. At what amount should the land be reported on Nim Com Soups’ balance sheet at year end?

Question 12

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 13

Royal Flush Plumbing, Inc., performed $1,000 of services on account of which it has collected $600. Revenues on the income statement equals?

Question 14

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 15

In its first month of business, Lord of the Fries, Inc., collected $27,000 from customers in advance during May. At May 31, it had a balance in its Unearned Revenue of $3,000. What is the amount of Revenue reported on the income statement for the month ended May 31?

Question 16

Bank ‘n’ Roll, Inc., pays its employees once a month and records the expense at the time of payment. On May 31, Bank ‘n’ Roll, Inc., paid its employees $10,000 for work performed in May. The entry to record the payment includes a ______. (Select all that apply.)

Question 17

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 18

Curl Up & Dye, Inc. began May with $200 of supplies. It purchased $860 of supplies on account during May. It paid $330 of the amount it owed for its supplies in May. At May 31, it only had $200 of supplies left. Supplies Expense for the month ended May 31 equals ______.

Question 19

During the year, Proffitts, Inc., had revenue of $62,000 and expenses of $25,000. During the year, it collected $7,000 from its customers and paid $3,000 of its expenses and $20,000 of dividends to its owners. Net income for the year equals ______.

Question 20

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 $44,000

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 21

During December, Acme, Inc., performed and billed its customers $30,000 for services on account of which it collected $2,000. How much revenue should Acme record in December?

Question 22

Indiana Bones, Inc., purchased $400 of supplies on account during May. Indiana bones paid $150 of the $400 it owed for its supplies. At May 31, Indiana Bones had $100 of supplies left. Which of the following statements is true about the May financial statements?

Cash Paid for Supplies on the ______.

Question 23

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

Question 24

The beginning balance in Lucre’s Notes Payable was $50,000. During the month, Lucre borrowed $60,000 cash from Last National Bank and then paid First National Bank the $40,000 it had borrowed five months prior. The balance in Lucre’s Notes Payable is now a ______.

Question 25

How many of the following accounts have a normal debit balance?

Accounts Receivable

Unearned Revenue

Wages Expense

Wages Payable

Depreciation Expense

Sales Revenue

Question 26

On December 31, Year 1, Accounts Payable had a balance of $10,000. During Year 2, there were $500,000 purchases on account and $490,000 payments of Accounts Payable. The December 31, Year 2, balance must equal $______. Do not include a $ in your answer.

Question 27

On November 1, Nim Com Soup, Inc., borrowed $33,000 by issuing a 6-month note at 12%. Interest Payable at December 31, equals ______.

Question 28

On December 1, Morris Lest, Inc., borrowed $79,000 by issuing a 7-month note at 6%. Interest Payable at December 31 equals ______.

Question 29

The adjusting entry to record depreciation on equipment includes a ______.

Question 30

Kincaid Company’s Retained Earnings balance on january 1 was $6,000. During the current year, Kincaid earned $6,400 in revenues and incurred $4,200 in expenses. Kincaid paid $2,500 in dividends, all in cash. After the closing entries are made, Kincaid’s Retained Earnings balance on December 31 will be ______.