TCO A) Resources owned by a business are referred to as (Points : 3) PROFITS. DIVIDENDS. ASSETS. EQUITY. Question 2.2. (TCO B) For 2014, EAB Corporation reported net income of $78,750; net sales of $1,378,125; and wei

TCO A) Resources owned by a business are referred to as (Points : 3)

Question 12.12. (TCOS E AND F) PLEASE PREPARE THE FOLLOWING JOURNAL ENTRIES. INDICATE WHICH ACCOUNT SHOULD BE DEBITED AND WHICH ACCOUNT SHOULD BE CREDITED, ALONG WITH THE DOLLAR AMOUNT OF THE DEBIT AND CREDIT.

(1) INVESTORS INVEST $500,000 IN EXCHANGE FOR 50,000 SHARES OF COMMON STOCK.

(2) COMPANY PURCHASED EQUIPMENT FOR $25,000 ON ACCOUNT.

(3) COMPANY PAID RENT FOR $4,000.

(4) COMPANY RECEIVED $15,000 FOR SERVICES NOT YET PERFORMED.

(5) EMPLOYEES WORK MONDAY THROUGH FRIDAY AND ARE PAID ON FRIDAY. SALARY EXPENSE IS $10,000 PER DAY AND THIS YEAR, DECEMBER 31 FALLS ON A WEDNESDAY. (POINTS : 30)

Question 13.13. (TCOS B AND D) THE FOLLOWING ITEMS ARE TAKEN FROM THE FINANCIAL STATEMENTS OF LACEY COMPANY FOR 2012:

Advertising Expense	$14,000
Accounts Receivable	12,000
Cost of Goods Sold	65,000
Accumulated Depreciation—Equipment	20,000
Accounts Payable	21,000
Cash	44,000
Depreciation Expense	17,000
Common Stock	100,000
Dividends	25,000
Insurance Expense	5,000
Note Payable (due 2014)	70,000
Rent Expense	4,000
Prepaid Insurance	17,000
Retained Earnings (beginning)	22,000
Salaries Expense	50,000
Salaries Payable	3,500
Net sales	175,000
Supplies	4,000
Supplies Expense	3,000
Equipment	210,000

INSTRUCTIONS

(A) CALCULATE THE NET INCOME. (18 POINTS)

(B) CALCULATE THE BALANCE OF RETAINED EARNINGS THAT WOULD APPEAR ON A BALANCE SHEET AT DECEMBER 31, 2012. (7 POINTS)

(C) CALCULATE THE GROSS PROFIT PERCENTAGE. (5 POINTS) (POINTS : 30)

Question 14.14. (TCO D) THE FOLLOWING ITEMS ARE TAKEN FROM THE FINANCIAL STATEMENTS OF SRW COMPANY FOR 2012:

Cash	$375,000
Accounts Receivable	125,000
Prepaid Insurance	100,000
Accounts Payable	88,000
Unearned Service Revenue	15,000
Equipment, net of accumulated depreciation	177,000
Common Stock	125,000
Retained Earnings 12/31/2011	106,000
Long-term debt	336,500
Service revenue	225,000
Cost of Goods Sold	62,500
Rent expense	30,000
Supplies expense	8,000
Insurance expense	18,000

Instructions

(a) Please create a classified Balance Sheet in good form for the year ended 2012. (25 points)

(b) Please calculate the current ratio. (5 points)

(POINTS : 30)

10 years ago

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TCO A) Resources owned by a business are referred to as (Points : 3) PROFITS. DIVIDENDS. ASSETS. EQUITY. Question 2.2. (TCO B) For 2014, EAB Corporation reported net income of $78,750; net sales of $1,378,125; and wei

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