Accounting
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Week8-FinalQuestions.docAcct 220
As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $950,000 and liabilities of $330,000. During Year 2, stockholders invested an additional $65,000 and received $30,000 in dividends from the business. What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $965,000 and liabilities were $290,000?
Your Answer:
Question 1 options:
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Answer |
Question 2 (3 points)
Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $310,000. The Focus Company initially offered to buy the land for $237,000. The companies settled on a purchase price of $282,000. On the same day, another piece of land on the same block sold for $322,000. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?
Your Answer:
Question 2 options:
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Answer |
Question 3 (12 points)
Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
Question 3 options:
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Received utility bill to be paid next month |
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Paid part of an amount owed to a creditor |
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Paid cash for the purchase of a one-year insurance policy |
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Payment for common stock by stockholder |
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Received payment from a customer on account |
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Received cash for providing services to customers |
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Purchased equipment for cash |
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Provided a service to a customer on account |
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Payment of dividends |
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Used up supplies that were already on hand |
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Purchased supplies on credit |
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Borrowed money from a bank |
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Received cash for services provided |
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Paid wages |
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Contribution of land by stockholder |
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1. Increase assets, increase liabilities 2. Increase liabilities, decrease stockholders' equity 3. Increase assets, increase stockholders' equity 4. No effect 5. Decrease assets, decrease liabilities 6. Decrease assets, decrease stockholders' equity
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Question 4 (10 points)
Match the type of account (a - e) with the business transactions that follow.
Question 4 options:
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Received 6 months of rental payments from a tenant. |
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Annual property taxes that are paid at the end of the year. |
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Received payment covering a 6-month magazine subscription. |
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Paid for a 6-month magazine subscription. |
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Services provided that have not been recorded. |
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Electric bill to be paid next month. |
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Annual depreciation on equipment, recorded on a monthly basis. |
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A contract to provide tutoring services beginning next month was signed. |
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Paid for one year’s insurance policy. |
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Provided tutoring for a student that will be invoiced next month. |
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Paid 6 months of rental payments to the landlord. |
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Retainer fee received from a client for future legal representation. Prepaid expense 2. Accrued expense 3. Unearned revenue 4. Accrued revenue 5. None of these |
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Question 6 (3 points)
Use the adjusted trial balance for Stockton Company below to determine the Retained Earnings ending balance.
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Stockton Company |
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Adjusted Trial Balance |
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31-Dec |
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Cash |
7,530 |
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Accounts Receivable |
2,100 |
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Prepaid Expenses |
700 |
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Equipment |
13,700 |
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Accumulated Depreciation |
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1,100 |
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Accounts Payable |
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1,900 |
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Notes Payable |
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4,300 |
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Common Stock |
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1,000 |
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Retained Earnings |
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12,940 |
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Dividends |
790 |
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Fees Earned |
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9,250 |
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Wages Expense |
2,500 |
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Rent Expense |
1,960 |
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Utilities Expense |
775 |
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Depreciation Expense |
250 |
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Miscellaneous Expense |
185 |
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Totals |
30,490 |
30,490 |
Your Answer:
Question 6 options:
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Answer |
Question 7 (3 points)
Use the adjusted trial balance for Stockton Company below to determine Total Current Assets.
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Stockton Company |
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Adjusted Trial Balance |
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31-Dec |
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Cash |
7,530 |
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Accounts Receivable |
2,100 |
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Prepaid Expenses |
700 |
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Equipment |
13,700 |
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Accumulated Depreciation |
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1,100 |
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Accounts Payable |
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1,900 |
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Notes Payable |
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4,300 |
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Common Stock |
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1,000 |
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Retained Earnings |
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12,940 |
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Dividends |
790 |
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Fees Earned |
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9,250 |
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Wages Expense |
2,500 |
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Rent Expense |
1,960 |
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Utilities Expense |
775 |
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Depreciation Expense |
250 |
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Miscellaneous Expense |
185 |
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Totals |
30,490 |
30,490 |
Your Answer:
Question 7 options:
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Answer |
Question 8 (3 points)
Use this end-of-period spreadsheet to answer the questions that follow.
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Finley Company |
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End-of-Period Spreadsheet |
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Adjusted Trial Balance |
Income Statement |
Balance Sheet |
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Account Title |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
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Cash |
48,000 |
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48,000 |
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Accounts Receivable |
18,000 |
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18,000 |
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Supplies |
6,000 |
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6,000 |
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Equipment |
57,000 |
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57,000 |
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Accumulated Depr. |
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18,000 |
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18,000 |
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Accounts Payable |
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25,000 |
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25,000 |
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Wages Payable |
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6,000 |
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6,000 |
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Common Stock |
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30,000 |
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30,000 |
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Retained Earnings |
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3,000 |
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3,000 |
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Dividends |
3,000 |
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3,000 |
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Fees Earned |
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155,000 |
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155,000 |
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Wages Expense |
63,000 |
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63,000 |
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Rent Expense |
27,000 |
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27,000 |
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Depreciation Expense |
15,000 |
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15,000 |
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Totals |
237,000 |
237,000 |
105,000 |
155,000 |
132,000 |
82,000 |
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Net Income (Loss) |
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50,000 |
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50,000 |
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155,000 |
155,000 |
132,000 |
132,000 |
The entry to close Expenses would be:
Question 8 options:
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Income Summary 105,000 Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 |
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Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 Income Summary 105,000 |
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Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 Dividends 105,000 |
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Expenses 105,000 Income Summary 105,000 |
Question 9 (3 points)
Use this end-of-period spreadsheet to answer the questions that follow.
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Finley Company |
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End-of-Period Spreadsheet |
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Adjusted Trial Balance |
Income Statement |
Balance Sheet |
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Account Title |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
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Cash |
48,000 |
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48,000 |
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Accounts Receivable |
18,000 |
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18,000 |
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Supplies |
6,000 |
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6,000 |
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Equipment |
57,000 |
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57,000 |
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Accumulated Depr. |
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18,000 |
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18,000 |
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Accounts Payable |
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25,000 |
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25,000 |
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Wages Payable |
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6,000 |
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6,000 |
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Common Stock |
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30,000 |
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30,000 |
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Retained Earnings |
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3,000 |
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3,000 |
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Dividends |
3,000 |
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3,000 |
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Fees Earned |
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155,000 |
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155,000 |
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Wages Expense |
63,000 |
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63,000 |
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Rent Expense |
27,000 |
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27,000 |
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Depreciation Expense |
15,000 |
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15,000 |
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Totals |
237,000 |
237,000 |
105,000 |
155,000 |
132,000 |
82,000 |
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Net Income (Loss) |
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50,000 |
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50,000 |
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155,000 |
155,000 |
132,000 |
132,000 |
The entry to close Income Summary would be:
Question 9 options:
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debit Common Stock, $50,000; credit Income Summary, $50,000 |
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debit Common Stock, $9,000; credit Income Summary, $9,000 |
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debit Income Summary, $155,000; credit Common Stock, $155,000 |
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debit Income Summary, $50,000; credit Retained Earnings, $50,000 |
Question 10 (3 points)
Using the following information, what is the amount of gross profit?
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Purchases |
$37,000 |
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Merchandise inventory, September 1 |
6,000 |
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Selling expense |
950 |
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Merchandise inventory, September 30 |
7,000 |
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Sales |
85,000 |
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Interest expense |
1,740 |
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Administrative expense |
1,910 |
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Rent revenue |
1,600 |
Your Answer:
Question 10 options:
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Answer |
Question 11 (3 points)
The following units of an inventory item were available for sale during the year:
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Unit |
Unit Cost |
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Beginning inventory |
14 |
$55 |
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First purchase |
30 |
60 |
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Second purchase |
30 |
65 |
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Third purchase |
16 |
70 |
The firm uses the periodic inventory system. During the year, 60 units of the item were sold.
The value of ending inventory using FIFO is
Your Answer:
Question 11 options:
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Answer |
Question 12 (3 points)
The following units of an inventory item were available for sale during the year:
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Unit |
Unit Cost |
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Beginning inventory |
15 |
$55 |
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First purchase |
29 |
60 |
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Second purchase |
32 |
65 |
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Third purchase |
15 |
70 |
The firm uses the periodic inventory system. During the year, 62 units of the item were sold.
The value of ending inventory using LIFO is
Your Answer:
Question 12 options:
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Answer |
Question 13 (3 points)
The following units of an inventory item were available for sale during the year:
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Unit |
Unit Cost |
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Beginning inventory |
12 |
$55 |
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First purchase |
26 |
60 |
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Second purchase |
32 |
65 |
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Third purchase |
17 |
70 |
The firm uses the periodic inventory system. During the year, 60 units of the item were sold.
The value of ending inventory rounded to nearest dollar using average cost is:
Your Answer:
Question 13 options:
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Answer |
A building with an appraisal value of $163,000 is made available at an offer price of $177,000. The purchaser acquires the property for $42,000 in cash, a 90-day note payable for $52,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is
Your Answer:
Question 18 options:
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Question 23 (3 points)
The Torre Company has the following stockholders' equity account balances in stockholders equity on December 31. Common Stock – $5 par, 500,000 shares authorized $340,000 Paid-In Capital in Excess of Par—Common Stock 600,000 Preferred Stock – $100 par, 100,000 shares authorized 590,000 Paid-In Capital in Excess of Par—Preferred 140,000 Retained Earnings 270,000 Treasury Stock (cost – $10 per share) 130,000 How many shares of common stock are outstanding? Your Answer: Question 23 options:
Answer Question 24 (3 points)
The Torre Company has the following stockholders' equity account balances in stockholders equity on December 31. Common Stock – $5 par, 60,000 shares issued $400,000 Paid-In Capital in Excess of Par—Common Stock 610,000 Preferred Stock – $100 par, 5,000 shares issued 520,000 Paid-In Capital in Excess of Par—Preferred 190,000 Retained Earnings 240,000 Treasury Stock (cost – $10 per share) 120,000 If net income for the year was $85,000 and a preferred stock dividend of $40,000 was paid, what was the beginning value of retained earnings? Your Answer: Question 24 options:
Answer
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