Chapter 1
Quicksilver Corp has Assets totaling $200,000 and Liabilities totaling $73,500. What is Quicksilver Corp's Stockholder's Equity?
$126,500
Phoenix & Co paid a dividend of $5,000. Prepare the journal entry.
Dr. Retained Earnings 5,000
Cr. Cash 5,000
A balance sheet ______, while a income statement _______.
a) Shows a period of time (shows the flow)
b) Is as of a point in time (shows the level)
A balance sheet b) Is as of a point in time (shows the level), while a income statement a) Shows a period of time (shows the flow).
$20,000 of equipment was bought using cash. Prepare the journal entry.
Dr. Equipment 20,000
Cr. Cash 20,000
The purchase of equipment is an example of which business activity?
(Hint: Investing, Financing or Operating?)
Investing Activity
Compute Wolverine & Nightcrawler's Current Ratio
(Current Ratio = Current Assets/Current Liabilities)
1.15
What adjustment type deals with an amount not previously recorded in a balance sheet account?
a) deferrals
b) accruals
b) accruals
50,000 shares are sold for $700,000 cash. Prepare the journal entry.
Dr. Cash 700,000
Cr. Common Stock 700,000
The sale of common stock to increase cash is an example of which business activity? (Hint: Investing, Financing or Operating?)
Financing Activity
Post the following journal entry to its t-accounts:
Dr. Cash 2,000
Cr. Accounts Payable 2,000
a. 2,000
c. 2,000
f. 2,000
h. 2,000
Is the following an adjusting or closing entry?:
Dr. Depreciation Expense; Cr. Accumulated Depreciation
Adjusting Entry
Prepaid Insurance Expense has a $20,000 balance on the unadjusted trial balance. During the current period, $15,000 of Insurance Expense has been incurred. Prepare the adjusting entry.
Dr. Insurance Expense 15,000
Cr. Prepaid Insurance Expense 15,000
As of 12/31/23, Cyclops & Co has $45,000 in Assets and $21,000 in Equity. As of 12/31/24, Cyclops & Co has $60,000 in Assets and $22,000 in Equity.
What is the company's Debt-to-Equity Ratio at the end of 2023?
(Debt-to-Equity Ratio = Total Liabilities/Total Stockholders' Equity)
1.14
What is Riptide Builders' Net Working Capital?
(Net Working Capital = Current Assets - Current Liabilities)
$20,000
Is the following an adjusting or closing entry?:
Dr. Sales Revenue; Cr. Retained Earnings
Closing Entry
Prepare the journal entry to close the following accounts: Rent Expense 12,000; Salaries Expense 20,000; Interest Expense 1,000.
Dr. Retained Earnings 33,000
Cr. Rent Expense 12,000
Cr. Salaries Expense 20,000
Cr. Interest Expense 1,000
Riptide LLC reported Net Incomes of $3,000 and $5,200 for 2022 and 2023, respectively. They reported Stockholders' Equity of $32,000 and $35,000 for fiscal years ending 2022 and 2023, respectively.
Compute Riptide LLC's Return on Equity for 2023.
(Return on Equity (ROE) = Net Income/Average Stockholders' Equity)
0.16
What is Sabretooth Dentistry's Quick Ratio?
(Quick Ratio = Quick Assets/Current Liabilities)
0.92
Which of the following accounts get closed during the closing process? (Hint: There are 4):
Cash, Unearned Sales Revenue, Interest Expense, Accounts Receivable, Retained Earnings, Inventory, Accounts Payable, Salaries Expense, Notes Payable, Sales Revenue, Rent Expense, Common Stock, Prepaid Rent Expense.
Interest Expense, Salaries Expense, Rent Expense & Sales Revenue.
Toad & Co sold $10,000 of inventory on account, which they had bought at a cost of $4,000. Prepare the journal entry.
Dr. Accounts Receivable 10,000
Cr. Sales Revenue 10,000
Dr. COGS 4,000
Cr. Inventory 4,000