Balance Sheet
Promenade Company’s retained earnings decreased $7,500 last year and its assets decreased $6,500. Promenade declared a $39,500 cash dividend during the year. What was last year's net income?
A) $38,500
B) $53,500
C) $32,000
D) $40,500
C) $32,000
Which of the following journal entries is correct when a business entity pays cash for advertising to be used next year?
A) Cash XXXXX
Advertising Expense XXXXX
B) Advertising Expense XXXXX
Cash XXXXX
C) Cash XXXXX
Prepaid Advertising Expense XXXXX
D) Prepaid Advertising Exp XXXXX
Cash XXXXX
D) Prepaid Advertising Exp XXXXX
Cash XXXXX
On July 1, 2023, Bass Company paid a two-year insurance premium. On that date the following journal entry was made:
Prepaid Insurance $4,800
Cash $4,800
The annual accounting period ends on December 31, 2023.
How much of the premium should be reported as expense on the 2023 income statement?
$1,200
The Lake Company has provided the following account balances:
Cash $76,000;
Short-term investments $8,000;
Accounts receivable $96,000;
Supplies $12,000;
Long-term notes receivable $4,000;
Equipment $192,000;
Factory Building $360,000;
Intangible assets $12,000;
Accounts payable $90,000;
Accrued liabilities payable $12,000;
Short-term notes payable $42,000;
Long-term notes payable $184,000.
What is Lake's current ratio?
1.33
Which of the following would not be reported on a statement of stockholders' equity?
A) Dividend payments
B) Net income
C) Beginning retained earnings
D) Ending retained earnings
A) Dividend payments
Ironwood Company purchased equipment for $210,000 and paid for one third in cash; the other two thirds is financed by a note payable. Which of the following are the effects on Ironwood’s accounting equation?
A) Total assets increase $210,000.
B) Total liabilities increase $210,000.
C) Total liabilities decrease $70,000.
D) Total assets increase $140,000.
D) Total assets increase $140,000.
Which of the following describes the transaction resulting in a journal entry with a debit to Wages Payable and a credit to Cash?
A) Wages expense has been incurred but is unpaid.
B) Cash was used to pay for wages that were previously recorded as an expense.
C) Cash was used to pay for wages that were not previously recorded as an expense.
D) Cash was used to prepay employee wages.
B) Cash was used to pay for wages that were previously recorded as an expense.
On July 1, 2023, Bass Company paid a two-year insurance premium. On that date the following journal entry was made:
Prepaid Insurance $4,800
Cash $4,800
The annual accounting period ends on December 31, 2023.
What is the amount of prepaid insurance that should be reported on the balance sheet at December 31, 2023?
$3,600
The following income statement was reported for Bauer Incorporated for the first year of operations ending December 31, 2022 reported (in thousands of dollars):
Sales Revenue $24,500
Expenses:
Cost of Sales $12,100
Wages $5,300
Rent $900
Utilities $500
Miscellaneous $600
Total Expenses $10,400
Income before taxes. $5,100
Income tax expense $1,785
Net Income $3,315
Calculate net profit margin.
Note: Round your answer to 1 decimal place.
13.5%
The Superior Company has provided the following account balances:
Cash $152,000;
Short-term investments $18,000;
Accounts receivable $36,000;
Inventory $116,000;
Long-term notes receivable $44,000;
Equipment $174,000;
Factory Building $270,000;
Intangible assets $33,000;
Accounts payable $130,000;
Accrued liabilities payable $19,000;
Short-term notes payable $84,000;
Long-term notes payable $169,000.
What is Superior's stockholders' equity?
$441,000
During 2022, Voyager Industries incurred operating expenses amounting to $224,000, of which 75% was paid in cash; the balance will be paid during 2023. Which of the following is correct for the 2022 year-end balance sheet?
A) Stockholders' equity decreases $168,000 and assets decrease $168,000.
B) Assets decrease $224,000 and stockholders' equity decreases $224,000.
C) Assets decrease $224,000, liabilities increase $56,000, and stockholders' equity decreases $224,000.
D) Stockholders' equity decreases $224,000, assets decrease $168,000, and liabilities increase $56,000.
D) Stockholders' equity decreases $224,000, assets decrease $168,000, and liabilities increase $56,000.
Which of the following journal entries is correct when a business entity uses cash to pay an account payable?
A) Accounts Payable XXXXX
Cash XXXXX
B) Accounts Receivable XXXXX
Cash XXXXX
C) Cash XXXXX
Accounts Payable XXXXX
D) Cash XXXXX
Notes Payable XXXXX
A) Accounts Payable XXXXX
Cash XXXXX
On July 1, 2023, Bass Company paid a two-year insurance premium. On that date the following journal entry was made:
Prepaid Insurance $4,800
Cash $4,800
The annual accounting period ends on December 31, 2023.
Prepare the adjusting entry that should be made on December 31, 2023, assuming no adjusting entries have been made during the year.
Insurance Expense $1,200
Prepaid Insurance $1,200
The following income statement was reported for Bauer Incorporated for the first year of operations ending December 31, 2022 reported (in thousands of dollars):
Sales Revenue $24,500
Expenses:
Cost of Sales $12,100
Wages $5,300
Rent $900
Utilities $500
Miscellaneous $600
Total Expenses $10,400
Income before taxes. $5,100
Income tax expense $1,785
Net Income $3,315
Required:
Calculate earnings per share if there are 200,000 weighted average shares of common stock outstanding.
Note: Round your answer to 2 decimal places.
$16.58
Regina Company's January 1, 2022 balance sheet reported total assets of $96,000 and total liabilities of $32,000. During January 2022, the following transactions occurred: (A) the company issued stock and collected cash totaling $24,000; (B) the company paid an account payable of $4,800; (C) the company purchased supplies for $800 with cash; (D) the company purchased land for $48,000, paying $8,000 with cash and signing a note payable for the balance. What is total stockholders' equity after the transactions above?
A) $24,000
B) $88,000
C) $64,000
D) $155,200
B) $88,000
At the beginning of October, Ingram Company’s assets totaled $288,000 and liabilities totaled $72,000. During October the following summarized transactions occurred:
Additional shares of stock were sold for $24,000 cash.
A building costing $114,000 was purchased using $12,000 cash and by signing a $102,000 long-term note payable.
Short-term investments costing $10,800 were purchased using cash.
$12,000 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan.
How much are Ingram's total liabilities at the end of October?
A) $174,000
B) $186,000
C) $198,000
D) $162,000
A) $174,000
Which of the following journal entries is correct when a business entity purchases land costing $30,000 by signing a one-year note payable?
A) Cash $30,000
Notes Payable $30,000
B) Land $30,000
Accounts Payable $30,000
C) Land $30,000
Notes Payable $30,000
D) Notes Payable $30,000
Land $30,000
C) Land $30,000
Notes Payable $30,000
Assume Idaho Company recorded the following adjusting journal entry at year-end:
Insurance Expense $2,000
Prepaid Insurance $2,000
If the beginning balance in prepaid insurance was $500, and $2,500 was paid for an insurance premium during the year, what is the ending balance in the prepaid insurance account after the above adjusting entry?
A) $1,200
B) $700
C) $2,200
D) $1,000
D) $1,000
Pasadena Company's 2023 sales revenue was $600,000 and 2022 sales revenue was $540,000. Pasadena's total assets as of December 31, 2023 were $450,000 and total assets as of January 1, 2023 were $390,000. What is Pasadena’s 2023 total asset turnover ratio?
A) 1.48
B) 1.43
C) 1.33
D) 1.36
B) 1.43
On December 31, 2023, Oakcrest Company prepared an income statement and a balance sheet. In preparing the adjusting entries at year-end, Oakcrest failed to record the adjusting entry for service revenue earned but not yet collected or billed amounting to $10,000. The income statement reported net income of $104,000. The balance sheet reported total assets of $508,000, total liabilities of $340,000, and stockholders' equity of $168,000. What is the correct amount for Oakcrest to report for each of these elements?
A) Net income $99,000; Total assets $503,000; Total liabilities $350,000; Stockholders’ equity $153,000
B) Net income $104,000; Total assets $498,000; Total liabilities $340,000; Stockholders’ equity $158,000
C) Net income $114,000; Total assets $518,000; Total liabilities $340,000; Stockholders’ equity $178,000
D) Net income $94,000; Total assets $508,000; Total liabilities $350,000; Stockholders’ equity $158,000
C) Net income $114,000; Total assets $518,000; Total liabilities $340,000; Stockholders’ equity $178,000
At the beginning of April, Warren Corporation's assets totaled $240,000 and liabilities totaled $60,000. During April the following summarized transactions occurred:
Additional shares of stock were sold for $20,000 cash.
A building costing $95,000 was purchased using $10,000 cash and by signing an $85,000 long-term note payable.
Short-term investments costing $9,000 were purchased using cash.
$10,000 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan.
How much are Warren's total liabilities at the end of April?
A) $145,000
B) $155,000
C) $165,000
D) $135,000
A) $145,000
On December 31, 2023, Hascall Company had revenue of $1,200,000 and expenses total $640,000 before consideration of the following:
Accrued wages $44,000
Accrued revenues $144,000
Depreciation expense. $68,000
Rental revenue $36,000
If Hascall's income tax rate is 40% of income before income taxes, what is the company’s net income after consideration of the above information?
A) $376,800
B) $628,000
C) $560,000
D) $355,200
A) $376,800
On January 1, 2023, the balance in Harrison Company’s prepaid insurance account was $5,000. On December 31, 2023, after the 2023 adjusting entries were made, the balance of the prepaid insurance account was $2,400. During 2023, cash payments for insurance premiums amounted to $10,000, which was debited to the prepaid insurance account. When the adjusting entries were prepared on December 31, 2023, what is the amount Harrison recorded for the adjustment and which account was debited?
A) $12,600; Insurance expense
B) $7,400; Insurance expense
C) $12,600; Prepaid insurance
D) $7,400 Prepaid insurance
A) $12,600; Insurance expense
Which of the following will result in an increase in earnings per share?
A) Accruing expenses at year-end.
B) Selling additional shares of common stock during the year.
C) Accruing revenue at year-end.
D) Receiving cash from a tenant that is recorded as unearned revenue.
C) Accruing revenue at year-end.
Eagle Crest Company has provided the following information for its recent year of operation:
The common stock account balance at the beginning of the year was $60,000 and the year-end balance was $75,000.
The additional paid-in capital account balance increased $7,500 during the year.
The retained earnings balance at the beginning of the year was $225,000 and the year-end balance was $273,000.
Net income was $78,000.
How much were Eagle Crest's dividend declarations during its recent year of operation?
A) $30,000
B) $126,000
C) $78,000
D) The dividend declarations cannot be determined from the information provided
A) $30,000