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    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2

Emmit had the following final balances after the first year of operations:
 
Assets                                                                 $35,000
stockholder's equity                               $13,900
dividends                                                         $3,900
net income                                                      $10,600.
 
What is the amount of Emmitt's liabilities?
 
$21,100
   
Use the following appropriate amounts to calculate net income:
 
Revenues, $11,300;
Liabilities, $4,100;
Expenses, $3,600;
Assets, $18,600;
Dividends, $1,300.
 
$7,700
   
The ending Retained Earnings balance of Carriage, Incorporated decreased by $1.2 million from the beginning of the year.
The company declared a dividend of $4.5 million during the year. What was the net income for the year?
 
$3.3 million
   
Anthem, Incorporated, reports the following information related to its other comprehensive income (in millions):

Net unrealized gains/losses on investments -                       680
Net unrealized gains/losses on derivatives -                                          (16)
Net gains/losses related to pension costs -                                            26
 
Other comprehensive income: 690
Total comprehensive income:    5,497
   
At the beginning of the year (January 1), Wild Horses Drilling has $11,000 of common stock outstanding and retained earnings of $7,900.
During the year, Wild Horses reports net income of $8,200 and pays dividends of $2,900. In addition,
Wild Horses issues additional common stock for $7,700.
Prepare the statement of stock-holders equity.
 
Beginning balance:
-              Common stock                  11,000
-              Retained earnings                           7,900
-              Total stockholder's equity
Issuance of common stock:
-              Common stock                  7,700
-              Reatined earnings                           0
-              Total stockholder's equity           7,700
Add: Net income:
-              Common stock                  0
-              Reatined earnings                           8,200
-              Total stockholder's equity           8,200
Less: Dividends
-              Common stock                  0
-              Reatined earnings                           2,900
-              Total stockholder's equity           2,900
Ending Balance:
-              Common stock                  18,700
-              Reatined earnings                           13,200
-              Total stockholder's equity           31,900
   
 
On January 1, Barton Brothers, Incorporated started the year with a $694,000 balance in Retained Earnings and a $602,000
balance in Common Stock. During the year, the company reported net income of $109,000, paid a dividend of $14,600, and
issued more common stock for $24,500. What is total stockholders' equity at the end of the year?
 
$1,414.900
   
Wildbird Construction has the following account balances on December 31, 2024. Use the appropriate accounts to prepare a balance sheet.

Equipment -                       16,500
Accounts payable -          1,100
Salaries expense -            23,500
Common stock -                11,000
Land -                                    8,500
Notes payable -                 10,500
Service revenue -             29,500
Cash -                                    4,100
Retained earnings - ?
 
Assets:
Equipment -                       16,500
Land -                    8,500
Cash -                    4,100
Total Assets:                      29,100

Liabilities:
Accounts payable -          1,100
Notes payable -                10,500
Total liabilities:                11,600

Stockholder's Equity:
Common stock -                                                               11,00
Retained earnings -                                                        6,500
Total stockholder's equity:                                          17,500
Total liabilities and stockholder's equity: 29,100
   
What is the amount of current assets, assuming the accounts above reflect normal activity?

Accounts payable                                             15,200
Buildings                                                              80,200
Cash                                                                                      10,700
Accounts receivable                                                        9,700
Salaries payable                                                4,700
Retained earnings                                            48,300
Supplies                                                               40,200
Notes payable (due in 18 months)                            35,200
Interest payable                                                               3,200
Common stock                                                  35,200
 
$60,600
   
Assets - 81000
Liabilities - 41000
Retained Earnings - 8000

What is the balance in the Common Stock account?
 
$32,000
   
The Accounts Payable account has a beginning balance of $11,500 and the company purchased $55,000 of supplies on account
during the month. The ending balance was $19,300.
How much did the company pay to creditors during the month?
 
$47,200
 
   
MMT Corporation reports the following income statement items ($ in millions) for the year ended December 31, 2024:
sales revenue, $2,200; cost of goods sold, $1,440; selling expense, $215; general and administrative expense, $205;
interest expense, $45; and gain on sale of investments, $85. Income tax expense has not yet been recorded.
The income tax rate is 25%. Prepare a multiple-step income statement.
 
Sales revenue                                                                  2,200
Cost of goods sold                                                          1,440
Gross profit                                                                       760
Operating expenses:
Selling expense                                                                                               215
General and administrative expenses                                                    205
Total operating expenses                                            420
Operating income                                                          240
Other income (expense):
- Interest expense -                                                                                         (45)
- Gain on sale of investments                                                                    85
Total other income, net                                                                               40
Income before income taxes                                     380
Income tax expense                                                                                      (95)
Net income                                                                        285
   
What is the amount of total assets?

Cash                                                      13,700
Supplies                                               6,200
Prepaid rent                                       3,700
Salaries expense                              6,200
Equipment                                          66,700
Service revenue                                36,800
Miscellaneous expenses                21,700
Dividends                                            4,700
Accounts payable                             6,700
Common stock                                  69,700
Retained earnings                            9,700
 
$90,300
   
What is the amount of current liabilities?

Retained earnings                                            52,200
Supplies                                                               37,200
Equipment                                                          72,200
Accounts receivable                                        8,800
Deferred revenue                                            6,200
Accounts payable                                             15,800
Common stock                                                 25,200
Notes payable (due in 18 months)            35,200
Interest payable                                               7,200
Cash                                                                      22,600
 
$29,200
   
In the statement of stockholders' equity, Retained Earnings had a beginning balance of $25,200.
During the period, the company reports a net income of $10,200 and a dividend of $4,200.
The ending balance in the retained earnings account is:
 
$31,200
   
Frosty Incorporated has the following balances on December 31 prior to the closing process:

Revenues                                                            37,400
Retained earnings, January 1 - 9,500
Cash                                                                      7,400
Expenses                                                             23,200
Accounts payable                                             3,800
Dividends                                                            1,900
Supplies                                                               18,200

Based upon the balances above, how will Retained Earnings change as a result of the closing process?
 
Increase of $12,300
   
At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400.
During the year, $86,000 was paid for insurance.
At the end of the year, after adjustments were recorded, the balance in the prepaid insurance account was $42,000.
Insurance expense for the year would be:
 
$92,400
   
A company would classify a six-month prepaid insurance policy as:

a) Property, plan, and equipment
b) Current asset
c) Goodwill
d) Investment
   
Cash received from a bank borrowing would be reported on the statement of cash flows as what type of activity?

a) Merchandising
b) Financing
c) Operating
d) Investing
   
When a restaurant pays salaries to its employees, the cost is classified as a(n):

a) Loss
b) Gain
c) Revenue
d) Expense
   
The statement of cash flows reports cash from the activities of:

a) Operating, purchasing, and investing
b) Financing, investing, and operating
c) Borrowing, paying, and investing
d) Using, investing, and financing
   
Operating cash outflows would include:

a) Purchase of investments
b) Purchase of equipment
c) Purchases of inventory
d) Payment of cash dividends
   
Porite Company recognizes revenue in the period in which it records an asset for the related account receivable,
rather than in the period in which the account receivable is collected in cash.
Porite's practice is an example of:

a) Economic entity
b) Cash basis accounting
c) The matching principle
d) Accrual accounting
   
The statement of stockholder's equity includes which of the following for the period?

a) Details of a company's profitability that represents stockholder's claims
b) Changes in the various stockholders' equity accounts (contributed capital, retained earnings, and accumulated other comprehensive income)
c) Current assets available to pay current liabilities to reduce risk to stockholders
d) Inflows and outflows of cash that benefit stockholders
   
Below is a list of activities for Blue Angus Incorporated. For each activity, indicate the impact on the accounting equation.
After doing so for all transactions, ensure that the accounting equation remains in balance.

1. Provide services to customers on account, $1750
2. Pay $300 for current month's rent
3. Hire a new employee who while be paid $650 at the end of each month
4. Pay $100 for advertising aired in the current period
5. Purchase office supplies for $300 cash
6. Receive cash of $1150 from customers in (1) above
7. Obtain a loan from the bank for $8500
8. Receive a bill of $450 for utility costs in the current period
9. Issue common stock for $11500 cash
10. Pay $650 to employee in (3) above
 
1. A = 1750; L = 0; SE = 1750
2. A = (300); L = 0; SE = (300)
3. A = 0; L = 0; SE = 0
4. A = (100); L = 0; SE = (100)
5. A = (300) & 300; L = 0; SE = 0
6. A = (1150) & 1150; L = 0; SE = 0
7. A = 8500; L = 8500; SE = 0
8. A = 0; L = 450; SE = (450)
9. A = 11500; L = 0; SE = 11500
10. A = (650); L = 0; SE = (650)
Totals: A = 20700; L = 8950; SE = 11750
   
Indicate whether the normal balance of each account is a debit or a credit.

1. Cash
2. Sales revenue
3. Salaries expense
4. Account payable
5. Equipment
6. Retained earnings
7. Cost of goods sold
8. Accounts receivable
9. Dividends
10. Common stock
 
1. Debit
2. Credit
3. Debit
4. Credit
5. Debit
6. Credit
7. Debit
8. Debit
9. Debit
10. Credit
   
Which financial accounting number impacts stock prices more than any other single piece of information?

a) Total assets
b) Common stock
c) Retained earnings
d) Net income
   
Which of the following is not reported in the balance sheet?

a) Assets
b) Expenses
c) Liabilities
d) Retained Earnings
   
A classified balance sheet:

a) Shows the changes in assets, liabilities, revenues and expenses
b) Shows only current assets and current liabilities
c) Shows subtotals for current assets and current liabilities
d) Contains confidential information
   
Which of the following is a shareholder's equity account in the balance sheet?

a) Deferred revenue
b) Retained earnings
c) Service revenue
d) Investments
   
Assets normally carry a _______ balance and are shown in the ______________.
a) Debit; Income statement
b) Debit; Balance sheet
c) Debit; Statement of stockholder's equity
d) Credit; Balance sheet
   
Consider the following accounts:

Dividends
Insurance Expense
Cash
Service Revenue

How many of these accounts are increased with credits?
 
1
   
How many of the following transactions would increase total liabilities in the current period?

Pay for advertising that will not occur until the following period.
Collect cash from customer prior to providing service.
Incur, but not pay, utilities cost in the current period.
Order supplies that have not yet been received.
 
2
   
When a company issues common stock for cash, what is the effect on the accounting equation for the company?

a) Assets decrease and liabilities decrease
b) Assets increase and liabilities increase
c) Assets increase and stockholder's equity increases
d) Liabilities decrease and stockholder's equity increases
   
Purchasing office supplies on account will:

a) Increase assets and increase liabilities
b) Increase assets and decrease liabilities
c) Not change assets
d) Increase assets and increase stockholder's equity
   
Which of the following transactions would cause a decrease in both assets and stockholders' equity?

a) Providing services to customers on account
b) Purchasing office equipment on account
c) Paying advertising for the current month
d) Paying insurance premium for the next two years
   
How many of the following transactions would decrease total stockholders' equity in the current period?
- Pay dividends to stockholders.
- Delay payment on supplies purchased until the following period.
- Provide services on account to customers.
- Borrow cash from a local bank.
 
1
   
A transaction is initially recorded in the _____, and then subsequently posted to the general _____.

a) Debit; Credit
b) Journal; Ledger
c) Chart; Statement
d) Statement; Account
   
Daniel Dino Restaurant owes employees' salaries of $15,000. How would this transaction be recorded?

a) Debit salaries expense; credit salaries payable
b) Debit salaries payable; credit salaries expense
c) Debit salaries payable; credit cash
d) Debit salaries expense; credit cash
   
Jerome purchased a building for his business by signing a note to be repaid over the next ten years.
Which of the following describes how to record this transaction?

a) Debit expenses; credit liabilities
b) Debit assets; credit stockholder's equity
c) Debit assets; credit liabilities
d) Debit liabilities; credit assets
   
Which of the following is NOT a common asset measurement method?
a) Net realizable value
b) Amortized cost
c) Historical cost
d) Liquidation value
   
The two measurements of earnings per share required to be calculated by all public companies are called:
a) Basic and diluted
b) Smple and diluted
c) Basic and complex
d) Simple and complex
   
A primary advantage of the multipe-step format of the income statement over the single-step format is that the multiple-step format:
a) Results in higher amount of net income
b) Lists revenues and expenses in order of their dollar amount
c) Separately lists income tax expense
d) Classifies expenses by function
   
For each of the following transactions, select the appropriate business classification category.

1. Purchase of equipment for cash
2. Payment of employee salaries
3. Collection of cash from customers
4. Cash proceeds from notes payable
5. Purchase of common stock of another corporation for cash
6. Issuance of common stock for cash
7. Sale of equipment for cash
8. Payment of interest on notes payable
9. Payment of cash dividends to stockholders
10. Payment of principal on notes payable
 
1. Investing
2. Operating
3. Operating
4. Financing
5. Investing
6. Financing
7. Investing
8. Operating
9. Financing
10. Financing
   
Record each transaction. Rochester uses the following accounts:
Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense.

March 1 - Issue common stock for $15500
March 5 - Obtain $7900 loan from the bank by signing a note
March 10 - Purchase construction equipment for $19500 cash
March 15 - Purchase advertising for the current month for $1200 cash
March 22 - Provide construction services for $16900 on account
March 27 - Receive $11900 cash on account from March 22
March 28 - Pay salaries for the current month of $4900
 
March 1               Cash                                      15,500
Common Stock                 15,500

March 5
Cash                                      7,900
Notes Payable                   7,900


March 10
Equipment                          19,500
Cash                                      19,500


March 15
Advertising Expense       1,200
Cash                                      1,200


March 22
Accounts Receivable      16,900
Service Revenue              16,900


March 27
Cash 1                                   1,900
Accounts Receivable      11,900


March 28
Salaries Expense              4,900
Cash                                      4,900
   
Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a:

a) Credit to retained earnings
b) Credit to notes payable
c) Credit to interest expense
d) Debit to investments
   
Clement Company paid an account payable related to a previous utility bill of $970.
How would this transaction be recorded on the payment date?

a) Debit cash $970; credit account payable $970
b) Debit cash $970; credit utilities expense $970
c) Debit utilities expense $970; credit cash $970
d) Debit accounts payable $970; credit cash $970
   
A trial balance can be best explained as a list of:

a) The income statement accounts used to calculate net income
b) Revenue, expense, and dividend accounts used to show the balances of the components of retained earnings
c) The balance sheet accounts used to show the equality of the accounting equation
d) All accounts and their balances at a particular date
   
Consider the following set of transactions occurring during the month of May for Bison Consulting Company.
For each transaction, indicate the impact on (1) the balance of cash, (2) cash-basis net income, and (3) accrual-basis net income for May.

1. Receive $1,500 from customers who were billed for services in April
2. Provide $3,200 of consulting services to a local business. Payment is not expected until June
3. Purchase office supplies for $400 on account. All supplies are used by the end of May
4. Pay $600 to workers. $400 is for work in May and $200 is for work in April
5. Pay $200 to advertise in a local newspaper in May
 
1. Cash Balance: 1500; Cash-Basis Net Income: 1500; Accrual-Basis Net Income: 0
2. Cash Balance: 0; Cash-Basis Net Income: 0; Accrual-Basis Net Income: 3200
3. Cash Balance: 0; Cash-Basis Net Income: 0; Accrual-Basis Net Income: (400)
4. Cash Balance: (600); Cash-Basis Net Income: (600); Accrual-Basis Net Income: (400)
5. Cash Balance: (200); Cash-Basis Net Income: (200); Accrual-Basis Net Income: (200)
Totals: Cash Balance: 700; Cash-Basis Net Income: 700; Accrual-Basis Net Income: 2200
   
For each situation, determine the date for which the company recognizes the revenue under accrual-basis accounting.

1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs on August 16

2. A customer purchases sunglasses from Eddie Bauer on January 27 on account. Eddie Bauer receives payment from the customer on February 2

3. On March 30, a customer preorders 10 supreme pizzas (without onions) from Pizza Hut for a birthday party.
    The pizzas are prepared and delivered on April 2. The company receives cash at the time of delivery

4. A customer pays in advance for a three-month subscription to Sports Illustrated on July 1.
    Issues are scheduled for delivery each week from July 1 through September 30
 
1. August 16
2. January 27
3. April 2
4. Revenue would be recognized as each magazine is delivered
   
In November, a company hires three temporary employees that are scheduled to work only the month of December.
Those employees work during December, and they are then paid their full salaries in January. In which month should the company record salaries expense?

a) November
b) December
c) January
d) Evenly over the three months
   
A company owes employee salaries of $16,000 at the end of the year. These salaries will be paid in the following year.
What adjusting entry, if any, does the company need to record at the end of the year?

a) Debit salaries expense and credit salaries payable for $16,000
b) Debit salaries expense and credit cash for $16,000
c) No adjusting entry is necessary at the end of the year
d) Debit salaries payable and credit salaries expense for $16,000
   
A company has a policy of paying salaries for contract labor on the 15th of the month following the labor services received.
In December 2024, the company recorded $15,000 paid in salaries for labor services received in November 2024.
In addition, labor services received in December 2024 were $12,000 and will be paid by the company on January 15, 2025.
What adjusting entry will the company record on December 31, 2024?

a) Debit salaries expense and credit salaries payable for $27,000
b) Debit salaries expense and credit salaries payable for $3,000
c) Debit salaries expense and credit cash for $15,000
d) Debit salaries expense and credit salaries payable for $12,000
   
GAAP is an abbreviation for:
 
Generally Accepted Accounting Principles

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2