Centro-matic company began the year with stockholders’ equity of

Centro-matic Company began the year with stockholders’ equity of $15,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $21,000, recorded expenses of $60,000, and paid dividends of $4,000. If Centro-matic’s ending stockholders’ equity was $56,000, what was the company’s revenue for the year?

 

$80,000. 

$84,000.   

$105,000. 

$101,000.

 

Barsuk Company began the year with stockholders’ equity of $217,000. During the year, Barsuk issued stock for $294,000, recorded expenses of $840,000, and paid dividends of $56,000. If Barsuk’s ending stockholders’ equity was $581,000, what was the company’s revenue for the year?

 

$966,000.   

$1,260,000. 

$910,000. 

$1,204,000.

 

At December 1, 2014, Cursive Company’s accounts receivable balance was $1,200. During December, Cursive had credit revenues of $4,800 and collected accounts receivable of $4,000. At December 31, 2014, the accounts receivable balance is

 

$400 debit. 

$400 credit. 

$2,000 debit.   

$2,000 credit.

 

At January 31, 2014, the balance in Aislers Inc.’s supplies account was $250. During February, Aislers purchased supplies of $300 and used supplies of $375. At the end of February, the balance in the supplies account should be

 

$175 debit.    

$325 credit. 

$175 credit. 

$325 debit.

 

On October 3, Karl Schickele, a carpenter, received a cash payment for services previously billed to a client. Karl paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the entries will include a

 

credit to Retained Earnings. 

credit to Notes Payable. 

debit to Accounts Receivable. 

credit to Accounts Payable.

 

A flower shop makes a large sale for $1,200 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,200 considered recognized?

 

December 1. 

December 5. 

December 10. 

November 30.

 

As of March 31, Macon Company owes $500 to Boswell Co. for equipment rented during March. An entry was not previously recorded for this transaction and the equipment will be returned on April 2. If no adjustment is made for this item at March 31, how will Macon’s financial statement be affected?

 

The financial statement will be accurate since the $500 does not have to be paid yet. 

Cash will be overstated at March 31. 

Net income for March will be overstated. 

Stockholders’ equity will be understated.

 

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Thursday is

 

debit Salaries and Wages Expense, $20,000; credit Salaries and Wages Payable, $20,000. 

debit Salaries and Wages Payable, $20,000; credit Cash, $20,000. 

debit Salaries and Wages Expense, $20,000; credit Cash, $20,000. 

debit Salaries and Wages Expense, $5,000; credit Salaries and Wages Payable, $5,000.

 

Buffalo Tom Cruises purchased a five-year insurance policy for its ships on April 1, 2013 for $50,000. Assuming that April 1 is the effective date of the policy, the adjusting entry on December 31, 2013 is

 

Insurance Expense2,500

Prepaid Insurance2,500

 

Prepaid Insurance7,500

Insurance Expense7,500

 

Insurance Expense10,000

Prepaid Insurance10,000

 

Insurance Expense7,500

Prepaid Insurance7,500

 

 

The following information is for Bright Eyes Auto Supplies:

Bright Eyes Auto Supplies

Balance Sheet

December 31, 2013

 

Cash$ 20,000Accounts Payable$ 65,000

Prepaid Insurance40,000Salaries and Wages Payable25,000

Accounts Receivable50,000Mortgage Payable75,000

Inventory70,000Total Liabilities$165,000

Land Held for Investment90,000

Land125,000

Building$100,000Common Stock$120,000

Less AccumulatedRetained Earnings250,000370,000

Depreciation(30,000)70,000

Trademark70,000Total Liabilities and

Total Assets$535,000Stockholders’ Equity$535,000

 

The total dollar amount of assets to be classified as investments is

 

$90,000. 

$125,000. 

$0. 

$70,000.

 

On May 25, Yellow House Company received a $650 check from Grizzly Bean for services to be performed in the future. The bookkeeper for Yellow House Company incorrectly debited Cash for $650 and credited Accounts Receivable for $650. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

 

debit Accounts Receivable $650 and credit Unearned Service Revenue $650. 

debit Accounts Receivable $650 and credit Cash $650. 

debit Cash $650 and credit Unearned Service Revenue $650. 

debit Accounts Receivable $650 and credit Service Revenue $650.

 

The following information is available for Baker Industries.

Baker Industies Inc.

Trial Balance

12/31/13

DebitCredit

Cash16

Accounts Receivable26

Supplies4

Equipment191

Accumulated Depreciation13

Accounts Payable21

Common Stock106

Retained Earnings56

Dividends11

Service Revenue189

Salaries and Wages Expense86

Depreciation Expense39

Supplies Expense12

385385

 

What is the balance in Retained Earnings after posting closing entries at December 31 for Baker Industries? 

 

$97  

$108 

$237 

$4

 

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

 

Small company with numerous accounts. 

All companies, since worksheets are required under generally accepted accounting principles. 

Large company with numerous accounts. 

Small company with few accounts.

 

A lawyer collected $720 of legal fees in advance. He erroneously debited Cash for $270 and credited Accounts Receivable for $270. The correcting entry is

 

Cash…………………………………………450

Accounts Receivable……………..450

 

Cash…………………………………………450

Accounts Receivable……………………..270

Unearned Service Revenue…….720

 

Cash…………………………………………270

Accounts Receivable……………………..450

Unearned Service Revenue…….720

 

Cash…………………………………………720

Service Revenue………………….               720

 

 

The following information is available for Baker Industries.

Baker Industies Inc.

Trial Balance

12/31/13

DebitCredit

Cash16

Accounts Receivable26

Supplies4

Equipment191

Accumulated Depreciation13

Accounts Payable21

Common Stock106

Retained Earnings56

Dividends11

Service Revenue189

Salaries and Wages Expense86

Depreciation Expense39

Supplies Expense12

385385

 

What is the amount of total debits on the post-closing trial balance for Baker Industries?

 

$224 

$237   

$289 

$248

 

On September 23, Sebagoh Company received a $350 check from Surfer Rosa Inc. for services to be performed in the future. The bookkeeper for Sebadoh Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should

 

debit Accounts Receivable $350 and credit Cash $350. 

debit Cash $350 and credit Unearned Service Revenue $350. 

debit Accounts Receivable $350 and credit Service Revenue $350. 

debit Accounts Receivable $350 and credit Unearned Service Revenue $350.

 

 

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