Test Bank: Financial Accounting Information for Decisions 6th Edition by Wild Test Bank

For This And Any Other test Bnaks, slotion Manuals, Quizess, Exams And Assignments Contact us At whiperhills@gmail.com

[Question]

181. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:

	Assets	Liabilities
Beginning of the year	$114,000	$68,000
End of the year	135,000	73,000

If the owners made no investments in the business and no dividends were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

Answer:

Beginning owner's equity = $114,000 - $68,000 = $46,000
Ending owner's equity = $135,000 - $73,000 = $62,000
Increase in owner's equity = $62,000 - $46,000 = $16,000
Since there were no investments or dividends during the year, the net income is $16,000.

Bloom’s Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
Learning Objective: 02-P3

[Question]

182. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:

	Assets	Liabilities
Beginning of the year	$114,000	$68,000
End of the year	135,000	73,000

If the owners invested an additional $12,000 in the business during the year, but no dividends were paid, what was the amount of net income earned by Josephine's Bakery during the current year?

Answer:

Beginning owner's equity = $114,000 - $68,000 = $46,000
Ending owner's equity = $135,000 - $73,000 = $62,000
Increase in owner's equity = $62,000 - $46,000 = $16,000
Net income = $16,000 - $12,000 = $4,000

[Question]

183. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:

	Assets	Liabilities
Beginning of the year	$114,000	$68,000
End of the year	135,000	73,000

If the owners made no investments and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

Answer:

Bloom’s Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Decision Making
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
Learning Objective: 02-P3

[Question]

184. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:

	Assets	Liabilities
Beginning of the year	$114,000	$68,000
End of the year	135,000	73,000

If the owners invested an additional $12,000 in the business and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

Answer:

[Question]

185. A company had total assets of $350,000; total liabilities of $101,500; and total equity of $248,500. Calculate its debt ratio.

Answer:

$101,500/$350,000 = 29%

Bloom’s Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2

[Question]

186. Montgomery Marketing Co. had assets of $475,000; liabilities of $275,500; and equity of $199,500. Calculate its debt ratio.

Answer: $275,500/$475,000 = 58%

[Question]

187. List all the necessary steps for recording transactions.

Answer:

1. Analyze transactions and source documents.
2. Apply double-entry accounting.
3. Record the journal entry.
4. Post entry to ledger.

Bloom’s Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-P1

[Question]

188. For each of the following errors, indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error.
a. $100 debit to Cash was debited to the Cash account twice
b. $1,900 credit to Sales was posted as a $190 credit
c. $5,000 debit to Office Equipment was debited to Office Supplies
d. $625 debit to Prepaid Insurance was posted as a $62.50 debit
e. $520 credit to Accounts Payable was not posted

Error	Amount Out of Balance	Column Having Larger Total
a.
b.
c.
d.
e.

Answer:

Error	Amount Out of Balance	Column Having Larger Total
a.	$100	Debit
b.	$1,710	Debit
c.	0	N/A
d.	$562.50	Credit
e.	$520	Debit

[Question]

189. After preparing an (unadjusted) trial balance at year-end, G. Chu of Chu Design Company discovered the following errors:

1. Cash payment of the $225 telephone bill for December was recorded twice.
2. Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes
    Payable for $1,000.
3. A $900 cash dividend was recorded to the correct accounts as $90.
4. An additional investment of $5,000 cash by the owner was recorded as a debit to Common
    Stock and a credit to Cash.
5. A credit purchase of office equipment for $1,800 was recorded as a debit to the Office
    Equipment account with no offsetting credit entry.

Using the form below, indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column.

Error	Yes	No
1.
2.
3.
4.
5.

Answer:

Error	Yes	No
1.		X
2.	X
3.		X
4.		X
5.	X

[Question]

190. The balances for the accounts of Mike's Maintenance, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.

Accounts payable	$ 6,500	Wages expense	$36,000
Accounts receivable	7,000	Rent expense	6,000
Cash	?	Retained Earnings	68,700
Maintenance supplies	1,200
Building	125,000	Land	50,000
Supplies expense	21,500	Unearned maintenance fees	4,000
Common Stock	50,000	Unearned maintenance fees	4,000
Maintenance revenue	175,000	Dividends	48,000

Calculate the correct balance for Cash and prepare a trial balance.

Answer:

MIKE’S MAINTENANCE, INC. Trial Balance For the year ended December 31
Cash**………………………………………………………………. Accounts receivable………………………………………………... Maintenance supplies………………………………………………. Land………………………………………………………………… Building……………………………………………………………... Accounts payable…………………………………………………… Unearned maintenance fees………………………………………… Common stock……………………………………………………… Retained earnings…………………………………………………… Dividends…………………………………………………………… Maintenance revenue……………………………………………….. Wage expense………………………………………………………. Rent expense………………………………………………………... Supplies expense………………………………………….................	$9,500 7,000 1,200 50,000 125,000 48,000 36,000 6,000 21,500	$6,500 4,000 50,000 68,700 175,000
Totals	$304,200	$304,200
** Total credits Total debits (excluding cash) Cash	$304,200 294,700 $9,500

Bloom’s Taxonomy: Create
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-P2

[Question]

191. The balances for the accounts of Lance’s Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.

Accounts payable $ 6,400 Wages expense $35,000

Accounts receivable 7,000 Rent expense 5,000

Cash 10,000 Retained Earnings 68,700

Office Supplies 1,000 Land 53,000

Building 99,000 Unearned Revenue 7,000

Supplies expense 15,000 Dividends 20,000

Consulting Revenue 150,000 Common Stock 12,900

Calculate Net Income.

Answer: $150,000- 15,000-35,000-5,000 = $95,000 Net Income

Bloom’s Taxonomy: Create
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-P3

[Question]

192. The balances for the accounts of Lance’s Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.

Accounts payable $ 6,400 Wages expense $35,000

Accounts receivable 7,000 Rent expense 5,000

Cash 10,000 Retained Earnings 68,700

Office Supplies 1,000 Land 53,000

Building 99,000 Unearned Revenue 7,000

Supplies expense 15,000 Dividends 20,000

Consulting Revenue 150,000 Common Stock 12,900

Calculate Ending Retained Earnings.

Answer: $68,700 + 95,000 – 20,000 =$143,700

Bloom’s Taxonomy: Create
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-P3

[Question]

193. The balances for the accounts of Lance’s Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.

Accounts payable $ 6,400 Wages expense $35,000

Accounts receivable 7,000 Rent expense 5,000

Cash 10,000 Retained Earnings 68,700

Office Supplies 1,000 Land 53,000

Building 99,000 Unearned Revenue 7,000

Supplies expense 15,000 Dividends 20,000

Consulting Revenue 150,000 Common Stock 12,900

Calculate Total Assets.

Answer: $7,000+10,000+1,000+99,000+53,000 = $170,000

Bloom’s Taxonomy: Create
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-P3

[Question]

194. The balances for the accounts of Lance’s Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.

Accounts payable $ 6,400 Wages expense $35,000

Accounts receivable 7,000 Rent expense 5,000

Cash 10,000 Retained Earnings 68,700

Office Supplies 1,000 Land 53,000

Building 99,000 Unearned Revenue 7,000

Supplies expense 15,000 Dividends 20,000

Consulting Revenue 150,000 Common Stock 12,900

Calculate the Debt Ratio.

Answer: $13,400/$170,000 = .0788: 7.9%

Bloom’s Taxonomy: Create
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2

Test Bank

Tuesday, 1 November 2016

Financial Accounting Information for Decisions 6th Edition by Wild Test Bank

For This And Any Other test Bnaks, slotion Manuals, Quizess, Exams And Assignments Contact us At whiperhills@gmail.com

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