Chapter 1 quiz this is in the first week PDF

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1. EX.01.02 Professional Ethics A fertilizer manufacturing company wants to relocate to Yellowstone County. A report from a fired researcher at the company indicates the company's product is releasing toxic by-products. The company suppressed that report. A later report commissioned by the company shows there is no problem with the fertilizer. What should the company's chief executive officer reveal about the content of the unfavorable report in discussions with Yellowstone County representatives? a. Disclose only the second report with no comments. b. Disclose both reports and point out deficiencies in the report of the fired researcher. c. Disclose both reports, omitting the deficiencies that the fired researcher reported. d. Disclose nothing.

2. EX.01.19.ALGO (Algorithmic) Income Statement Imaging Services was organized on March 1, 20Y5. A summary of the revenue and expense transactions for March follows: Fees earned Wages expense

$541,500 276,200

Rent expense

53,600

Supplies expense

16,800

Miscellaneous expense

17,900

Prepare an income statement for the month ended March 31. Imaging Services Income Statement For the Month Ended March 31, 20Y5 $ Expenses: $

Total Expenses $

3. EX.01.18.ALGO (Algorithmic) Statement of stockholders’ equity Financial information related to Organic Products Company for the month ended June 30, 20Y9, is as follows: Net income for June

$ 111,000

Dividends paid in June

26,000

Common stock, June 1, 20Y9

170,000

Common stock issued in June

40,000

Retained earnings, June 1, 20Y9

1,620,000

a. Prepare a statement of stockholders’ equity for the month ended June 30, 20Y9. Organic Products Company Statement of Stockholders’ Equity For the Month Ended June 30, 20Y9 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

b. Why is the statement of stockholders’ equity prepared before the June 30, 20Y9, balance sheet? The statement of stockholders’ equity is prepared before the June 30, 20Y9, balance sheet because as of June 30, 20Y9, are needed for the June 30, 20Y9, balance sheet.

4. BE.01.04.ALGO (Algorithmic) Income Statement The revenues and expenses of Paradise Travel Service for the year ended May 31, 20Y6, follow: Fees earned Office expense Miscellaneous expense Wages expense

$940,690 216,360 18,815 451,530

Prepare an income statement for the year ended May 31, 20Y6. Paradise Travel Service Income Statement For the Year Ended May 31, 20Y6 $

Expenses: $

Total expenses $

5. EX.01.18 Statement of stockholders’ equity Financial information related to Organic Products Company for the month ended June 30, 20Y9, is as follows: Net income for June

$ 115,000

Dividends paid in June

25,000

Common stock, June 1, 20Y9

180,000

Common stock issued in June

50,000

Retained earnings, June 1, 20Y9

1,630,000

a. Prepare a statement of stockholders’ equity for the month ended June 30, 20Y9. Organic Products Company Statement of Stockholders’ Equity For the Month Ended June 30, 20Y9 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

b. Why is the statement of stockholders’ equity prepared before the June 30, 20Y9, balance sheet? The statement of stockholders’ equity is prepared before the June 30, 20Y9, balance sheet because as of June 30, 20Y9, are needed for the June 30, 20Y9, balance sheet.

6. EX.01.10.ALGO (Algorithmic) Effect of Transactions on Accounting Equation

a. A vacant lot acquired for $524,500 is sold for $1,012,500 in cash. What is the effect of the sale on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders' equity? If there is no change, select 'No change' from the dropdown and then enter a "0" in the amount box. Effect

Amount

1. Total Assets

$

2. Total Liabilities

$

3. Stockholders' Equity

$

b. Assume that the seller owes $147,000 on a loan for the land. After receiving the $1,012,500 cash in (a), the seller pays the $147,000 owed. What is the effect of the payment on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders' equity? If there is no change, select 'No change' from the dropdown and then enter a '0' in the amount box. Consider only the payoff of the loan, without considering the sale of the land. Effect

Amount

1. Total Assets

$

2. Total Liabilities

$

3. Stockholders' Equity

$

c. Is it true that a transaction always affects at least two elements (Assets, Liabilities, or Stockholders' Equity) of the accounting equation?

7. EX.01.08 Asset, liability, and stockholders' equity items Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) stockholders' equity: a. Accounts payable b. Accounts receivable c. Fees earned d. Supplies e. Supplies expense f. Utilities expense

8. EX.01.19 Income Statement Imaging Services was organized on March 1, 20Y5. A summary of the revenue and expense transactions for March follows: Fees earned Wages expense Rent expense

$482,000 300,000 41,500

Supplies expense

3,600

Miscellaneous expense

1,900

Prepare an income statement for the month ended March 31.

Imaging Services Income Statement For the Month Ended March 31, 20Y5 $ Expenses: $

Total expenses $

9. EX.01.04.ALGO (Algorithmic) Accounting Equation The total assets and total liabilities (in millions) of ABC Corporation and XYZ Corporation follow: ABC Assets Liabilities

XYZ

$32,179

$31,214

14,159

14,983

Determine the stockholders' equity of each company.

ABC Corporation stockholders' equity

$ million

XYZ Corporation stockholders' equity

$ million

10. BE.01.06 Balance Sheet The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow: Fees earned

$900,000

Office expense

300,000

Miscellaneous expense Wages expense

15,000 450,000

Accounts payable

18,000

Accounts receivable

38,000

Cash

52,000

Common Stock

100,000

Land

450,000

Supplies

3,000

$10,000 of dividends were paid during the year. Retained earnings as of June 1, 20Y5, were $300,000 Prepare a balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity. Paradise Travel Service Balance Sheet May 31, 20Y6 Assets $

$ Total assets Liabilities $ Stockholders' Equity $

Total stockholders' equity $ Total liabilities and stockholders' equity

11. BE.01.02 Accounting Equation Be-The-One is a motivational consulting business. At the end of its accounting period, December 31, 20Y2, Be-TheOne has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the following amounts: a. Stockholders' equity as of December 31, 20Y2. $ b. Stockholders' equity as of December 31, 20Y3, assuming that assets decreased by $65,000 and liabilities increased by $36,000 during 20Y3. $

12. BE.01.03 Transactions

Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May: Indicate the effect of each transaction on the following accounting equation elements (Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Common Stock increases by $18,000.

1. Received cash in exchange for common stock, $18,000.

Element

Item

Direction

Asset

Cash

Increases

Common Stock

Increases

2. Paid advertising expense, $4,850.

3. Purchased supplies on account, $2,100.

4. Billed customers for delivery services on account, $14,700.

5. Received cash from customers on account, $8,200.

13. Introduction_to_Accounting Click to watch the Introduction to Accounting video and then answer the questions below. 1. Most students initially believe that if they are good at math, they will be good at accounting.

2. Foundational accounting concepts are generally taught in which courses? a. Financial and Managerial Accounting courses b. Tax and Auditing courses

3. Which accounting course focuses on the preparation of external financial statements by applying Generally Accepted Accounting Principles (GAAP)? a. Financial Accounting b. Managerial Accounting

4. Which of the following are concepts taught in a financial accounting course? a. Understanding and applying the policies and procedures that a business puts in place to protect the business b. Reporting what a business owns and owes c. Reporting the cash a business receives and spends

5. Which of the following are concepts taught in a managerial accounting course? a. Estimating the revenues and expenses of a product b. Recording and reporting the cost of the products a business makes c. Analyzing the relationship of the costs of a product, how much to make of a product, and how much profit a product will make for a business

14. EX.01.06 Accounting Equation Determine the missing amount for each of the following: Assets $

a. b.

= Liabilities + Stockholders' Equity =

$776,500 =

$550,000 + $

+

$1,345,000 $588,800

c. $14,750,000 = $4,455,000 +

$

15. EX.02.07.ALGO (Algorithmic) Transactions Innovative Consulting Co. has the following accounts in its ledger: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, Retained Earnings, Dividends, Fees Earned, Rent Expense, Advertising Expense, Utilities Expense, Miscellaneous Expense. Journalize the following selected transactions for October 20Y2 in a two-column journal. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank. Oct. 1. Paid rent for the month, $5,000. 3. Paid advertising expense, $3,210. 5. Paid cash for supplies, $1,380. 6. Purchased office equipment on account, $21,100. 12. Received cash from customers on account, $6,890. 20. Paid creditor on account, $2,020. 27. Paid cash for miscellaneous expenses, $870. 30. Paid telephone bill for the month, $320.

31. Fees earned and billed to customers for the month, $45,900. 31. Paid electricity bill for the month, $550. 31. Paid dividends, $3,500. 20Y2 Oct. 1

Oct. 3

Oct. 5

Oct. 6

Oct. 12

Oct. 20

Oct. 27

Oct. 30

Oct. 31

Oct. 31

Oct. 31

16. EX.01.17 Income Statement Items From the following list of selected items taken from the records of Bobcat Appliance Service as of a specific date, identify those that would appear on the income statement. 1. Accounts Payable 2. Cash 3. Common Stock 4. Fees Earned 5. Land 6. Rent Expense 7. Retained Earnings 8. Supplies 9. Supplies Expense 10. Wages Payable

17. EX.01.16 Balance Sheet Items From the following list of selected items taken from the records of Bobcat Appliance Service as of a specific date, identify those that would appear on the balance sheet: 1. Accounts Payable 2. Cash 3. Common Stock 4. Fees Earned 5. Land 6. Rent Expense 7. Retained Earnings 8. Supplies 9. Supplies Expense 10. Wages Payable

18. EX.01.12 Transactions The selected transactions below were completed by Cota Delivery Service during July:

Indicate the effect of each transaction on the accounting equation by choosing the appropriate letter from the following list: a. Increase in an asset, decrease in another asset. b. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders' equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders' equity. 1. Received cash in exchange for common stock, $35,000.

2. Purchased supplies for cash, $1,100.

3. Paid rent for October, $4,500.

4. Paid advertising expense, $900.

5. Received cash for providing delivery services, $33,000.

6. Billed customers for delivery services on account, $58,000.

7. Paid creditors on account, $2,900.

8. Received cash from customers on account, $27,500.

9. Determined that the cost of supplies on hand was $300 and $8,600 of supplies had been used during the month.

10. Paid cash dividends, $2,500.

19. EX.02.01 Chart of Accounts The following accounts appeared in recent financial statements of Delta Air Lines (DAL). Identify each account as either a balance sheet account or an income statement account. For each balance sheet account, identify it as an asset, a liability, or stockholders' equity. For each income statement account, identify it as a revenue or an expense. Item Accounts Payable

Financial Statement

Type of Account

Advanced Payments for Equipment Air Traffic Liability Aircraft Fuel (Expense) Aircraft Maintenance (Expense) Aircraft Rent (Expense) Cargo Revenue Cash Contract Carrier Arrangements (Expense) Flight Equipment Frequent Flyer (Obligations) Fuel Inventory Landing Fees (Expense) Parts and Supplies Inventories Passenger Commissions (Expense) Passenger Revenue Prepaid Expenses Taxes Payable

20. BE.01.05 Statement of stockholders’ equity The revenues and expenses of Paradise Travel Service for the year ended May 31, 20Y6, follow: Fees earned

$900,000

Office expense

300,000

Miscellaneous expense

15,000

Wages expense

450,000

Everett McCauley invested an additional $40,000 in the business in exchange for common stock, and $10,000 of dividends were paid during the year. Common stock had a balance of $60,000 and retained earnings had a balance of $300,000 as of June 1, 20Y5. Prepare a statement of stockholders’ equity for the year ended May 31, 20Y6. Paradise Travel Service Statement of Stockholders’ Equity For the Year Ended May 31, 20Y6 Common Stock $

Retained Earnings $

Total $

$

$

$

21. EX.02.07 Transactions Innovative Consulting Co. has the following accounts in its ledger: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, Retained Earnings, Dividends, Fees Earned, Rent Expense, Advertising Expense, Utilities Expense, Miscellaneous Expense. Journalize the following selected transactions for October 20Y2 in a two-column journal. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank.

Oct. 1. Paid rent for the month, $2,500. 4. Paid advertising expense, $1,000. 5. Paid cash for supplies, $1,800. 6. Purchased office equipment on account, $11,500. 12. Received cash from customers on account, $7,500. 20. Paid creditor on account, $2,700. 27. Paid cash for miscellaneous expenses, $700. 30. Paid telephone bill for the month, $475. 31. Fees earned and billed to customers for the month, $42,400. 31. Paid electricity bill for the month, $900. 31. Paid dividends, $1,500.

20Y2 Oct. 1

Oct. 4

Oct. 5

Oct. 6

Oct. 12

Oct. 20

Oct. 27

Oct. 30

Oct. 31

Oct. 31

Oct. 31

22. EX.02.04 Rules of Debit and Credit The following table summarizes the rules of debit and credit. Indicate whether the proper answer is a debit or a credit. Increase

Decrease

Normal Balance

Balance sheet accounts: Credit

Asset Liability

Credit

Stockholders' equity: Common Stock

Credit

Retained Earnings Dividends

Credit Debit

Credit

Income statement accounts: Revenue Expense

Credit Credit

Debit

23. BE.02.04.ALGO (Algorithmic) Journal Entry for Dividends Prepare a journal entry on June 30 for the payment of dividends of $16,000. If an amount box does not require an entry, leave it blank.

June 30

24. EX.01.21.ALGOEX.01-21.ALGO (Algorithmic) Balance Sheets, Net Income Financial information related to the corporation of Ebony Interiors for February and March 2018 is as follows:

February 28, 2018 March 31, 2018 Cash

150,500

255,500

85,300

98,000

7,500

6,300

Accounts payable

$38,600

$41,700

Common stock

130,000

130,000

?

?

Accounts receivable Supplies

Retained earnings

a. Prepare balance sheets for Ebony Interiors as of February 28, 2018. Ebony Interiors Balance Sheet February 28, 2018 Assets $

$ Total assets Liabilities $ Stockholders' Equity $

Total stockholders' equity Total liabilities and stockholders' equity

$

Prepare balance sheets for Ebony Interiors as of March 31, 2018. Ebony Interiors Balance Sheet March 31, 2018 Assets $

$ Total assets Liabilities $ Stockholders' Equity $

Total stockholders' equity $ Total liabilities and stockholders' equity

b. Determine the amount of net income for March, assuming that no additional common stock was issued and no dividends were paid during the month. $ c. Determine the amount of net income for March, assuming that no additional common stock was issued, but dividends of $31,300 were paid during the month. $

25. EX.02.14 Journal Entries Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts:

Cash (1) 40,000 (2) 4,000

Equipment (3) 15,000

Dividends (9) 1,500

(7)

13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500

Accounts Receivable

Accounts Payable

(5) 20,500 (7) 13,100

(6) 6,000 (3) 10,000

Supplies

Common Stock

(2) 4,000 (8) 2,200

(1) 40,000

Service Revenue (5) 20,500

Operating Expenses (4) 6,175 (8) 2,200

Prepare the nine journal entries from which the postings were made. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)...