1-

On January 1 of the current year, Jimmy's Sandwich Company, Inc. reported stockholders' equity totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year the business paid $20,000 to the stockholders. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in stockholders' equity during the year was:

A decrease of $9,500.

An increase of $9,500.

An increase of $30,500.

A decrease of $30,500.

An increase of 73,500.

2-

The following information is available for the Higgins Travel Agency, Inc. After these closing entries what will be the balance in the Retained Earnings account?

Net Income	$ 44,500
Retained earnings	131,000
Dividends	12,800

$73,700.

$188,300.

$99,300.

$162,700.

$131,000.

3-

On January 1, Imlay Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000. Imlay uses the straight-line depreciation method to allocate costs. The adjusting entry needed on December 31 of the first year is:

Debit Depreciation Expense, $9,000; credit Accumulated Depreciation, $9,000.

Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000.

Debit Depreciation Expense, $90,000; credit Accumulated Depreciation, $90,000.

Debit Depreciation Expense, $18,000; credit Equipment, $18,000.

Debit Depreciation Expense, $9,000; credit Equipment, $9,000.

4-

Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $188,000, expenses of $105,200, The company paid $19,200 cash in dividends to the owner (sole stockholder). The retained earnings account before closing had a balance of $300,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

Debit Retained Earnings $300,000; credit Income Summary $300,000

Debit Retained Earnings $63,600; credit Income Summary $63,600

Debit Income Summary $63,600; credit Retained Earnings $63,600

Debit Income Summary $82,800, credit Retained Earnings $82,800

Debit Retained Earnings $82,800, credit Income Summary $82,800

5-

A company pays its employees $4,000 each Friday, which amounts to $800 per day for the five-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:

$4,000.

$800.

$1,600.

$2,400.

$3,200.