1.

The Bark Company fails to record these two journal entries:

1. Expiration of Prepaid Insurance: $10
2. Cash dividends declared: $40

Working capital will be:

Select one:

a. $10 overstated

b. $30 overstated

c. $10 understated

d. $50 overstated

e. $50 understated

2.

The Looper River Company makes three adjusting entries at 12/31:

• Depreciation $50
• Accrued Revenue $80
• Accrued Expense $65

Indicate the net effect of these three entries on Net Income and Working Capital, respectively:

Select one:

a. Increase $15, Increase $15

b. Decrease $65, Decrease $15

c. Decrease $15, Increase $15

d. Decrease $35, Decrease $65

e. Decrease $35, Increase $15

3.

Following all closing entries, the trial balance totals will be:

Select one:

a. $48,000

b. $82,000

c. $62,000

d. $88,000

e. $54,000

$15,000 7,000 3,000 5,000 24,000 LAKE CORPORATION ADJUSTED TRIAL BALANCE DECEMBER 31, 2012 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation, Equipment Accounts Payable Common Stock Retained Earnings Dividends Commission Revenue Depreciation Expense, Equipment Wages Expense Insurance Expense $ 6,000 12,000 20,000 10,000 8,000 34,000 2.000 14,000 4.000 $82,000 $82,000