1. Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $46,000 2) borrowed $28,000 from its bank 3) provided consulting services for $44,000 cash 4) paid back $18,000 of the bank loan 5) paid rent expense for $10,500 6) purchased equipment for $15,000 cash 7) paid $3,300 dividends to stockholders 8) paid employees' salaries of $24,000 What is Yowell's net cash flow from operating activities?

Multiple Choice:

Inflow of $9,500

Inflow of $6,200

Inflow of $37,500

Inflow of $20,000

2. Santa Fe Company was started on January 1, Year 1, when it acquired $9,400 cash by issuing common stock. During Year 1, the company earned cash revenues of $5,600, paid cash expenses of $3,450, and paid a cash dividend of $1,000. Based on this information, Multiple Choice The Year 1 statement of cash flows would show a net cash flow from financing activities of $9,400. The Year 1 statement of cash flows would show net cash inflow from financing activities of $8,400. The balance sheet at December 31, Year 1 would show total equity of $15,000. The Year 1 income statement would show net income of $1,150.

Multiple Choice

The Year 1 statement of cash flows would show a net cash flow from financing activities of $9,400.

The Year 1 statement of cash flows would show net cash inflow from financing activities of $8,400.

The balance sheet at December 31, Year 1 would show total equity of $15,000.

The Year 1 income statement would show net income of $1,150.

3. Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,950 cash from the issue of common stock. 2) Borrowed $1,420 from a bank. 3) Earned $1,600 of revenues cash. 4) Paid expenses of $450. 5) Paid a $250 dividend. During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $1,325 of common stock. 2) Repaid $920 of its debt to the bank. 3) Earned revenues of $1,750 cash. 4) Incurred expenses of $760. 5) Paid dividends of $300. The amount of retained earnings on Packards Year 2 balance sheet is?

Multiple Choice

$1,590.

$2,515.

$1,890.

$2,290.

4. The year-end financial statements of Calloway Company contained the following elements and corresponding amounts: Assets = $26,000; Liabilities = ?; Common Stock = $5,600; Revenue = $12,200; Dividends = $1,050; Beginning Retained Earnings = $4,050; Ending Retained Earnings = $7,600. The amount of liabilities reported on the end-of-period balance sheet was?

Multiple Choice

$12,800.

$16,350.

$9,650.

$11,650.

5. Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $4,500 cash from issuing common stock. 2) Borrowed $2,950 from a bank. 3) Earned $3,850 of revenues. 4) Incurred $2,550 in expenses. 5) Paid dividends of $550. Lexington Company engaged in the following transactions during Year 2: 1) Acquired an additional $1,250 cash from the issue of common stock. 2) Repaid $1,825 of its debt to the bank. 3) Earned revenues, $5,250. 4) Incurred expenses of $3,050. 5) Paid dividends of $1,540. The amount of total assets on Lexington's balance sheet at the end of Year 1 was?

Multiple Choice

$8,200.

$3,950.

$1,550.

6. Gomez Company collected $18,600 on September 1, Year 1 from a customer for services to be provided over a one-year period beginning on that date. How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31, Year 1? How much would it report as cash flows from operating activities for Year 1?

Multiple Choice

$6,200; $6,200

$18,600; $18,600

$6,200; $18,600

$0; $18,600

7. Nelson Company experienced the following transactions during Year 1, its first year in operation. Issued $7,400 of common stock to stockholders. Provided $3,700 of services on account. Paid $1,950 cash for operating expenses. Collected $2,600 of cash from accounts receivable. Paid a $170 cash dividend to stockholders. The amount of net cash flow from operating activities shown on Nelson Company's Year 1 statement of cash flows is?

Multiple Choice

$480.

$650.

$1,750.

$1,580.

8. The following accounts and balances were drawn from the records of Carolina Company on December 31, Year 1: Cash $ 3,400 Accounts receivable $ 1,450 Dividends $ 1,700 Common stock $ 2,175 Land $ 2,000 Revenue $ 2,000 Accounts payable $ 1,050 Expense $ 1,150 The amount of Carolinas retained earnings after closing on December 31, Year 1 was:

Multiple Choice

$4,475.

$5,400.

$2,775.

$3,625.

9. Jacks Snow Removal Company received a cash advance of $13,500 on December 1, Year 1 to provide services during the months of December, January, and February. The year-end adjustment on December 31, Year 1, to recognize the partial expiration of the contract will

Multiple Choice

increase assets by $4,500

increase equity by $4,500

increase liabilities by $4,500

increase assets by $4,500 and increase equity by $4,500.

10. Revenue on account amounted to $4,400. Cash collections of accounts receivable amounted to $4,100. Cash paid for expenses was $3,200. The amount of employee salaries accrued at the end of the year was $1,000. Cash flow from operating activities was

Multiple Choice

$1,000.

$900.

$1,200.

$5,000

11. Assume the perpetual inventory method is used. 1) Green Company purchased merchandise inventory that cost $16,300 under terms of 4/10, n/30 and FOB shipping point. 2) The company paid freight cost of $630 to have the merchandise delivered. 3) Payment was made to the supplier within 10 days. 4) All of the merchandise was sold to customers for $24,100 cash and delivered under terms FOB shipping point with freight cost amounting to $430. The gross margin from these transactions of Green Company is.

Multiple Choice

$8,452.

$7,392.

$7,822.

$8,022.

12. Assume the perpetual inventory method is used. 1) The company purchased $13,600 of merchandise on account under terms 2/10, n/30. 2) The company returned $3,100 of merchandise to the supplier before payment was made. 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $21,200 cash. The amount of gross margin from the four transactions is:

Multiple Choice

$10,910.

$7,448.

$10,972.

$7,600.

13. Galaxy Company sold merchandise costing $2,800 for $4,600 cash. The merchandise was later returned by the customer for a refund. If the perpetual inventory method is used, what effect will the sales return have on the accounting equation?

Multiple Choice

Total assets and total equity decrease by $4,600.

Total assets and total equity decrease by $1,800.

Total assets decrease by $4,600 and total equity is decreased by $2,800.

Total assets and total equity increase by $1,800.

14. Ballard Company uses the perpetual inventory system. The company purchased $8,400 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also paid $290 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $15,800 cash. The amount of gross margin for this merchandise is:

Multiple Choice:

$7,278.

$7,400.

$7,110.

$8,400.

15. Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $12,500 of common stock for cash. 2) The company paid cash to purchase $7,600 of inventory. 3) The company sold inventory that cost $5,000 for $10,150 cash. 4) Operating expenses incurred and paid during the year, $4,500.

Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $10,800 of inventory. 2) The company sold inventory that cost $9,200 for $16,750 cash. 3) Operating expenses incurred and paid during the year, $5,500. Note: Sanchez uses the perpetual inventory system. Sanchez's gross margin for the Year 2 is:

Multiple Choice

$7,550.

$2,050.

$9,200.

$5,950.