11) Celery Company has assets of $150,000, liabilities of $90,000, and equity of $60,000. It buys supplies forcash $5,000. What effect would this transaction have on the accounting equation? Assets, $5,000 increase, equity, $5,000 increase. Assets, $5,000 increase, equity, $5,000 decrease. Liabilities, $5.000 increase, equity, $5.000 decrease. Assets, $5,000 decrease, equity, $5,000 decrease. Assets, no effect:liabilites, no effect 12) Unearned revenues are revenues that have been earned and received revenues that have been earned but not yet colected liabilites created by advancecash payments fromcustomers forproducts orservices recorded as an asset in the accounting records increases to owners' equity 13) On June 30, the Cash account of Majeau Company had a no mal balance of$4.300. During July the account was debited for a total of $3,400 and credited fora total of $3,600. What was the balance in the Cash account on August 1? $0 $4.100 debit $3,400 credit $3,400 debit $4,100 credit 14) Adjusting entries are joumal entries made at the end of an accounting period forthe purposeof Updating related liabl ty and asset accounts Assigning revenues to the periodin which they are earn ed Assigning expenses to the period in which the expirationof benefit has incurred Recording intemal transactions All of these 15) Before recording adjusting entries, the Office Supplies account had a $359 d ebit balance whilea physical count of the suppliesshowed $105 of unused supplies on hand. Thus, the required adjusting entry is Debit Office Supplies $105 and credt Office Supplies Expense $105 Debit Office Supplies Expense $254 and credit Office Supplies $254 Debit Office Supplies Expense $105 and credit Office Supplies $105 Debit Office Supplies $254 and credt Office Supplies Expense $254 Some other en try 16) The information on a work sheet can be used to prepare Year-end finandal statements Adjusting entries Closing entries Interim inangal statements All of these 17) A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columms of the worksheet. The Adjustments columns showexpined insurance of $600. This adjusting entry results in $600 less proft $600 more profit $200 diflerence between the debt and credit columns of the unadjusted trial balance $400 in the Income Statement Debit column on the wok sheet $400 in the Balance Sheet Credit column on the work sheet 18) TheJ. Dawson, Capital account has a credt balance of $1,200 before closing entries are made. If total revenues for the year are S65,200, total expenses $49,800, and withdrawals are $2.400, what is the ending balance in theJ. Dawson, Captal account ater all closing entries have been made? $5,200 $7.600 $14,200 $16,600 $23,200 19) The asset section of a classified balance sheet includes Current assets, long-terminvestments, property, plant and equipment, and intangible assets. Current assets, non-current assets, equity, and intangble assets. Current assets, long terminvestments, property, plant and equipment, and withdrawals Current liabilities, long-term investments, property, plant and equipment and intangible assets. Current assets, liablities, property, plant and equipment, and intangibie assets 20) A merchandising company Earns profit from buying and seling merchandise Buys products from manufacturers and sels to retailer Buys products from manutacturers and sells them to consumers Reports cost of goods sold on the income statement All of the above 21)Z-Martpurchased $3,000 worth of merchandise on credt. Transportation costs were an additional $100, paid cash to the cartage company on delivery. Z-Mart returned $300 worth of merchandse and paid the invoice ontime, and took a 2% purchase discount. The amountof this payment was $2,744 $2,700 $3,000 $3,100 $2.900 221 On April 4. Fianda Company (FC) sold sweaters to one of its customers for $65,000 on credt terms of 3/15 net 30, On April 8, the customer contacted FC to say that the sweater colours did not match their onginal order.FC reached an agreement with the customer to keep the shipment and FC granted the customer apricereduction of $3.000 Thecustomer outstanding bill on April 15. The joumal entry to be made by FC on Apni 15 is Debit Sales Returns and Allowances $3.000 Credit Accounts Receivable $3.000 Debit Accounts Receivable $62,000; Credit Sales Revenue $62,000 Debit Cash $62,000: Credit Acoounts Recevable $62,000 Debit Cash $60,140, Debit Sales Discounts $1,860:Credit Acoounts Receivable $62.000 Debit Cash $62,000: Debit Sales Disoounts $1,860: Credit Accounts Receivable $55.290 23) A business soid some inventory that had cost $5.000 befose taxes. The sale is subject to 5 % goods and services tax (GST) and 7% provincial sales tax (PST). Thebusiness uses a perpetual inventory system How much wil be credied to the Merchand se Inventory acCount as a resultofthissale? $5,000 $5,300 $5,350 $5,600 None oftheseanswersis cornect 25) Physical counts of inventory Are notnecessary under the perpetual system Are necessary to adjust for shrinkage Should be taken at least oncea month Are necessary to adjust for shrinkage and should be taken at least once a month Are notnecessary under the perpetual system and should be taken at least once a month 26) Use of the FIFO cost flow assumption means that Ending inventory items are the ones most recently purchased Goods are removed from inventory at their average cost The periodic costing system is used The beginning inventory contains the oldest costs All of these are correct an swers 27) On September 30, Stark Company needed to estimate its endinginventory in order to prepare its third quarterfinancial statements. The following information is available:(1) Inventory, July 1:$12,500 (2) Third quarter net sales: $40,000 (3) Thind quarter net purchases: $17,500 Stark's gross proft ratio is 15 %. Estimated cost of goods sold would be $6,000 $34.000 $36,000 $40,000 $57,500 28) Toys "R" Ltd. had cost ofgoods sold of $6,000 million, ending inventory of $2.500 million, and average inventory of $2.000 million. The merchandise turnover is 2.40 3.00 0.33 0.4 12.00 29) Explain why temporary accounts are closed each period. (10 Points) 30) Discuss the difference between theperiodic and perpetual inventory systems. (10 Points) 31) A company made the following purchases during the year Jan. 10 15 units at $360 Mar. 15 25 units at S390 Apr. 25 July 30 units at S420 10 20 units at S450 Oct. 10 15 units at S480 On December 31, there were 27 units in ending inventory. These 27 units consisted of 4 from the January 10 shipment, 6 from the March 15 shipment, 3 from the April 25 shipment, 12 from the July 30 shipment, and 2 from the October 10 shipment. Using specific identification, calculate the cost of the ending inventory