#2 Normal Balance of Account (8 points) 1. Debitor Credit Cash 2. Debitor Credit Wage Expense 3. Debit or Credit Sales Revenue 4. Debitor Credit Common Stock 5. Debitor Credit Accumulated Depreciation 6. Debitor Credit Retained Earnings 7. Debit or Credit Cost of Goods Sold 8. Debit or Credit Inventory #3 Type of Account (6 points) For each of the following identify if the account is an ASSET, LIABILITY, EQUITY, REVENUE, or EXPENSE account. If the account is a CONTRA account be sure to indicate that as well. 1. Common Stock 2. Accounts Receivable 3. Unearned Revenue 4. Sales Allowances 5. Accumulated Depreciation 6. Bonds Payable #4 Financial Statement (8 points) For each of the following identify the financial statement(s) on which each is found. Your answer choices are: BALANCE SHEET INCOME STATEMENT STATEMENT OF RETAINED EARNINGS STATEMENT OF CASH FLOWS TRIAL BALANCE JOURNAL ENTRY STATEMENT You only need to identify 1 statement for credit. 1. Total net income less total dividends over the life of the company 2. Current Assets 3. Liabilities due within the next year 4. Expenses 5. Gross Profit 6. Net Income 7. Cash Flow from Operating Activities 8. Deferred Revenue #5 True/False (3 points) 1. TRUE or FALSE 2. TRUE or FALSE 3. TRUE or FALSE Opportunity costs are found on the financial statements. Estimates are used to compute depreciation expense. Estimates are used to compute bad debt expense. 3/8 #6 Journal entries (7 points) Prepare regular journal entries, adjusting journal entries, or closing journal entries for #1-#7 below. 1. On November 1, 2020, Cook Inc. issued 10,000 shares of $2 par value Common Stock for $26 per share. Prepare JE for the issuance of the stock. 2. On November 1, 2020, Cook Inc. purchases equipment for $25,000 with cash. At the time of purchase, Cook Inc. estimates the salvage value is $1,000 and Cook Inc. expects to use the equipment for 8 years. Prepare the JE for the purchase of equipment. 3. On November 1, 2020, Cook Inc. borrows $100,000 from a bank. Cook Inc. will repay the loan in 3 years. The annual interest rate is 6%. Prepare the JE for the loan. 4. On December 15, 2020, Cook Inc. sells inventory worth $50,000 for $275,000. The customers pay cash. Cook Inc. uses FIFO as its inventory costing method. 5. At 12/31/2020 prepare any adjusting entry(ies) necessary related to #2 above. 6. At 12/31/2020 prepare any adjusting entry(ies) necessary related to #3 above. 7. The final balance for the year in the Dividends account is $7,000 (normal balance). Prepare the closing entry for Dividends, if one is required. If one is not required, state that