2. Snark Inc. ended the year with $100,000 in salaries payable. During the year they paid $75,000 in cash salaries and recorded $85,000 in salary expenses. What was their beginning year's balance for salaries payable? $110,000 $100,000 $90,000 $85,000 3. The December 31, 2019 Income Statement of Jackson Industries is shown below. Jackson Industries Income Statement for year Ending December 31, 2019 (amounts in millions) Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expenses Operating Income Less: Interest Expenses Income Before Taxes Less: Tax Expense Net Income $175.0 $95.0 $80.0 $40.0 $40.0 $5.0 $35.0 $7.0 $28.0 Jackson began 2019 with a taxes payable account balance of $5 million. During the year, it made a cash payment of $3 million to the tax authorities. On December 31, 2019, what is its taxes payable account balance? $2 million S8 million $9 million $12 million 9. Horan Industries purchased a parcel of land next to their existing plant for $700,000, in order to expand operations. The seller was reluctant to sell initially so to persuade them, Horan offered a price that was twice the market value of the land. According to the historic cost concept, how should the purchase be recorded on the balance sheet? It should be reported at the purchase price of $700,000 It should be reported at its fair market value of $350,000 It should be reported at the value provided by an independent appraiser It should be reported at $700,000 and immediately report a loss of $350,000 12. On January 1, 2018, Schmidt Industries purchased a new paint sprayer for $400,000. The salvage value after 5 years is estimated to be $100,000. The sprayer is depreciated by straight line depreciation for 5 years. On December 31, 2020, the sprayer is sold for $200,000. Which of the following is correct regarding the disposal of the sprayer? It results in a taxable gain of $100,000. It results in a taxable gain of $20,000. It results in a tax loss of $20,000. It results in a tax loss of $100,000 14. ABC Industries estimates its tax expense for 2019 to be $20,000. ABC makes a cash payment for $15,000 to the tax authorities on December 31, 2019. Their taxes payable account was $22,000 at the beginning of 2019. What is the balance of that account at the end of 2019? $17,000 $27,000 $37,000 $42,000 15. Zebra Inc. produced net income of $100,000 in 2019. They paid out half their net income in dividends and the other half was reinvested back into the company. During the year, they incurred $10,000 in interest expense. How did these transactions impact Zebra's income for 2019? Income is reduced $10,000 for interest. Income is reduced $50,000 for dividends. Income is reduced $60,000 for interest and dividends. Income is not impacted. 16. The December 31, 2019 Income Statement of Jackson Industries is shown below. Jackson Industries Income Statement for year Ending December 31, 2019 (amounts in millions) Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expenses Operating Income Less: Interest Expenses Income Before Taxes Less: Tax Expense Net Income $175.0 $95.0 $80.0 $40.0 $40.0 $5.0 $35.0 $7.0 $28.0 Jackson began 2019 with an interest payable account balance of $16 million. On December 31, 2019, its interest payable account balance is $17 million. How much interest was paid during 2019? $4 million $5 million $6 million S7 million 17. The next question deals with the December 31, 2019 Balance Sheet of Horan Industries. Horan Industries Balance Sheet as of December 31, 2019 Assets Current Assets Cash Inventory Accounts Receivables Total Current Assets $65,000 40,000 20,000 $125,000 $45,000 55,000 $100,000 Liabilities Current Liabilities Accounts Payable Notes Payable Total Current Liabilities Non-current Liabilities Debt Owner's Equity Common Stock Retained Earnings Total Liabilities and Owner's Equity 75,000 Non-current Assets Plant and Equipment (Net) Patents (Net) Total Assets 175,000 25,000 $325,000 110,000 40,000 $325,000 In 2019, Horan produced net income of $10,000. Also during 2019, $5,000 in dividends were declared and paid. What was Horan's retained earnings balance one year earlier on December 31, 2018? $30,000 $35,000 $40,000 $45,000 Jump to unanswered question: Question 17 768 submit 18. The statement of financial position that shows a snapshot of the company at a specific point in time is referred to as the income statement statement of cash flows balance sheet statement of retained earnings 19. Under GAAP, which of the following would not qualify a lease arrangement as a capital lease? The lessee has an option to purchase the leased asset at fair market value. Ownership of the leased asset is transferred to the lessee at the end of the lease term. The term of the lease is 75 percent or more of the leased asset's economic life (.e., its productive life). The present value of the lease payments discounted by the lessee's borrowing cost is 90 percent or more of the fair value of the property. 20. The December 31, 2019 Income Statement of Jackson Industries is shown below. Jackson Industries Income Statement for year Ending December 31, 2019 (amounts in millions) Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expenses Operating Income Less: Interest Expenses Income Before Taxes Less: Tax Expense Net Income $175.0 $95.0 $80.0 $40.0 $40.0 $5.0 $35.0 $7.0 $28.0 Jackson began 2019 with an inventory T-account debit balance of $300 million. Inventory purchases during the year amounted to $150 million. There were no inventory-related write-downs or losses. What is its December 31, 2019 inventory account balance? $245 million $355 million $450 million $545 million Jump to unanswered question: Question 20 768 submit 21. F&G Sporting Goods sells baseball equipment to a customer for $15,000. The customer pays $5,000 in cash and agrees to pay the balance in 40 days. Which one of the following choices describes the most appropriate accounting for the transaction? Debit cash $5,000; debit accounts receivables $10,000; credit sales $15,000 Debit cash $5,000; debit accounts payable $10,000; credit sales $15,000 Debit sales $15,000; credit cash $5,000; credit accounts receivables $10,000 Debit cash $5,000; credit sales $5,000