A transaction caused a $50,000 decrease in both assets and liabilities. Which could have happened?

1. A customer paid cash for work performed by the firm earlier
2. The firm bought computers and paid cash
3. The firm recorded depreciation on a long-lived asset
4. A customer gave a deposit for work to be performed later
5. The firm paid cash to their suppliers for inventory received earlier

When a firm declares dividends (and pays them within the same quarter) which of the following happens:

1. Total Assets go down
2. Total Liabilities go up
3. Contributed Capital goes down
4. Net Income goes down
5. None of the above

A retailer made $400,000 in sales in the second quarter. The average rate of merchandise returns for this firm is 5%. The beginning balance of the Return Reserve was $22,000. The actual cash returned to customers as a result of returns in the second quarter was $17,000. What was the ending balance of the Return Reserve?

1. $17,000
2. $20,000
3. $22,000
4. $25,000
5. $42,000