Chapter 1 h Mechanical Repar Shop started the ings of $18,000 ar total assets of $60.000 total abilities of $40,000, and retained corded $100.000 in auto repair revenues, $70,000 in expenses, and 1. The net income repe addi n g the year the business recorded $100.0 aid dividends of $15 000 me reported by Mrs Machanical Repair Shop for 2. Mer's balance of stockhom Repair Shop for the year was of stockholders' cauity at the start of the year was * Mel's balance of retained earnings at the wgs at the end of the year was David Bash's Landscaping Company has com revenues and expenses on December USE THE FOLLOWING INFOR E FOLLOWING INFORMATION FOR QUESTIONS 80-84. ber 31, 2018 led the following list of account balances of various assets, liabetes, 11. 2016, the end of its first year of operations Common stock Accounts payable Salary expense Repairs expense Dividends Truck Equipment Notes payable Cash Supplies expense Service revenue Gasoline expense 50,400 10,000 18,000 3,200 20,000 34,000 25,200 32,800 70.400 6,400 87,200 3.200 4. The net income for David Bash's Landscaping for the year was 5. The total assets for David Bash's Landscaping on December 31, 2016 are: 5. The accounting equation for Sock Monkey Company is as follows: Chapter 2 Assets $480.000 = Liabilities - $240,000 + Stockholders Equity $240.000 If the company now issues stock for $60,000, the accounting equation will change to: Assets A) $480,000 - $540,000 $480,000 $540,000 = = = = Liabilities $180,000 $300,000 $300,000 $240,000 + + + + Stockholders' Equity $300,000 $240,000 $180,000 $300,000 0000 The accounting equation for Bear Enterprises is as follows: Assets $240.000 $120.000 Stockhodet $120.000 onths, the accounting equation Liabilities Assets If the company now prepays rent of $18,000 for the next six month Stockholders' Equity A) $240.000 - $138,000 + $102.000 B) $276.000 = $138.000 $138.000 c) $240.000 - $120.000 + $120.000 D) $258.000 = $138,000 - $120.000 & The accounting equation for Woolsey Enterprises is as follo Assets $720,000 Liabetes $360,000 Soch det $380 000 the company now purchases a truck on account for $60.000 000, the accounting equation will change in Assets Liabilities Stockholders' Equity $780,000 $360,000 + $420,000 $780,000 = $396.000 + $384.000 $780,000 = $420,000 $350.000 $720,000 = $360,000 + $360,000 9. Beginning and ending Cash account balances of Moonhe di Cash account balances of Moonbeam, Inc. were $38.000 and $15000 ch received during the period was $74,000, what amount of cash was paid out durinn Chapter 3 10 Farly in the accounting period, Sam Smith paid $6,000 for services in advance of moving the Cash was de and Uneared Service Fees was credited for $6,000. At the end of the accounting period, two-thirds of the services paid for had yet to be performed. The proper adjusting entry is: 11. Leona Harper received $10,000 from a tenant on December 1 for five months rent of an affor. That was for December, January, February March, and April If Leona debited Cash and credited Uneamed Renta come to $10,000 on December 1, what necessary adiustment would be made on December 31 2.000 2.000 8.000 A) Unearned Rental Income Rental Income B) Rental Income Unearned Rental Income C) Unearned Rental Income Rental Income D) Rental Income Unearned Rental Income 12. Hyundai Company signed a two-ye recorded the transaction as a debit to Prepaid a two-year lease on July 1, 2016. and paid the 54.800 total rent in advance Hyunda bit to Prepaid Rent and a credit to Cash What adjusting entry should Hyund uid Hyundai make on December 31, 2016 (no previous adjustment has been made? 13. Gallery Company calculates that interest of $1 A has rued at December 31 on outstanding notes payable. How should Gallery record this on December 31? 14. Which of the following is a temporary account? Revenues Diuidents Chapter 4 Expenses 15. Presented below is the Statement of Cash Flows for Margarete Originals Clothing Company MARGARETE ORIGINALS CLOTHING COMPANY Statement of Cash Flows For Year Ended December 31, 2019 Cash flows from operating activities: Received from sales to customers Interest income received Payment for inventory Payment to employees Net increase from operating activities $ 2,000,000 40.000 (320,000) 1240.000 $ 1,480,000 Cash flows from investing activities: Payment for stock of another company Payment for purchase of equipment Net decrease from investing activities (200,000) (800,000) $(1,000,000) Cash flows from financing activities: Received from loans from bank From issuance of common stock From issuance of bonds Payment of dividends Net Increase from financing activities $ 200,000 600.000 400.000 (80.000) $ 120.000 $ 1.600.000 Net increase in cash Determine the company's free cash flow A) $600,000) B) ($520,000) C) $400,000 D) $680,000 16. Data from the financial statements of Dils Brothers Co. and J. Cox, Inc. are presented below (in millions) Total Dils Brothers Co $73,044 72 208 92,372 93,028 322,932 2,600 Total liabilities, 2016 Total liabilities, 2015 Total assets, 2016 Total assets, 2015 Net sales, 2016 Net income, 2015 J. Cox, Inc. $54,196 60,092 65,744 70.416 163,404 4.415 debit Total Assest To the nearest hundredth of a percent, what is the return on sales ratio 2016 for J. Cox, Inc.? 17. The following amounts have been taken from the recent financial statements for Emma Enterprises Current liabilities $890,000 Cash from operations $4,200,000 Expenditures on PPE $1,500,000 Dividends (cash) $130,000 Which of the following amounts is the free cash flow for Emma Enterprises? Chapter 2 6. The accounting equation for Sock Monkey Company is as follows: Assets $480,000 Liabilities $240,000 Stockholders' Equity $240,000 If the company now issues stock for $60,000, the accounting equation will change to: Assets A) $480,000 B) $540,000 C) $480,000 D) $540,000 Liabilities $180,000 $300,000 $300,000 $240,000 + + Stockholders' Equity $300,000 $240,000 $180,000 $300,000 = = + The accounting equation for Bear Enterprises is as follows: Assets $240,000 Liabilities $120,000 - Stockholders' Equity $120.000 If the company now prepays rent of $18,000 for the next six months, the accounting equation will change to Assets A) $240.000 B) $276.000 C) $240,000 D) $258,000 = = = = Liabilities $138,000 $138,000 $120.000 $138,000 + + + + Stockholders' Equity $102,000 $ 138,000 $120.000 $120,000 8. The accounting equation for Woolsey Enterprises is as follows: Assets $720,000 Liabilities $360,000 Stockholders' Equity $360,000 If the company now purchases a truck on account for $60,000, the accounting equation will change to Assets Liabilities Stockholders' Equity $780,000 = $360,000 $420,000 $780.000 = $396,000 + $384.000 $780,000 = $420,000 + $360,000 $720,000 = $360,000 + $360,000 9. Beginning and ending Cash account balances of Moonbeam, Inc. were $38,000 and $16,000, respectively. If total cash received during the period was $74,000, what amount of cash was paid out during the period? Chapter 3 10. Early in the accounting period, Sam Smith paid $6,000 for services in advance of receiving them; Cash was debited and Unearned Service Fees was credited for $6,000. At the end of the accounting period, two-thirds of the services paid for had yet to be performed. The proper adjusting entry is: 11. Leona Harper received $10,000 from a tenant on December 1 for five months' rent of an office. This rent was for December, January, February, March, and April. If Leona debited Cash and credited Unearned Rental Income for $10,000 on December 1, what necessary adjustment would be made on December 317 2,000 2,000 8,000 8,000 A) Unearned Rental Income Rental Income B) Rental Income Unearned Rental Income C) Unearned Rental Income Rental Income D) Rental Income Unearned Rental Income 8,000 8,000 2,000 2,000 12. Hyundai Company signed a two-year lease on July 1, 2016, and paid the $34,800 total rent in advance. Hyundai recorded the transaction as a debit to Prepaid Rent and a credit to Cash. What adjusting entry should Hyundai make on December 31, 2016 (no previous adjustment has been made)? 13. Gallery Company calculates that interest of $1,800 has accrued at December 31 on outstanding notes payable. How should Gallery record this on December 31? 14. Which of the following is a temporary account? Revenues Dindents Chapter 4 Faxpenses 16. Presented below is the Statement of Cash Flows for Margarete Originals Clothing Company MARGARETE ORIGINALS CLOTHING COMPANY Statement of Cash Flows For Year Ended December 31, 2019 Cash flows from operating activities Received from sales to customers Interest income received Payment for inventory Payment to employees Net increase from operating activities $ 2,000,000 40.000 (320,000) 1240.000) $ 1.480,000 Cash flows from investing activities Payment for stock of another company Payment for purchase of equipment Net decrease from investing activities (200,000) (800.000 5(1,000,000) Cash flows from financing activities: Received from loans from bank From issuance of common stock From issuance of bonds Payment of dividends Net increase from financing activities $ 200,000 600.000 400,000 180.000 $ 1.120.000 Net increase in cash $ 1.600.000 Determine the company's free cash flow A) ($600,000) B) ($520,000) C) $480,000 D) $680,000 16. Data from the financial statements of Dils Brothers Co. and J. Cox, Inc. are presented below (in millions): Total Dils Brothers Co. $73,044 72,208 92,372 93,028 322,932 2,600 Total liabilities, 2016 Total liabilities, 2015 Total assets, 2016 Total assets, 2015 Net sales, 2016 Net income, 2015 J. Cox, Inc $54,196 60,092 65,744 70.416 163,404 4,415 debt Total Assest To the nearest hundredth of a percent, what is the return on sales ratio 2016 for J. Cox, Inc.?! 17. The following amounts have been taken from the recent financial statements for Emma Enterprises: Current liabilities $890,000 Cash from operations $4,200,000 Expenditures on PPE $1,500,000 Dividends (cash) $130,000 Which of the following amounts is the free cash flow for Emma Enterprises