Part 4: Multiple Choice Questions 1. Which transaction would appear as an inflow of cash in the financing section of the statement of cash flows? a A company sold a delivery vehicle for $5,000 cash. b. A company sold inventory to customers for $210,000 A company paid off a $50,000 note payable to a bank d. A company received $100,000 from its shareholders in exchange for common stock. 2. When reviewing a company's statement of cash flows, in which section would you prefer to see strong. positive cash flows? a Financing activities b. Investing activities Operating activities 3. Sally's Candy Store sold 120 bars of chocolate at $3 each during the day. At the end of the day, Sally will make a journal entry that includes a credit to which account? a Unearned Revenue b. Cost of Goods Sold C.Cash d. Revenue 4. Blue Corporation recorded the following journal entry. Which is a possible explanation for this entry? Accounts Receivable $888 Revenue 5888 2. Blue Corporation is being paid for services they performed for a customer. te Blue Corporation is purchasing from a supplier on account c. Blue Corporation performed services, and the customer charged on account d. This is an incorrect journal entry that should not appear in the accounting records. 5. Which financial statement(s) is impacted by the following journal entry? 260 Inventory Accounts Payable 260 1 II. III. IV. Income Statement Statement of Stockholders' Equity Balance Sheet Statement of Cash Flows . I and II b. I and III C. lll only d. II, III, and IV 6. Good Vibez Inc borrowed $13,000 on October 31, 2020 at 5% interest. The note is due to the bank on October 31, 2021. What should Good Vibez inc. credit in the adjusting journal entry on December 31, 2020 before preparing their annual financial statements? a interest expense b. Interest payable C Notes payable d. Nothing, as there is no entry to be recorded on December 31, 2020. Part 3: Analyzing Transactions and Recording Journal Entries Harrison's Electronics is a new company that sells TVs. Analyze each December 2020 transaction for Harrison's Electronics then prepare the necessary journal entry within the General Journal (in proper form, as discussed in class). Ensure that Assets = Liabilities + Stockholders' Equity and Debits = Credits for each entry you record. If the transaction does not need to be recorded in the accounting records, write "Not an accounting event." The first transaction has been completed for you as an example. a) Harrison, the owner, contributed $60,000 in exchange for 4,000 shares of stock. b) Harrison hires Max, who will work 40 hours per week and earn $20 hour. Max agrees to start working next week. c) Max completes his first full week of work. He did not like his job and quit after the first week. Max will be paid later in the month. d) Harrison's Electronics issues a paycheck to Max. e) Harrison's Electronics pays $3,500 for insurance coverage for the upcoming year. f) Harrison's Electronics purchases $720 of office supplies on account from Staples. g) Harrison's Electronics pays Staples for the office supplies purchased. h) Harrison performs a count of office supplies and notes that half remain 0 Harrison's Electronics purchases 20 TVs from its main supplier, writing a check for $8,000. 1) Harrison's Electronics sells 5 TVs at $600 each to KC Sports Bar for use at their downtown location. The Sports Bar charges the purchase on account with Harrison's Electronics (Hint: This transaction requires 2 journal entries; use the information in letter i above to determine the cost of each TV.) k) The KC Sports Bar issues payment to Harrison's Electronics for the TVs purchased. 1) Harrison's Electronics purchases a new copy machine for the company's office for $1,200. Harrison's Electronics makes a $500 down payment and signs a note for the balance. m) The KC Sports Bar likes the TVs so much that they pre-order 8 TVs for next year. They pay an $800 deposit for the order. n) Harrison's Electronics issues a check for next month's rent, which totals $2,200 o) The company invests $5,500 into a money market account. p) Harrison's Electronics receives the electric bill in the mail. The bill totals $550 and is due in two weeks. a) Harrison's Electronics purchases 6 TVs from its supplier, charging the $2,400 purchase on account ) Harrison hires a plumber to fix a leaky faucet in the company's break room. The plumber fixes the faucet and is paid $250 s) Harrison's brother Bob needs cash for a new business he is starting. Because Harrison's Electronics has extra funds, the company lends $6,000 to Bob, requiring him to sign a note. t) The company pays Harrison a $1,800 dividend. General Journal (Skip a line between entries.) Credit Debit 60.000 a Cash Common Stock 60,000