Question

QUESTION 11

Use this selection for the next set of questions related to Harborside, Inc., a marina:

Cash Net Income

A. - NE

B. - -

C. NE -

D. NE NE

E. No Transaction

.On August 1, Harborside, Inc. prepaid $5,600 of rent.

QUESTION 12

Use this selection for the next set of questions related to Harborside, Inc., a marina:

Cash Net Income

A. - NE

B. - -

C. NE -

D. NE NE

E. No Transaction

On August 28, Harborside, Inc. paid for supplies purchased on an earlier date.

QUESTION 13

Use this selection for the next set of questions related to Harborside, Inc., a marina:

Cash Net Income

A. - NE

B. - -

C. NE -

D. NE NE

E. No Transaction

On August 30, Harborside, Inc. received a bill for Blackberry service from August 2 through August 20. Harborside, Inc. will pay the bill in September.

QUESTION 14

Use this selection for the next set of questions related to Harborside, Inc., a marina:

Cash Net Income

A. - NE

B. - -

C. NE -

D. NE NE

E. No Transaction

On August 30, Harborside, Inc. paid a dividend .

QUESTION 15

Use this selection for the next set of questions related to Harborside, Inc., a marina:

Cash Net Income

A. - NE

B. - -

C. NE -

D. NE NE

E. No Transaction

On August 30, Harborside, Inc. used the rent prepaid on August 1th.

QUESTION 16

Muller Companytook out a note payable in the amount of $4,000 and it had an interest rate of 8% on August 1, 2016. The note carried an 8 month term. The amount of cash flow from operating activities on the 2016 statement of cash flows would be:

1. $320

2. $53.33

3. $240

4. $0

QUESTION 17

Raymond Company borrowed $8,000 on April 1, 2016 from the Meramec Bank. The note issued by Raymond carried a one year term and a 7% annual interest rate. Raymond earned cash revenue of $850 in 2016 and $700 in 2017. Assume no other transactions. The amount of net income on the 2017 income statement would be:

1. $140

2. $560

3. $700

4. $290

QUESTION 18

Raymond Company borrowed $8,000 on April 1, 2016 from the Meramec Bank. The note carried a one year term and a 7% annual interest rate. Raymond earned cash revenue of $850 in 2016 and $700 in 2017. Assume no other transactions. The amount of cash flow from operating activities that would appear on the 2017 statement of cash flows would be:

1. 850

2. 700

3. 140

4. 560

QUESTION 19

Mune Company recorded journal entries for the payment of $50,000 of dividends, the $32,000 increase in accounts receivable for services rendered, and the purchase of equipment for $21,000. What net effect do these entries have on owners’ equity? 1. Decrease of $71,000.

2. Decrease of $39,000.

3. Decrease of $18,000.

4. Increase of $11,000.

5. None of the aboe

QUESTION 20

Tate Company purchased equipment on November 1, 2016 and gave a 3-month, 9% note with a face value of $20,000. The December 31, 2016 adjusting entry is:

1. debit Interest Expense and credit Interest Payable, $1,800.

2. debit Interest Expense and credit Interest Payable, $450.

3. debit Interest Expense and credit Cash, $300.

4. debit Interest Expense and credit Interest Payable, $300.

5. None of the above.

Answer 1

Question 11 to 15 are not complete.

Answer 16. Since the note payable validity is for 8 months as on 1st August. Therefore the same would be payable in the next financial year i.e. 2017. Thus, the answer is (d) i.e. $0 in FY 2016.

Answer 17. Cash revenue in 2017 = $ 700

Interest Expense for 2017 = $8000 * 7%*(3/12) = $140.

Net Income for 2017 = $700 - $ 140 = $560 . Therefore answer is 2.

Answer 18. The answer is 2. i.e. $700. Since interest payment is a financing activity and Revenue reciept is the only operating activity.

Answer 19. Payment of dividend would decrease the equity by $50,000 and increase in the amount of receivable would increase equity by $32,000.

Therefore the answer is 3. i.e. decrease of equity by $18,000.

Answer 20. Since there is no mention of actual payment in 2016, the answer is 4. i.e. debit the interest expense and credit the payable by $300 ($20,000 * 9% * (2/12)).