Question

In: Accounting

1. After closing revenue and expense accounts, Income Summary has a credit balance of $20,000. A....

1. After closing revenue and expense accounts, Income Summary has a credit balance of $20,000.

A. The $20,000 represents a net loss for the period.

B. Cannot answer this question based on the above information.

2. The $20,000 represents a net income for the period.Before any year-end adjustments were made, the net income of Husky Company was $42,000. However, the following unrecorded adjustments and transactions were necessary: office supplies used, $600; services performed for clients but not yet recorded or collected, $1,300; interest accrued on note receivable from a customer, $300; dividends declared and paid to shareholders, $700. After recording these adjustments the net income would be:

A. $39,800

B. $40,400

C. $42,300

D. $43,000

E. None of the above.

Use the following data for the next 4 questions:

Shown below is an adjusted trial balance for Dave’s Repair Service on December 31, 2012:

Dave’s Repair Service

Adjusted Trial Balance

December 31, 2012

Cash $25,100

Salaries Expense 22,000

Office Equipment 37,000

Accounts Payable $2,500

Depreciation Expense 500

Accumulated Depreciation 1,500

Unearned Revenue 400

Retained Earnings 4,200

Accounts Receivable 6,500

Dividends 300

Fees Revenue 54,000

Common Stock 40,000

Advertising Expense 10,000

Utilities Expense 1,200

$102,600 $102,600

3. Compute total current liabilities on the balance sheet as of December 31, 2012.

A. $4,400

B. $2,900

C. $3,200

D. $2,500

E. None of the above.

4. Compute the amount of total assets on the balance sheet as of December 31, 2012.

A. $67,500

B. $31,600

C. $67,100

D. $68,600

E. None of the above.

5. Compute the ending balance in Retained Earnings as of December 31, 2012, after closing entries are made.

A. $4,200

B. $24,500

C. $20,300

D. $24,200

E. None of the above.

6. After closing entries are made, compute the dollar amount the post-closing trial balance will balance at.

A. $67,500

B. $64,200

C. $68,600

D. $67,100

E. None of the above.

Solutions

Expert Solution

Q1.
Answer is C. The $ 20000 represent a net income for the period.

Q2.
Answer is D. 43000
Explanation:
Net income before adjustment		42000
Add: Service performed not collected		1300
Add: Interest accrued		300
Less: Office supplies		-600
Adjusted net income		43000

Q3.
B. 2900
Accounts payable	2500
Unearned revevnue	400
Total current liabilities	2900

Q4.
C. 67100
Cash		25100
officce equipment (37000-1500)		35500
Accounts receivable		6500
Total assets		67100

Q5.
D. 24200
Net Income:
Revenue			54000
Less: Expenses (22000+500+10000+1200)			33700
Net Income:			20300
Add: beginning balance of RE			4200
			24500
Less: Dividend paid			300
Ending balance of Retained earnings			24200

Q6.
C. 68600
Total of Trial balance is total of gross assets balance:
Cash		25100
officce equipment		37000
Accounts receivable		6500
Total assets		68600

ekkarill92 answered 1 year ago

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