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 2 years ago
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