Question

Use the following information to answer the next 5 questions

The following balances were taken from the adjusted trial balance of Pear Corp. for the fiscal year ending December 31, 2012.

Cash $ 22,500 Accounts Receivable 12,000

Depreciation Expense -- Equipment 3,500 Equipment 54,000

Accumulated Depreciation – Equipment 5,500 Accounts Payable 6,000

Interest Payable 1,000 Unearned Service Revenue 2,000

Common Stock 40,000 Dividends 1,000

Notes Payable, Due 5/1/2013 22,500 Rent Expense 3,000

Interest Expense 1,000 Wages Expense 24,500

Retained Earnings, 1/1/2012 16,000 Prepaid Rent 2,000

Service Revenue 30,500

Each of these accounts has the normal debit or credit balance.

1. The adjusted trial balance has a total credit balance of:

A. $ 122,500

B. $ 124,500

C. $ 123,500

D. $ 119,000

E. None of the above

2. The total current liabilities on the balance sheet at the end of the year would be:

A. $ 37,000

B. $ 31,500

C. $ 7,000

D. $ 9,000

E. None of the above

3. The total assets on the balance sheet at the end of the year would be:

A. $ 90,500

B. $ 85,000

C. $ 86,000

D. $ 87,000

E. None of the above

4. The net income (net loss) for the year is:

A. $ (2,500)

B. $ 2,000

C. $ (1,500)

D. $ 500

E. None of the above

5. The total owners’ equity at the end of the year would be:

A. $ 57,000

B. $ 52,500

C. $ 39,500

D. $ 53,500

E. None of the above

Use the following information to answer the next two questions:

Fisk Company made an entry to record $24,500 received from a customer for services which were completed and paid in cash immediately.

6. The journal entry would include a debit to which type of account?

A. Asset

B. Liability

C. Owners’ Equity

D. Expense

E. Revenue

7. The journal entry would include a credit to which type of account?

A. Asset

B. Liability

C. Owners’ Equity

D. Revenue

E. Expense

Use the following data for the next 3 questions

Iowa Company reports these account balances at December 31, 2012 after the accounts were closed:

Equipment $ 85,000

Cash 37,000

Accounts Payable 95,000

Land 90,000

Accumulated Depreciation 20,000

Unearned Revenue 7,000

Accounts Receivable 40,000

Buildings 115,000

Common Stock 170,000

Retained Earnings 75,000

On January 1, 2013, Iowa Company collected $12,000 of its accounts receivable, paid $30,000 of its accounts payable, and collected $10,000 in advance for revenues to be earned in February 2013. The $10,000 was recorded as a credit to Unearned Revenue. These are the only transactions ocurring on January 1st and 2nd, 2013.

8. In a trial balance prepared at December 31, 2012, the total of the debit column is:

A. $367,000

B. $360,000

C. $387,000

D. $347,000

E. None of the above

9. In a trial balance prepared at January 2, 2013 the total of the debit column is:

A. $327,000

B. $337,000

C. $340,000

D. $347,000

E. None of the above

10. On January 2, 2013, total liabilities and owners’ equity on an actual balance sheet prepared on January 2, 2013 are:

A. $347,000

B. $367,000

C. $327,000

D. $339,000

None of the above

Answer 1

Q1.
C    123500
Total credit of Trial balance:
Accumulated dep			5500
Accounts payable			6000
Interest payable			1000
Unearned service revenue			2000
Common Stock			40000
Notes payable			22500
Retained earnings			16000
Service revenue			30500
Total credit of Trial balance:			123500
Q2.
B. 31500
Accounts payable			6000
Interest payable			1000
Unearned service revenue			2000
Notes payable			22500
Total current liabilities			31500
Q3.
B. 85000
Cash			22500
Accounts receivbale			12000
Equipment (54000-5500)			48500
Prepaid rent			2000
Total Assets			85000
Q4.
C. (1500)
Service revenue			30500
Less: Depreciation			3500
Rent expenses			3000
Interest expenses			1000
Wages expenses			24500
Net Lloss			-1500
Q5.
D. 53500
Common Stock			40000
Ret earnings (16000-1500-1000)			13500
Total Equity			53500