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.

Use the following information to answer the next two questions
On December 31, 2012, Shasha Corporation made an adjusting entry to recognize the correct amount of unearned revenue now earned. Originally, the revenue was recorded in a real account when received.
7. The journal entry on December 31, 2012 would include a debit to which type of account?
A. Asset
B. Liability
C. Owners’ Equity
D. Revenue
E. Expense
8. The journal entry on December 31, 2012 would include a credit to which type of account?
A. Asset
B. Liability
C. Owners’ Equity
D. Revenue
E. Expense

Solutions

Expert Solution

1)

I think the options are mixed with the problem 2.

In case only option A and B is there, the correct option is B. Cannot answer this question based on the above information.

Since the credit balance of Income summary account means the company has profit. But the option is not given in the question.

Otherwise

Option C is correct The $20,000 represents a net income for the period

2)

Net Income After Adjustment = $43,000

Net Income before adjustment

$42,000

Less: Supplies Expense

-$600

Plus: Service Revenue not recorded

$1,300

Plus: Interest Accrued

$300

Net Income after adjustment

$43,000

The correct option is D. $43,000

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts

ekkarill92 answered 2 years ago
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