Question

In: Accounting

In the first month of operations for Pocket Industries, the total of the debit entries to...

In the first month of operations for Pocket Industries, the total of the debit entries to the cash account amounted to $9,000 ($5,000 investment by the owner and revenues of $4,000). The total of the credit entries to the cash account amounted to $4,000 (purchase of equipment $2,000 and payment of accoubts payable $2,000). At the end of the month, the cash account has a(n)

a. $2,000 credit balance.

b. $4,000 debit balance.

c. $2,000 credit balance.

d. $4,000 debit balance.

Grayton Industries purchased supplies for $1,200. They agreed to pay the balance of $700 in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,200, a credit to a liability account for $700. Which of the following would be the correct way to complete the recording of the transaction?

a. Credit an asset account for $500.

b. Credit the Grayton, Capital account for $500.

c. Debit the Grayton, Capital account for $500.

d. Credit another liability account for $500.

On June 1, 2008, Delbert Inc. reported a cash balance of $12,000. During June, Delbert made deposits of $3,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?

a. $1,000 debit balance

b. $15,000 debit balance

c. $1,000 credit balance

d. $4,000 credit balance

At January 1, 2008, Burton Industries reported owner’s equity of $130,000. During 2008, Burton had a net income of $30,000 and owner drawings of $10,000. At December 31, 2008, the amount of owner’s equity is

a. $130,000.

b. $140,000.

c. $10,000.

d. $80,000.

Expert Solution

Answer #1
End balance = Total Debits – Total Credits
= 9000 – 4000
= $ 5000
Correct Answer = $ 5000 Debit Balance [None of the option matches this answer]
Answer #2
Correct Answer = Option ‘a’ Credit an asset account for $ 500
$ 1200 Supplies (Asset) will be debited,
$ 700 Accounts payable (Liability) will be credited,
Balance $ 500 (1200 – 700) is paid in Cash (Asset) and will be credited.
Answer #3
Cash balance at end = Beginning balance + Deposits – Disbursements
= 12000 + 3000 – 14000
= $ 1000 Debit Balance
Correct Answer = Option ‘a’ $ 1000 Debit balance
Answer #4
Owner’s Equity at end = Beginning balance+ Net Income - Net Loss – Drawings
= 130000 + 30000 – 10000
= $ 150,000
Again, none of the options matches the Correct Answer which is $ 150,000

ekkarill92 answered 2 years ago

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