Question

Aaliyah Turner opened Turner Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

1. Aaliyah invested $14,100 cash in the business in exchange for common stock.
2. Aaliyah contributed $26,000 of photography equipment to the business in exchange for common stock.
3. The company paid $2,700 cash for an insurance policy covering the next 24 months.
4. The company received $6,300 cash for services provided during January.
5. The company purchased $6,800 of office equipment on credit.
6. The company provided $3,350 of services to customers on account.
7. The company paid cash of $2,100 for monthly rent.
8. The company paid $3,700 on the office equipment purchased in transaction #5 above.
9. Paid $335 cash for January utilities.

Based on this information, the amount of total stockholders’ equity reported on the Balance Sheet at the end of the month would be:

Multiple Choice

• $39,800.

• $38,350.

• $36,815.

• $47,315.

• $46,400.\

Larry Bar opened a frame shop and completed these transactions:

1. Larry started the shop by investing $41,100 cash and equipment valued at $19,100 in exchange for common stock.
2. Purchased $180 of office supplies on credit.
3. Paid $2,300 cash for the receptionist's salary.
4. Sold a custom frame service and collected $5,600 cash on the sale.
5. Completed framing services and billed the client $310.

What was the balance of the cash account after these transactions were posted?

Multiple Choice

• $11,020.

• $44,710.

• $44,530.

• $11,330.

• $44,400.

At the beginning of January of the current year, Little Mikey's Catering ledger reflected a normal balance of $63,000 for accounts receivable. During January, the company collected $17,000 from customers on account and provided additional services to customers on account totaling $13,600. Additionally, during January one customer paid Mikey $6,100 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

Multiple Choice

• $60,300.

• $66,400.

• $59,600.

• $3,400.

• $65,700.

On December 1, Orenthal Marketing Company received $3,600 from a customer for a 2-month marketing plan to be completed January 31 of the following year. The cash receipt was recorded as unearned fees. The adjusting entry for the year ended December 31 would include:

Multiple Choice

• a credit to Earned Fees for $2,400.

• a debit to Unearned Fees for $1,800.

• a debit to Earned Fees for $3,600.

• a credit to Unearned Fees for $1,200.

• a debit to Earned Fees for $2,400.

Answer 1

i)	Calculation of Stockholder's Equity
	Particulars	Amount in $
	Common Stock against Cash	14,100
	Common Stock against Phtography Equipment	26,000
	Total Common Stock	40,100
	Calculation of Profit/ (Loss)
	Cash From Services	6,300
	Services to Customers	3,350
	Total Income (A)	9,650
	Less: Expenses:
	Insurance for January	113
	(2,700*1/24)
	Rent per month	2,100
	Utilities for the month of Jan	335
	Total Expenses (B)	2,548
	Profit (Retained Earnings) (A-B)	7,103
	Total Stockholder Equity (Total Common Stock + Total Profit )	$ 47203
	Approx to 47,315
	Correct option is $47,315.
ii)	Calculation of Cash Balance
	Particulars	Amount in $
	Investment by Cash	41,100
	Less: Receptionist's Salary paid in cash	-2,300
	Add: Cash received on sale of Custom Frame Service	5,600
	Cash Balance	44,400
	Correct option is $44,400.
iii)	Calculation of Accounts Receivable
	Particulars	Amount in $
	Opening Balance	63,000
	Less: Amount collected from Customers	-17,000
	Add: Services provided to Customers	13,600
	Closing Balance	59,600
	Correct option is $59600.