Question

1. Entity A reported the following items on its balance sheet at the end of the current year. All accounts are listed.
   Cash $45,000
   Accounts payable 80,000
   Property, plant & equipment 200,000
   Long-term debt 60,000
   Common stock 150,000
   Accounts receivable 90,000
   Retained earnings ?
   Inventory 75,000
   What is Entity A’s Retained Earnings balance at the end of the current year?

   		$270,000
   		$410,000
   		$140,000
   		$120,000

2.5 points   

QUESTION 6

1. Entity I forgot to record four adjusting entries during 2019. Which one of the following omissions will understate net income?

   		Interest on monies borrowed has not yet been recorded.
   		Income taxes owed but not yet paid are ignored.
   		Credit sales made during the last week of the period are not recorded.
   		Prepaid insurance is not reduced for the portion of the policy that has expired during the period.

2.5 points   

QUESTION 7

1. Assets which are expected to be realized in cash, sold or consumed generally within a year are reported on a classified balance sheet as:

   		Property, Plant and Equipment.
   		Intangible Assets.
   		Current Assets.
   		Current Liabilities.

Answer 1

Correct Answer is $120,000

Total assets=Total liabilities +Stockholders equity

Total assets=Cash+Accounts receivable+Inventory+Property plant and equipment

=$45,000+$90,000+$75,000+$200,000

Total assets=$410,000

Total libailities=Accounts payable+Long term debt

=$80,000+$60,000

Total liabilities=$140,000

Stockholders equity=Common stock+Retained earnings

Stockholders equity=$150,000+Retained earnings

Now, puttiong all the information in equation

410,000=$140,000+$150,000+Retained earnings

Retained earnings=$410,000-$290,000

Retained earnings=$120,000

Answer 6

Correct asnwer is Credit sales made during the last week of the period are notrecorded,

Credit sales made during the last week have not been recorded, These sales would have increase the net income as these are income and increases net icnome.Omission of these sales will understate income.

Interest on monies borrowed not recorded is an expense and its omission would have overstated the income.Similarly Income taxed owed but ignored are. expense and its omission would overstate income.Prepaid insurance is an asset and its reduction would mean insurance expense was to be recorded and omission to record this expense would mean overstatement of income.

Answer 7

Correct asnwer is current assets.

Current assets are the assets which are expected to be relaised in cash,sold or consumed generally in one year.

Current assets include the accounts receivable, cash inventory etc.

Current liabilitie are the laibilities payable within one oeprating cycyle that is generally within ayear.

Property plant and equipment are the assets which are capable of generating cash flows to the entity.

Intangible assets are non current assets that is the asset which can not be feel and touch and has its economic substance and capable of generating cash flows.

Hope it helps