Question

1.As of December 31, 2016, the Balance Sheet of Peterson Products, Inc. contains the following items (in random order): Accounts Payable $ 10,000 Land 80,000 Building 240,000 Notes Payable 125,000 Accounts Receivable 30,000 Cash 6,000 Retained Earnings 100,000 Common Stock 180,000 Equipment ? Determine the amount for Equipment.

A. $69,000 B. $145,000 C. $45,000 D. $59,000

2.

Simon Corporation had a transaction that caused a $60,000 increase in both assets and liabilities. This transaction could have been:

A.	Paying cash for office equipment costing $60,000

B.	Repaying a $60,000 bank loan

C.	Purchasing office equipment for $88,000, paying for it with $28,000 cash and a note payable for $60,000

D.Stockholders investing $60,000 cash in the business 3. Yale Company began operations on January 1, 2016, with an investment of $250,000 by each of its two stockholders (total amount invested $500,000). Net income for its first year of business was $472,000. During the year, the company paid dividends of $100,000 to each of the two stockholders. How much is the company's ending Stockholders' Equity on December 31, 2016? A. $964,000 B. $1,128,000 C. $772,000 D. $1,112,000

Answer 1

1. Calculate equipment :

Common stock	180000
Retained Earnings	100000
Notes Payable	125000
Account payable	10000
Total liabilities and shareholder's equity	415000
Less: Cash	(6000)
Less: Account receivable	(30000)
Less: Land	(80000)
Less: Building	(240000)
Equipment	59000

so answer is d) 59000

2. If Company Purchasing office equipment for $88,000, paying for it with $28,000 cash and a note payable for $60,000 then increase total assets by 60000 and increase total liabilities by 60000

so answer is c) Purchasing office equipment for $88,000, paying for it with $28,000 cash and a note payable for $60,000

3. Shareholder's equity = Total investment+net income-dividend

                                  = 500000+472000-200000

Shareholder's equity = 772000

so answer is c) 772000