Posted: October 20th, 2022

Penn Foster 06160900 Financial Accounting (The Accounting Model)

Penn Foster 06160900 – The Accounting ModelDaniel Company reported the following items on its financial statements for the current year:Sales $260,000Costs of Goods Sold $90,000Salary Expense $40,000Interest Expense $17,000Dividends $20,000Income Tax Expense $32,0001. What amount will Daniels report on its income statement for total expenses? a. $130,000 b. $158,000 c. $179,000 d. $210,0002. Assume that total expenses were $220,000. The income statement for Daniels will report Net income for the current year of how much? a. $40,000 b. $70,000c. $90,000d. $150,0003. Henry truck sells new trucks and pays each salesperson a commission of $2,000 for each truck sold. During the month of August, A salesperson, Nathan, sold three new trucks. Henry pays Nathan on the 10th day of the month following the sales. Nathan operates on the cash basis, the car dealer operates on the accrual basis. Which of the following statements best describes how income is recognized?Nathan will recognize commission revenue earned in the amount of $6,000 in AugustHenry will recognize commission expense in the amount of $6,000 in AugustHenry will recognize commission expense in the amount of $6,000 in SeptemberNathan will recognize revenue in the same month that the car dealer recognizes expense.Year 3 Year 2Current Assets $6,000 $3,000Long term assets $7,000 $4,000Current Liabilities $2,000 $3,000Long term liabilities $7,000 $0Stockholders’ Equity $4,000 $4,0004. Between Year 2 and Year 3 a. working capital and current ratio both increased b. working capital and current ratio both decreased c. working capital increased and its current ratio decreased d. working capital increased and its current ratio increased5. A company sold merchandise to a customer for $1,200 on credit on July 11. The customer paid the amount due on July 31. Under the accrual basis of accounting.a. revenue is recognized on July 31b. the July 11th transaction increases revenue but has no effect on assets because cash hasn’t been received.c. revenue is recognized after the cost of the merchandise sold has been paid by the company.d. the July 31st transaction has no effect on total assets under the accrual basis of accountingDuring its fifth year of operations, a company reports a beginning cash balance of $132,000 cash inflows from investing activities of $210,000, cash outflows from financing activities of $79,000 and cash outflows from operating activities of $13,000.6. What is the company’s cash balance at the end of the fifth year?a. $132,000 b. $250,000c. $276,000d. $434,000January 23: bouquet flower shop started business. Stockholders invested cash of $70,000 in the business and received 7,000 shares of common stock as evidence of their ownership interest.Feb 1: Rent of $1,600 was paid for the month of FebruaryFeb 7: Equipment with a cost of $3,000 was purchased on credit, payment is due within 30days.Feb 15: Bills totaling $5,400 were presented to customers for flower arrangements created and delivered; $2,900 was received in cash immediately; the balance of $2,500 is due within 10days.Feb 18: Full payment was made for the equipment purchased on Feb 7Feb 22: Payment of $1,900 was received from customers with balance due from Feb 14Feb 28: Employee salaries of $3,300 were paid.7. Based solely on the information provided, what are the total expenses as of Feb 28? a. $1,600 b. $3,300 c. $4,900 d. $7,9008. What is the balance in the Accounts receivable account at Feb 28? a. $600 b. $2,500 c. $3,500 d. $5,4009. On Jan 1, a company’s balance in Retained Earnings was $77,000. At the end of the year December 31, the balance in retained Earning was $96,000. During the year, the company earned net income of $45,000. Based on this information, dividends declared and paid for the year were a. $19,000 b. $26,000 c. $45,000 d. $64,00010. If a company has $152,000 of revenues, declares and pays $55,000 in dividends, and has net income of $89,000, how much are expenses for the year? a. $8,000 b. $55,000 c. $63,000 d. $144,000Set up a T account and answer Question 11 based on the following information: Susie’s stitchery shop purchased supplies at a cost of $1,000 during the current year. At January 1, the beginning balance in the supplies account was $300. At Dec 31, supplies on hand are $100.11. What was the supplies expense for the year? a. $1,100 b. $1,200 c. $1,300 d. $1,40012. A plant operates five days per week with a daily payroll of $4,000. Employees are paid every Sunday for the workweek just completed (Monday through Friday).The Last day of the month is Wednesday March 31. The correct adjusting entry at March 31 is a. debit wages expense $4,000, credit wages payable $4,000 b. debit wages payable $4,000, credit cash $4,000 c. debit wages expense $12,000, credit cash $12,000 d. debit wages expense $12,000, credit wages payable $12,00013. Woods Corporation began operations on January 2, 2007, with an investment of $62,000 by each of its two stockholders. Net income for its year of business was $218,000.Wood paid a total of $132,000 in dividends to its stockholders during the year. How much is ending retained earnings at December 31, 2007? a. $86,000 b. $124,000 c. $148,000 d. $280,00014. A company takes out a two year, 10%, $150,000 note on May 1, 2007 with interest and principal to be paid at maturity. How much interest will be reported on the income statement for the year ended Dec 31, 2008. a. $5,000 b. $10,000 c. $15,000 d. $30,000Prepare December 31 journal entries and answer question 15 based on the following informationOn November 1, ABC company paid rent of $4,000 per month for six months in advance.15. After the Dec 31 journal entries, which of the following will be shown on the financial statements at Dec 31? a. Prepaid Rent of $24,000 on the 2004 balance sheet b. Prepaid rent of $16,000 on the 2004 balance sheet c. Rent expense of $24,000 on the 2004 income statement d. Rent Revenue of $16,000 on the 2004 income statementPrepare a statement of cash flows and answer question 16 based on the following informationDuring 2007, Wolf Sound systems reported $60,000 of net income and generated $80,000 of cash from operations. During the year, Wolf paid $15,000 to buy a new delivery truck and also paid dividends in the amount of $30,000. Wolf borrowed $40,000 cash from the bank. At the beginning of the year, cash amounted to $50,000.16. How much more cash does Wolf Sound Systems have available at the end of the year than at the beginning? a. $50,000 b. $75,000 c. $80,000 d. $125,000Sales Revenue $24,000 Accounts Receivable $4,850Accounts Payable $600 Rent Expense $4,000Dividends $750 Interest revenue $950Supplies $500 Depreciation expense $1,550Cash $4,500 supplies expense $2,000Prepaid rent $1,150 wages expense $2,800Wages Payable $1,600 cost of goods sold $12,500Fees Collected in advance $40Retained earnings January 1 $6,00017. What amount will be transferred from income summary to retained earnings? a. $950 b. $1,350 c. $1,700 d. $2,10018. What is the balance in the retained earnings account after the closing entries have been posted? a. $7,350 b. $2,850 c. $4,650 d. $6,000Answer question 19 from the following information:Net Loss $25,000Dividends $5,000Dec 31, 2008 Retained Earnings $50,00019. The Jan 1, 2008 Retained Earnings balance was a. $0 b. $20,000 c. $70,000 d. $80,00020. R Company has current assets of $20,000, current liabilities of $8,000 and long term liabilities of $3,000. R wants to buy new equipment. How much of existing cash can R use to acquire equipment without allowing the current ratio to decline below 2.0 to 1? a. $4,000 b. $8,000 c. $10,000 d. $12,00021. A company purchased equipment in Dec 2007 for $64,800. The equipment has an estimated useful life of six years and zero salvage value. What amount will appear on the income statement for depreciation expense for the month of March 2010? a. $-0- b. $300 c. $900 d. $3,600Use the following information to set up T accounts, prepare a trial balance, and answer question 22 and 23.(a) May 1: Morgan Company purchased computer equipment for $8,400, paying $1,000 now and issuing a promissory note for the balance, the note is due in monthly installments of $500 plus interest at 10% on the unpaid balance.(b) May 8: Morgan records service revenue earned: $3,200 form cash customers, $12,000 for customers billed for completed services.(c) May 2: Common stock is issued for land with a fair value of $35,000(d) May 31: An invoice for $1,200 is received from the company’s Advertising agency for ads that were run on radio and TV during May: the invoice is due in 30days.22. What are the total assets as May 31? a. $23,800 b. $43,600 c. $57,600 d. $58,80023. What is the total of the credit column of the trial balance at May 31? a. $15,200 b. $43,600 c. $57,600 d. $58,80024. A company recorded salaries expense of $130,000 in 2008. However, additional salaries of $5,000 had been earned, but not paid or recorded at Dec 31, 2008. After you record and post the Dec 31, 2008, adjustments, the balances in the Salaries Expense and Salaries Payable accounts will be a. Salaries Expense $125,000, Salaries Payable $5,000 b Salaries Expense $135,000, Salaries Payable $-0- c. Salaries Expense $135,000, Salaries Payable $5,000 d Salaries Expense $130,000, Salaries Payable $5,00025. If a company’s current ratio is 5 to 1 and current liabilities are $15,000, what is the working capital? a. $5,000 b $60,000 c $75,000 d Unable to determine

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