ADM 1300 Study Guide - Midterm Guide: Cash Cash, Accounts Payable, Retained Earnings

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June 1: issued common shares to shareholders in exchange for ,500 cash. (a) basic. The asset account cash is increased by ,500; the shareholders" equity account common shares is increased by. June 2: purchased supplies on account for . (a) basic. The asset account supplies is increased by ; the liability account accounts payable is increased by . (b) equation. June 12: billed j. kronsnoble for welding work done. (a) basic. The asset account accounts receivable is increased by ; the revenue account service revenue is increased by . June 22: received cash from j. kronsnoble for work billed on. The asset account cash is increased by ; the asset account accounts receivable is decreased by . (b) equation. June 25: hired an employee to start work on july 2. (a) basic. There is only an agreement of employment to start on july 2.

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QUESTION 21 A journal entry for a $75 payment for Rent expensewas posted as a debit to Salary expense and a credit to Cash. Thiserror will cause which of the following conditions on the trialbalance? A. The sum of the credits will equal the sum of thedebits. B. The sum of the debits will exceed the sum of the creditsby $75. C. The sum of the credits will exceed the sum of the debitsby $150. D. The sum of the debits will exceed the sum of thecredits by $150.

QUESTION 22 The business receives cash from a customer that isowed to the company "on account," based on services rendered to thecustomer previously. How does the collection of the cash affect theaccounting equation? A. Assets increase; owner's equity increases.B. Assets increase; liabilities increase. C. Assets decrease;owner's equity decreases. D. One asset increases; one assetdecreases

QUESTION 23 A business completes service to a client and sendsout a sales invoice. The amount will be collected from the customerat a later time. Which of the following would be TRUE at the timewhen the invoice is sent out? A. Total assets will decrease. B. Netincome will increase. C. Owner's equity will decrease. D. Totalliabilities will increase.

QUESTION 24 Which of the following accounts increases with adebit? A. Cash B. Interest Payable C. Accounts Payable D. Smith,Capital

QUESTION 25 The Accounts Receivable account of Nuptials Inc. isshown below. Accounts Receivable Dr Cr 26,000 3,500 5,000 Calculatethe ending balance of the account. A. $33,500 debit B. $31,000,debit C. $3,500, credit D. $27,500, debit

QUESTION 26 The following transactions for the month of Marchhave been journalized and posted to the proper accounts. Mar. 1Martinez invested $9,000 cash in his new design services business.Mar. 2 Paid the first month's rent of $800. Mar. 3 Purchasedequipment by paying $3,000 cash and executing a note payable for$5,000. Mar. 4 Purchased office supplies for $750 cash. Mar. 5Billed a client for $10,000 of design services completed. Mar. 6Received $8,000 on account for the services previously recorded.What is the balance in Cash? A. $13,250 B. $12,450 C. $15,450 D.$14,000

QUESTION 27 Which of the following sequences states the order inwhich a trial balance lists accounts? A. Equity â Assets âLiabilities B. Liabilities â Assets â Equity C. Assets â Equity âLiabilities D. Assets â Liabilities â Equity

QUESTION 28 Which of the following statements is FALSE? A. Atrial balance shows total amounts for assets, liabilities, andequity. B. A trial balance is created before the balance sheet isprepared. C. A trial balance presents data in debit and creditformat, but a balance sheet does not. D. A trial balance showstotal debits and total credits.

QUESTION 29 A promise received from a business's customers topay for goods and services that they received from the business iscalled a(n): A. revenue. B. account receivable. C. account payable.D. expense.

QUESTION 30 You can evaluate the economic resources, debt, andoverall financial position of a company in which of the followingfinancial statements? A. Income statement B. Balance sheet C.Statement of owner's equity D. Statement of cash flows

QUESTION 31 A book holding all of the accounts is called the: A.income statement. B. journal. C. ledger. D. balance sheet.

QUESTION 32 Which of the following groups of accounts BOTHnormally have a debit balance? A. Assets and Liabilities B.Liabilities and Owner's equity C. Revenues and Expenses D. Assetsand Expenses

QUESTION 33 A business buys $500 of supplies on account. Whichaccount is debited? A. Supplies B. Cash C. Service revenue D.Accounts payable

Spreadsheet and Statement of Cash Flows

The following information was taken from Lamberson Company's accounting records:

	Account Balances
Account Titles	January 1, 2016	December 31, 2016
Debits
Cash	$ 1,400	$ 2,400
Accounts Receivable (net)	2,800	2,690
Marketable Securities (at cost)	1,700	3,000
Allowance for Change in Value	500	800
Inventories	8,100	7,910
Prepaid Items	1,300	1,710
Investments (long-term)	7,000	5,400
Land	15,000	15,000
Buildings and Equipment	32,000	46,200
Discount on Bonds Payable	â	290
	$69,800	$85,400
Credits
Accumulated Depreciation	$16,000	$16,400
Accounts Payable	3,800	4,150
Income Taxes Payable	2,400	2,504
Wages Payable	1,100	650
Interest Payable	â	400
Note Payable (long-term)	3,500	â
12% Bonds Payable	â	10,000
Deferred Taxes Payable	800	1,196
Convertible Preferred Stock, $100 par	9,000	â
Common Stock, $10 par	14,000	21,500
Additional Paid-in Capital	8,700	13,700
Unrealized Increase in Value of Marketable Securities	500	800
Retained Earnings	10,000	14,100
	$69,800	$85,400

Additional information for the year:

Sales		$ 39,930
Cost of goods sold		(19,890)
Depreciation expense		(2,100)
Wages expense		(11,000)
Other operating expenses		(1,000)
Bond interest expense		(410)
Dividend revenue		820
Gain on sale of investments		700
Loss on sale of equipment		(200)
Income tax expense		(2,050)
Net income		$ 4,800

Dividends declared and paid totaled $700.

On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.

Long-term nonmarketable investments that cost $1,600 were sold for $2,300.

The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.

Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.

Equipment was purchased at a cost of $16,200.

The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.

Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.

Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

Prepare the statement of cash flows.

LAMBERSON COMPANY Statement of Cash Flows For Year Ended December 31, 2016

Operating Activities:

Prepare the statement of cash flows.

___________________ ____________

Adjustment for noncash income items:

___________________ ____________

Adjustments for cash flow effects from working capital items:

___________________ ____________

Net cash provided by operating activities ______________

Investing Activities:

___________________ ____________

Net cash used for investing activities ____________

Financing Activities:

___________________ ____________

Net cash provided by financing activites ____________

Cash, january 1, 2016 _____________

Cash, december 31, 2016 ____________

Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place.

Cash flows from operations ratio ________:%

Profit margin:___________ %

turquoiseraccoon399

The transactions completed by PS Music during June 2018 weredescribed at the end of Chapter 1. The following transactions werecompleted during July, the second month of the businessâsoperations: Jul. 1 Peyton Smith made an additional investment in PSMusic in exchange for common stock by depositing $5,000 in PSMusicâs checking account. 1 Instead of continuing to share officespace with a local real estate agency, Peyton decided to rentoffice space near a local music store. Paid rent for July, $1,750.1 Paid a premium of $2,700 for a comprehensive insurance policycovering liability, theft, and fire. The policy covers a one-yearperiod. 2 Received $1,000 on account. 3 On behalf of PS Music,Peyton signed a contract with a local radio station, KXMD, toprovide guest spots for the next three months. The contractrequires PS Music to provide a guest disc jockey for 80 hours permonth for a monthly fee of $3,600. Any additional hours beyond 80will be billed to KXMD at $40 per hour. In accordance with thecontract, Peyton received $7,200 from KXMD as an advance paymentfor the first two months. 3 Paid $250 on account. 4 Paid anattorney $900 for reviewing the July 3 contract with KXMD. (Recordas Miscellaneous Expense.) 5 Purchased office equipment on accountfrom Office Mart, $7,500. 8 Paid for a newspaper advertisement,$200. 11 Received $1,000 for serving as a disc jockey for a party.13 Paid $700 to a local audio electronics store for rental ofdigital recording equipment. 14 Paid wages of $1,200 toreceptionist and part-time assistant. Enter the followingtransactions on Page 2 of the two-column journal: Jul. 16 Received$2,000 for serving as a disc jockey for a wedding reception. 18Purchased supplies on account, $850. 21 Paid $620 to Upload Musicfor use of its current music demos in making various music sets. 22Paid $800 to a local radio station to advertise the services of PSMusic twice daily for the remainder of July. 23 Served as discjockey for a party for $2,500. Received $750, with the remainderdue August 4, 2018. 27 Paid electric bill, $915. 28 Paid wages of$1,200 to receptionist and part-time assistant. 29 Paidmiscellaneous expenses, $540. 30 Served as a disc jockey for acharity ball for $1,500. Received $500, with the remainder due onAugust 9, 2018. 31 Received $3,000 for serving as a disc jockey fora party. 31 Paid $1,400 royalties (music expense) to National MusicClearing for use of various artistsâ music during July. 31 Paiddividends, $1,250. PS Musicâs chart of accounts and the balance ofaccounts as of July 1, 2018 (all normal balances), are as follows:11 Cash $3,920 12 Accounts Receivable 1,000 14 Supplies 170 15Prepaid Insurance â 17 Office Equipment â 21 Accounts Payable 25023 Unearned Revenue â 31 Common Stock 4,000 33 Dividends 500 41Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 80052 Equipment Rent Expense 675 53 Utilities Expense 300 54 MusicExpense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59Miscellaneous Expense 415 Required: 1. Enter the July 1, 2018,account balances in the appropriate balance column of a four-columnaccount. No entry is needed for accounts with a zero balance. WriteBalance in the Item column, and select a check mark in the PostingReference column. (Note: Verify the equality of the debit andcredit balances in the ledger before proceeding with the nextinstruction.) 2. Analyze and journalize each transaction in atwo-column journal beginning on Page 1, omitting journal entryexplanations. Refer to the Chart of Accounts for exact wording ofaccount titles. 3. Post the journal to the ledger, extending theaccount balance to the appropriate balance column after eachposting. Indicate a zero balance by inserting a 0 (zero) in eitherof the Balance columns opposite the entry. 4. Prepare an unadjustedtrial balance as of July 31, 2018. none of the previous answershave the entire answers

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ADM 1300 Study Guide - Midterm Guide: Cash Cash, Accounts Payable, Retained Earnings

ADM 1300 Full Course Notes

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