Question 1

A company has assets of $500,000 and equity of $350,000.What is the amount of liabilities?

Accepted Answer

The answer of A company has assets of $500,000 and...

Question 2

Halley Burton began Web Consulting as a corporation and completed these transactions during September of the current year:.
 \(\begin{array}{|l|l|l|}
\hline\text { Sept } & 1 & \begin{array}{l}
\text { Invested } \$ 100,000 \text { of his personal savings into a checking account opened in } \
\text { the name of the business and received stock in the corporation. }
\end{array} \
\hline & 2 & \text { Rented office space and paid } \$ 1,200 \text { cash for the month of September. } \
\hline & 3 & \begin{array}{l}
\text { Purchased office equipment for } \$ 30,000 \text {, paying } \$ 8,000 \text { cash and agreeing to } \
\text { pay the balance in one year. }
\end{array}\
\hline & 4 & \text { Purchased office supplies for } \$ 750 \text { cash. } \
\hline & 8 & \begin{array}{l}
\text { Completed work for a client and immediately collected } \$ 2,700 \text { cash for the } \
\text { services. }
\end{array} \
\hline & 15 & \text { Completed } \$ 3,600 \text { services for a client on credit. } \
\hline & 20 & \text { Received } \$ 3,600 \text { from a client for the work completed on September } 15 . \
\hline & 30 & \text { Paid the office secretary's monthly salary, } \$ 3,000 \text { cash. } \
\hline&30 &\text { Web Consulting paid a } \$ 2,000 \text { cash dividend. }\
\hline
\end{array}\)
 
Show the effects of the above transactions on the accounting equation of Web Consulting.Use the following format for your answers.The first item is shown as an example.
Increase = I Decrease = D No effect = N
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Date } & \text { Assets } & \text { Liabilities } & \text { Equity } \
\hline \text { Example: } & & & \
\hline \text { September I } & \text { I } & \text { N } & \text { I } \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Halley Burton began Web Consulting as a...

Question 3

If Madeira Company paid $42,000 of its accounts payable in cash,what would be the effect of this transaction on assets,liabilities,and equity?

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The answer of If Madeira Company paid $42,000 of its...

Question 4

A company purchased $7,000 of supplies and testing equipment on credit.Enter the appropriate amounts for this transaction into the accounting equation format shown below:
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of A company purchased $7,000 of supplies and...

Question 5

For each of the following transactions,identify the effects on the accounting equation.Use "+" to indicate an increase and "-" to indicate a decrease.Use "A","L" and "E" to indicate assets,liabilities,and equity,respectively.Part (a)has been completed as an example.
 $\begin{array}{|l|l|l|l|l|}
\hline a. &\text { L. Berryman invested } \$ 100,000 \text { in the } \
&\text { new corporation in exchange for stock. } & +\mathrm{A}  &  +\mathrm{E}  &  +\mathrm{L}\
\hline b. & \text { Land was purchased for } \$ 50,000 . \mathrm{A} \
&\text { down payment of } \$ 15,000 \text { cash was } \
&\text { made and a note was signed for the } \
&\text { balance. } & & \
\hline c. &\text { Services were rendered to customers } \
&\text { for cash } & & \
\hline d. &\text { A building was purchased for cash. }& & \
\hline e. & \text { Supplies were purchased for cash. }& & \
\hline f. &\text {  Paid the office secretary's salary. }& & \
\hline g. & \text { The amount owed on the land from } \
&\text { part (b) was paid. } & & \
\hline
\end{array}$

Accepted Answer

The answer of For each of the following transactions,identify the...

Question 6

A company spent $52,000 in cash for this period's advertising activities.Enter the appropriate amounts for this transaction into the accounting equation format shown below:
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of A company spent $52,000 in cash for...

Question 7

A company paid its employees $90,000 in cash for wages earned during the past two weeks.Enter the appropriate amounts for this transaction into the accounting equation format shown below:
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of A company paid its employees $90,000 in...

Question 8

A parcel of land offered for sale at $600,000 is assessed for tax purposes at $500,000,is recognized by its purchasers as easily being worth $575,000,and is purchased for $570,000.At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?

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The answer of A parcel of land offered for sale...

Question 9

On May 1,Chuck Taylor formed FastForward,a shoe consulting business as a corporation.To start the business he invested $750,000 in cash.Enter the appropriate amounts for this transaction into the accounting equation format shown below:
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of On May 1,Chuck Taylor formed FastForward,a shoe...

Question 10

At the beginning of the year,a company had $120,000 worth of liabilities.During the year,assets increased by $160,000,and at year-end they equaled $360,000.Liabilities decreased $20,000 during the year.Calculate the beginning and ending values of equity.

Accepted Answer

Ending equity = $260,000
 
 11ea8897_df64_dd80_a96f_abdcfb0758c0_TB6312_00_TB6312_00_TB6312_00

Question 11

The following schedule reflects the first month's transactions of the Blue Real Estate Company:
 $\begin{array}{|l|r|r|r|r|r|r|l|}
\hline&&\text { Accounts } & & & \text { Accounts } & \text { Common } & \text { Retained } \
&\text { Cash }+ & \text { Receivable }+ & \text { Supplies }+ & \text { Equipment }- & \text { Payable }+ & \text { Stock }+ & \text { Earnings } \
\hline \text { a. } & -20,000 & & & & & +20,000 & \
\hline \text { b. } & -5,000 & & & -5,000 & & & \
\hline \text { c. } & & & +1,500 & & +1,500 & & \
\hline \text { d. } & +3,000 & & & & & & +3,000 \
\hline \text { e. } & +1,000 & +1,500 & & & & & +2,500 \
\hline \text { f. } & -750 & & & & -750 & &\
\hline \mathrm{g} & +500 & -500 & & & & & \
\hline \mathrm{h} . & && -400 & & & & -400 \
\hline \mathrm{i} . & -2,000 & & & & & & -2,000 \
\hline
\end{array}$
 
Provide descriptions for each transaction.

Accepted Answer

The answer of The following schedule reflects the first month's...

Question 12

A company has liabilities of $475,000 and equity of $925,000.What is the amount of its assets?

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The answer of A company has liabilities of $475,000 and...

Question 13

The characteristics below apply to at least one of the forms of business organization.
a.Is a separate legal entity?
b.Is allowed to be owned by one person only?
c.Owner or owners are personally liable for debts of the business.
d.Is a taxable entity?
e.Is a business entity?
f.May have a contract specifying the division of profits among the owners?
g.Has an unlimited life.
Use the following format to indicate (with a yes or no)whether or not a characteristic applies to each type of business organization.
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { Proprietorship } & \text { Partnership } & \text { Corporation } \
\hline \text { a } & & & \
\hline \text { b } & & & \
\hline \text { c } & & & \
\hline \text { d } & & & \
\hline \text { e } & & & \
\hline \text { f } & & & \
\hline \text { g } & & & \
\hline
\end{array}$$

Accepted Answer

The answer of The characteristics below apply to at least...

Question 14

Sara Bloom has prepared the following analysis of September transactions for her business,Blooming Florist.Unfortunately,she has lost some information.Determine the missing amounts (a)through (c)below:
 $\begin{array}{|l|r|r|r|r|r|r|}
\hline\text { Date } & \text { Cash } & \text { Accounts } & \text { Accounts } & \text { Notes } & \text { Common } & \text { Retained } \
& & \text { Receivable } & \text { Payable } & \text { Payable } & \text { Stock } & \text { Earnings }\
\hline \text { Balances } & 30,000 & 30,100 & \text { (a) } & 8,500 & 10,000 & 30,000 \
\hline 9 / 5 & -10,000 & 0 & \text { (b) } & 0 & 0 & \
\hline 9 / 10 & -3,500 & 0 & 0 & 0 & 0 & \text { (c) }\
\hline 
\end{array}$

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The answer of Sara Bloom has prepared the following analysis...

Question 15

If the liabilities of a business increased $86,000 during a period of time and equity in the business decreased $23,000 during the same period,enter the appropriate amounts for this activity in the accounting equation format shown below.
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of If the liabilities of a business increased...

Question 16

You are reviewing the accounting records of Cathy's Antiques,Inc.owned by Cathy Miller.You have uncovered the following situations.Compose a memo to Ms.Miller that cites the appropriate accounting principle and the suggested action for each separate situation.
A. In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon.
B. Cathy plans a Going Out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy's Antiques indefinitely.
C. Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars.
D. Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.

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The answer of You are reviewing the accounting records of...

Question 17

Annie's Attic has the following account balances for the dates given:
 $$\begin{array} { | l | r | r | } 
\hline &{ \text { September } 1 } & \text { September 30 } \
\hline \text { Cash } & \$ 40,000 & 60,000 \
\hline \text { Accounts Receivable } & 40,000 & 38,000 \
\hline \text { Accounts Payable } & 6,000 & ? \
\hline
\end{array}$$ 
Its net income for September 1 through September 30 was $20,000 and there were no investments by the owners or dividends paid.Determine the equity at both September 1 and September 30.

Accepted Answer

The answer of Annie's Attic has the following account balances...

Question 18

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period,did the assets of the company increase or decrease and by what amount?

Accepted Answer

Assets = Liabilities + Equity
+ $62,000 = +$92,000 - $30,000

Question 19

A company performed testing services for a client.The client paid the company $3,000 in cash.Enter the appropriate amounts for this transaction into the company's accounting equation format shown below:
 $$\begin{array} { | c | c | c | } 
\hline \text { Assets } = & \text { Liabilities } + & \text { Equity } \
\hline & & \
\hline
\end{array}$$

Accepted Answer

The answer of A company performed testing services for a...

Question 20

Lorton's Web Services has assets of $265,000 and liabilities of $130,000.Calculate the amount of equity.

Accepted Answer

The answer of Lorton's Web Services has assets of $265,000...

Quiz 1: Introducing Accounting in Business