Saturday 15 March 2014

If Accounts Payable had a balance of $18,340 at the beginning of the month, and the six amounts shown below were posted to this account, what should be the ending balance? Three debits posted to Accounts Payable this month: $4,560, $11,160, and $14,660. Three credits posted to Accounts Payable this month: $3,740, $9,640, and $12,840. $4,160. $22,500. $48,720. correct $14,180. Accounts payable is a liability account which means it has a normal credit balance and is increased by credits and decreased by debits. $18,340 – $4,560 – $11,160 – $14,660 + $3,740 + $9,640 + $12,840 = $14,180.

If Accounts Payable had a balance of $18,340 at the beginning of the month, and the six amounts shown below were posted to this account, what should be the ending balance?

Three debits posted to Accounts Payable this month: $4,560, $11,160, and $14,660.
Three credits posted to Accounts Payable this month: $3,740, $9,640, and $12,840.
$4,160.
$22,500.
$48,720.
correct $14,180.

he balance sheet of Mister Ribs Restaurant reports current assets of $50,000 and current liabilities of $20,000. Required: (a) Calculate the current ratio. (Round your answer to 1 decimal place.) Current ratio (b) Does it appear likely that Mister Ribs will be able to pay its current liabilities as they come due in the next year? Yes Explanation: (a) Current Ratio = Current Assets Current Liabilities Current Ratio = $50,000 = 2.5 $20,000 (b) Yes, it is likely that Mister Ribs will be able to pay its current liabilities as they come due. The current ratio of 2.5 indicates that for every dollar in current liabilities, the company has 2.5 dollars in current assets. This ratio indicates a good ability to pay.

he balance sheet of Mister Ribs Restaurant reports current assets of $50,000 and current liabilities of $20,000.  
Required:
(a) Calculate the current ratio. (Round your answer to 1 decimal place.)
 
  Current ratio   
 
(b)
Does it appear likely that Mister Ribs will be able to pay its current liabilities as they come due in the next year?

Yes



Explanation:
 

he balance sheet of Mister Ribs Restaurant reports current assets of $50,000 and current liabilities of $20,000. Required: (a) Calculate the current ratio. (Round your answer to 1 decimal place.) Current ratio (b) Does it appear likely that Mister Ribs will be able to pay its current liabilities as they come due in the next year? Yes Explanation: (a) Current Ratio = Current Assets Current Liabilities Current Ratio = $50,000 = 2.5 $20,000 (b) Yes, it is likely that Mister Ribs will be able to pay its current liabilities as they come due. The current ratio of 2.5 indicates that for every dollar in current liabilities, the company has 2.5 dollars in current assets. This ratio indicates a good ability to pay.

he balance sheet of Mister Ribs Restaurant reports current assets of $50,000 and current liabilities of $20,000.  
Required:
(a) Calculate the current ratio. (Round your answer to 1 decimal place.)
 
  Current ratio   
 
(b)
Does it appear likely that Mister Ribs will be able to pay its current liabilities as they come due in the next year?

Yes



Explanation:
 

The following accounts are taken from the financial statements of Trump Entertainments Resorts, Inc., at its September 30, 2008, year-end. (Amounts are in thousands.)

The following accounts are taken from the financial statements of Trump Entertainments Resorts, Inc., at its September 30, 2008, year-end. (Amounts are in thousands.)

     
  General expenses $ 176,703  
  Salaries payable   26,513  
  Interest expense   79,552  
  Accounts payable   38,739  
  Other current liabilities   136,863  
  Food and beverage revenue   77,816  
  Cash   275,489  
  Accounts receivable   45,880  
  Other current assets   25,182  
  Property and equipment   1,985,231  
  Long-term note payable   1,702,506  
  Contributed capital   14  
  Retained earnings   427,147  

 
Required:
(a)
Prepare a classified balance sheet at September 30, 2008. (TIP: Some of the above accounts are not reported on the balance sheet.) (Enter your answers in thousands. Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

Trump Entertainments Resorts Inc.
Balance Sheet
At September 30, 2008
(in thousands)
  Assets   Liabilities
  Current Assets       Current Liabilities    
      Cash $         Accounts payable $  
      Accounts receivable           Salaries payable    
      Other current assets           Other current liabilities    
 
   
  Total Current Assets       Total Current Liabilities    
        Long-term notes payable    
         
        Total Liabilities    
         
        Stockholders’ Equity    
  Property and equipment           Contributed capital    
            Retained earnings    
         
        Total Stockholders’ Equity    
         
 
   
  Total Assets $     Total Liabilities & Stockholders’
Equity
$  
 

   


 
(b)
Using the balance sheet, indicate whether the total assets of Trump Entertainments Resorts, Inc. at the end of the year were financed primarily by liabilities or stockholders' equity.
 
The total assets were financed primarily by liabilities.
 

Explanation:
As of September 30, 2008, liabilities have provided the primary source of financing for Trump Entertainments Resorts, Inc. The company has financed $1,904,621 of its assets with liabilities and only $427,161 with stockholders' equity.

J.K. Builders was incorporated on July 1, 2010. a. Received $37,500 cash invested by owners and issued stock. b. Bought an unused field from a local farmer by paying $43,000 cash. As a construction site for smaller projects, it is estimated to be worth $48,000 to J.K. Builders. c. A lumber supplier delivered lumber to J.K. Builders for future use. The lumber would have normally sold for $11,200, but the supplier gave J.K. Builders a 11 percent discount. J.K. Builders has not yet received a bill from the supplier. d. Borrowed $22,000 from the bank with a plan to use the funds to build a small workshop in August. The loan must be repaid in two years. e. One of the owners sold $12,000 worth of his stock to another shareholder for $13,000. Required: Prepare journal entries for the above transactions from the first month of business. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Cash Contributed capital b. Land Cash c. Lumber Accounts payable d. Cash Note payable e. No journal entry required No journal entry required

J.K. Builders was incorporated on July 1, 2010.  
a. Received $37,500 cash invested by owners and issued stock.
b.
Bought an unused field from a local farmer by paying $43,000 cash. As a construction site for smaller projects, it is estimated to be worth $48,000 to J.K. Builders.
c.
A lumber supplier delivered lumber to J.K. Builders for future use. The lumber would have normally sold for $11,200, but the supplier gave J.K. Builders a 11 percent discount. J.K. Builders has not yet received a bill from the supplier.
d.
Borrowed $22,000 from the bank with a plan to use the funds to build a small workshop in August. The loan must be repaid in two years.
e. One of the owners sold $12,000 worth of his stock to another shareholder for $13,000.
 
Required:
Prepare journal entries for the above transactions from the first month of business. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Event General Journal Debit Credit
a.   Cash    
        Contributed capital    
       
b.   Land    
        Cash    
       
c.   Lumber    
        Accounts payable    
       
d.   Cash    
        Note payable    
       
e.   No journal entry required    
        No journal entry required    

 

For each of the following transactions of Spotlighter Inc. for the month of January 2010, indicate the accounts, amounts, and direction (+ for increase and − for decrease) of the effects on the accounting equation. A sample is provided. a. (Sample) Borrowed $8,460 from a local bank on a note due in six months. b. Received $4,930 cash from investors and issued stock to them. c. Purchased $1,610 in equipment, paying $190 cash and promising the rest on a note due in one year. d. Paid $597 cash for supplies. e. Bought $580 of supplies on account. Assets = Liabilities + Stockholders' Equity a. Cash +8,460 Notes payable +8,460 b. Cash +4,930 Contributed capital +4,930 c. Cash -190 Notes payable +1,420 Equipment +1,610 d. Cash -597 Supplies +597 e. Supplies +580 Accounts payable +580

For each of the following transactions of Spotlighter Inc. for the month of January 2010, indicate the accounts, amounts, and direction (+ for increase and − for decrease) of the effects on the accounting equation. A sample is provided.
 
a. (Sample) Borrowed $8,460 from a local bank on a note due in six months.
b. Received $4,930 cash from investors and issued stock to them.
c. Purchased $1,610 in equipment, paying $190 cash and promising the rest on a note due in one year.
d. Paid $597 cash for supplies.
e. Bought $580 of supplies on account.
  
  Assets = Liabilities + Stockholders' Equity
a.  Cash +8,460       Notes payable +8,460        
b.  Cash +4,930             Contributed capital +4,930  
c.  Cash -190       Notes payable +1,420        
   Equipment +1,610              
d.  Cash -597              
   Supplies +597              
e.  Supplies +580       Accounts payable +580        

 

The following accounts are taken from Buck Up!, Inc., a company that specializes in horse-breaking services and rodeo lessons, as of December 31, 2010. BUCK UP!, INC. Unadjusted Trial Balance At December 31, 2010 Account Name Debits Credits Cash $ 59,750 Accounts Receivable 3,300 Prepaid Insurance 1,200 Equipment 64,600 Land 23,000 Accounts Payable $ 29,230 Unearned Revenues 1,500 Long-term Notes Payable 74,000 Contributed Capital 5,000 Retained Earnings 14,500 Dividends 3,500 Horse-breaking Revenue 25,200 Rodeo Lesson Revenue 10,500 Wages Expense 3,900 Maintenance Expense 410 Other Expenses 270 Totals $ 159,930 $ 159,930 Requirement 1: Using the unadjusted trial balance provided, create an income statement for Buck Up!, Inc., for the year ended December 31, 2010. (Omit the "$" sign in your response.) BUCK UP!, INC. Income Statement For the Year Ended December 31, 2010 Revenues: Horse-breaking revenue $ Rodeo lesson revenue Total Revenues Expenses: Wages expense Maintenance expense Other expenses Total Expenses Net income $ Requirement 2: Using the unadjusted trial balance provided, create a statement of retained earnings, for Buck Up!, Inc., for the year ended December 31, 2010. (Input all amounts as positive values. Omit the "$" sign in your response.) BUCK UP!, INC. Statement of Retained Earnings For the Year Ended December 31, 2010 Retained Earnings, Jan. 1, 2010 $ Add: Net income Less: Dividends Retained Earnings, Dec. 31, 2010 $ Requirement 3: Using the unadjusted trial balance provided, create a classified balance sheet, for Buck Up!, Inc., for the year ended December 31, 2010. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.) BUCK UP!, INC. Balance Sheet At December 31, 2010 Assets Current Assets Cash $ Accounts receivable Prepaid insurance Total Current Assets Equipment Land Total Assets $ Liabilities Current Liabilities Accounts payable $ Unearned revenues Total Current Liabilities Long-term notes payable Total Liabilities Stockholders' Equity Contributed capital Retained earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $

The following accounts are taken from Buck Up!, Inc., a company that specializes in horse-breaking services and rodeo lessons, as of December 31, 2010.  
BUCK UP!, INC.
Unadjusted Trial Balance
At December 31, 2010
Account Name Debits Credits
  Cash $ 59,750      
  Accounts Receivable   3,300      
  Prepaid Insurance   1,200      
  Equipment   64,600      
  Land   23,000      
  Accounts Payable     $ 29,230  
  Unearned Revenues       1,500  
  Long-term Notes Payable       74,000  
  Contributed Capital       5,000  
  Retained Earnings       14,500  
  Dividends   3,500      
  Horse-breaking Revenue       25,200  
  Rodeo Lesson Revenue       10,500  
  Wages Expense   3,900      
  Maintenance Expense   410      
  Other Expenses   270      
 



     Totals $ 159,930   $ 159,930  
 








 
Requirement 1:
Using the unadjusted trial balance provided, create an income statement for Buck Up!, Inc., for the year ended December 31, 2010. (Omit the "$" sign in your response.)

BUCK UP!, INC.
Income Statement
For the Year Ended December 31, 2010
  Revenues:    
      Horse-breaking revenue $  
      Rodeo lesson revenue    
 

      Total Revenues    
 

  Expenses:    
      Wages expense    
      Maintenance expense    
      Other expenses    
 

      Total Expenses    
 

  Net income $  
 




 
Requirement 2:
Using the unadjusted trial balance provided, create a statement of retained earnings, for Buck Up!, Inc., for the year ended December 31, 2010. (Input all amounts as positive values. Omit the "$" sign in your response.)

BUCK UP!, INC.
Statement of Retained Earnings
For the Year Ended December 31, 2010
  Retained Earnings, Jan. 1, 2010 $  
      Add: Net income    
      Less: Dividends    
 

  Retained Earnings, Dec. 31, 2010 $  
 




 
Requirement 3:
Using the unadjusted trial balance provided, create a classified balance sheet, for Buck Up!, Inc., for the year ended December 31, 2010. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

BUCK UP!, INC.
Balance Sheet
At December 31, 2010
  Assets    
  Current Assets    
      Cash $  
      Accounts receivable    
      Prepaid insurance    
 

        Total Current Assets    
  Equipment    
  Land    
 

  Total Assets $  
 



  Liabilities    
  Current Liabilities    
      Accounts payable $  
      Unearned revenues    
 

        Total Current Liabilities    
  Long-term notes payable    
 

  Total Liabilities    
 

  Stockholders' Equity    
      Contributed capital    
      Retained earnings    
 

        Total Stockholders' Equity    
 

  Total Liabilities and Stockholders' Equity $  
 



An auto-body repair shop has been in business for 23 years. a. Signed a long-term note and received a $150,000 loan from a local bank. b. Billed a customer $2,000 for repair work just completed. Payment is expected in 45 days. c. Wrote a check for $600 of rent. d. Received $450 cash from a customer for work done the same day. e. The company incurred $400 in advertising costs for the current month and is planning to pay these costs next month. Required: Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.) General Journal Debit Credit a. Cash Note payable b. Accounts receivable Repair/Service revenue c. Rent expense Cash d. Cash Repair/Service revenue e. Advertising expense Accounts payable

An auto-body repair shop has been in business for 23 years.
 
a. Signed a long-term note and received a $150,000 loan from a local bank.
b. Billed a customer $2,000 for repair work just completed. Payment is expected in 45 days.
c. Wrote a check for $600 of rent.
d. Received $450 cash from a customer for work done the same day.
e.
The company incurred $400 in advertising costs for the current month and is planning to pay these costs next month.

Required:
Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.)
 
  General Journal Debit Credit
a.   Cash     
        Note payable    
       
b.   Accounts receivable     
        Repair/Service revenue    
       
c.   Rent expense     
        Cash    
       
d.   Cash     
        Repair/Service revenue    
       
e.   Advertising expense     
        Accounts payable    

An international children’s charity collects donations, which are used to buy clothing and toys for children in need. The charity records donations of cash and other items as Donations Revenue when received. a. Received $4,000 in cash and checks from a door-to-door campaign. b. Paid $2,000 cash for employee wages this month. c. Paid $1,000 cash on a loan from the bank (ignore interest). d. Bought $3,000 worth of new toy supplies from a large toy manufacturer, paying $1,000 cash and signing a short-term note for $2,000. e. The manufacturer generously donated an additional $2,500 of toy supplies. Required: Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.) General Journal Debit Credit a. Cash Donations revenue b. Wages expense Cash c. Bank loan payable Cash d. Supplies Cash Note payable e. Supplies Donations revenue

An international children’s charity collects donations, which are used to buy clothing and toys for children in need. The charity records donations of cash and other items as Donations Revenue when received.
 
a. Received $4,000 in cash and checks from a door-to-door campaign.
b. Paid $2,000 cash for employee wages this month.
c. Paid $1,000 cash on a loan from the bank (ignore interest).
d.
Bought $3,000 worth of new toy supplies from a large toy manufacturer, paying $1,000 cash and signing a short-term note for $2,000.
e. The manufacturer generously donated an additional $2,500 of toy supplies.

Required:
Prepare journal entries for the above transactions, which occurred during a recent month. (Omit the "$" sign in your response.)
 
  General Journal Debit Credit
a.   Cash     
        Donations revenue    
       
b.   Wages expense     
        Cash    
       
c.   Bank loan payable     
        Cash    
       
d.   Supplies     
        Cash    
        Note payable    
       
e.   Supplies     
        Donations revenue