ACCT 211 Exam 1 Liberty University Solution

Question 1

Use the following information for Meeker Corp. to determine the amount of equity to report.

Question 2

Arrow's net income of $118 million and average assets of $1,500 million results in a return on assets of 7.87%.

Question 3

If a company is considering the purchase of a parcel of land that was acquired by the seller for $101,000, is offered for sale at $182,000, is assessed for tax purposes at $111,000, is recognized by the purchaser as easily being worth $172,000, and is purchased for $169,000, the land should be recorded in the purchaser's books at:

Question 4

If a company purchases equipment costing $4,400 on credit, the effect on the accounting equation would be:

Question 5

Zippy had cash inflows from operations $78,500; cash outflows from investing activities of $63,000; and cash inflows from financing of $41,000. The net change in cash was:

Question 6

Gi Gi's Dance Studio provided $300 of dance instruction and rented out its dance studio to the same client for another $175. The client paid immediately. Identify the general journal entry below that Gi Gi's will make to record the transaction.

Question 7

On January 1 of the current year, Jimmy's Sandwich Company reported stockholders’ equity totaling $127,500. During the current year, total revenues were $105,000 while total expenses were $94,500. Also, during the current year paid $29,000 in cash dividends. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $205,000, the change in total stockholders’ equity during the year was:

Question 8

On April 30, Victor Services had an Accounts Receivable balance of $32,300. During the month of May, total credits to Accounts Receivable were $67,600 from customer payments. The May 31 Accounts Receivable balance was $26,000. What was the amount of credit sales during May?

Question 10

On May 31, the Cash account of Bottle's R US had a normal balance of $5,300. During May, the account was debited for a total of $12,500 and credited for a total of $11,800. What was the balance in the Cash account at the beginning of May?

Question 13

At the end of its first month of operations, Michael's Consulting Services reported net income of $32,500. They also had account balances of: Cash, $23,000; Office Supplies, $3,250 and Accounts Receivable $12,500. The sole stockholder’s total investment in exchange for common stock for this first month was $6,250. There were no dividends in the first month.

Question 17

Sanborn Company has 10 employees, who earn a total of $3,800 in salaries each working day. They are paid on Monday for the five-day workweek ending on the previous Friday. Assume that year ended on December 31 which is a Wednesday and all employees will be paid salaries for five full days on the following Monday. The adjusting entry needed on December 31 is:

Question 18

A company pays each of its two office employees each Friday at the rate of $130 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

Question 29

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: