Answers for Review Problems

Answers for Review Problems - ANSWERS FOR EXAM 1 REVIEW...

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Unformatted text preview: ANSWERS FOR EXAM 1 REVIEW PROBLEMS 1. 1. SE 6. A 2. A 7. A 3. L 8. SE 4. SE 9. SE 5. SE 10. L 2. a) $6,000 b) $7,000 c) $27,000 3. a) $325,000 increase b) $85,000 increase c) $230,000 decrease 4. 1. C 9. A 2. G 10. D 3. H 11. C 4. E 12. F 5. G 13. C 6. A 14. A 7. D 15. H 8. H 16. E 5. a) Current ratio: $32,500 $19,500 = 1.67:1 b) Debt to total assets ratio: $37,500 $83,200 = 45.1% c) Working capital $32,500 $19,500 = $13,000 d) Earnings per share ( $11,000 5,000) = $2.20 per share 6. 1. J 8. E 2. H 9. I 3. A 10. C 4. K 11. B 5. L 12. G 6. D 13. M 7. F 7. 1. Credit 2. Debit 3. Debit 4. Debit 5. Debit 6. Credit 7. Credit 8. Type of Normal Account Balance 1. Land .. A Dr. 2. Note payable . L Cr. 3. Service revenue. R Cr. 4. Dividends. N Dr. 5. Accounts payable.. L Cr. 6. Salaries expense E Dr. 7. Common stock N Cr. 8. Prepaid insurance... A Dr. 9. Buildings.... A Dr. 10. Notes receivable. A Dr. 9. Normal . Debit__ _Credit_ Balance 1. Insurance expense. __+_ _ _____ ___ __Dr___ 2. Accounts receivable. __+__ __ _____ __ __Dr___ 3. Rent revenue. ____ ___ ___+__ __ __Cr___ 4. Retained earnings ____ ___ ___+__ __ __Cr___ 5. Dividends ___+ ___ _____ __ __Dr___ 10. The balance at the end of the month is a $10,000 credit, calculated as follows: Beginning accounts payable $12,000 Add: Purchases on account 25,000 Less: Payments made on account 27,000 Ending accounts payable $10,000 __________Accounts Payable__________...
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Answers for Review Problems - ANSWERS FOR EXAM 1 REVIEW...

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