Section_Problem_Set_2__solution

Section_Problem_Set_2__solution - AEM 221 Section #2-TA...

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Section #2—TA ANSWER KEY!!! Name:_______________________________ Section:______________________ Multiple Choice 1. Wang Corporation was organized on April 1, 20B. Wang Corporation issued shares of capital stock to each of the six owners who paid $18,000 in total. On the basis of transactional analysis, the following entry should be recorded. A) A debit to cash for $18,000 and a credit to revenue for $18,000. B) A credit to cash for $18,000 and a debit to retained earnings for $18,000. C) A credit to cash for $18,000 and a debit to contributed capital for $18,000. D A debit to cash for $18,000 and a credit to contributed capital for $18,000. E) None of the above is correct. 2. Assume a company's January 1, 20A, financial position was: Assets, $75,000 and Liabilities, $30,000. During January 20A, the company completed the following transactions: (a) paid on a note payable $5,000 (no interest was paid); (b) collected an accounts receivable, $4,000; (c) paid an accounts payable, $3,000; and (d) purchased a truck, $2,000 cash, and received a $13,000 note payable. The company's January 31, 20A financial position is Assets Liabilities Stockholders' Equity A) $83,000 $38,000 $45,000 B) $80,000 $35,000 $45,000 C) $65,000 $35,000 $30,000 D) $78,000 $37,000 $41,000 E) None of the above. 3. During 2004, Blue Corporation incurred operating expenses amounting to $100,000 of which $75,000 were paid in cash; the balance will be paid in January 2005. Transaction analysis of operating expenses for 2004, should reflect only the following A) decrease stockholders' equity, $75,000; decrease assets, $75,000. B) decrease assets, $100,000; decrease stockholders' equity, $100,000. C) decrease assets, $100,000; increase liabilities, $25,000; decrease stockholders' equity, $100,000. D) decrease stockholders' equity, $100,000; decrease assets, $75,000; increase
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Section_Problem_Set_2__solution - AEM 221 Section #2-TA...

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