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Accounting Quiz 1

Accounting Quiz 1 - Name 4-Digit Number[if known_Section...

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Name_____________________ 4-Digit Number [if known]_______Section #_________ Determining Year-End Account Balances: [073Q1] The Jose Company [the firm] was formed on May 31, Year 1, when four owners each invested $20,000. One of the owners lent $25,000 to the firm. This loan has to be repaid in full along with $2,400 interest on May 31, Year 2. During Year 1, Jose purchased supplies inventory on account at a cost of $7,000. In Year 1, 70% of supplies purchased had been used. During the remainder of Year 1, payments had been made for 80% of the supplies purchased on account. In July Year 1, Jose collected $230,000 from its first consulting client while performing $185,000 work for this client. The remainder of the work will be done in Year 2. In September Year 1, Jose started working for its second consulting client and completed $180,000 of work for this new client. Before the end of Year 1 this second client paid $250,000 to Jose. There will be more work in Year 2. Jose hired six consultants at a monthly salary of $4,000 each. These six consultants worked for the firm from June 20, Year 1, until the end of the year.
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