fav3chp3-4 - 28 CHAPTER3 Problem31 1.C 2.C 3.A 4.B 5.C...

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          28 CHAPTER   3 Problem  3-1        Problem  3-2                         1.  C                 1.  A            2.  C                 2.  B            3.  A                 3.  B              4.  B                 4.  A              5.  C                 5.  C                   Problem 3-3  Answer  D Capital – December 31 2,500,000 Add: Withdrawals – merchandise at cost      200,000 Total   2,700,000 Less: Capital – January 1 2,000,000          Additional investment (1,000,000 + 120,000) 1,120,000 3,120,000 Net loss                       (   420,000 Problem 3-4  Answer  B Total assets – January 1 5,000,000 Less:  Total liabilities 2,000,000           Contributed capital 2,000,000    4,000,000 Retained earnings – January 1   1,000,000 Total assets – December 31   7,500,000 Less: Total liabilities 3,200,000         Contributed capital (2,000,000 + 500,000 + 300,000) 2,800,000   6,000,000 Retained earnings – December 31 1,500,000 Add: Dividends paid    500,000 Total   2,000,000 Less: Retained earnings – January 1 1,000,000 Net income   1,000,000          
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            29 Problem 3-5  Answer  D             Effect on net assets        Increase       Decrease   Cash    450,000 Accounts receivable    300,000 Merchandise inventory       200,000 Accounts payable    100,000 Prepaid expenses         20,000 Accrued expenses      40,000 Unearned rental income          30,000 Notes payable    200,000 Accrued interest payable                          30,000 Total       700,000    670,000 Net increase (700,000 – 670,000)      30,000 Add: Withdrawals    100,000 Total    130,000 Less: Additional investment    500,000 Net loss   (370,000 ) Problem 3-6  Answer  B Assets 3,000,000 Less: Liabilities    200,000 Shareholders’ equity       2,800,000 Less: Contributed capital (15,000 x 150)       2,250,000          Increase in contributed capital – 2,000 shares    250,000 2,500,000 Retained earnings, December 31            300,000
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Add: Dividends          500,000 Net income          800,000 Problem 3-7  Answer  A Beginning inventory     1,600,000 Purchases         5,300,000 Purchase discounts           (   100,000 ) 5,200,000 Goods available for sale       6,800,000 Less: Ending inventory 2,150,000 Cost of goods sold       4,650,000           30 Problem 3-8  Answer  A                              Inventory – January 1 4,500,000      Purchases       6,000,000   Goods available for sale           10,500,000  Less: Inventory – December 31             2,500,000   Cost of goods sold before writedown  8,000,000 Loss on inventory writedown             1,500,000 Cost of goods sold after writedown             9,500,000 Problem 3-9  Answer  A        Finished goods – January 1 1,000,000 Cost of goods manufactured 5,000,000
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fav3chp3-4 - 28 CHAPTER3 Problem31 1.C 2.C 3.A 4.B 5.C...

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