exam1 practice -...

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Use the following trial balance to answer question 1 through 3:   Crusty Crab Trial Balance    12/31/03 Dr. Cr. Cash 10,000 Accounts Receivable 1,150 Supplies 3,750 Inventory 8,000 Prepaid Insurance 2,000 Land 9,000 Building 69,000 Equipment 4,200 Accumulated Depreciation 1,600 Accounts Payable 5,300 Unearned Revenues 750 Long Term Note Payable 70,500 Common Stock 24,000 Retained Earnings (1/1/03) 2,440 Dividends (paid) 1,400 Sales 56,500 Cost of Goods Sold 20,000 Rent Expense 12,000 Depreciation Expense 1,600 Salaries Expense 11,940 Insurance Expense 3,000 Interest Expense 2,050 Income Tax Expense 2,000 Total 161,090 161,090 1. What is the net income for Crusty Crab for the year ending December 31, 2003?  d. 2.  What is the amount of current assets for Crusty Crab at December 31, 2003? Cash+a/r+supp+inve+pre. Ins. = 24,900 3.  What is the amount of ending retained earnings, if net income is $2,000  for Crusty Crab at December 31, 2003? (Ignore prior answers) 2000+2440-1400= 3040 Use these choices for 1-3 a. $1,910   e. $4,050 ae.  $24,900 b. $2,440 ab. $5,960 bc. $33,900 c. $3,040 ac. $14,900    d.   $3,910 ad. $22,900
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  -------------------------------------------------------------------------------------------------------------------- USE THE FOLLOWING TO ANSWER QUESTIONS 4-5 On January 1, 2003 Chuck started a business that he called Muggle Moons.   Muggle Moons issued common stock to Chuck for $25,000 cash.   The company borrowed $5,000 at Tucson Credit Union (this was prearranged and the cash was received on  January 1, 2003).  On the same day, Muggle Moons used $12,000 cash to purchase equipment.  The equipment has a useful life of  three years and has no salvage value. During 2003, Muggle Moons provided services to Mindy’s Mint Shop and received $9,000 cash.   Muggle Moons made cash payments during 2003 of $3,500 for operating expenses and $1,000 dividend. Select the best answer to each of the following questions: 4. What is the ending cash balance at December 31, 2003? 25,000+5,0000-12,000+9,000-3,500-1000= 22500 5. What is net income for 2003 (Hint: be sure to include all expenses to calculate net income)? 9,000-3500=5500 Use these choices for 4-5 a. $500 e. $5,000 bc. $25,000   b. $1,500 ab. $5,500 bd. $28,000 c. $3,000 ac. $18,000 d. $4,500 ad. $22,500  --------------------------------------------------------------------------------------------------------------------- 6.  What is the advantage of corporations relative to partnerships and sole proprietorships? a.
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This note was uploaded on 01/30/2011 for the course ACCT 200 taught by Professor Cohen during the Spring '07 term at University of Arizona- Tucson.

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exam1 practice -...

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