BUS214_SOLUTIONS

BUS214_SOLUTIONS - 1. At December 31, 2005, assets were...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. At December 31, 2005, assets were $1,391,500 and liabilities were $598,800. For the year ended December 31, 2006, revenues of $632,400 were earned, expenses of $594,300 were incurred, dividends of $31,100 were declared and paid, and $54,700 of common stock was issued. At December 31, 2006, liabilities were $614,700. What were assets at December 31, 2006? a. $1,469,100 (1point) b. $1,437,300 c. $1,345,700 d. $1,392,900 e. None of the above A. Use the Assets = Liabilities + Shareholders’ Equity formula. Enter the known amounts and compute assets at December 31, 2005: Assets = Liabilities + Shareholders’ Equity 12/31/04 $1,391,500 = $598,800 + $792,700 (1 point) Rev 632,400 Exp (594,300) Div (31,100) Stock 54,700 $1,469,100 = $614,700 + $854,400 (1 point) 12/31/05 2.. Retained Earnings had a beginning balance of $1,628,900 and an ending balance of $2,452,300. Total revenues for the year were $6,707,500. During the year $518,100 in dividends were declared and paid and $288,000 in stock was issued for cash. Which of the following is true? a. Total expenses for the year were $5,884,100. b. Net income for the year was $1,341,500 (1 point) c. Total expenses for the year were $6,172,100. d. Net income for the year was $823,400. e. More than one of the above answers is correct. B. Beginning balance of $1,628,900 + Revenues of $6,707,500 - Expenses ------------------------------ 1 point (see below = 5,366,000) – $518,100 of dividends = $2,452,300 ending balance. (The issuance of stock for cash does not affect retained earnings = 1 point .) Therefore, Expenses were $5,366,000 . This is not one of the answers, so we solve for net income = $1,341,500 ($6,707,500 – $5,366,000) and that is an answer. 3.. The following transactions occurred:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
- contributed 100,000 of cash to start the business - purchased $10,000 of supplies on account - performed $20,000 of services for clients (all on account) - incurred expenses of$5,000 ($2,500 paid in cash and the rest charged on account) - paid for $4,000 of the supplies and collected $18,000 of the accounts receivable - declared and paid a $500 dividend.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

BUS214_SOLUTIONS - 1. At December 31, 2005, assets were...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online