BUS214_SOLUTIONS

BUS214_SOLUTIONS - 1 At assets were $1,391,500 and...

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 Document Right 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.

{[ snackBarMessage ]}

Page1 / 5

BUS214_SOLUTIONS - 1 At assets were $1,391,500 and...

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