A100%2BFall+1%2C+2011

E assets are decreased when the revenue is earned use

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Unformatted text preview: earned revenue is received. b Upon receipt, the amount received is recorded as revenue. c Total assets are increased when the revenue is earned. d There is no change to income statement accounts when the cash is received. e Assets are decreased when the revenue is earned. Use the following information to answer questions 22 and 23: Morton Inc. borrowed $100,000 on July 1, 2009, and must repay $112,000 on July 1, 2012. 22 What is the balance in interest payable on December 31, 2011? a $10,000 b $2,000 c $4,000 d $12,000 23 What is the total interest expense reported on the annual financial statements dated December 31, 2011? a $10,000 b $2,000 c $4,000 d $12,000 e None of the above e None of the above 24 College Corporation began 2011 with total assets of $82,000 and total liabilities of $40,000. College paid dividends of $10,000 during 2011 and ended the year with $44,000 in stockholders' equity. What was the company's approximate return on equity for 2011? a 27.3% b 27.9% c 28.6% d 23.3% e None of the above 25 DELETED Use the following information from the annual financial statements to answer questions 26 through 34. (Answer each question independently.) 2010 2011 2010 Cash $1,200 $ 2,000 Accounts payable $3,000 Accounts receivable $6,000 $ 5,600 Unearned revenue $5,000 Inventory $14,000 $ 16,600 Utilities payable $1,200 Prepaid Insurance $4,000 $ 1,000 Note payable $24,000 Equipment $28,000 $ 28,000 Interest payable $1,000 Accumulated depreciation ($6,000) ($9,000) Common...
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