Record October 24th transaction AMOUNTS cash[amount1],noncas…

Record October 24th transaction AMOUNTS cash[amount1],noncashasset[amount2],liabilities[amount3],contributed capital[amount4],earned capital[amount6],Revenue[amount7],Expenses[amount8],Net Income[amount9] ACCOUNTS cash[account1],noncashasset[account2],liabilities[account3],contributed capital[account4],earned capital[account6],Revenue[account7],Expenses[account8],Net Income[account9]

On August 1, Year 1, Gomez Company borrowed $68,000 cash. Th…

On August 1, Year 1, Gomez Company borrowed $68,000 cash. The one-year note carried a 25% rate of interest. Which of the following shows how the accrual of interest expense in Year 2 will affect Gomez’s financial statements? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders’ Equity Revenues − Expenses = Net Income A. = 9,919 + (9,919) − 9,919 = (9,919) (9,919) OA B. = 9,919 + (9,919) − 9,919 = (9,919) C. = 7,081 + (7,081) − 7,081 = (7,081) (7,081) OA D. = 7,081 + (7,081) − 7,081 = (7,081)

On August 1, Year 1, Gomez Company borrowed $59,000 cash. Th…

On August 1, Year 1, Gomez Company borrowed $59,000 cash. The one-year note carried a 16% rate of interest. Which of the following shows how the December 31, Year 1, recognition of accrued interest will effect Gomez’s financial statements? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders’ Equity Revenues − Expenses = Net Income A. = 5,505 + (5,505) − 5,505 = (5,505) (5,505) OA B. = 5,505 + (5,505) − 5,505 = (5,505) C. = 3,935 + (3,935) − 3,935 = (3,935) (3,935) OA D. = 3,935 + (3,935) − 3,935 = (3,935)

On January 1, Year 5, Raven Limo Service, Incorporated sold…

On January 1, Year 5, Raven Limo Service, Incorporated sold a used limo that had cost $80,000 and had accumulated depreciation of $44,000. The limo was sold for $32,400 cash. Which of the following shows how the sale of the limo would affect Raven’s financial statements? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Equity Cash + Book Value of Limo Gain − Loss = Net Income A. 32,400 + (36,000) = + (3,600) 3,600 − = (3,600) 32,400 IA B. 32,400 + (36,000) = + 3,600 3,600 − = 3,600 3,600 IA C. 32,400 + (36,000) = + (3,600) − 3,600 = (3,600) D. 32,400 + (36,000) = + (3,600) − 3,600 = (3,600) 32,400 IA

On December 31, Year 1, the Loudoun Corporation estimated th…

On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun’s customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050. Which of the following correctly states the effect of the adjustment dated December 31, Year 1, on the financial statements of the Loudoun Corporation? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders’ Equity Revenue − Expense = Net Income A. (3,375) = 3,375 + − = B. (3,375) = + (3,375) − 3,375 = (3,375) C. 3,375 = + 3,375 − (3,375) = 3,375 3,375 OA D. = + − =

On January 1, Year 1, Marino Moving Company paid $64,000 cas…

On January 1, Year 1, Marino Moving Company paid $64,000 cash to purchase a truck. The truck was expected to have a four year useful life and a $4,000 salvage value. If Marino uses the straight-line method, which of the following shows how the adjusting entry to recognize depreciation expense at the end of Year 3 will affect the Company’s financial statements? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders’ Equity Cash + Book Value of Truck = Accounts Payable + Common Stock + Retained Earnings Revenue − Expense = Net Income A. + (45,000) = + + (45,000) − 45,000 = (45,000) B. + (45,000) = + + (45,000) − 45,000 = (45,000) C. + (15,000) = + + 15,000 − 15,000 = (15,000) (15,000) OA D. + (15,000) = + + (15,000) − 15,000 = (15,000)