Author: Anonymous

For the year ended December 31, a company has revenues of $317,000 and expenses of $196,000. The company paid $50,000 in dividends during the year. The balance in the Retained earnings account before closing is $81,000. Which of the following entries would be used to close the dividends account?

During the month of March, Homey’s Computer Services made purchases on account totaling $43,500. Also during the month of March, Homey was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March?

If Tyler Smith, the sole stockholder of Smith Hardware, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

During the month of February, Carl’s Services had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the February 1 beginning cash balance?

At the end of its first month of operations, Don’s Repair Services reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The sole stockholder’s total investment in exchange for common stock for this first month was $5,000. There were no dividends in the first month. Calculate the amount of total equity to be reported on the balance sheet at the end of the month.

Phillips, Inc. purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the first year of its useful life using the double-declining-balance method?

Conners, Inc. purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset’s book value on December 31, Year 2 will be:

Asset accounts normally have debit balances and revenue accounts normally have credit balances.

All of the following statements accurately describe the debt ratio except.