Share
Explore BrainMass

ACC300: using the accounting formula in analyzing transactio

Part I Fill in the blanks: Question 1 to 8:

In the space provided, classify each as it would be reported on a balance sheet. Use the following

code:

A -----Asset

L -----Liability

SE ------ stockholders' equity

_____1. Accounts Payable

_____2. Accounts Receivable

_____3. Buildings

_____4. Cash

_____5. Contributed Capital

_____6. Land

_____7. Merchandise Inventory

_____8. Income Taxes Payable
--------------------------------------------------------------------------

Part II Multiple choice: Question 9 to 17

9. National Corp. purchases $1,000 of supplies on credit. As a result its

a. current assets will increase by $1,000

b. current assets will decrease by $1,000

c. current assets will remain the same

d. total assets will decrease by $1,000

10. A journal does all of the following except

a. summarizes all of the transactions that effect one account in a "T-account"

b. records all the assets of a company

c. records each day's transactions

d. records all the revenues and expenses of a company

Which of the following requires a debit?

a. decrease in assets

b. decrease in liabilities

c. increase in liabilities

d. increase in stockholders' equity

Which of the following requires a credit?

a. decreases in liabilities

b. decreases in stockholders' equity

c. increases to assets

d. increases to liabilities

ABC Co. received $20,000 from investors and in return issued $20,000 of stock. As a result of this transaction, what journal entry is required?

a. debit cash $20,000 and credit contributed capital $20,000

b. debit cash $20,000 and debit contributed capital $20,000

c. credit cash 20,000 and credit contributed capital $20,000

d. credit cash $20,000 and debit contributed capital $20,000

National Corporation purchased $10,000 of furnishings and equipment for cash. As a result of this transaction, what journal entry is required?

a. debit cash $10,000 and credit furnishings and equipment $10,000

b. debit furnishings and equipment $10,000 and credit cash $10,000

c. debit furnishings and equipment $10,000 and debit cash $10,000

d. credit furnishings and equipment $10,000 and credit cash $10,000

XMO, Inc. borrowed $25,000 from a bank, signing a formal agreement to repay the loan plus interest in five years. XMO placed the borrowed money in its checking account. What is the impact of this transaction?

a. current assets are increased and current liabilities are increased

b. noncurrent assets are increased and current liabilities are increased

c. current assets are increased and noncurrent liabilities are increased

d. noncurrent assets are increased and noncurrent liabilities are increased

The Hawk Co. borrowed $30,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. What is the correct journal entry for this transaction?

a. debit notes payable and credit cash for $30,000

b. debit notes payable and debit cash for $30,000

c. credit notes payable and credit cash for $30,000

d. debit cash and credit notes payable for $30,000

The Enterprise Co. paid $4,000 cash to purchase furnishings and equipment. What is the impact of this transaction?

a. total assets are decreased

b. current assets are decreased

c. current assets stay the same

d. total assets are increased
-------------------------------------------------------------------------

Part III Use the following information from 2003 incomestement for ABC company to complete question number 18-20. Please show your computations.

2003

Sales
$121,761

Cost of Goods Sold
71,583

Other operating costs
37,408

Income before income tax expense
12,770

Income tax expense
5,344

Other expense
196

Net income
$7,230

2003 Avergage Net Fixed Assets = $44,300

From the information from above, calculate the following financial ratios

Calculate Gross Profit Percentage.

Calculate Net Profit Margin.

Calculate Fixed Assets Turnover.

Attachments

Solution Preview

Part I Fill in the blanks: Question 1 to 8:

In the space provided, classify each as it would be reported on a balance sheet. Use the following code:

A -----Asset
L -----Liability
SE ------ stockholders' equity

L_____1. Accounts Payable
A_____2. Accounts Receivable
A_____3. Buildings
A___ _4. Cash
SE____5. Contributed Capital
A_____6. Land
A_____7. Merchandise Inventory
L_____8. Income Taxes Payable
--------------------------------------------------------------------------

Part II Multiple choice: Question 9 to 17

9. National Corp. purchases $1,000 of supplies on credit. As a result its

a. current assets will increase by $1,000
b. current assets will decrease by $1,000
c. current assets will remain the same
d. total assets will decrease by $1,000

The entry would be a debit to supplies expense and a credit to account payable. Therefore c. current assets will remain the same.

10. A journal does all of the following except

a. summarizes all of the transactions that effect one account in a "T-account"
b. records all the assets of a company
c. records each day's transactions
d. records all the revenues and expenses of a company

A journal records transactions. A ledger summarizes transaction: a is incorrect.

Which of the following requires a debit?

a. decrease in assets
b. decrease in liabilities ...

$2.19