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    Personal Financial Accounting

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    1. A company has $123,000 in Assets and $65,000 in Liabilities. How much does the company have in Stockholders' Equity?

    2. Beginning Retained Earnings are $65,000, sales are $29,500, expenses are $33,000, and dividends paid are $3,500. How much is the amount in ending Retained Earnings?

    3. The Notes Payable account began with a zero balance and then had the following changes: increase of $500, increase of $200, decrease of $550, and increase of $250. What is the final balance in the Notes Payable account, and is it a debit or a credit?

    4. The trial balance for Motor Work, Inc. contains the following balances:
    Accounts payable $267
    Accounts receivable $429
    Cash $367
    Expenses $103
    Revenue $632

    What is the amount of total debits for this trial balance?

    5. On January 1, 2014, a company paid $36,000 for a machine with a salvage value of $4,000.If the company uses straight-line depreciation for 10 years, what is the depreciation expense for 2014?

    6. The total revenues of $6,500, total expenses of $3,500, and dividends of $500 were recorded in the closing entries for September. What is the net change in Retained Earnings for the month?

    7. Cosmo Co. purchases goods for resale from Galaxy,Inc. The amount of a recent purchase is $12,500 with terms of 3/10, n/30. Cosmo later returns $500 worth of the goods. Under the perpetual inventory method, what is the journal entry to record the return?

    8. A company has net sales of $126,000, cost of goods sold of $72,000, operating expenses of $38,000, and other expenses of $3,000. What is the company's operating income?

    9. Olympic Enterprises has the following inventory data:
    Assuming average cost, what is the cost of goods sold for the June 7 sale?

    10. A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory, and $2,000 in beginning inventory. What is the company's cost of goods sold?

    11. Goods available for sale total $25,000, beginning inventory is $8,000, ending inventory is $12,000, and cost of goods sold is $10,000. How many days is the days-sales-in­ inventory?

    12. Identify the following two schemes:
    1. An employee gives a false refund and pockets the cash.
    2. An employee receives a check from a customer, endorses it, and then cashes it.

    13. Which part of the Fraud Triangle relates to committing a fraud because one feels that it will be easy to do?

    14. A company has $317,000 in credit sales. The company uses the allowance method to account for uncollectible accounts, and the Allowance for Doubtful Accounts now has an $8,150 debit balance. If the company estimates 6% of credit sales will be uncol­ lectible, what is the amount of the journal entry for the estimated uncollectible accounts?

    15. Bestway,Inc. had credit sales of $142,000 for the period. The balance in Allowance for Doubtful Accounts is a debit of $643. If Bestway ages accounts receivable and determines estimated uncollectible accounts to be $2,840, what is the required journal entry to record estimated uncollectible accounts?

    16. After four years, a machine had an accumulated depreciation of $38,000. The machine originally had an anticipated life of eight years and a salvage value of $5,000. If the current book value after four years is $43,000 and the machine has only two years of usable life left, how much will be depreciated in year five and in year six using the straight-line method of depreciativn, and assuming the salvage value is still $5,000?

    17. Equipment costing $118,000 has accumulated depreciation of $92,000. The equipment is a trade-in for new equipment costing $187,000. If the trade-in value received for the old equipment is $30,000, what is the journal entry to record this transaction?

    18. On January 1, Bestway,Inc. signed a $175,000, 8%, 30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year. What is the journal entry to record the second semiannual payment (round interest calculation to the nearest dollar)?

    19. $200,000 of 6%, 25-year bonds were sold for $190,000 on January 1. The bonds require semiannual interest payments on June 30 and December 31. What is the journal entry to record the June 30 interest payment on the bonds?

    20. Liberty Company declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of $20-par, 6% preferred stock and 10,000 shares of $15-par common stock. The preferred stock is cumulative. How much will be distributed to the preferred and common stockholders on the date of payment if the preferred stock is $12,000 in arrears?

    21. Arc Electric,Inc. has 400,000 shares of $10-par common stock outstanding. They have declared a 5% stock dividend. The current market price of the common stock is $18/share. What is the amount that will be credited to Paid-in Capital in Excess of Par Common Stock on the date of declaration?

    22. Prestige Auto's records show net income of $30,000, depreciation expense of $10,000, and cash dividends paid of $5,000. Using the indirect method, determine the cash flow from operating activities on the cash flow statement.

    23. Operating expenses for the year, other than depreciation, were $563,000. Accrued expenses decreased by $47,000. Using the direct method, determine the cash pay­ ments for operating expenses to be reported on the cash flow statement.

    24. A company has $56,000 in cash, $12,000 in accounts receivable, $25,000 in short­ term investments, and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. What is the company's quick ratio (rounded to the near­ est hundredth)?

    25. If sales are $100,000, net income is $22,700, beginning stockholders' equity is $88,000, and ending common stockholders' equity is $84,000, what is the return on equity?

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    https://brainmass.com/business/annuity/personal-financial-accounting-632061

    Solution Preview

    Computations and schedules shown in excel (click in cells to see computations).

    1. A company has $123,000 in Assets and $65,000 in Liabilities. How much does the company have in Stockholders' Equity?
    $123,000 - $65,000 = $58,000

    2. Beginning Retained Earnings are $65,000, sales are $29,500, expenses are $33,000, and dividends paid are $3,500. How much is the amount in ending Retained Earnings?
    beg $ 65,000
    Less: net loss $ (3,500)
    less: div $ (3,500)
    end $ 58,000

    3. The Notes Payable account began with a zero balance and then had the following changes: increase of $500, increase of $200, decrease of $550, and increase of $250. What is the final balance in the Notes Payable account, and is it a debit or a credit?
    Credit balance: $400
    Notes Payable
    $ -
    $ 500
    $ 200
    $ 550
    $ 250
    $ 400

    4. The trial balance for Motor Work, Inc. contains the following balances:
    Accounts payable $267
    Accounts receivable $429
    Cash $367
    Expenses $103
    Revenue $632

    What is the amount of total debits for this trial balance?
    $899

    debit credit
    AP $ 267
    AR $ 429
    Cash $ 367
    Expenses $ 103
    Revenue $ 632
    $ 899 $ 899

    5. On January 1, 2014, a company paid $36,000 for a machine with a salvage value of
    $4,000.If the company uses straight-line depreciation for 10 years, what is the depreciation expense for 2014?
    SL depreciation:
    cost - salvage $ 32,000 $ 3,200
    useful life in years 10

    6. The total revenues of $6,500, total expenses of $3,500, and dividends of $500 were recorded in the closing entries for September. What is the net change in Retained Earnings for the month?
    add: net income $ 3,000
    less: div $ (500)
    net change $ 2,500

    7. Cosmo Co. purchases goods for resale from Galaxy,Inc. The amount of a recent purchase is $12,500 with terms of 3/10, n/30. Cosmo later returns $500 worth of the goods. Under the perpetual inventory method, what is the journal entry to record the return?
    debit credit
    Accounts payable $ 500
    Inventory $ 500

    8. A company has net sales of $126,000, cost of goods sold of $72,000, operating expenses of $38,000, and ...

    Solution Summary

    Computations and schedules shown in excel (click in cells to see computations).

    $2.19