Question :
131. How does the purchase of equipment by signing a note : 1246489
131. How does the purchase of equipment by signing a note affect the accounting equation?
A. assets increase; assets decrease
B. assets increase; liabilities decrease
C. assets increase; liabilities increase
D. assets increase; stockholders’ equity increases
132. Land, originally purchased for $20,000, is sold for $75,000 in cash. What is the effect of the sale on the accounting equation?
A. assets increase $75,000; stockholders’ equity increases $75,000
B. assets increase $55,000; stockholders’ equity increases $55,000
C. assets increase $75,000; liabilities decrease $20,000; stockholders’ equity increases $55,000
D. assets increase $20,000; no change for liabilities; stockholders’ equity increases $75,000
133. The Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000, and at the time of the sale, $40,000 was still owed to Regions Bank on that purchase. After the sale, The Austin Land Company paid off the loan to Regions Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?
A. assets decrease $20,000; liabilities decrease $40,000; stockholders’ equity increases $20,000
B. assets increase $20,000; liabilities decrease $40,000; stockholders’ equity increases $20,000
C. assets decrease $25,000; liabilities decrease $40,000; stockholders’ equity increases $65,000
D. assets increase $45,000; liabilities decrease $40,000; stockholders’ equity increases $85,000
134. On July 1 of the current year, the assets and liabilities of Wong Industries, are as follows: Cash, $15,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $8,700. What is the amount of stockholders’ equity as of July 1 of the current year?
A. $32,100
B. $43,700
C. $56,700
D. $65,400
135. At of the end of its accounting period, December 31, 2009, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2010, Great Marks sold $65,000 of capital stock and declared and paid $45,000 in dividends. What is the amount of net income during 2010, assuming that as of December 31, 2010, assets were $995,000, and liabilities were $270,000?
A. $ 65,000
B. $ 50,000
C. $105,000
D. $370,000
136. The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, dividends were declared and paid in the amount of $60,000 and the company sold additional shares of capital stock amounting to $45,000.
Assets
Liabilities
Beginning of year
$305,000
$200,000
End of year
365,000
230,000
The amount of net income for the year was
A. $45,000
B. $60,000
C. $75,000
D. $90,000
137. If beginning retained earnings was $70,000, ending retained earnings was $48,000, and cash dividends in the amount of $21,000 were declared and paid, the amount of net income or net loss was
A. net income of $42,000
B. net income of $17,000
C. net loss of $22,000
D. net loss of $1,000
138. Transactions affecting stockholders’ equity include
A. shares of capital stock issued to stockholders and payment of liabilities
B. shares of capital stock issued to stockholders, dividends declared and paid to stockholders, revenues, and expenses
C. shares of capital stock issued to stockholders, revenues, expenses, and collection of accounts receivable
D. shares of capital stock issued to stockholders, revenues, expenses, and purchase of supplies on account
139. Clifford Moore deposits $15,000 in a bank account in the name of Star Tech, a computer programming business, in return for shares of stock. Star Tech’s records would show:
A. Increased Assets (Cash) and increased Liabilities (Accounts Payable)
B. Increased Assets (Cash) and increased Stockholders’ Equity (Capital Stock)
C. Increased Assets (Accounts Receivable) and decreased Liabilities (Accounts Payable)
D. Increased Assets (Cash) and increased Assets (Accounts Receivable)
140. Simpson Auto Body Repair purchased $20,000 of Machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments. How will this transaction affect the accounting equation?
A. Increase Assets (Machinery $20,000) and decrease Liabilities (Accounts Payable $20,000)
B. Increase Total Assets by a net amount of $12,000 (increase Machinery $20,000 and decrease Cash $8,000) and increase Liabilities (Notes Payable $12,000)
C. Increase Total Assets by a net amount of $20,000 (increase Machinery $12,000 and increase Cash $8,000) and decrease Liabilities (Accounts Payable $20,000)
D. Increase Assets (Machinery $12,000) and increase Liabilities (Accounts Payable $12,000)
