31) Mercy, Inc. purchased equipment for $5,000 cash. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(5,000) cash
No effect
No effect
(5,000) equipment expense
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
5,000 cash
(5,000) equipment
No effect
No effect
No effect
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
5,000 equipment
(5,000) cash
No effect
No effect
No effect
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
5,000 equipment
No effect
Increase
5,000 cash
32) Stackables, Inc. paid $8,000 cash for inventory. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Increase
No effect
No effect
Increase
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Decrease
No effect
No effect
Decrease
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
No effect
No effect
No effect
No effect
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Increase
No effect
Increase
No effect
33) Stackables, Inc. paid $2,000 cash for inventory. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(2,000) cash
No effect
No effect
(2,000) inventory
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(2,000) inventory
No effect
No effect
(2,000) cash
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(2,000) cash
(2,000) inventory
No effect
No effect
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
2,000 inventory
(2,000) cash
No effect
No effect
No effect
34) Squid Roe, Inc. paid $1,000 cash for janitorial services. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Increase
No effect
Increase
No effect
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Decrease
No effect
No effect
Decrease
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
No effect
Decrease
No effect
Increase
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Decrease
No effect
Decrease
No effect
35) Squid Roe, Inc. paid $500 cash for janitorial services. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(500) cash
No effect
No effect
(500) expense
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
500 supplies
(500) cash
No effect
No effect
No effect
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
(500) cash
(500) expense
No effect
No effect
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
No effect
(500) expense
No effect
(500) cash
36) Poe, Inc. made $7,000 of cash sales to customers. The effect of this transaction on the accounting equation is;
A) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Increase
No effect
Increse
No effect
B) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Decrease
No effect
No effect
Decrease
C) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
No effect
Decrease
No effect
Increase
D) Total shareholders' equity
Total assets
Total liabilities
Contributed capital
Retained earnings
Increase
No effect
No effect
Increase
37) During the year, The Mane Event, Inc. had sales of $300,000 and had expenses of $240,000. The owners were paid $20,000 in dividends. Net income for the year equals ________.
A) $90,000
B) $60,000
C) $50,000
D) $40,000
38) Assume 2011 is the company's first year of business and there were no dividends declared in 2011.
For the year ended
December 31, 2011
Revenues$300
Expenses1.$_____________
Net Income2.$_____________
December 31, 2011
Assets$1,000
Liabilities3.$_____________
Contributed capital$300
Retained earnings$200
Determine the missing amounts, 1. Expenses. 2. Net income and 3. Liabilities, in the condensed income statement and balance sheet for the year ended December 31, 2011.
A) 1. Expenses of $(100); 2. Net income of $200; 3. Liabilities of $500
B) 1. Expenses of $(200); 2. Net income of $500; 3. Liabilities of $1,500
C) 1. Expenses of $(200); 2. Net income of $100; 3. Liabilities of $500
D) 1. Expenses of $(500); 2. Net income of $200; 3. Liabilities of $500
39) Assume 2011 is the company's first year of business. There were no dividends declared in 2011 and $100 of dividends declared in 2012.
For the year endedFor the year ended
December 31, 2011December 31, 2012
Revenues$300$2,500
Expenses$ $ (1,400)
Net Income$ 1.$ __
December 31, 2011December 31, 2012
Assets$1,000$2,500
Liabilities$ ___2. $
Contributed capital$300$300
Retained earnings$ ______________3.$ _____________
Determine the missing amounts, 1. Net income, 2. Liabilities of $200, and 3. Retained earnings of $1,400, in the condensed income statement and balance sheet for the year ended December 31, 2012.
A) 1. Net income of $1,100; 2. Liabilities of $200; 3. Retained earnings of $1,400
B) 1. Net income of $3,900; 2. Liabilities of $1,000; 3. Retained earnings of $1,300
C) 1. Net income of $1,100; 2. Liabilities of $1,000; 3. Retained earnings of $1,200
D) 1. Net income of $1,100; 2. Liabilities of $200; 3. Retained earnings of $1,200
40) It is Dives, Inc.'s first year of business. Dives' net income for its first year is $200,000. Dives declared and paid dividends of $50,000. The balance in retained earnings at the end of the first year equals;
A) $200,000.
B) $50,000.
C) $150,000.
D) $250,000.
Lox Stock & Bagel Company
a._____________________________
April 30, 2012
Cashb. $_________Accounts payable$3,000
Inventory1,610Notes payable15,000
Supplies300
Land10,000Common stock10,000
Building (net) 25,000Retained earningsc.
$39,910 $39,910
