Acct 2301 Spring 2010 Test 1

Student: ___________________________________________________________________________

1. Each of the following independent companies is missing numerical data. Use your knowledge of the financial
statement equations and their interrelationships to fill in the missing amounts.

Company Total Total Net Income Total Assets Total Stockholders

Revenues Expenses (Loss) Liabilities Equity

Apple Co $80,000 a. $30,000 b. $35,000 $30,000

Beta Co c. $80,000 ($30,000) d. $98,000 $32,000

Charlie Co. $30,000 $5,000 e. $50,000 $30,000 f.

a. 50000 b. 65000 c. 50000 d. 130000 e. 25000 f. 20000

2. Match the lettered terms to the blanks below to complete the relevant formula for each financial statement.
Each term to be used only once except Net Income which is used twice.

A. Cash at beginning of year

B. Net cash flow from operating activities
C. Balance of retained earnings from previous year
D. Net cash flow from investing activities
E. Liabilities
F. Net cash flow from financing activities
G. Balance of retained earnings at end of year
H. Net income (used 2 times in equations below)
I. Revenue
J. Assets
K. Stockholders' equity
L. Expenses
M. Cash at end of year
N. Dividends paid
A letter may be used more than once. Use the blank on the left side of the equal sign for the "bottom line"
number that is reported at the end of each financial statement. Rearrange the formula if necessary.
 3. Stockholders contribute (1) $10,000 cash to a company. The company uses (2) $5,000 to buy new equipment
and (3) $3,000 to pay off accounts payable. Show the effect of these transactions on the basic accounting
equation. Then, show the journal entries that would be used to record the transactions.

Assets = Liabilities + Stockholders Equity

1 +10000 +10000

2 +/- 5000

3 -3000 -3000

Account Names debit credit

Cash 10000
Stockholders Equity 10000

Equipment 5000
Cash 5000

A/P 3000
Cash 3000
 4. Prepare a classified balance sheet for Purrfect Pets, Inc., using the following data for June 30, 2005.

heading

Assets Current
Cash 97100
Accounts Receivable 202500
Total Current Assets 299600
Assets Noncurrent
Property & Equip 421600
Total Assets 721200

Liabilities - Current
Accounts Payable 119400
Unearned Revenue 3900
Total Current Liabilities 123300
Liabilities - Noncurrent
Note payable 343200
Total Liabilities 466500
Stockholders Equity
Contributed Capital 200000
Retained Earnings 54700
Total Stockholders Equity 254700
Total Liability and Stockholders equity 721200
 5. Jim's Gymnastics Training's operations for the month of October are summarized as follows:
Provided $5,000 of training to students. Billed customers on account.
Received $8,000 cash from studentsof which $4,000 is for training provided in October (as billed above),
$1,000 is for training to be provided in November, and $3,000 is for training provided in September.
Paid September's gym rental bill of $1,000. Received October's bill of $1,500 but did not pay.

Prepare appropriate journal entries using the accrual basis of accounting.

Accounts Receivable 5000

Revenue 5000

Cash 4000
Accounts Receivable 4000
Cash 1000
Unearned Revenue 1000
Cash 3000
Accounts Receivable 3000

Accounts Payable 1000

Cash 1000
Rent Expense 1500
Accounts Payable 1500
6. The following is a series of accounts for the Sprinkler Blowout Company, listed alphabetically and numbered
for identification. Following the accounts is a series of transactions. For each transaction, indicate the account(s)
that should be debited and credited by entering the appropriate account number(s) to the right of each
transaction. If no journal entry is needed, write none after the transaction. The first transaction is given as an
example.

In E above the term booked means scheduled. The work was not done but will be done next month.

A. dr 5 cr 12
B. dr 14 cr 1
C. dr 4 cr 5 & 10
D. dr 11 cr 5
E. none