Question

The following information was taken from the financial statements of the Scott Corporation Assets, 12/31/02 $14,000 Common Stock, 12/31/02 $1,112 Dividends, 1/1/02-12/31/02 $573 Expenses, 1/1/02-12/31/02 $8,975 Liabilities, 12/31/02 $7,350 Retained Earnings, 1/1/02 $5,021 Revenues 1/1/02-12/31/02 $10,056 Determine the dollar amount of the Corporation's resources that had been borrowed as of December 31, 2002. a $1,112 b. $5,021 c. $7,359 d. $14,000 QUESTION 19 The Grafton Corporation paid $12,200 for supplies purchased in the previous month. Determine the effects on the Corporation's assets, liabilities, and stockholders' equity. a. Assets increase and decrease by $12,200. b. Assets decrease by $12,200 and stockholders' equity decreases by $12,200. c. Assets decrease by $12.200 and liabilities decrease by $12,200. d. Liabilities decrease by $12,200 and stockholders' equity increases by $12,200.

Answer 1

Solution 18. Corporation's resources that had been borrowed includes, Debentures, Bonds, Loans and other such liabilities In case of Scott Corporation, Laibilites amounted $7,359 Option (c) $7,359 will be the correct answer. Solution 19. Grafton Corporation paid $12,200 for supplies purchased in the previous month These Previous month's amount is Liabiliy and now it is paid which will reduce the Cash balance therefore, Asset (Cash) will be reduced and Liability will also be reduced. Option (c)-Assets decrease by $12,200 and Liabilities decrease by $12,200 is the correct answer

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