Question

12) Alkman Company has paid dividends of $2.410, 80, 81,570 and $1,060 over the first four years the company's existence. If Retained Earnings after year four has an ending balance of 89,700, what is the average annual amount of net income (loss) over the past four years for Aikman? A) $1,260. C) $3.685. D) $840. B) $14,740. 13) Sooner Company had a net income of 58,000, $5,000 $12,000, and $10,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last fou years is $3,000, what is the ending retained earnings balance? A) $23,000. B) $35,000. C) $7,000. D) $47.000 14) On July 8, Ray Inc, sold 100 printers to Office Rental Company at S600 each and offered a 276 discount for payment within 10 days. On July 15, Office Rental Company paid the full amount in cash. What should Ray Inc. record on July 15? 60,000 60,000 38,800 58,800 A Cash Accounts Receivable B. Cash 110 Accounts Receivable c. Cash Sales Discount Accounts Receivable D. Cash Sales Discounts Sales Revenue 58,800 1.200 60,000 60,000 1,200 58,800 A) Option B) Option A C) Option D D) Option B

Answer 1

Answer 12.

Beginning retained earnings+Total Net income-Dividends=Ending retained earnings

0+Total net income-(2410+0+1570+1060) = 9700

Total net income=(9700+5040)=$14740

Average annual amount of net income=(14740/4) = 3685

Correct option is C

Answer 13.

Ending retained earnings balance = Beginning retained earnings balance+ Total Net income - dividends

Ending retained earnings balance = 8000 + 5000 + 12000 + 10000 - [4*3000] = 23000

Option A is correct

Answer 14.

correct option a - option c

sales / accounts receivable = [100*600] = 60,000

cash = [100*600] - [2% * 60000] = 60000 - 1200 = 58800

Discount = [2% * 60000] = 1200