Question

#1. A corporation was started on January 3, 2015 with an initial sale of common stock of $160,000. At December 31, 2015, the company had $600,000 in assets and $350,000 in liabilities. During 2015 the corporation paid $40,000 of dividends. What was the company’s net income for 2015?

#2. On May 31, Zent Co. borrows $80,000 from a local bank. A note is signed with principal and 6% interest to be paid on May 31 the following year. Select the necessary adjusting journal entry for Zent Co. at December 31 of the current year.

#3. Dillon Co. bought $2,500 supplies at the beginning of the month. At the end of the month $500 of supplies were still on hand. Select the adjusting entry that should be recorded at the end of the accounting period.

#4. At the beginning of the month, Bobcat Boards and Skis received $800 in advance for future services to be performed. At the end of the month, $300 worth of services were still owed to the customer. Select the adjusting entry that should be recorded at the end of the accounting period.

#5. At the end of the month, The Roost had unpaid employee salaries and wages totaling $32,000. What is the correct adjusting journal entry to record unpaid salaries and wages?

#6. Sola Cafe employees worked the last few days of the year and earned $4,000 of wages. Sola will not pay their employees until January. Select the adjusting entry that should be recorded at the end of the year.

#7. How to calculate net income from cash revenues?

Answer 1

#1	Assets	600000
Add	Sale of common stock	160000
less	Liability	350000
add	Dividend pay out	40000
	Net Income	450000

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#4	Date	Particular	Debit	Credit	calculation
	Beginning of the Month	Bank	$800
		Advance fee Receipt		$800
	(Being Advance Income received)
	End of the accounting period	Advance fee receipt	$500
		Profit and loss account		$500	Services provided
	(Being services provided is recorded as income into profit and loss account)

#5	Salary and wages account Dr. $32000
	To Salary and wages payable account     $32000
	(being amount transferred to salary and wages payable account)
	Profit and loss account Dr. $32000
	To salary and wages                $32000
	(Being amount transfer to profit and loss account)
#6	Salary and wages account Dr. $4000
	To Salary and wages payable account     $4000
	(being amount transferred to salary and wages payable account)
	Profit and loss account Dr. $4000
	To salary and wages                $4000
	(Being amount transfer to profit and loss account)

#7	Total Revenues – Total Expenses = Net Income. .
	or
	Revenue – Cost of Goods Sold – Expenses = Net Income.