Question

MIDTERM Sace Johnson Waterworks Company provides plumbing services. The company is a sole proprieorship. Transactions uring the first year of operations are provided below a) The owner, Mitchell Johnson, contributed $13.000 cash in exchange for capital b) Paid $1,700 for equipment to be used for plumbing repairs e) Borrowed $10,000 from a local bank and deposted the money in the checking account d) Paid $400 in rent for the year e) Paid $200 for plumbing supplies to be used on various jobs next year ) Completed a plumbing repair for a law firm and received $2.900 Calculate the amount of total assets at the end of the fist vear, Assume the plumbing supplies of $200 are let al the end of the year. A. $1,900 O B. $23,000 C. $25,500 O D. $1,700 The equity of Alliance Company is $110,000 and the total liabilities are $90,000. The total assets are 21. OA $180,000 B. $200,000 O C. $20,000 O D. $220,000 22. The left side of the T-account for Accounts Receivable is the debit side and the left side of the T-account for Accounts Payable is the credit side. True False 23. A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n). O A. notes receivable B. unearned revenue O C. accrued liability O D. service revenue John Tilden contributes cash to his business in exchange for capital. John is the sole proprietor. The two accounts involved in this transaction are 24. A. Cash and Tilden, Capital B. Tilden, Capital and Accounts Payable C. Accounts Payable and Cash D. Tilden, Capital and Accounts Receivable rint/accountino.

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Answer 1

20.

Let us calculate the assets from each transaction

a) Increase in cash $ 13,000
b) Increase in equipment $ 1,700 and decrease in cash $ 1,700 - No impact on assets
c) Increase in cash $ 10,000
d) Decrease in cash $ 400
e) Decrease in cash $ 200 but the supplies are still remaining so no impact on assets
f) Increase in cash $ 2,900

So assets would be 13,000 + 10,000 - 400 + 2,900 = $ 25,500. Answer is C.

21.
Assets = Equity + Liabilities
Assets = 110,000 + 90,000 = 200,000
Answer is B

22.
The correct answer is B
No matter what the account title, the T account will always be debit on the left side.

23.
The correct answer is B unearned revenue

24.
Entry would be

Cash Debit
Tilden Capital Credit