The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets?

1. Increase in current assets
2. Decrease in current assets
3. No effect on current assets
4. Unable to determine

A company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of the company’s current ratio?

1. No effect
2. Increase
3. Decrease
4. Cannot be determined

Which of the following would increase retained earnings?

1. an increase to an expense account.
2. an increase to a revenue account.
3. a cash dividend being declared and paid to stockholders.
4. issuance of additional shares of common stock.

A company had the following account balances at the end of its first year of operations. Find the missing amounts.

Cash	1,300	Accounts receivable	?
Inventory	400	Property and equipment	1200
Accounts payable	500	Salaries payable	800
Common Stock	1475	Retained earnings	525
Revenue	2500	Expenses	?
Net Income	570	Dividends	?

1. Determine Accounts Receivable
2. Determine Expenses
3. Determine Dividends

Accounts payable	$12,000	Accounts Receivable	20,900
Furniture	5,000	Accumulated Depreciation	6,500
Building	82,000	Cash	21,500
Common Stock	?	Sales Revenue	90,700
Cost of Goods Sold	51,500	Depreciation Expense	1,450
Dividends	6,600	Note Payable (due 3/1 Year 4)	20,000
Marketable Securities	1,400	Prepaid Expenses	18,000
Salaries Payable	2,800	Land	38,000
Note Payable (due 5/30 Year 2)	12,400	Service Revenue	22,550
Retained Earnings (1/1 Year 1 )	39,700	Salary Expense	18,000
Accrued Expenses Payable	1,500	Unearned Revenue	30,500
Utilities Expense	5,400

1. Determine Total assets on December 31, Year 1
2. Determine Current Liabilities on December 31, Year 1
3. Determine Net Income for the year ended December 31, Year 1
4. Determine the total amount of Common Stock on December 31, Year 1

A company began operations at the start of Year 1.

During the year, it had cash sales of $50,000 and credit sales of $450,000. The company collected $420,000 in cash from the credit sales. The company purchased inventory costing $250,000 and paid $18,000 in dividends. The company incurred the following expenses:

Cost of goods sold	210,000	Rent expense	6,000
Salary expense	80,000	Depreciation expense	4,000
Interest expense	5,000	Income tax expense	57,000

Using this information, answer the following questions.

1. What would Operating Income on the Dec. 31, Year 1 Income Statement be reported as?
2. As of Dec. 31, Year 1, determine the ending balance in the Accounts Receivable
3. Determine Ending Retained Earnings as of December 31, Year 1