Q.1

If a parcel of land that was originally acquired for $92,500 is offered for sale at $145,000, is assessed for tax purposes at $102,500, is recognized by its purchasers as easily being worth $135,000, and is sold for $132,000, the land should be recorded in the purchaser’s books at:

$135,000.  

$102,500.  

$132,000.  

$133,500.  

$145,000. 

Q.2

If a parcel of land that was originally purchased for $90,000 is offered for sale at $160,000, is assessed for tax purposes at $100,000, is recognized by its purchasers as easily being worth $150,000, and is sold for $147,000, the land account transaction amount to handle the sale of the land in the seller’s books is:

$90,000 decrease.  

$150,000 decrease.  

$147,000 decrease.  

$90,000 increase.  

$147,000 increase. 

Q.3 

If a parcel of land that was originally purchased for $90,500 is offered for sale at $149,000, is assessed for tax purposes at $100,500, is recognized by its purchasers as easily being worth $139,000, and is sold for $136,000. What is the effect of the sale on the accounting equation for the seller?

Assets increase $45,500; owner’s equity increases $45,500.   

Assets increase $139,000; owner’s equity increases $139,000.  

Assets decrease $90,500; owner’s equity decreases $90,500.  

Assets increase $136,000; owner’s equity increases $136,000.  

Assets increase $90,500; owner’s equity increases $90,500. 

Q.4

If a parcel of land that was originally purchased for $95,000 is offered for sale at $140,000, is assessed for tax purposes at $105,000, is recognized by its purchasers as easily being worth $130,000, and is sold for $127,000. At the time of the sale, assume that the seller still owed $20,000 to TrustOne Bank on the land that was purchased for $95,000. Immediately after the sale, the seller paid off the loan to TrustOne Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?

Assets increase $12,000; owner’s equity increases $32,000; liabilities decrease $20,000  

Assets increase $32,000; owner’s equity increases $32,000; liabilities decrease $20,000  

Assets decrease $20,000; owner’s equity decreases $20,000; liabilities decrease $20,000  

Assets increase $32,000; owner’s equity increases $20,000; liabilities decrease $20,000  

Assets decrease $95,000; owner’s equity decreases $95,000; liabilities decrease $20,000 

Q.5

If equity is $280,000 and liabilities are $182,000, then assets equal: 

$462,000.    

$98,000.  

$182,000.  

$742,000.  

$280,000. 

Q. 6. 

If assets are $104,000 and liabilities are $34,500, then equity equals: 

$69,500.    

$138,500.  

$208,000.  

$34,500.  

$104,000. 

Q.7

The assets of a company total $640,000; the liabilities, $170,000. What are the claims of the owners? 

$170,000.  

$640,000.  

It is impossible to determine unless the amount of this owners’ investment is known.  

$470,000.  

$810,000. 

Q.8

On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $21,300; Accounts Receivable, $7,650; Supplies, $730; Equipment, $16,000; Accounts Payable, $10,100. What is the amount of owner’s equity as of July 1 of the current year?

$10,100  

$21,300  

$16,730  

$45,680  

$35,580   

Q.9

If the assets of a business increased $91,000 during a period of time and its liabilities increased $63,000 during the same period, equity in the business must have:

Decreased $28,000.  

Increased $91,000.  

Decreased $154,000.  

Increased $28,000.     

Increased $154,000. 

Q.10

If the liabilities of a company increased $72,300 during a period of time and equity in the company decreased $20,700 during the same period, what was the effect on the assets?

Assets would have increased $51,600.     0

Assets would have decreased $51,600.  

Assets would have increased $20,700.  

Assets would have decreased $20,700.  

None of these. 

Q.11

If assets are $371,500 and equity is $107,000, then liabilities are: 

$478,500.  

$371,500.  

$264,500.       

$107,000.  

$636,000. 

Q.12

Reston had net income of $130 million and average invested assets of $1,840 million. Its return on assets is (Round your answer to 1 decimal place): 

7.1%.       

141.5%.  

70.7%.     

14.2%.  

29.3%. 

Q.14

Use the following information as of December 31 to determine equity.

  Liabilities$146,000

  Cash62,000

  Equipment211,000

  Buildings180,000

$307,000.    

$62,000.  

$453,000.  

$146,000.  

$599,000. 

Q.15

Determine the net income of a company for which the following information is available for the month of May.

 Employee salaries expense$194,000

 Interest expense17,000

 Rent expense27,000

 Consulting revenue414,000

$414,000.  

$237,000.  

$176,000.        

$652,000.  

$238,000. 

Q.16

Flash had cash inflows from operations $61,000; cash outflows from investing activities of $48,500; and cash inflows from financing activities of $26,500. The net change in cash was:

$39,000 increase.        

$136,000 decrease.  

$136,000 increase.  

$39,000 decrease.  

$14,000 increase. 

Q.17

Flash has beginning equity of $260,000, net income of $51,600, withdrawals of $39,400 and investments by owners of $9,000. Its ending equity is:

$229,600.  

$238,800.  

$272,200.  

$281,200.        

$269,000. 

Q18

A company reported total equity of $151,000 at the beginning of the year. The company reported $222,000 in revenues and $174,600 in expenses for the year. Liabilities at the end of the year totaled $93,200. What are the total assets of the company at the end of the year?

$47,400.  

$291,600.        

$222,000.  

$198,400.  

$93,200. 

Q.19

Della’s Donuts had cash inflows from operating activities of $36,000; cash outflows from investing activities of $31,000, and cash outflows from financing activities of $21,000. Calculate the net increase or decrease in cash.  

$88,000 increase.  

$36,000 increase.  

$16,000 decrease.    

$16,000 increase.  

$52,000 decrease. 

Q.20

Della’s Donuts owner made investments of $59,500 and withdrawals of $21,900. The company has revenues of $84,900 and expenses of $62,100. Calculate its net income.

$37,600.  

$84,900.  

$62,100.  

$22,800.     

$60,400.