Reference no: EM132742364
Questions -
Q1. An analysis of Thrift Corp.'s unadjusted prepaid expense account at December 31, 20x3, revealed the following:
An opening balance of 1,500 for Thrift's comprehensive insurance policy. Thrift had paid an annual premium of 3,000 on July 1, 20x2.
A 3,200 annual insurance premium payment made July 1, 20x3.
A 2,000 advance rental payment for a warehouse
Thrift leased for one year beginning January 1, 2004. In its December 31, 20x3 balance sheet, what amount should Thrift report as prepaid expenses?
Q2. The balance in retained earnings at December 31, 2003 was 810,000 and at December 31, 2004 was 654,000. Net income for 2004 was 563,000. A stock dividend was declared and distributed which increased common stock 225,000 and paid-in capital 125,000. A cash dividend was declared and paid.
The amount of the cash dividend was?
Q3. On April 1, 2008, Ivy began operating a service proprietorship with an initial cash investment of 1,000. The proprietorship provided 3,200 of services in April and received full payment in May. The proprietorship incurred expenses of 1,500 in April which were paid in June. During May, Ivy drew 500 against her capital account.
What was the proprietorship's income for the two months ended May 31, 2008, under the following methods of accounting?
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Cash basis
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Accrual basis
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a.
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1,200
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1,200
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b.
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1,700
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1,700
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c.
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2,700
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1,200
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d.
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3,200
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1,700
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Q4. Entity Co. uses the cash basis of accounting and reported income of ?87,000 in 20x1. The following items were considered in the computation of the cash basis net income.
Inventory, beginning 12,000
Inventory, ending 18,000
Receivables, beginning 40,000
Receivables, ending 38,000
Payables, beginning 19,000
Payables, ending 25,000
The accrual basis income is
a. 97,000 b. 73,000 c. 89,000 d. 85,000
Q5. Information on an entity's accounts is shown below:
Current tax payable, beg. 150,000
Current tax payable, end. 400,000
Increase in deferred tax liability 60,000
Increase in deferred tax asset 20,000
Income tax paid 280,000
How much is the income tax expense for the period?
a. 530,000 b. 540,000 c. 570,000 d. 610,000