a. $360,000.
b. $300,000.
c. $240,000.
d. $270,000.
Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution: ($300,000 - $240,000) + ($630,000 - $330,000) - $60,000 = $300,000
[Beg. tot. assets – beg. tot. liab.) + (rev.- exp.) – div.]
129. Jimmy’s Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000. The net income reported by Jimmy’s Repair Shop for the year was
a. $240,000.
b. $300,000.
c. $180,000.
d. $570,000.
Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution: $630,000 - $330,000 = $300,000
(Rev. – exp)
130. Ashley’s Accessory Shop started the year with total assets of $210,000 and total liabilities of $120,000. During the year, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000. Stockholders’ equity at the end of the year was
a. $180,000.
b. $165,000.
c. $195,000.
d. $105,000.
Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution: ($210,000 - $120,000) + ($330,000 - $165,000) - $60,000 = $195,000
[Beg. tot. assets – beg. tot. liab.) + (rev. - exp.) – div.]
131. Ashley’s Accessory Shop started the year with total assets of $210,000 and total liabilities of $120,000. During the year, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000. The net income reported by Ashley’s Accessory Shop for the year was
a. $120,000.
b. $150,000.
c. $195,000.
d. $165,000.
Ans: D, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution: $330,000 - $165,000 = $165,000
(Rev. – exp.)
132. If total liabilities increased by $90,000 and stockholders’ equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?
a. $120,000 decrease
b. $120,000 increase
c. $150,000 increase
d. $180,000 increase
Ans: B, LO: 3, Bloom: AN, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: Business Economics
Solution: $90,000 + $30,000 = $120,000
(Tot. liab. inc. + st. eq. inc.)
133. If total liabilities decreased by $90,000 and stockholders’ equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?
a. $120,000 increase
b. $60,000 decrease
c. $60,000 increase
d. $90,000 decrease
Ans: B, LO: 3, Bloom: AN, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: Business Economics
Solution: ($90,000) + $30,000 = ($60,000)
(Tot. liab. dec. + st. eq. inc.)