The following is the Balance Sheet for Alpha Company as of


Question Description:

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The following is the Balance Sheet for Alpha Company as of December 31, 2011 Assets Cash 135,000 Accounts Receivable 47,000 Office Equipment 45,000 Total Assets 227,000 Liabilities Accounts Payable 34,000 Notes Payable 52,000 Total Liabilities 86,000 Equity Capital Stock 100,000 Retained Earnings 41,000 Total Equity 141,000 Total Liabilities and Equity 227,000 Construct the four financial statements as of December 31, 2012 for Alpha giving effect to the following transactions: Transaction A. Collection of $36,000 Accounts Receivables B Cash sales of $68,000. C. Sales on account of $125,000. D. Alpha paid $185,000 in operating expenses. E. Alpha paid $25,000 off in accounts payable. F. On October 1, 2012, Alpha collected $24,000 for a one year contract for services that were to begin on the date the money was received. G. Alpha paid $10,000 in dividends to stockholders H. Alpha sold another $150,000 in stock to investors for cash. I. Alpha purchased $25,000 office equipment for cash J. On December 31, 2012 an adjustment is made to reflect the 2012 income earned from the contract in transaction F. Answer the following questions based on the 2012 financial statements you have prepared. First, make a horizontal financial statement model. 1. The total change in cash for 2012 is: a. a decrease of 33,000 b. an increase of 33,000 c. an increase of 135,000 d. No change 2. How many operating activities were there in 2012? a. 2 b. 3 c. 4 d. 5 3. The total expenses for 2012 were: a. 185,000 b. 14,000 c. 195,000 d. None of the above 4. The net income for 2012 was _______ the cash balance at 12/31/12. a. 154,000 less than b. 33,000 more than c. 19,000 more than d. 19,000 less than 5. Total assets as of December 31, 2012 were a. 374,000 b. 295,000 c. 79,000 d. None of the above 6. How many financing transactions were there in 2012 that served to increase cash? a. 1 b. 2 c. 3 d. 4 7. By how much did the capital stock increase during 2012? a. 150,000 b. 10,000 c. 250,000 d. none 8. As of December 31, 2012, how many months remain in the contract referred to in transaction F? a. 3 b. 4 c. 6 d. 9 9. The collection of $36,000 referred to in transaction A _____ result in an increase in revenue. a. did b. did not 10. If the note payable recorded at the end of 2011 would have been paid off in 2012, what would the cash balance have been at the end of 2012? (Disregard any interest paid.) a. 116,000 b. 135,000 c. 52,000 d. None of the above 11. The net cash flow from operating activities in 2012 was: a. 82,000 b. (82,000) c. 33,000 d. 140,000 12. For transaction B, in which direction is accounts receivable going? a. increase b. decrease c. no change 13. What effect does transaction C have on Retained Earnings? a. increase b. decrease c. no change 14. What effect does transaction H have on cash? a. increase b. decrease c. no change 15. Transaction F a. increases cash b. decreases cash and increases retained earnings c. increases expenses and decreases retained earnings d. None of the above 16. Total revenues ______ include transaction H? a. do b. do not 17. Total liabilities at the end of 2012 ____ include the unearned revenue account. a. do b. do not 18. The payment of the dividend is a(n)______activity a. financing b. operating c. investing 19. What kind of an activity is transaction C? a. financing b. operating c. investing d. none 20. In total, do Alpha’s customers owe the company more or less at the end 2012 than at the beginning of the year? a. more b. less c. no change 21. How much did Alpha’s equity change in 2012? a. increase of 250,000 b. decrease of 10,000 c. increase of 154,000 d. none of the above 22. Did the change in Accounts Payable in 2012 increase or decrease net income? a. increase b. decrease c. no change 23. Did the investing activities in 2012 serve to increase or decrease Alpha’s cash? a. Increase b. Decrease c. No change 24. Did the Note Payable increase or decrease Alpha’s cash in 2012? a. Increase b. Decr…

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