Generally Accepted Accounting Principles and Net Income
University of Dubuque
School of Business
BAC 241: Principles of Financial Accounting
Homework Chapter 4: Completing Accounting Cycle
Name: Due Thursday, October 04, 2012 in class 1. During 2013, Rumbo Corporation had cash and credit sales of $21,760 and $15,225, respectively. The company also collected accounts receivable of $9,765 and incurred operating expenses of $27,700, 80 percent of which were paid during the year. In addition, Rumbo paid $4,500 for an 18-month advertising campaign that began on September 30. Rumbo 's accrual-basis net income (loss) for 2009 was a. | $9,285 | b. | $8,535 | c. | $14,075 | d. | $(775) |
2. The 2013 accrual-basis income statement for Razorri Corporation reports sales revenue of $81,000. The related balance sheet accounts for the beginning and end of the year were
| Jan. 1, 2013 | Dec. 31, 2013 | Unearned Sales Revenue | 0 | $29,250 | Accounts Receivable | 6,750 | 2,250 |
Based on this information, the amount of cash collected during 2013 from Razorri 's customers was a. | $81,000 | b. | $119,250 | c. | $114,750 | d. | $99,000 |
3. Nona Corporation, a calendar-year company, had the following transactions during 2012:
| Rented an office building to Erma Company. On September 1, Erma paid $27,000 for the year ending August 31, 2013. | | Received notice that a $1,200 dividend would be paid on January 2, 2013, by Leslie Corporation. | | Received a check for $13,000 from a client on December 31 for services that will be performed during 2013. |
Assuming cash-basis accounting for Nona Corporation, how much income should be reported on its 2012 income statement? a. | $21,000 | b. | $27,000 | c. | $40,000 | d. | $41,200 |
4. Prior to making any adjusting entries, Terra Corporation had net income of $155,100. The following adjusting entries were made: salaries payable, $1,574; interest earned on short-term investments but not yet recorded or
School of Business
BAC 241: Principles of Financial Accounting
Homework Chapter 4: Completing Accounting Cycle
Name: Due Thursday, October 04, 2012 in class 1. During 2013, Rumbo Corporation had cash and credit sales of $21,760 and $15,225, respectively. The company also collected accounts receivable of $9,765 and incurred operating expenses of $27,700, 80 percent of which were paid during the year. In addition, Rumbo paid $4,500 for an 18-month advertising campaign that began on September 30. Rumbo 's accrual-basis net income (loss) for 2009 was a. | $9,285 | b. | $8,535 | c. | $14,075 | d. | $(775) |
2. The 2013 accrual-basis income statement for Razorri Corporation reports sales revenue of $81,000. The related balance sheet accounts for the beginning and end of the year were
| Jan. 1, 2013 | Dec. 31, 2013 | Unearned Sales Revenue | 0 | $29,250 | Accounts Receivable | 6,750 | 2,250 |
Based on this information, the amount of cash collected during 2013 from Razorri 's customers was a. | $81,000 | b. | $119,250 | c. | $114,750 | d. | $99,000 |
3. Nona Corporation, a calendar-year company, had the following transactions during 2012:
| Rented an office building to Erma Company. On September 1, Erma paid $27,000 for the year ending August 31, 2013. | | Received notice that a $1,200 dividend would be paid on January 2, 2013, by Leslie Corporation. | | Received a check for $13,000 from a client on December 31 for services that will be performed during 2013. |
Assuming cash-basis accounting for Nona Corporation, how much income should be reported on its 2012 income statement? a. | $21,000 | b. | $27,000 | c. | $40,000 | d. | $41,200 |
4. Prior to making any adjusting entries, Terra Corporation had net income of $155,100. The following adjusting entries were made: salaries payable, $1,574; interest earned on short-term investments but not yet recorded or