Consider the overall effects on Global Cleaning Service from selling and performing services on account for $6,400 and paying expenses totaling$ 2,500. What is Global Cleaning Service's net income or net loss? a. Net income of $3,900 c. Net income of$ 6,400 b. Net loss of $3,900 d. Net income of$ 8,900

Which of the following requires accounting information to be complete, neutral, and free from material error? a. Faithful representation concept b. Cost principle c. Economic entity assumption d. Going concern assumption

Daniels Consulting began operations and completed the following transactions during December 201 6:

Dec. 2. Stockholders contributed $20,000 cash in exchange for common stock. 2. Paid monthly office rent,$2,000. 3. Paid cash for a computer, $3,600. This equipment is expected to remain in service for five years. 4. Purchased office furniture on account,$3,000. The furniture should last for five years. 5. Purchased office supplies on account, $800. 9. Performed consulting service for a client on account,$2,500. 12. Paid utilities expenses, $150. 18. Performed service for a client and received cash of$2,100. 21. Received $2,400 in advance for client service to be performed in the future. 21. Hired an administrative assistant to be paid$2,055 on the 20th day of each month. The secretary begins work immediately. 26. Paid $200 on account. 28. Collected$400 on account. 30. Cash dividends of $1,000 were paid to stockholders.

Requirements

1. Analyze the effects of Daniels Consulting's transactions on the accounting equation. Include these headings: Cash; Accounts Receivable; Office Supplies; Equipment; Furniture; Accoun ts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Rent Expense; and Utilities Expense.
2. Prepare the income statement of Daniels Consulting for the month ended December 3 1, 2016.
3. Prepare the statement of retained earnings for the month ended December 3 1,

4 . Prepare the balance sheet as of December 31, 2016. 5. Calculate the return on assets for Daniels Consulting for December, 2016.

Ariana Peterson recently opened her own law office, which she operates as a corporation. The name of the new entity is Ariana Peterson, Attorney. Peterson experienced the following events during the organizing phase of the new business and its first month of operation, December 2016. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.

Dec. 1. Sold personal investment in Nike stock, which she had owned for several years, receiving $25,000 cash. 2. Deposited the$25,000 cash from the sale of the Nike stock in her personal bank account. 3. Deposited $65,000 cash in a new business bank account titled Ariana Peterson, Attorney. The business issued common stock to Peterson. 5. Paid$400 cash for ink cartridges for the printer. 7. Purchased computer for the law office, agreeing to pay the account, $6,800, within three months. 9. Received$2,900 cash from customers for services rendered. 15. Received bill from The Lawyer for magazine subscription, $300. (Use Miscellaneous Expense account.) 23. Finished court hearings on behalf of a client and submitted a bill for legal services,$18,000, on account. 28. Paid bi ll from The Lawyer. 30. Paid utilities, $840. 31. Received$2,800 cash from clients billed on Dec. 23. 31. Cash dividends of $2,500 were paid to stockholders.

Requirements

1. Analyze the effects of the preceding events on the accounting equation of Ariana

2. Prepare the following financial statements: a.. Income statement. b. Statement of retained earnings. c. Balance sheet.

Andre Simmon recently opened his own accounting firm, which he operates as a corporation. The name of the new entity is Andre Simmon, CPA. Simmon experienced the following events during the organizing phase of the new business and its first month of operations in 2016.

Feb. 5. Simmon deposited $65,000 in a new business bank account titled Andre Simmon, CPA. The business issued common stock to Simmon. 6. Paid$300 cash for letterhead stationery for new office. 7. Purchased office furniture for the office on account, $6,800. 10. Consulted with tax client and received$3,300 for services rendered. 11. Paid utilities, $100. 12. Finished tax hearings on behalf of a client and submitted a bill for accounting services,$12,500. 18. Paid office rent, $1,000. 25. Received amount due from client that was billed on February 12. 27. Paid full amount of accounts payable created on February 7. 29. Cash dividends of$3,000 were paid to stockholders.

Requirements

1. Analyze the effects of the events on the accounting equation of Andre Simmon, CPA.
2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheer.

The bookkeeper of Beautiful World Landscaping prepared the company's balance sheet while the accountant was ill. The balance sheet contains numerous errors. In particular, the bookkeeper knew that the balance sheet should balance, so he plugged in the retained earnings amount needed to achieve this balance. The retained earnings is incorrect. All other amounts are correct, but some are out of place or should not be included on this statement. Prepare a corrected balance sheet.

$$\begin{array}{c} \textbf{BEAUTIFUL WORLD LANDSCAPING}\\ \text{Balance Sheet}\\ \text{Month Ended July 31, 2016} \end{array}$$

$$\begin{array}{lcr|lcr} &\textbf{Assets}&&&\textbf{Liabilities}&\\ \text{Cash}&&\$5,500&\text{Accounts Receivable}&& \$1,900\\ \text{Office Supplies}&&300&\text{Dividends}&& 13,000\\ \text{Land}&&34,100&\text{Service Revenue}&& 44,000\\ \text{Salaries Expense}&&2,700&\text{Property Tax Expense}&& 2,600\\ \text{Office Furniture}&&5,600&\text{Accounts Payable}&& 2,400\\ \text{Notes Payable}&&24,600&\text{Retained Earnings}&& 3,300\\ \text{Rent Expense}&&400&&\textbf{Stockholder's Equity}&\\ &&&\text{Common Stock}&& 6,000\\ \hline\textbf{Total Assets}&&\$73,200&\text{Total Liabilities}&& \$73,200\\ \hline\hline \end{array}$$

Precision Pies works weddings and prom-type parties. The balance of Retained Earnings was $26,000 at December 31, 2015. Ar December 31, 2016, the business's accounting records show these balances:

$$\begin{array}{lrlr} \hline \text { Insurance Expense } & \$ 14,000 & \text { Accounts Receivable } & \$ 7,000 \\ \text { Cash } & 38,000 & \text { Notes Payable } & 9,000 \\ \text { Accounts Payable } & 13,000 & \text { Retained Earnings, Dec. 31, 2016 } & ? \\ \text { Advertising Expense } & 3,500 & \text { Salaries Expense } & 21,000 \\ \text { Service Revenue } & 110,000 & \text { Equipment } & 96,500 \\ \text { Dividends } & 11,000 & \text { Common Stock } & 33,000 \\ \hline \end{array}$$

Prepare rhe following financial statements for Precision Pies for the year ended December 31, 2016: a. Income statement. b. Statement of retained earnings. c. Balance sheet.

Which of the following characteristics best describes a corporation? a. A business with a single owner b. Is not taxed c. Stockholders not personally liable for entity's debts d. Not a separate taxable entity

Michael McNamee is the proprietor of a property management company, Apartment Exchange, near the campus of Pensacola State College. The business has cash of $8,000 and furniture that cost$ 9,000$and has a market value of$ 13,000. The business debts include accounts payable of $6,000. Michael's personal home is valued at$ 400,000, and his personal bank account has a balance of $1,200. Consider the accounting principles and assumptions discussed in the chapter, and identify the principle or assumption that best matches the situation:

a. Michael's personal assets are not recorded on the Apartment Exchange's balance sheet. b. The Apartment Exchange records furniture at its cost of$ 9,000, not its market value of $ 13,000. c. The Apartment Exchange reports its financial statements in U.S. dollars. d. Michael expects the Apartment Exchange to remain in operation for the foreseeable future.

What is the role of the Financial Accounting Standards Board (FASB)?

Presented here are the accounts of Town and Country Realty for the year ended December 31, 2016:

$$\begin{array}{lrlr} \hline \text { Land } & \$ 5,000 & \text { Common Stock } & \$ 28,000 \\ \text { Notes Payable } & 36,000 & \text { Accounts Payable } & 14,000 \\ \text { Property Tax Expense } & 3,400 & \text { Accounts Receivable } & 1,000 \\ \text { Dividends } & 32,000 & \text { Advertising Expense } & 14,000 \\ \text { Rent Expense } & 10,000 & \text { Building } & 144,600 \\ \text { Salaries Expense } & 69,000 & \text { Cash } & 3,800 \\ \text { Salaries Payable } & 1,500 & \text { Equipment } & 13,000 \\ \text { Service Revenue } & 180,000 & \text { Insurance Expense } & 2,200 \\ \text { Office Supplies } & 12,000 & \text { Interest Expense } & 6,500 \\ \text { Retained Earnings, } 12 / 31 / 15 & 57,000 & & \\ \hline \end{array}$$

Requirements

1. Prepare Town and Country Realty's income statement.
2. Prepare the statement of retained earnings.
3. Prepare the balance sheet.

Cosmo Timmins started a new business, Timmins Gymnastics, and completed the following transactions during December:

Dec. 1.Cosmo contributed $20,000 cash in exchange for common stock. 2.Received$2,200 cash from customers for services performed. 5.Paid $350 cash for office supplies. 9. Performed services for a customer and billed the customer for services rendered,$4,500. 10. Received $100 invoice for utilities due in two weeks. 15. Paid for advertising in the local paper,$475. 20. Paid utility invoice received on Dec. 10. Received $100 invoice for utilities due in two weeks. 25. Collected cash in full from customer billed on Dec. 9. 28. Paid rent for the month,$3,000. 28. Paid $1,500 to assistant for wages. 30. Received$2,000 cash from customers for services performed. 31. Cash dividends of $3,500 were paid to stockholders.

Analyze the effects of the transactions on the accounting equation of Timmins Gymnastics

Meg Clifford opened a public relations firm called Dance Fever on August 1, 2016. The following amounts summarize her business on August 31, 2016:

During September 2016, the business completed the following transactions:

a. Meg Clifford contributed $13,000 cash in exchange for common stock. b. Performed service for a client and received cash of$1,200. c. Paid off the beginning balance of accounts payable. d. Purchased office supplies from OfficeMax on account, $1,000. e. Collected cash from a customer on account,$1,500. f. Cash dividends of $1,900 were paid to stockholders. g. Consulted for a new band and billed the client for services rendered,$6,000. h. Recorded the following business expenses for the month: Paid office rent: $1,400. Paid advertising:$350.

Analyze the effects of the transactions on the accounting equation of Dance Fever.

Angela Petrillo recently opened her own law office, which she operates as a corporation. The name of the new entity is Angela Petrillo, Attorney. Petrillo experienced the following events during the organizing phase of the new business and its first month of operation, March 2016. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.

Mar. 1. Sold personal investment in Amazon stock, which she had owned for several years, receiving $31,000 cash. 2. Deposited the$31,000 cash from the sale of the Amazon stock in her personal bank account. 3. Deposited $72,000 cash in a new business bank account titled Angela Petrillo, Attorney. The business issued common stock to Petrillo. 5. Paid$350 cash for ink cartridges for the printer. 7. Purchased computer for the law office, agreeing to pay the account, $5,500, within three months. 9. Received$2,500 cash from customers for services rendered. 15. Received bill from The Lawyer for magazine subscription, $340. (Use Miscellaneous Expense account.) 23. Finished court hearings on behalf of a client and submitted a bill for legal services,$18,000, on account. 28. Paid bill from The Lawyer. 30. Paid utilities, $1,300. 31. Received$1,800 cash from clients billed on Mar. 23. 31. Cash dividends of $2,000 were paid to stockholders.

Requirements

1. Analyze the effects of the preceding events on the accounting equation of Angela Petrillo, Attorney.
2. Prepare the following financial statements: a.. Income statement. b. Statement of retained earnings. c. Balance sheet.