1. Use the balance sheet to calculate the missing item in each of the following independent cases:Item Case A Case B Case CAssets $16,000 ? $4,000Liabilities $5,000 $22,000 ?SE ? $38,000 $3,0002. Compute the missing amountsCase Revenue Expenses Net Income Assets Liabilities SEA ? 63,000 15,000 ? 120,000 450,000B 156,000 184,000 ? 478,000 ? 387,000C 79,000 ? 23,000 ? 58,000 95,000D ? 47,000 (4,000) 142,000 ? 105,0003.Account Classification on BS Used toincreaseUsed todecreaseNormal BalanceAssetLiabilitySE DebitCreditDebitCreditDebit CreditCashA/PA/REquipBuildingCont. CapitalLandInventoryN/PSupplies4. Determine the effect on the accounting equation for the following transactionsa. Issued additional shares of stock for $100,000 cashb. Borrowed $120,000 cash from the bank and signed a 10yr notec. Built an addition on the factory for $200,000 and paid cash to the contractord. Purchased equipment for the new addition for $30,000 paying $3,000 in cash and signing a note due in six months for the balancee. Returned a $3,000 piece of equipment, from (d), because it proved to be defective; received a reduction of the note payablef. Purchased a delivery truck for $10,000; paid $5,000 cash and signed a note for the remainderg. Ordered computer equipment for $16,000h. Received and paid cash for the equipment ordered in (g)5. Assets share all of the following features except:a. Benefits arise from having acquired assets in the pastb. They are unavoidable obligationsc. It is probably they will generate future economic benefitsd. The company can obtain these benefits and control others’ access to them6. Liabilities are defined as:a. Amounts owed by a businessb. Amounts invested and reinvested in a company by its stockholdersc. Resources owned by a business that generate future economic benefitsd. None of the above correctly defines the term, liability7. Stockholder’s equity consists of:a. Contributed capital and liabilitiesb. Contributed capital and retained earningsc. Assets and retained earningsd. Assets and contributed capital8. A transaction can best be described as:a. Any internal or external event taking place in a businessb. An event that impacts the accountant personallyc. An event that involves the IRSd. An event that effects assets, liabilities, or SE and its effects are direct and measurable9. The accrual basis of accounting records revenues when ______ and expenses when________.a. Cash is received; cash is paidb. Earned; incurredc. Cash is received; incurredd. Earned; cash is paidGROUP PROBLEMS Record Journal EntriesSold shoes to customers worth $500,000 on Feb 28, 2006. Collected half in cash and the rest on accountReceived cash for future sales of $400,000 on December 31, 2006Paid advertising expenses of $120,000 Jan 1, 2006 for the entire yearSold shoes worth $10,000,000 to customers on March 10, 2006Paid $1,000,000 for leather to be used between Jan 1, 2006 and December 31, 2006.Paid for insurance on the shoe factory on October 1, 2006. Paid $120,000. The insurance will last for one year from the date
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