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Current Assets Chapter 2

The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets?

  1. Increase in current assets
  2. Decrease in current assets
  3. No effect on current assets
  4. Unable to determine

Solving for Missing Amounts Chapter 2

A company had the following account balances at the end of its first year of operations. Find the missing amounts.


Cash 1,300 Accounts receivable ?
Inventory 400 Property and equipment 1200
Accounts payable 500 Salaries payable 800
Common Stock 1475 Retained earnings 525
Revenue 2500 Expenses ?
Net Income 570 Dividends ?
  1. Determine Accounts Receivable
  2. Determine Expenses
  3. Determine Dividends
  1. Accounts Receivable - 400
  2. Expenses - 1,930
  3. Dividends - 45

Account Classifications Chapter 2

Accounts payable $12,000 Accounts Receivable 20,900
Furniture 5,000 Accumulated Depreciation 6,500
Building 82,000 Cash 21,500
Common Stock ? Sales Revenue 90,700
Cost of Goods Sold 51,500 Depreciation Expense 1,450
Dividends 6,600 Note Payable (due 3/1 Year 4) 20,000
Marketable Securities 1,400 Prepaid Expenses 18,000
Salaries Payable 2,800 Land 38,000
Note Payable (due 5/30 Year 2) 12,400 Service Revenue 22,550
Retained Earnings (1/1 Year 1 ) 39,700 Salary Expense 18,000
Accrued Expenses Payable 1,500 Unearned Revenue 30,500
Utilities Expense 5,400
  1. Determine Total assets on December 31, Year 1
  2. Determine Current Liabilities on December 31, Year 1
  3. Determine Net Income for the year ended December 31, Year 1
  4. Determine the total amount of Common Stock on December 31, Year 1
  1. Total Assets - 180,300
  2. Current Liabilities - 59,200
  3. Net Income - 36,900
  4. Common Stock - 31,100