36. Vance Company's balance sheet reported assets of $12,000, liabilities of $5,000 and common stock of $2,000 as of December 31, 2010. If Retained Earnings on the December 31, 2011 balance sheet is $8,000 and Vance paid a $2,000 dividend during 2011, then the amount of net income for 2011 was which of the following?
A. $5,000
B. $10,000
C. $3,000
D. None of these.
37. Hidalgo Company issued common stock for $300,000 cash. As a result of this event,
A. assets increased.
B. retained earnings increased.
C. equity increased.
D. both A and C.
38. If Fraser Company reported assets of $600 and liabilities of $200, Fraser's total claims totaled
A. $400.
B. $600.
C. $800.
D. none of the above.
39. If a company's total assets decreased while liabilities and common stock were unchanged, and no dividends were paid, then
A. cash flow from operating activities was greater than cash flow from investing activities.
B. retained earnings were less than net income during the period.
C. revenues were less than expenses.
D. the company must have purchased assets with cash.
40. Varghese Company paid cash to purchase land. As a result of this accounting event
A. total assets decreased.
B. total assets were unaffected.
C. total equity decreased.
D. none of these.
41. The total equity of Timberlake Company at the beginning of 2011 amounted to $3,500. During 2011 the company reported net income of $1,800 and paid a $500 dividend. If retained earnings at the end of 2011 is $2,200, what was beginning contributed capital?
A. $3,100
B. $2,100
C. $400
D. $2,600
42. A company mistakenly recorded a cash purchase of land as an expense. As a result of this error
A. Assets were understated and equity was overstated.
B. Assets and equity were understated.
C. Assets and equity were overstated.
D. Assets were overstated and equity was understated.
43. As of December 31, 2011, Bloom Company had $1,800 of assets, $600 of liabilities and $200 of retained earnings. The balance in the common stock account on the December 31, 2011 balance sheet was
A. $1,200
B. $800
C. $1,000
D. none of the above
44. On January 1, 2011, Baird Company had beginning balances as follows:
Assets = $1,250
Liabilities = $420
Common Stock = $500
During 2011, Baird paid dividends to its stockholders of $500. Given that ending retained earnings was $600, what was Baird's net income for the 2011 accounting period?
A. $770
B. $830
C. $1,250
D. $500
45. The transaction, "earned cash revenue," affects which two accounts?
A. Revenue and Salaries Expense
B. Cash and Notes Payable
C. Cash and Revenue
D. Cash and Dividends