Baltimore Company reports total assets and total liabilities of $236,000 and $85,000, respectively, at the conclusion, of its first year of business.
1) Baltimore Company reports total assets and total liabilities of $236,000 and $85,000, respectively, at
the conclusion, of its first year of business. The company earned $81,500 during the first year, and distributed $25,000 to shareholders as dividends. How much did shareholders initially invest in the business?
2) During June, Bravo Magazine sold for cash six advertising spaces for $400 each to be run in the July through December issues. On that date, Bravo properly recognized Unearned Revenue. The adjusting entry to record on July 31 includes:
A. a credit to Unearned Revenue for $400
B. a debit to Unearned Revenue for $400
C. a debit to Cash for $2,000
D. a credit to Revenue for $2,000
3) On January 7, Bravo purchased supplies on account for $1,000, and recorded this purchase to the Supplies account. At the end of January, Bravo had $600 of these supplies still on hand. The proper adjusting journal entry at January 31 would:
A. include a debit to Supplies Expense for $600
B. include a credit to Supplies for $400
C. include a debit to Supplies for $1,000
D. include a debit to Accounts Payable for $400
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