At December 31, 2016, the accounting records of Hill Pool, Co. reflected the fol

Question

At December 31, 2016, the accounting records of Hill Pool, Co. reflected the following:

Accounts Payable                        $ 10,100                                    Accounts Receivable                         8,450   

Retained Earnings                             7,830                                   Supplies             `                          2,350

Building                                                   23,950                                    Cash                                            15,420                        

Notes Payable, due Jan 2018            10,240                                    Common Stock                              20,000            

Unearned Revenue                            2,000                       

During January 2017, the following transactions occurred:

            Jan 2     Issued 5,000 shares of common stock in exchange for $10,000

            Jan 8     Paid creditors $2,500 of what was owed on account.

            Jan 15   Repaired a pool and collected the fee of $1,800.

            Jan 19   Performed a $500 repair job, which Hill had previously been paid for.

            Jan 25   Collected $2,400 from customers on account.

            Jan 28   Repaired a customer’s pool for $8,200.  Billed the customer.

            Jan 30   Declared and paid a cash dividend of $500.

            Jan 30   Paid $2,000 for January wages.

            Jan 30   Supplies on hand at the end of the month amount to $1,300.

            Jan 30   Received a utility bill for $500 which will be paid next month.

1.         The journal entry to record the Jan 19 transaction would include a:

A. Debit to Accounts Receivable

B. Credit to Service Revenue

C. Debit to Service Revenue

D. Credit to Unearned Revenue

E. Credit to Accrued Expenses Payable

2.         To record the Jan 30 transaction for the supplies, Hill, Inc would:

A. Debit to Supplies Expense for $1,300

B. Debit to Supplies for $1,050

C. Credit to Cash for $1,050

D. Credit to Supplies $1,300

E. Debit to Supplies Expense for $1,050

3.         The balance in the Cash account on January 31, 2017 is:

A. $24,620

B. $26,320

C. $26,820

D. $25,770

E. $23,570

4.         What is net income for the month of January?

            A.         $16,350

            B.         $ 8,850

            C.         $ 6,950

            D.         $18,350

            E.         $ 5,850

Explanation / Answer

Q1. Answer is B. Credit to Service revenue Explanation: Journal entry for Jan19: Unearned revenue account dr.   $ 500      Service revenue Account                      $500 Q2. Answer is E. Debit to Supplies expense for $1050 Explanation: Journal entry: Supplies expense Account Dr.       Supplies Account Q3. Answer is A. $ 24620 Explanation: Beginning balance of cash 15420 Add: issue of common stock 10000 Repair fees collected 1800 Collection from Accounts receivable 2400 Subtotal 29620 Less: paid to creditors -2500 Dividend paid -500 Wages paid -2000 Ending balance of cash 24620 Q4. Answer is C. $ 6950 Explanation: Revenue: Repair fees 1800 Repair job perform 500 Repair on account 8,200 Total revenue 10500 Less: Expense Wages paid 2,000 Suppliees expense 1,050 Utility expense 500 Total expense 3550 Net income 6950

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