33. The income statement for the year 2015 of Fugazi Co. contains the following

Question

33. The income statement for the year 2015 of Fugazi Co. contains the following information:
Revenues  $70,000
Expenses:
Salaries and Wages Expense $45,000
Rent Expense 12,000
Advertising Expense 10,000
Supplies Expense 6,000
Utilities Expense 2,500
Insurance Expense     2,000
  Total expenses     77,500
Net income (loss)  $ (7,500)

After all closing entries have been posted, the revenue account will have a balance of
a. $0.
b. $70,000 credit.
c. $70,000 debit.
d. $7,500 credit.

34. The following information is for Bright Eyes Auto Supplies:
Bright Eyes Auto Supplies
Balance Sheet
December 31, 2015

Cash $ 40,000 Accounts Payable $ 130,000
Prepaid Insurance 80,000 Salaries and Wages Payable 50,000
Accounts Receivable 100,000 Mortgage Payable    150,000
Inventory 140,000 Total Liabilities 330,000
Land Held for Investment 180,000
Land 250,000
Buildings $200,000  Common Stock $400,000
Less Accumulated   Retained Earnings 340,000   740,000
Depreciation (60,000) 140,000
Trademark     140,000 Total Liabilities and
Total Assets $1,070,000 Stockholders’ Equity $1,070,000

The total dollar amount of liabilities to be classified as current liabilities is
a. $50,000.
b. $130,000.
c. $180,000.
d. $330,000

Explanation / Answer

Post Closure of all closing entries the balance in the revenue account will be $0, since all revenues and expenses will be transferred to Retained Earning Account Answer is A Total Current Liabilities: Account Payable 130000 Salaries & Wages Payable 50000 Total Current Liabilities 180000 Answer is C Note: Mortgage Payable is a Long term Liability and hence not included in Current Liabilities

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