Question 1: Urlacher Company performs the following accounting tasks during the year.
______Analyzing and interpreting information.
______Classifying economic events.
______Explaining uses, meaning, and limitations of data.
______Keeping a systematic chronological diary of events.
______Measuring events in dollars and cents.
______Preparing accounting reports.
______Reporting information in a standard format.
______Selecting economic activities relevant to the company.
______Summarizing economic events.
Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users.
Instructions:
Categorize the accounting tasks performed by Urlacher as relating to either the identification (I), recording (R), or communication (C) aspects of accounting.
Question 2: Meredith Cleaners has the following balance sheet items.
Accounts payable
Accounts receivable
Cash
Notes payable
Cleaning equipment
Salaries payable
Cleaning supplies
Common stock
Instructions: Classify each item as an asset, liability, or stockholders' equity.
Question 3: The following information relates to Linda Stanley Co. for the year 2008.
Retained earnings, January 1, 2008 $ 48,000
Advertising expense $ 1,800
Dividends during 2008 6,000
Rent expense 10,400
Service revenue 62,500
Utilities expense 3,100
Salaries expense 30,000
Instructions: After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2008.
Question 4: Mary Close is the bookkeeper for Mendez Company. Mary has been trying to get the balance sheet of Mendez Company to balance.
MENDEZ COMPANY Balance Sheet December 31, 2008
Assets: Liabilities:
Cash $15,000 Accounts payable $20,000
Supplies 8,000 Accounts receivable (8,500)
Equipment 46,000 Common stock 50,000
Dividends 10,000 Retained earnings 17,500
Total assets $79,000 Total liabilities and stockholders' equity $79,000
Instructions: Prepare a correct balance sheet.