ABC Company has the following accounts and normal balances. Cash $4,000, Accounts Receivables $8,000, Allowance for Doubtful Accounts $500, Accounts Payable $2,500, Unearned Revenue $4,000, Revenue $9,000, Rent Expense $1,000, Wage Expense $4,000 and Capital of $1,000. Use this information to answer questions 1 – 4.

1. The debit column of the trial balance would equal:

• $17,000
• $16,000
• $17,500
• $19,000

2. Assuming no adjusting journal entries are made, Net Income would equal:

• $18,000
• $15,000
• $7,000
• $4,000

3. At year end, if we performed 50 percent of the work contracted for that was previously recorded s unearned revenue, what adjusting journal entry should be made at year end?

• Debit cash $2,000 and credit unearned revenue for $2,000.
• Debit cash $2,000 and credit revenue for $2,000.
• Debit unearned revenue $2,000 and credit revenue for $2,000.
• Debit unearned revenue $4,000 and credit revenue for $4,000.

4. At the time we prepared financial statements as of 12/31/XX, we owed our employees $950. We would not actually pay the wages until the following week at a total cost of $1,500. Based on this information, what adjusting journal entry should be made?

a. None, as the payment would occur in the following financial period.

b. Debit wage expense and credit cash for $950.

c. Debit wage expense and credit cash for $1,500.

d. Debit wage expense and credit wages payable for $950.

Answer rating: 100% (QA)

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