Accounts

Question 1 (6 marks) Mona has started a new business and is wondering about different ways of increasing liabilities (she is especially confused about unearned revenues). Discuss, in detail, a few liability accounts and how they typically increase. Be specific! Question 2 18 marks) On July 21, Gerry purchased $3,000 of products with the intention of reselling them for profit. His supplier has agreed to collect payment later. On July 7, Gerry sold a third of these products for $2,500 cash. Gerry' customer paid in full on July 10th. Make all necessary journal entries. Question 3 (5 marks) Kim originally calculated a $2,000 annual straight-line depreciation rate for her vehicle ($22,000 purchase price). Four years later, Kim believes that her car will last another three years and have a salvage value of $2,000. Discuss, in detail, what kim needs to do with regards to depreciation this year. Question 4 16 marks) Quinn has a choice between earning $40,000 as a contractor (he wouldn't have CPP and El deducted from his paycheck), or $50,000 as an employee. As a contractor, his income tax rate would be 20% versus 25% as an employee. Quinn wants to take home the most money possible, but he doesn't fully understand the CPP and El programs. Give Quinn some advice, discussing all relevant factors