ACCT 220 HW1

Question 1 Bravo's complete assets and liabilities are Accounts Receivable $800, Equipment $10,000, Accounts Payable $4,200, Prepaid Rent $2,000, Supplies $400, Bank Loan $1,600, and Tools $300. Bravo's total assets are: (All account balances are normal.) None of these. $11,100 ❏ ❏ $13,500 $11,500 $13,100 Question 2 Bravo Company began operations at the beginning of 20X6 with a $10,000 cash investment by stockholders. During 20X6, Bravo Company had revenue on account of $5,000; of this amount $2,000 was collected during 20X6 and $3,000 was an outstanding receivable at year-end. Bravo Company incurred $3,000 of operating expenses during 20X6; of this amount $1,000 was unpaid at year-end. During 20X6, $1,000 cash was disbursed as dividends. The only other transaction during 20X6 was the purchase of $5,000 of equipment for cash near the end of the year. How much was Bravo Company's 20X6 net income? Answer: $2,000 Question 3 Beginning stockholders' equity was $120,000. Ending stockholders' equity was $195,000. Additional issuances of capital stock during the year amounted to $18,000. Dividends during the year amounted to $12,000. How much was net income for the year? Answer: $69,000 Question 4 Eight years ago, Bravo Company purchased land for $170, 000. The current fair market value of the land is $421,000. The rate of general inflation experienced during the 8-year period has averaged 10% per year. At the time the land was purchased, Bravo intended to hold it for 20 years. At what amount should the land be carried on Bravo's books today? Answer: $170,000