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8. In the first month of operations for Pocket Industries, the total of the debi

ID: 2431411 • Letter: 8

Question

    8.     In the first month of operations for Pocket Industries, the total of the debit entries to the cash account amounted to $9,000 ($5,000 investment by the owner and revenues of $4,000). The total of the credit entries to the cash account amounted to $5,000 (purchase of equipment $2,000 and payment of expenses $3,000). At the end of the month, the cash account has a(n)

a.   $2,000 credit balance.

b.   $2,000 debit balance.

c.   $3,000 credit balance.

d.   $4,000 debit balance.

9.         Denton Company showed the following balances at the end of its first year:

Cash                                                       $ 7,000

Prepaid insurance                                          700

Accounts receivable                                    3,500

Accounts payable                                        2,800

Notes payable                                             4,200

Denton, Capital                                           1,400

Denton, Drawing                                            700

Revenues                                                 21,000

Expenses                                                 17,500

What did Denton Company show as total credits on its trial balance?

a. $30,100

b. $29,400

c. $28,700

d. $30,800

10.     Cerner Company showed the following balances at the end of its first year:

Cash                                                       $ 5,000

Prepaid insurance                                          500

Accounts receivable                                    2,500

Accounts payable                                        2,000

Notes payable                                             3,000

Cerner, Capital                                            1,000

Cerner, Drawing                                             500

Revenues                                                 15,000

Expenses                                                 12,500

What did Cerner Company show as total credits on its trial balance?

a.   $21,500

b.   $21,000

c.   $20,500

d.   $22,000

Explanation / Answer

8) Cash balance of (9000-5000) = 4000 Debit

So answer is d) $4,000 debit balance.

9) Total credit :

So answer is b) $29400

10) Total credit

So answer is b) $21000

Account payable 2800 Notes payable 4200 Denton, Capital    1400 Revenue 21000 Total 29400
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