Question

Q1

Use the adjusted trial balance for Stockton Company to answer the question that follow.

Stockton Company Adjusted Trial Balance December 31
	Account No.	Debit Balances	Credit Balances
Cash	11	5,411
Accounts Receivable	12	2,548
Prepaid Expenses	13	659
Equipment	18	13,452
Accumulated Depreciation	19		1,399
Accounts Payable	21		1,427
Notes Payable	22		5,444
Bob Steely, Capital	31		9,740
Bob Steely, Drawing	32	688
Fees Earned	41		8,853
Wages Expense	51	2,519
Rent Expense	52	874
Utilities Expense	53	368
Depreciation Expense	54	271
Miscellaneous Expense	59	73
Totals		26,863	26,863

Use the adjusted trial balance for Stockton Company. Determine the net income (loss) for the period.

a.Net income is $26,863.

b.Net loss is $4,748.

c.Net loss is $7,635.

d.Net income is $4,748.

Q2

Journalize the following inventory merchandise transactions, assuming that the company uses the perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.

Dec.	1	Travis Company purchased merchandise on account from a supplier for $11,100, terms 2/10, net 30.
	6	Travis Company paid for the merchandise within the discount period. Q3 Gently Laser Clinic purchased laser equipment for $6,981 and paid $856 down, with the remainder to be paid later. The correct entry would be a. Equipment$6,981 Accounts Payable$6,125 Cash$856 b. Equipment Expense$6,981 Accounts Payable$856 Cash$6,125 c. Cash$856 Accounts Payable$6,125 Equipment$6,981 d. Equipment$856 Cash$856

Answer 1

1) Net income = 8853-(2519+874+368+271+73) = 4748

So answer is d) Net income is $4,748.

Q2 Journal entry

Date	account and explanation	debit	credit
Dec 1	Inventory	11100
	Account payable		11100
	(to record purchase)
Dec 6	Account payable	11100
	Cash (11100*98%)		10878
	Inventory		222
	(To record amount paid)

3) Journal entry

Date	account and explanation	debit	credit
	Equipment	6981
	Cash		856
	Account payable		6125

So answer is a)