Multiple Choice

Multiple Choice

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1. Carlita began 2004 with a taxes payable account balance of $3,000. On December 31, 2004, its taxes payable account balance is $7,000. How much did Carlita pay to the tax authorities during the year?

• $2,000

• $6,000

• $4,000

• Cannot be calculated

2. On January 1, 2005, Jon Sports has a bond payable of $200,000. During 2005, it pays off $20,000 of the outstanding bond principal and issues a new $70,000 bond. There are no other transactions related to the bond payable account.

What is Jon Sports’ December 31, 2005 bond payable balance?

• A debit balance of $250,000

• A credit balance of $150,000

• A debit balance of $150,000

• A credit balance of $250,000

3. The next 7 questions are based on Panjim Trading Company’s cash T-account for 2005.

Based on Panjim’s 2005 cash T-account, which one of the following statements must be true?

• During 2005, Panjim’s total merchandise sales were $60,000

• During 2005, Panjim’s total merchandise purchases were $44,000

• During 2005, Panjim issued $75,000 of debt

• Panjim did not record any tax expense for 2005

4. Panjim began 2005 with salaries payable balance of $75,000. It had 2005 salary expense of $80,000. Its 2005 ending salaries payable balance must be:

• $95,000

• $55,000

• $155,000

• $105,000