Jerry Mathers Started His Business by Issuing $4,000 of Common

question 78

Short Answer

Jerry Mathers started his business by issuing $4,000 of common stock on January 1, 2013. Jerry performed $8,500 of service on account in 2013, and he collected $6,200 of this amount by year end. He paid operating expenses of $6,900 and paid a $900 dividend to the stockholders. Required:
A) What is the amount of total assets at the end of 2013?
B) What is the amount of cash on hand at the end of 2013?
C) What is net income for 2013?
D) Prepare a balance sheet for 2013.

• A) What is the amount of total assets at the end of 2013?
• B) What is the amount of cash on hand at the end of 2013?
• C) What is net income for 2013?
• D) Prepare a balance sheet for 2013.

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Gambler's Fallacy

The erroneous belief that if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future, or vice versa, in situations that are truly random.

Ignoring Base Rates

Ignoring base rates is a cognitive bias that involves disregarding or underestimating general information (base rates) in favor of specific individual information when making decisions or judgments.

Availability Bias

A cognitive bias that causes people to overestimate the likelihood of events based on their availability in memory, often leading to skewed decision-making.