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Exam 1: Financial Statements and Business Decisions

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Question 51

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As of January 1, 2014, a corporation had assets of $340,000 and liabilities of $120,000. During 2014, assets increased $45,000 and liabilities increased $15,000. What was stockholders' equity at December 31, 2014?

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Assets at December 31, 2014 ($340,000 + ...

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Question 52

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Husky Company has provided the following information for its most recent year of operation: Cash collected from customers totaled $89,300. Cash borrowed from banks totaled $31,700. Cash paid to employees for salaries totaled $32,100. Cash received from selling Husky common stock to stockholders totaled $41,000. Cash payments to banks for repayment of money borrowed totaled $7,500. Cash paid to suppliers totaled $12,500. Land costing $25,000 was sold for $25,000 cash. Cash paid for dividends to stockholders totaled $3,300. How much was Husky's cash flow from operating activities?

A) $47,600.
B) $44,700.
C) $41,400.
D) $37,200.

E) A) and B)
F) A) and C)

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Question 53

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The auditor can be held liable for malpractice in situations where the investors suffered losses while relying on the financial statements.

Which of the following describes the amount of insurance expense reported on the income statement?

The amount of cash paid by a business for dividends would be reported as an operating activity cash flow on the statement of cash flows.

Atlantic Corporation reported the following amounts at the end of the first year of operations: common stock $200,000; sales revenue $800,000; total assets $600,000; dividends declared $40,000; and total liabilities $320,000. What are Atlantics' retained earnings at the end of the year and what amount of expenses were incurred during the year?

What financial statement would you look at to determine the dividends declared by a business?

Which of the following has primary responsibility to develop Generally Accepted Accounting Principles?

Which of the following best describes the balance sheet?

During 2014, Winterset Company performed services for which customers paid or promised to pay $587,000. Of this amount, $552,000 had been collected by year-end. Winterset paid $340,000 in cash for employee wages and owed the employees $15,000 at the end of the year for work that had been done but had not paid for. Winterset paid interest expense of $3,000 and $195,000 for other service expenses. The income tax rate was 35%, and income taxes had not yet been paid at the end of the year. Winterset declared and paid dividends of $20,000. There were no other transactions that affected cash. Requirements: 1. What was the amount of the increase or decrease in cash during the year? 2. Prepare an income statement for Winterset for the year. 3. At the beginning of 2014, Winterset's retained earnings were $90,000. Prepare a statement of stockholders' equity with only a column for retained earnings.

Business managers utilize managerial accounting reports to plan and manage the daily operations.

Determine the missing amounts for each independent case below. Assume the amounts given are at the end of the company's first year of operation. $\begin{array} { | l | l | l | l | r | r | r | } \hline \begin{array} { l } \text { Company } \\\text { Name }\end{array} & \begin{array} { l } \text { Total } \\\text { Revenue }\end{array} & \begin{array} { l } \text { Total } \\\text { Assets }\end{array} & \begin{array} { l } \text { Total } \\\text { Expenses }\end{array} & \begin{array} { l } \text { Total } \\\text { Liabilities }\end{array} & \begin{array} { l } \text { Net Income } \\\text { (Loss) }\end{array} & \begin{array} { l } \text { Stockholders' } \\\text { Equity }\end{array} \\\hline \text { Randolph } & \$ 600,000 & \$ 450,000 & \$ 350,000 & \$ 130,000 & & \\\hline \text { Newman } & \$ 105,000 & & & \$ 80,000 & \$ 10,000 & \$ 75,000 \\\hline \text { Wiseman } & & \$ 190,000 & \$ 70,000 & & ( \$ 30,000 ) & \$ 100,000 \\\hline \text { Martin } & \$ 180,000 & \$ 215,000 & \$ 115,000 & \$ 75,000 & & \\\hline \begin{array} { l } \text { Van } \\\text { Tassel }\end{array} & & & \$ 55,000 & \$ 75,000 & \$ 19,000 & \$ 79,000 \\\hline\end{array}$

Which of the following properly describes the impact on the financial statements when a company borrows $20,000 from a local bank?

Which of the following statements is correct?

Due to the relationships among financial statements, the statement of stockholders' equity links the income statement to the balance sheet.

Which of the following equations best describes the income statement?

Which of the following is not one of the three steps taken by a corporation to assure the accuracy of its records?

Which of the following does not represent a professional accounting certification?

Which financial statement would you utilize to determine whether a company will be able to pay liabilities which are due in 30 days?

Lena Company has provided the following data (ignore income taxes) : 2014 revenues were $99,000. 2014 expenses were $47,800. Dividends declared and paid during 2014 totaled $9,500. Total assets at December 31, 2014 were $177,000. Total liabilities at December 31, 2014 were $89,000. Common stock at December 31, 2014 was $28,000. Which of the following is correct?