Question 1

At the end of 2009, Corey Company has total assets and liabilities at $40,000 and $13,000, respectively.Corey reported net income for 2010 in the amount of $10,000.How much is shareholders' equity at the end of 2010?

Accepted Answer

$40,000 - $13,000 + $10,000 = $37,000

Question 2

Valley Company has retained earnings of $12,000, total assets totaling $38,000, and total liabilities of $20,000.How much is total shareholders' equity?

Accepted Answer

$38,000 - $20,000 = $18,000

Question 3

Darwin Company has current assets, shareholders' equity, current liabilities, and long-term liabilities of $8,000, $24,000, $4,000, and $8,000, respectively.How much are long-term assets?

Accepted Answer

[$24,000 + $8,000 + $4,000] - $8,000 = $28,000

Question 4

If the beginning and ending balances in retained earnings are $12,000 and $10,000, respectively, and dividends during the year are $10,000, then net income for the year is

Accepted Answer

$12,000 F1F1F1S1?F1F1F10 $10,000 F1F1F1S1?F1F1F10 $10,000 = $8,000

Question 5

Legacy Company has total assets, liabilities, and shareholders' equity of $30,000, $17,000, and $13,000, respectively at the beginning of 2010.If Legacy reports revenues of $125,000, expenses of $85,000, and pays dividends of $30,000, how much is shareholders' equity at the end of 2010?

Accepted Answer

$13,000 + [$125,000 - $85,000] -$30,000 = $23,000

Question 6

Artec Corporation has total assets, current liabilities, and long-term liabilities of $36,000, $2,000, and $13,000, respectively.If Artec purchases equipment for $4,000 for cash, how much would shareholders' equity be?

Accepted Answer

$36,000 - $2,000 -$13,000 + $4,000 -$4,000 = $21,000

Question 7

Below are several accounts from Nortec Company's accounting records.

The amount of retained earnings at the end of the year is

Accepted Answer

$18,000 + 65,000 F1F1F1S1-F1F1F10 $31,000 = $52,000
or $100,000 F1F1F1S1-F1F1F10 $36,000 F1F1F1S1-F1F1F10 $12,000 = $52,000

Question 8

Given below are several accounts from Deere Company's accounting records.

Net income for the year was $35,000.How much is total shareholders' equity at the end of the year?

Accepted Answer

$22,000 + $25,000 - $5,000 + $35,000 = $77,000

Question 9

If cash flows from operating activities were $1,000, cash flows for financing activities were $12,500, and the net increase in cash was $15,000, how much are cash flows from investing activities?

Accepted Answer

$15,000 - $12,500 - $1,000 = $1,500

Question 10

The information below was taken from the 2010 annual report of Jena Corp.  
-Which of the following is the missing amount for the beginning cash balance for 2009?

Accepted Answer

The answer of The information below was taken from the...

Question 11

The information below was taken from the 2010 annual report of Jena Corp.   
-Which of the following is the missing amount for the ending cash balance for 2009?

Accepted Answer

The answer of The information below was taken from the...

Question 12

Garrison Corporation has the following transactions:
1)Dividends are paid to the shareholders.
2)A utility bill for July is paid in August.
3)A new warehouse facility is purchased
4)Principal payments on outstanding debt are paid.
5)Employees wages are paid.
6)Forty-five units of inventory are sold for $100 each
7)Common stock is issued for $230,000 in cash.
8)A delivery van used for 5-years is sold for $12,000, which is its book value.
-
Which of the above transaction(s) are examples of financing activities?

Accepted Answer

Financing activities involve transactions between a company and its creditors or investors. This includes issuing equity (common stock), paying dividends, and repaying principal amounts on debt. Transactions 1 (Dividends are paid to the shareholders), 4 (Principal payments on outstanding debt are paid), and 7 (Common stock is issued for $230,000 in cash) fall under financing activities.

Question 13

Garrison Corporation has the following transactions:
1)Dividends are paid to the shareholders.
2)A utility bill for July is paid in August.
3)A new warehouse facility is purchased
4)Principal payments on outstanding debt are paid.
5)Employees wages are paid.
6)Forty-five units of inventory are sold for $100 each
7)Common stock is issued for $230,000 in cash.
8)A delivery van used for 5-years is sold for $12,000, which is its book value.
-
Which of the above transaction(s) are examples of investing activities?

Accepted Answer

Investing activities involve the purchase and sale of long-term assets and other investments. Transaction 3 (purchase of a new warehouse facility) and transaction 8 (sale of a delivery van at its book value) fall under investing activities.

Question 14

Garrison Corporation has the following transactions:
1)Dividends are paid to the shareholders.
2)A utility bill for July is paid in August.
3)A new warehouse facility is purchased
4)Principal payments on outstanding debt are paid.
5)Employees wages are paid.
6)Forty-five units of inventory are sold for $100 each
7)Common stock is issued for $230,000 in cash.
8)A delivery van used for 5-years is sold for $12,000, which is its book value.
-
Which of the above transaction(s) are examples of operating activities?

Accepted Answer

Operating activities include transactions that affect net income. This includes payment of utility bills (2), payment of wages (5), and sale of inventory (6). Purchasing a facility (3), issuing stock (7), and selling a delivery van at book value (8) are investing and financing activities, not operating.

Question 15

For items select the appropriate section of the balance sheet in which the item would be reported.
-Amounts owed for purchasing inventory from creditors (due next month).

Accepted Answer

Amounts owed for purchasing inventory from creditors that are due next month are considered current liabilities because they are obligations that need to be paid within a year.

Question 16

For items select the appropriate section of the balance sheet in which the item would be reported.
-Cumulative profits retained by the company since operations began.

Accepted Answer

Cumulative profits retained by the company since operations began are reported in the Shareholders' Equity section of the balance sheet. This is because retained earnings represent the portion of net income that was not distributed to shareholders as dividends but was instead retained by the company to be reinvested in its core business or to pay debt.

Question 17

For items select the appropriate section of the balance sheet in which the item would be reported.
-Cost of a building expected to be used by the company for ten more years.

Accepted Answer

The cost of a building expected to be used by the company for ten more years is classified under Property, Plant, & Equipment (PP&E) on the balance sheet, as it is a tangible fixed asset used in operations and not expected to be converted into cash within a year.

Question 18

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-Total past earnings not distributed to the owners

Accepted Answer

Retained earnings represent the cumulative amount of net income earned by a company over time that has not been distributed to shareholders in the form of dividends.

Question 19

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-Inflow of assets from the regular operating activities

Accepted Answer

Inflows of assets from regular operating activities are recognized as revenues, which are increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

Question 20

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-Obligations which must be met at some future date

Accepted Answer

Obligations which must be met at some future date describe liabilities, as they represent the company's debts or financial obligations that arise during the course of its business operations.

Quiz 2: The Financial Statementsa Closer Look

At the end of 2009, Corey Company has total assets and liabilities at $40,000 and $13,000, respectively.Corey reported net income for 2010 in the amount of $10,000.How much is shareholders' equity at the end of 2010?

Valley Company has retained earnings of $12,000, total assets totaling $38,000, and total liabilities of $20,000.How much is total shareholders' equity?

Darwin Company has current assets, shareholders' equity, current liabilities, and long-term liabilities of $8,000, $24,000, $4,000, and $8,000, respectively.How much are long-term assets?

If the beginning and ending balances in retained earnings are $12,000 and $10,000, respectively, and dividends during the year are $10,000, then net income for the year is

Legacy Company has total assets, liabilities, and shareholders' equity of $30,000, $17,000, and $13,000, respectively at the beginning of 2010.If Legacy reports revenues of $125,000, expenses of $85,000, and pays dividends of $30,000, how much is shareholders' equity at the end of 2010?

Artec Corporation has total assets, current liabilities, and long-term liabilities of $36,000, $2,000, and $13,000, respectively.If Artec purchases equipment for $4,000 for cash, how much would shareholders' equity be?

Below are several accounts from Nortec Company's accounting records. The amount of retained earnings at the end of the year is

Given below are several accounts from Deere Company's accounting records. Net income for the year was $35,000.How much is total shareholders' equity at the end of the year?

If cash flows from operating activities were $1,000, cash flows for financing activities were $12,500, and the net increase in cash was $15,000, how much are cash flows from investing activities?

The information below was taken from the 2010 annual report of Jena Corp. -Which of the following is the missing amount for the beginning cash balance for 2009?

The information below was taken from the 2010 annual report of Jena Corp. -Which of the following is the missing amount for the ending cash balance for 2009?

For items select the appropriate section of the balance sheet in which the item would be reported. -Amounts owed for purchasing inventory from creditors (due next month) .

For items select the appropriate section of the balance sheet in which the item would be reported. -Cumulative profits retained by the company since operations began.

For items select the appropriate section of the balance sheet in which the item would be reported. -Cost of a building expected to be used by the company for ten more years.

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -Total past earnings not distributed to the owners

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -Inflow of assets from the regular operating activities

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -Obligations which must be met at some future date