Question 1

Following are the total assets and liabilities at the beginning and end of the year for Hagedorn Company:
  Determine the net income or loss for the year in each of the following situations:
a.There were no additional stock issues and no dividends were paid during the year.
b.Additional stock was issued for $20,000 and dividends of $12,000 were paid during the year.

Accepted Answer

The answer of Following are the total assets and liabilities...

Question 2

Distinguish between profitability and liquidity.

Accepted Answer

The answer of Distinguish between profitability and liquidity....

Question 3

How does the statement of retained earnings relate to the income statement and the balance sheet?

Accepted Answer

The answer of How does the statement of retained earnings...

Question 4

Newberry Company's stockholders' equity equals one-fourth of the company's total assets.The company's liabilities are $309,000.What is the amount of the company's stockholders' equity?

Accepted Answer

The answer of Newberry Company's stockholders' equity equals one-fourth of...

Question 5

What is independence,and why is it important for a CPA to maintain it when conducting an audit?

Accepted Answer

The answer of What is independence,and why is it important...

Question 6

Chin Company's stockholders' equity equals one-third of the company's total assets.The company's liabilities are $120,000.What is the amount of the company's stockholders' equity?

Accepted Answer

The answer of Chin Company's stockholders' equity equals one-third of...

Question 7

Explain why each of the following persons or groups would be interested in seeing the financial statements of a company.Also state whether each has a direct or indirect financial interest.
a.Potential investor
b.Internal Revenue Service
c.A labor union
d.Securities and Exchange Commission
e.Potential creditor
f.Management
g.Economic planners

Accepted Answer

The answer of Explain why each of the following persons...

Question 8

Garcia Company's stockholders' equity equals one-half of the company's total assets.The company's liabilities are $140,000.What is the amount of the company's stockholders' equity?

Accepted Answer

The answer of Garcia Company's stockholders' equity equals one-half of...

Question 9

Use the following information to calculate at or for the year ended December 31,2014:
(a)net income, (b)retained earnings, (c)total liabilities and stockholders' equity,and (d)accounts receivable.

Accepted Answer

The answer of Use the following information to calculate at...

Question 10

Which four types of transactions affect stockholders' equity,and how do they affect it?

Accepted Answer

The answer of Which four types of transactions affect stockholders'...

Question 11

Feldman Company had a balance of $360,000 in Retained Earnings on December 31,2013.During 2014,the company reported a net income of $48,000,and dividends of $36,000 were paid.Prepare the company's statement of retained earnings for the year ended December 31,2014.

Accepted Answer

The answer of Feldman Company had a balance of $360,000...

Question 12

On the right side of the accounting equation are two types of claims against resources.Explain what they are and give an example of an item that would increase each.Which type of claim has priority?

Accepted Answer

The answer of On the right side of the accounting...

Question 13

Upshaw Company had a balance of $160,000 in Retained Earnings on December 31,2013.During 2014,the company reported a net income of $84,000 after taxes,and dividends of $32,000 were paid.Prepare the company's statement of retained earnings for the year ended December 31,2014.

Accepted Answer

The answer of Upshaw Company had a balance of $160,000...

Question 14

At the beginning of the year,Shannon Company's assets were $150,000 and its stockholders' equity was $100,000.During the year,assets decreased $30,000 and liabilities increased $15,000.What was the stockholders' equity at the end of the year?

Accepted Answer

The answer of At the beginning of the year,Shannon Company's...

Question 15

What is the responsibility of the independent auditor? Who is responsible for the content of the published financial statements?

Accepted Answer

The answer of What is the responsibility of the independent...

Question 16

Use the following information to calculate at or for the year ended December 31,2014:
(a)net income, (b)retained earnings, (c)total assets,and (d)cash.

Accepted Answer

The answer of Use the following information to calculate at...

Question 17

List five possible users of a set of financial statements and state what each would be interested in learning from its review.

Accepted Answer

The answer of List five possible users of a set...

Question 18

Why would it be less risky for an individual to incorporate his or her business rather than to operate it as a sole proprietorship or partnership?

Accepted Answer

The answer of Why would it be less risky for...

Quiz 1: Uses of Accounting Information and the Financial Statements