Accounting Chapter 1
During its first five years of operations, Red Raider Consulting reports net income and pays dividends as follows. Required: Calculate the balance of retained earnings at the end of each year. Note that retained earnings will always equal $0 at the beginning of year 1. Note: Retained earnings = beginning retained earnings + net income - dividends Year 1: Net Income = $1,250 Dividends =$510 Retained earnings =? Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: xxx ______(20 %) Year 2: Net income = $1,750 Dividends =$510 Retained earnings =? Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx ____(20 %) Year 3: Net Income = $2,200 Dividends = $1,050 Retained earnings =? Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx ______(20 %) Year 4: Net Income = $3,300 Dividends = $1,050 Retained earnings =? Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx ______(20 %) Year 5: Net Income = $4,500 Dividends = $1,050 Retained earnings =? Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx ______(20 %)
740 1,980 3,130 5,380 8,830
Each of the following independent situations represents amounts shown on the four basic financial statements. Fill in the formulas and missing blanks using your knowledge of amounts that appear on the financial statements. 1. Revenues = $25,200; Expenses = $17,100; Net Income = Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx Assets = $23,100; Stockholders' equity = $15,000; Liabilities = ____________. Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx
8,100 8,100
Which business form has the advantage of limited liability? A) Corporation. B) Sole proprietorship. C) Partnership. D) All business forms share equal limited liability.
A) Corporation.
The costs of providing goods and services to customers are referred to as: A) Revenues. B) Expenses. C) Liabilities. D) Assets.
B) Expenses.
Financial accounting does not deal with which of the following? A) Preparing financial reports. B) Making business decisions. C) Measuring a company's economic activity. D) Communicating financial results to investors.
B) Making business decisions
Which definition below best describes financial accounting? A) Process of measuring income taxes owed to the government. B) Measuring business activities and communicating them to external parties. C) System of maintaining communication with a company's customers and suppliers. D) Procedures designed to enhance the company's image to potential investors.
B) Measuring business activities and communicating them to external parties.
Wolfpack Construction has the following account balances at the end of the year. Accounts Equipment $23,500 Accounts payable 2,500 Salaries expense 30,500 Common stock 12,000 Land 15,500 Notes payable 17,500 Service revenue 36,500 Cash 5,500 Retained earnings ? Calculate retained earnings. Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: xx,xxx Calculate total assets. Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: xx,xxx
12,500 44,500
At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $7,800. During the year, Buffalo reports net income of $8,100 and pays dividends of $2,800. In addition, Buffalo issues additional common stock for $7,600. Required: Calculate ending balance for retained earnings. Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: xx,xxx
13,100 30,700
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Cash $3,800 Salaries expense 1,400 Accounts payable 1,800 Retained earnings 4,700 Utilities expense 1,200 Supplies 12,200 Service revenue 7,700 Common stock 4,400 Required: Calculate Total expenses. Omit the "$" sign in your response. Add commas for a number in input field while typing. Please enter in this format only: x,xxx
2,600 5,100
On January 1, Gucci Brothers Inc. started the year with a $709,000 balance in retained earnings and a $600,000 balance in common stock. During the year, the company reported net income of $108,000, paid a dividend of $14,700, and issued more common stock for $23,500. What is total stockholders' equity at the end of the year? A) $1,455,200 B) $1,309,000 C) $1,425,800 D) $1,378,800
C) $1,425,800
Sooner Company has had a net income of $7,000, $4,600, $9,600, and $10,000 over the first four years of the company's existence. If the average annual amount of dividends paid over the last four years is $2,500, what is the ending retained earnings balance? A) $31,200 B) $41,200 C) $21,200 D) $35,350
C) $21,200
Use the following appropriate amounts to calculate net income: Revenues, $11,600; Liabilities, $4,500; Expenses, $5,200; Assets, $18,800; Dividends, $1,700. A) $14,300 B) $7,450 C) $6,400 D) $4,700
C) $6,400
Emmitt had the following final balances after the first year of operations: assets, $36,600; stockholders' equity, $14,900; dividends, $3,300; and net income, $9,700. What is the amount of Emmitt's liabilities? A) $8,700 B) $36,600 C) $20,700 D) $21,700
D) $21,700
The account type that represents payments to stockholders is called: A) Assets. B) Liabilities. C) Stockholders' equity. D) Dividends.
D) Dividends.
Transactions of a company that include the purchase and sale of long-term productive assets are referred to as: A) Financing activities. B) Operating activities. C) Expenditure activities. D) Investing activities.
D) Investing activities.