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Exam 1: An Introduction to Accounting

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Question 71

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The following is a partial set of financial statements prepared for the company's first year of operations. All transactions were for cash. Required:Fill in the missing information by determining the amounts represented by letters a through d.

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a)$9,700, ...

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Question 72

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Liabilities are not a source of assets for a business.

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B) False

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Question 73

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Retained earnings reduces a company's commitment to use its assets for the benefit of its stockholders.

Which of the following financial statements provides information about a company as of a specific point in time?

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. What was the amount of total liabilities reported on the balance sheet as of the end of the current year?

The four financial statements prepared by a business bear no relationship to each other.

Which of the following are shown on the income statement? Total assetsLandCommon StockNet Change in CashRevenueNotes PayableStockholders' EquityTotal Liabilities and Stockholders' EquityExpensesNet IncomeEnding cash balanceBeginning cash balanceDividends

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $4,100 cash from issuing common stock.Borrowed $2,750 from a bank.Earned $3,650 of revenues.Incurred $2,510 in expenses.Paid dividends of $510. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) Acquired an additional $1,050 cash from the issue of common stock.Repaid $1,685 of its debt to the bank.Earned revenues, $5,050.Incurred expenses of $2,970.Paid dividends of $1,300. What is the amount of total assets that will be reported on Lexington's balance sheet at the end of Year 1?

Bates Company entered into the following transactions during its first year in business. Assume that all transactions involve the receipt or payment of cash.1)Issued common stock to investors for $25,000 cash.2)Borrowed $18,000 from the local bank.3)Provided services to customers for $28,000.4)Paid expenses amounting to $21,400.5)Purchased a plot of land costing $22,000.6)Paid a dividend of $15,000 to its stockholders.7)Repaid $12,000 of the loan listed in item 2. Required:(a)Fill in the three column headings of the accounting equation in the first row of the table shown below.(b)Show the effects of the above transactions on the accounting equation.a. ________ = ________ + ________b. Event Number1)2)3)4)5)6)7)

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $1,450 cash from the issue of common stock.2) Borrowed $920 from a bank.3) Earned $1,150 of revenues.4) Paid expenses of $350.5) Paid a $150 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $825 of common stock.2) Repaid $570 of its debt to the bank.3) Earned revenues of $1,250.4) Incurred expenses of $560.5) Paid dividends of $200. What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1?

Chico Company experienced an accounting event that affected its accounting equation as indicated below: Which of the following accounting events could have caused these effects on Chico's accounting equation?

At the end of Year 2, retained earnings for the Baker Company was $3,500. Revenue earned by the company in Year 2 was $1,500, expenses paid during the period were $800, and dividends paid during the period were $500. Based on this information alone, what was the amount of retained earnings at the beginning of Year 2?

When a business provides services for cash, what is the effect on the accounting equation are affected?

What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?

Ballard Company reported assets of $500 and liabilities of $200. What amount will Ballard's report for stockholders' equity?

Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, what is the amount of the company's retained earnings?

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities?

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock.2) Borrowed $420 from a bank.3) Earned $650 of revenues.4) Paid expenses of $250.5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock.2) Repaid $220 of its debt to the bank.3) Earned revenues of $750.4) Incurred expenses of $360.5) Paid dividends of $100. The amount of total liabilities on Packard's Year 1 balance sheet is

Li Company paid cash to purchase land.What happened as a result of this business event?

Which of the following shows the effects of providing services for cash on the accounting equation?