Acct 2101 - Ch1 - 5 StudyTest

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Chapter 1 101. Ending retained earnings for a period is equal to beginning a. Retained earnings + Net income + Dividends b. Retained earnings – Net income – Dividends c. Retained earnings + Net income – Dividends d. Retained earnings – Net income + Dividends 107. Net income results when a. Assets > Liabilities. b. Revenues = Expenses. c. Revenues > Expenses. d. Revenues < Expenses. 108. Net income will result during a time period when a. assets exceed liabilities. b. assets exceed revenues. c. expenses exceed revenues. d. revenues exceed expenses. 109. Retained earnings at the end of the period is equal to a. retained earnings at the beginning of the period plus net income minus liabilities. b. retained earnings at the beginning of the period plus net income minus dividends. c. net income. d. assets plus liabilities. 113. If the retained earnings account increases from the beginning of the year to the end of the year, then a. net income is less than dividends. b. a net loss is less than dividends. c. additional investments are less than net losses. d. net income is greater than dividends. 114. The retained earnings statement would not show a. the retained earnings beginning balance. b. revenues and expenses. c. dividends. d. the ending retained earning balance. 115. If the retained earnings account decreases from the beginning of the year to the end of the year, then a. net income is less than dividends. b. there was a net income and no dividends. c. additional investments are less than net losses. d. net income is greater than dividends.

119. Henson Company began the year with retained earnings of $330,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson’s retained earnings at the end of the year? a. $490,000 b. $410,000 c. $790,000 d. $450,000 120. Pinson Company began the year with retained earnings of $570,000. During the year, the company recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000. What was Pinson’s retained earnings at the end of the year? a. $930,000 b. $650,000 c. $1,030,000 d. $500,000 121. Finney Company began the year by issuing $40,000 of common stock for cash. The company recorded revenues of $370,000, expenses of $320,000, and paid dividends of $20,000. What was Finney’s net income for the year? a. $30,000 b. $70,000 c. $50,000 d. $90,000 122. Lankston Company began the year by issuing $90,000 of common stock for cash. The company recorded revenues of $825,000, expenses of $720,000, and paid dividends of $45,000. What was Lankston’s net income for the year? a. $60,000 b. $150,000 c. $105,000 d. $195,000 123. Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey’s ending retained earnings was $495,000, what was the company’s revenue for the year? a. $1,830,000 b. $1,950,000 c. $2,460,000 d. $2,580,000 124. Kilmer Corporation began the year with retained earnings of $620,000. During the year, the company issued $840,000 of common stock, recorded expenses of $2,400,000, and paid dividends of $160,000. If Kilmer’s ending retained earnings was $660,000, what was the company’s revenue for the year? a. $2,440,000 b. $2,600,000 c. $3,280,000 d. $33,440,000

125. A balance sheet shows a. revenues, liabilities, and stockholders’ equity. b. expenses, dividends, and stockholders’ equity. c. revenues, expenses, and dividends. d. assets, liabilities, and stockholders’ equity. 126. The accounting equation may be expressed as a. Assets = Stockholders’ Equity – Liabilities. b. Assets = Liabilities + Stockholders’ Equity. c. Assets + Liabilities = Stockholders’ Equity. d. Assets + Stockholders’ Equity = Liabilities. 127. Which of the following is not a satisfactory statement of the accounting equation? a. Assets = Stockholders’ Equity – Liabilities b. Assets = Liabilities + Stockholders’ Equity c. Assets - Liabilities = Stockholders’ Equity d. Assets - Stockholders’ Equity = Liabilities Be. 180 Indicate in the space provided by each item whether it would appear on the income statement (IS), balance sheet (BS), or retained earnings statement (RE): a. ______ Service Revenue g. ____ Accounts Receivable b. ______ Utilities Expense h.____ Common Stock c. ______ Cash i._____ Equipment d. ______ Accounts Payable j._____ Advertising Expense e. ______ Supplies k.____ Dividends f. ______ Salaries and Wages Expense l._____ Notes Payable Be. 183 Determine the missing items. Assets = Liabilities + Stockholders’ Equity $80,000 $56,000 (a) (b) $28,000 $34,000 $84,000 (c) $55,000

Be. 184 Determine the missing items. Assets = Liabilities + Stockholders’ Equity $66,000 $50,000 (a) (b) $18,000 $30,000 $54,000 (c) $40,000 Be. 191 Compute the missing amount in each category of the accounting equation. Assets Liabilities Stockholders’ Equity (a) $243,000 $ ? $ 91,000 (b) $183,000 $ 75,000 $ ? (c) $ ? $212,000 $310,000 Chapter 2 127. Based on the following data, what is the amount of current assets? Accounts payable……………………………………………………….. $62,000 Accounts receivable…………………………………………………….. 100,000 Cash………………………………………………………………………. 50,000 Intangible assets………………………………………………………… 100,000 Inventory…………………………………………………………………. 138,000 Long-term investments…………………………………………………. 160,000 Long-term liabilities……………………………………………………… 200,000 Short-term investments…………………………………………………. 80,000 Notes payable……………………………………………………………. 56,000 Property, plant, and equipment…………………………………………… 1,340,000 Prepaid insurance……………………………………………………….. 2,000 a. $212,000 b. $370,000 c. $232,000 d. $230,000 Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution: $100,000 + $50,000 + $138,000 + $80,000 + $2,000  $370,000 128. Based on the following data, what is the amount of working capital? Accounts payable……………………………………………………….. $64,000 Accounts receivable…………………………………………………….. 114,000 Cash………………………………………………………………………. 60,000 Intangible assets………………………………………………………… 100,000 Inventory…………………………………………………………………. 138,000

Long-term investments…………………………………………………. 160,000 Long-term liabilities……………………………… ……………………. 200,000 Short-term investments…………………………………………………. 80,000 Notes payable (short-term)……………………………………………… 56,000 Property, plant, and equipment…………………………………………… 1,340,000 Prepaid insurance……………………………………………………….. 2,000 a. $274,000 b. $322,000 c. $360,000 d. $316,000 129. Using the following balance sheet and income statement data, what is the total amount of working capital? Current assets $ 16,000 Net income $ 21,000 Current liabilities 8,000 Stockholders’ equity 39,000 Average assets 80,000 Total liabilities 21,000 Total assets 60,000 Average common shares outstanding was 10,000. a. $ 4,000 b. $16,000 c. $ 5,000 d. $ 8,000 130. Using the following balance sheet and income statement data, what is the current ratio? Current assets $ 16,000 Net income $ 21,000 Current liabilities 8,000 Stockholders’ equity 39,000 Average assets 80,000 Total liabilities 21,000 Total assets 60,000 Average common shares outstanding was 10,000. a. 2.0 : 1 b. 2.6 : 1 c. 0.5 : 1 d. 2.9 : 1 131. Using the following balance sheet and income statement data, what is the earnings per share? Current assets $ 16,000 Net income $ 21,000 Current liabilities 8,000 Stockholders’ equity 39,000 Average assets 80,000 Total liabilities 21,000 Total assets 60,000 Average common shares outstanding was 10,000. a. $3.90 b. $6.00 c. $2.10 d. $0.48

132. Using the following balance sheet and income statement data, what is the debt to assets ratio? Current assets $ 14,000 Net income $ 21,000 Current liabilities 8,000 Stockholders’ equity 39,000 Average assets 80,000 Total liabilities 21,000 Total assets 60,000 Average common shares outstanding was 10,000. a. 26 percent b. 13 percent c. 65 percent d. 35 percent 133. Using the following balance sheet and income statement data, what is the total amount of working capital? Current assets $ 7,000 Net income $ 15,000 Current liabilities 4,000 Stockholders’ equity 21,000 Average assets 44,000 Total liabilities 9,000 Total assets 30,000 Average common shares outstanding was 10,000. a. $7,000 b. $5,000 c. $3,000 d. $2,000 134. Using the following balance sheet and income statement data, what is the current ratio? Current assets $ 7,000 Net income $ 15,000 Current liabilities 4,000 Stockholders’ equity 21,000 Average assets 44,000 Total liabilities 9,000 Total assets 30,000 Average common shares outstanding was 10,000. a. 0.78 : 1 b. 3.33 : 1 c. 0.57 : 1 d. 1.75: 1 135. Using the following balance sheet and income statement data, what is the earnings per share? Current assets $ 7,000 Net income $ 15,000 Current liabilities 4,000 Stockholders’ equity 21,000 Average assets 44,000 Total liabilities 9,000 Total assets 30,000 Average common shares outstanding was 10,000. a. $1.50 b. $2.50 c. $0.67 d. $0.55

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