Chapter 01 – Accounting and Business
Accounts receivable
Office expense
Fees earned
Wages expense
Fees earned
Wages expense
Office expense
Miscellaneous expense
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
197. Given the following:
Beginning stockholders’ equity $58,000
Ending stockholders’ equity $30,000
Stockholder dividends $25,000
Calculate net income or net loss.
ANSWER:
Ending stockholders’ equity
$30,000
Beginning stockholders’ equity
58,000
Decrease in stockholders’ equity
$28,000
Less dividends
25,000
Net loss
$ 3,000
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–04 – LO: 01–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
Accounts payable
Miscellaneous expense
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Page 76
205. Name and describe the four primary financial statements for a corporation.
ANSWER:
1. Income statement: A summary of the revenue and expenses for a specific period of
time, such as a month or a year.
2. Statement of stockholder’s equity: A summary of the changes in stockholder’s
equity that have occurred during a specific period of time such as a month or a year.
3. Balance sheet: A list of the assets, liabilities, and owner’s equity as of a specific
date, usually at the close of the last day of a month or a year.
4. Statement of cash flows: A summary of the cash receipts and cash payments for
a specific period of time, such as a month or a year.
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–05 – LO: 01–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
206. A summary of cash flows for Evelyn’s Event Planning for the year ended December 31 is shown below.
Cash receipts:
Cash received from customers
$57,360
Cash received from bank loan
15,000
Cash payments:
Cash paid for operating expenses
$12,120
Cash paid for equipment
18,070
Cash paid for party supplies
9,480
Dividends
12,000
The cash balance as of January 1
$15,580
Prepare a statement of cash flows for Evelyn’s Event Planning for the year ended December 31.
ANSWER:
Evelyn’s Event Planning
Statement of Cash Flows
For the Year Ended December 31
Cash flows from operating activities:
Cash received from customers
$57,360
Cash payments for expenses and supplies
(21,600)
Net cash flows from operating activities
$35,760
Cash flows from investing activities:
Cash paid for equipment
(18,070)
Cash from financing activities:
Chapter 01 – Accounting and Business
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
Accounts receivable
8,490
Office expense
2,470
Cash
13,980
Spa supplies
9,230
Fees earned
98,435
Wages expense
26,580
Spa furniture & equipment
56,000
Dividends
38,170
Computers
2,130
Prepare a statement of stockholder’s equity for Rocky’s Day Spa for the current year ended December 31.
ANSWER:
Rocky’s Day Spa
Statement of Stockholders’ Equity
For the Year Ended December 31
_____________________________________________________________________
Common Retained
Stock Earnings Total
Balances, January 1 $48,000 $20,000 $68,000
Issue common stock 10,000 10,000
Net income 45,625 45,625
Dividends (38,170) (38,170)
Balances, December 31 $58,000 $27,455 $85,455
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–05 – LO: 01–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
210. Explain the interrelationship between the balance sheet and the statement of cash flows.
ANSWER:
The cash reported on the balance sheet is also reported as the end-of-period cash on the
statement of cash flows.
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–05 – LO: 01–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
Chapter 01 – Accounting and Business
Copyright Cengage Learning. Powered by Cognero.
Page 80
(a)
Rent expense
(b)
Land
(c)
Common stock
(d)
Fees earned
(e)
Dividends
(f)
Wages expense
(g)
Investment
ANSWER:
(a), (d), (f)
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–05 – LO: 01–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
212. Identify which of the following accounts would appear on a balance sheet.
(a)
Cash
(b)
Fees earned
(c)
Common stock
(d)
Wages payable
(e)
Rent expense
(f)
Supplies
(g)
Land
ANSWER:
(a), (c), (d), (f), (g)
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.01–05 – LO: 01–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/26/2017 4:27 PM
DATE MODIFIED:
10/16/2017 3:33 PM
213. Indicate whether each of the following activities would be reported on the statement of cash flows as an operating
activity, an investing activity, a financing activity, or does not appear on the cash flow statement.
(a)
Cash paid for building
(b)
Cash paid to suppliers
(c)
Cash paid for dividends
(d)
Cash received from customers