29. The going concern concept refers to a presumption that:
30. Consolidated financial statements report financial position, results of operations, and
cash flows for:
31. A concept or principle that relates to transactions is:
32. Matching revenues and expenses refers to:
33. Accrual accounting:
34. Which of the following accounting methods accomplishes much of the matching of
revenues and expenses?
35. The principle of consistency means that:
36. The principle of full disclosure pertains to:
37. The balance sheet of an entity:
38. Listed below are a number of financial statement captions. Indicate in the spaces to the
right of each caption (1) the category of each item, and (2) the financial statement on which the
item can usually be found.
39. Listed below are a number of financial statement captions. Indicate in the spaces to the
right of each caption (1) the category of each item, and (2) the financial statement on which the
item can usually be found.
40. From the data given below, calculate the Retained Earnings balance of December 31,
2013.
Prepare the retained earning portion of a statement of changes in stockholders’ equity for the
year ended December 31, 2014.
41. From the data given below, calculate the Retained Earnings balance as of December 31,
2014.
42. Volunteer, Inc. is in the process of liquidating and going out of business. The firm has
$34,910 in cash, inventory totaling $107,000, accounts receivable of $72,000, plant and
equipment with a $192,000 book value, and total liabilities of $307,000. It is estimated that the
inventory can be disposed of in a liquidation sale for 75% of its cost, all but 15% of the accounts
receivable can be collected, and plant and equipment can be sold for $210,000.
(a.) Calculate the amount of cash that would be available to the stockholders if the accounts
receivable are collected, the other assets are sold as described, and the liabilities are paid in full.
(b.) Describe how the difference between book value and liquidation value would be treated on
the final income statement for Volunteer, Inc. with respect to the following assets: inventory,
accounts receivable, and plant and equipment. What income statement accounts would be
affected when these assets are sold or collected as described above?
43. Ann Kimber is thinking about going out of business and retiring. Her firm has $25,000 in
cash, other assets totaling $35,700, and total liabilities of $25,500. The other assets can be sold
for an estimated $34,000 cash in a liquidation sale. Calculate the amount of cash that would be
available upon Ann’s retirement if the other assets were sold and the liabilities were paid.
44. Presented below is a statement of cash flows for Plum, Inc., for the year ended December
31, 2014. Also shown is a partially completed comparative balance sheet as of December 31,
2014 and 2013.
Required:
(a.) Complete the December 31, 2014 and 2013 balance sheets.
(b.) Prepare a Statement of Changes in Retained Earnings for the year ended December 31,
2014.
