1. The first caption in most income statements in annual reports is:
2. Gains differ from revenues because gains:
3. Under most circumstances, in order to recognize revenue:
4. The concept of matching revenue and expense refers to the fact that:
5. Most entities satisfy the accounting criteria for recognizing revenue when:
6. Most entities satisfy the accounting criteria for recognizing an expense when:
7. The gross profit ratio is useful to the manager for each of the following purposes
except
that:
8. Which of the following accounts/captions are not ever included in the calculation for
Gross Profit?
9. When the periodic inventory system is used:
10. Income from operations is:
11. The earnings per share of common stock calculation:
12. An item that cost $90 is sold for $120. The gross profit ratio for this item is:
13. An item that cost $240 is to be sold for a price that will yield a gross profit ratio of 20%.
The selling price should be:
14. Recognition of revenue in accrual accounting requires:
15. The major difference between the indirect and the direct method of a statement of cash
flows appears in which the following activities section(s)?
16. Which of the following is an accurate statement regarding a statement of cash flows?
17. In the statement of cash flows, depreciation and amortization expense is added back to
net income because:
18. In the statement of cash flows, an increase in the accounts receivable balance from the
beginning of the period to the end of the period would:
19. Revenue may be recognized:
20. The term, “realization,” in revenue recognition refers to which of the following?
21. The term, “earned,” in revenue recognition refers to which of the following?
22. Sparkle Cleaners, Inc., had net income of $516,050 for its fiscal year ended September
30, 2014. During the year, the company had outstanding 24,000 shares of 8%, $50 par value
preferred stock, and 135,500 shares of common stock. Calculate the basic earnings per share of
common stock for the 2014 fiscal year.
23. Norman’s Cabinet, Inc., had net income of $424,800 for its fiscal year ended October 31,
2014. During the year, the company had outstanding 53,000 shares of 9%, $60 par value preferred
stock, and 36,960 shares of common stock. Calculate the basic earnings per share of common
stock for the 2014 fiscal year.
24. Gwinnett Park Co. reported net income of $506,600 for its fiscal year ended September
30, 2014. At the beginning of that year, 150,000 shares of common stock were outstanding. On
February 1, 2014, an additional 30,000 shares were issues. On September 1, 2014, 12,000 shares
were purchased as treasury stock. During the year, the company paid the annual dividend on
14,000 shares of its 8%, $60 par value preferred stock that were outstanding during the entire
fiscal year. Calculate the basic earnings per share of common stock for the year ended
September 30, 2014.
25. Use the appropriate information from the data provided below to calculate operating
income for the year ended December 31, 2014.
26. Use the appropriate information from the data provided below to calculate operating
income for the year ended December 31, 2014.
27. Presented below is a partially completed balance sheet for Baldin, Inc., at December 31,
2014, together with comparative data for the year ended December 31, 2013. From the Statement
of Cash Flows for the year ended December 31, 2014, you determine that:
• Net income for the year ended December 31, 2014, was $106,000.
• Dividends paid during the year ended December 31, 2014, were $42,000.
• Accounts receivable increased $14,000 during the year ended December 31, 2014.
• The cost of new buildings acquired during 2014, was $85,000.
• No buildings were disposed of during 2014.
• The land account was not affected by any transactions during the year, but the fair value of the
land at December 31, 2014, is $210,000.
Required:
(a.) Complete the December 31, 2014, balance sheet.
(b.) Prepare a statement of cash flows for the year ended December 31, 2014.
