119. Benchmark Surveyors
The following balances are provided:
Cash
$234,000
Accounts Payable
$ 97,000
Inventories
121,000
Notes Payable (due 2018)
211,000
Land
453,000
Accounts Receivable
46,000
Refer to Benchmark Surveyors. Calculate Current Assets.
120. Benchmark Surveyors
The following balances are provided:
Cash
$234,000
Accounts Payable
$ 97,000
Inventories
121,000
Notes Payable (due 2018)
211,000
Land
453,000
Accounts Receivable
46,000
Refer to Benchmark Surveyors. Calculate Current Liabilities.
121. Which one of the following items is reported as a current stockholders’ equity on a classified balance
sheet?
122. Barnes Restaurant reports the following amounts:
Cash
$125,000
Inventory
$215,000
Land
275,000
Unearned Revenue
117,000
Equipment
350,000
Common Stock
300,000
Calculate Current Assets.
123. Which of the following accounts are normally reported as current liabilities on a classified balance sheet?
124. Which one of the following is not a major category for long-term assets?
125. Which of the following would not be considered to be an intangible asset?
126. If assets are expected to be realized in cash, sold, or consumed within the normal operating cycle of a
business or within one year (if the operating cycle is shorter than one year), how are they reported on a
classified balance sheet?
127. Which set of items below are current assets?
128. A non-classified balance sheet typically does not have a distinction between which of the following
items?
129. For the most recent year, a company’s current ratio was significantly lower than its industry average. What
is the best possible explanation for this situation?
130. Bass Tours
The following balances were taken from the company’s records:
Inventory
$380,000
Accounts Receivable
$190,000
Land
290,000
Accounts Payable
180,000
Cash
129,000
Unearned Revenue
110,000
Prepaid Rent
33,000
Common Stock
312,000
Retained Earnings
220,000
Long-term Notes Payable
200,000
Refer to Bass Tours. Calculate the total current assets.
131. Bass Tours
The following balances were taken from the company’s records:
Inventory
$380,000
Accounts Receivable
$190,000
Land
290,000
Accounts Payable
180,000
Cash
129,000
Unearned Revenue
110,000
Prepaid Rent
33,000
Common Stock
312,000
Retained Earnings
220,000
Long-term Notes Payable
200,000
Refer to Bass Tours. Calculate the current ratio.
132. Bass Tours
The following balances were taken from the company’s records:
Inventory
$380,000
Accounts Receivable
$190,000
Land
290,000
Accounts Payable
180,000
Cash
129,000
Unearned Revenue
110,000
Prepaid Rent
33,000
Common Stock
312,000
Retained Earnings
220,000
Long-term Notes Payable
200,000
Refer to Bass Tours. If the average current ratio for similar companies is 2.0 to 1, what does this tell you about this company’s liquidity?
133. If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working
capital.
134. Working capital is calculated by which of the following?
135. A company has current assets of $100,000, total assets of $250,000, current liabilities of $20,000, and
long-term liabilities of $50,000. How much of its existing cash can the company use to acquire equipment
without allowing its current ratio to decline below 2.0 to 1?
136. A company increased its dollar amount of working capital over the past several years. Which one of the
following measures should be used to further evaluate the company’s short-run liquidity?
137. Which financial statement reports information helpful in assessing working capital?
138. Barrett Oil Company reported the following balances as of December 31, 2013:
Accounts Receivable
$125,000
Unearned Revenue
$ 5,000
Cash
150,000
Notes Payable (due in 6 months)
115,000
Land
200,000
Accounts Payable
70,000
Building
400,000
Equipment
165,000
Inventories
105,000
Notes Payable (due 07/01/2020)
600,000
What is the company’s current ratio?
139. If the current ratio is 2 to 1 and total assets equal $200,000, how much is working capital?
140. For which of the following is the working capital and current ratio is most useful?
141. Liquidity
142. Which of the following would appear on an income statement?
143. The Income Statement shows:
144. Which of the following items would not be reported on a multiple-step income statement after income
from operations?
145. A question frequently asked by investors is, “How much debt does this company have?” Which financial
statement answers this question?
146. On a multiple-step income statement, operating income results from subtracting total operating expenses
from which of the following amounts?
147. The list below contains several items that appear on a multiple-step income statement.
1.
2.
3.
4.
5.
6.
7.
Select the choice that lists the items in the order they would appear on a multiple-step income statement.
148. Bellweather Times
The company reports the following balances:
Other Revenue
$180,000
General and Administrative Expense
$320,000
Dividends paid
$220,000
Operating Revenues
$700,000
Selling Expenses
$280,000
Income Tax Expense
$60,000
Refer to Bellweather Times. What is the company’s income from operations?
149. Bellweather Times
The company reports the following balances:
Other Revenue
$180,000
General and Administrative Expense
$320,000
Dividends paid
$220,000
Operating Revenues
$700,000
Selling Expenses
$280,000
Income Tax Expense
$60,000
Refer to Bellweather Times. What is the company’s Net Income?
150. Bellweather Times
The company reports the following balances:
Other Revenue
$180,000
General and Administrative Expense
$320,000
Dividends paid
$220,000
Operating Revenues
$700,000
Selling Expenses
$280,000
Income Tax Expense
$60,000
Refer to Bellweather Times. By what amount will net income on a single-step income statement differ from net income on a multiple-step income
statement if the company prepares both formats?
151. The Earnings Per Share measure appears on which of the following financial statements?
152. A company reported the following income statement amounts:
2013
2012
Sales revenues
$950,000
$800,000
Operating expenses
$700,000
$550,000
Income taxes
$100,000
100,000
Which of the following best describes the company’s performance?
153. Which one of the following equations represents the Statement of Retained Earnings activity?
154. Been There Used Furniture
Been There Used Furniture began operation on January 1, 2013, with an initial investment of $100,000 from
each of its five stockholders. During the year, the company had net income of $200,000 and paid dividends of
$50,000.
Refer to Been There Used Furniture. Calculate the retained earnings balance at December 31, 2013.
155. Been There Used Furniture
Been There Used Furniture began operation on January 1, 2013, with an initial investment of $100,000 from
each of its five stockholders. During the year, the company had net income of $200,000 and paid dividends of
$50,000.
Refer to Been There Used Furniture. The dividends for the year
156. Been There Used Furniture
Been There Used Furniture began operation on January 1, 2013, with an initial investment of $100,000 from
each of its five stockholders. During the year, the company had net income of $200,000 and paid dividends of
$50,000.
Refer to Been There Used Furniture. If the company’s revenues were $500,000 for the year ended December
31, 2013, how much were total expenses?
157. Which one of the following is not one of the activities on the Statement of Cash Flows?
158. Which of the following best describes a company’s operating activities?
159. As used in accounting, the “Notes to the Financial Statements” should be:
160. Which of the following items will be found in a corporate annual report?
161. Which one of the following items is least likely to be found in a corporate annual report?
162. Management’s Discussion and Analysis:
163. In which section of the annual report would you find: “The financial statements, in our opinion, present
fairly the financial position, operating results, and cash flows, in conformity with generally accepted accounting
principles”?
164. Which of the following represents one of the purposes of the Auditor’s Report?
165. Backus Tractor Sales
The accountant prepared the following list of account balances from the company’s records for the year ended
December 31, 2013.
Sales Revenue
$1,650,000
Cash
$300,000
Accounts Receivable
140,000
Selling Expenses
440,000
Equipment
420,000
Common Stock
170,000
Accounts Payable
120,000
Interest Income
30,000
Salaries & Wages Expense
400,000
Cost of Sales
510,000
Inventories
220,000
Prepaid Expenses
20,000
Income Taxes Payable
50,000
Income Taxes Expense
180,000
Notes Payable
200,000
Retained Earnings
?
Determine the following amounts for Backus Tractor Sales.
A)
Current Assets at the end of 2013
Total Assets at the end of 2013
B)
Current Liabilities at the end of 2013
C)
What parties have a claim on the company’s assets? Explain your answer in the terms of the accounting equation.
A)
Current Assets = $680,000
($300,000 Cash + $140,000 Accounts Receivable + $220,000 Inventories + 20,000 Prepaid Expenses = $680,000)
Total Assets = $1,100,000
($300,000 Cash + $140,000 Accounts Receivable + $220,000 Inventories + $20,000 Prepaid Expenses + $420,000 Equipment)
B)
Current Liabilities = $370,000
($120,000 Accounts Payable + $50,000 Income Taxes Payable + $200,000 Notes Payable = $370,000)
166. Backus Tractor Sales
The accountant prepared the following list of account balances from the company’s records for the year ended
December 31, 2013.
Sales Revenue
$1,650,000
Cash
$300,000
Accounts Receivable
140,000
Selling Expenses
440,000
Equipment
420,000
Common Stock
170,000
Accounts Payable
120,000
Interest Income
30,000
Salaries & Wages Expense
400,000
Cost of Sales
510,000
Inventories
220,000
Prepaid Expenses
20,000
Income Taxes Payable
50,000
Income Taxes Expense
180,000
Notes Payable
200,000
Retained Earnings
?
Determine the following amounts for Backus Tractor Sales:
A)
The balance of Retained Earnings at the end of 2013.
B)
The total stockholders’ equity at the end of 2013.
C)
Name the two events that might cause stockholders’ equity to increase.
A)
$560,000
($1,100,000 Total Assets – $370,000 Total Liabilities – $170,000 Common Stock = $560,000)
B)
$730,000
($1,100,000 Total Assets – $370,000 Total Liabilities = $730,000)
OR
($170,000 Common Stock + $560,000 Retained Earnings = $730,000)
167. Backus Tractor Sales
The accountant prepared the following list of account balances from the company’s records for the year ended
December 31, 2013.
Sales Revenue
$1,650,000
Cash
$300,000
Accounts Receivable
140,000
Selling Expenses
440,000
Equipment
420,000
Common Stock
170,000
Accounts Payable
120,000
Interest Income
30,000
Salaries & Wages Expense
400,000
Cost of Sales
510,000
Inventories
220,000
Prepaid Expenses
20,000
Income Taxes Payable
50,000
Income Taxes Expense
180,000
Notes Payable
200,000
Retained Earnings
?
Determine the following amounts for Backus Tractor Sales:
A)
The total revenues for 2013.
B)
The total expenses for 2013.
C)
What is the purpose of the Income Statement?
D)
Is this company profitable? Explain your answer.
E)
Is this the first year of operations for this company? Explain your answer.
A)
$1,680,000
($1,650,000 Sales Revenue + $30,000 Interest Income = $1,680,000)
$1,530,000
168. Backus Tractor Sales
The accountant prepared the following list of account balances from the company’s records for the year ended
December 31, 2013.
Sales Revenue
$1,650,000
Cash
$300,000
Accounts Receivable
140,000
Selling Expenses
440,000
Equipment
420,000
Common Stock
170,000
Accounts Payable
120,000
Interest Income
30,000
Salaries & Wages Expense
400,000
Cost of Sales
510,000
Inventories
220,000
Prepaid Expenses
20,000
Income Taxes Payable
50,000
Income Taxes Expense
180,000
Notes Payable
200,000
Retained Earnings
?
Prepare an Income Statement for Backus Tractor Sales in good form.
Backus Tractor Sales
Income Statement
For the Year Ended December 31, 2013
Revenues:
Sales revenue
$1,650,000
Interest income
30,000
$1,680,000
Expenses:
Cost of sales
$ 510,000
Salaries & wages expense
400,000
Selling expenses
440,000
Income taxes expense
180,000
1,530,000
Net income
$ 150,000
169. Backus Tractor Sales
The accountant prepared the following list of account balances from the company’s records for the year ended
December 31, 2013.
Sales Revenue
$1,650,000
Cash
$300,000
Accounts Receivable
140,000
Selling Expenses
440,000
Equipment
420,000
Common Stock
170,000
Accounts Payable
120,000
Interest Income
30,000
Salaries & Wages Expense
400,000
Cost of Sales
510,000
Inventories
220,000
Prepaid Expenses
20,000
Income Taxes Payable
50,000
Income Taxes Expense
180,000
Notes Payable
200,000
Retained Earnings
?
Prepare a Balance Sheet for Backus Tractor Sales in good form.
Backus Tractor Sales
Balance Sheet
December 31, 2013
Cash
$ 300,000
Accounts payable
$ 120,000
Accounts receivable
140,000
Income taxes payable
50,000
Inventories
220,000
Notes payable
200,000
Prepaid expenses
20,000
Common stock
170,000
Equipment
420,000
Retained Earnings
560,000
Total Assets
$1,100,000
Total Liabilities &
Stockholders’ Equity
$1,100,000
170. Ben & Terry’s Ice Cream
The accountant prepared the following list from the company’s accounting records for the year ended December
31, 2013:
Retained Earnings
?
Prepaid Expenses
$ 50,000
Cash
$ 77,000
Common Stock
400,000
Accounts Payable
50,000
Accounts Receivable
170,000
Sales Revenue
955,000
Interest Income
50,000
Cost of Sales
700,000
Salary Expense
140,000
Land
750,000
Income Tax Expense
20,000
Notes Payable
450,000
Selling Expense
45,000
Inventory
200,000
Salaries Payable
40,000
Determine the following amounts for Ben & Terry’s Ice Cream.
A)
Total Assets at the end of 2013.
B)
Total Liabilities at the end of 2013.
C)
Total Equity at the end of 2013.
A)
$1,247,000
($77,000 Cash + $170,000 Accounts Receivable + $200,000 Inventories + $50,000 Prepaid Expense + $750,000 Land = $1,247,000)
B)
$540,000
($50,000 Accounts Payable + $450,000 Notes Payable + $40,000 Salaries Payable = $540,000)
C)
$707,000
($1,247,000 Total Assets – $540,000 Total Liabilities = $707,000)
171. Ben & Terry’s Ice Cream
The accountant prepared the following list from the company’s accounting records for the year ended December
31, 2013:
Retained Earnings
?
Prepaid Expenses
$ 50,000
Cash
$ 77,000
Common Stock
400,000
Accounts Payable
50,000
Accounts Receivable
170,000
Sales Revenue
955,000
Interest Income
50,000
Cost of Sales
700,000
Salary Expense
140,000
Land
750,000
Income Tax Expense
20,000
Notes Payable
450,000
Selling Expense
45,000
Inventory
200,000
Salaries Payable
40,000
Determine the following amounts for Ben & Terry’s Ice Cream:
A)
Total Revenues for 2013.
B)
Total Expenses for 2013.
C)
Net Income for 2013.
A)
$1,005,000
($955,000 Sales Revenue + $50,000 Interest Income = $1,005,000)
B)
$905,000
($700,000 Cost of Sales + $140,000 Salary Expense + $20,000 Income Tax Expense + $45,000 Selling Expense = $905,000)
C)
$100,000
($1,005,000 Total Revenue – $905,000 Total Expenses = $100,000)
172. Ben & Terry’s Ice Cream
The accountant prepared the following list from the company’s accounting records for the year ended December
31, 2013:
Retained Earnings
?
Prepaid Expenses
$ 50,000
Cash
$ 77,000
Common Stock
400,000
Accounts Payable
50,000
Accounts Receivable
170,000
Sales Revenue
955,000
Interest Income
50,000
Cost of Sales
700,000
Salary Expense
140,000
Land
750,000
Income Tax Expense
20,000
Notes Payable
450,000
Selling Expense
45,000
Inventory
200,000
Salaries Payable
40,000
Using good form, prepare an income statement for Ben & Terry’s Ice Cream.
Ben & Terry’s Ice Cream
Income Statement
For the Year Ended December 31, 2013
Revenues:
Sales Revenue
$955,000
Interest Income
50,000
$1,005,000
Expenses:
Cost of Sales
$700,000
Salary Expense
140,000
Selling Expense
45,000
Income tax Expense
20,000
905,000
Net Income
$ 100,000
173. Ben & Terry’s Ice Cream
The accountant prepared the following list from the company’s accounting records for the year ended December
31, 2013:
Retained Earnings
?
Prepaid Expenses
$ 50,000
Cash
$ 77,000
Common Stock
400,000
Accounts Payable
50,000
Accounts Receivable
170,000
Sales Revenue
955,000
Interest Income
50,000
Cost of Sales
700,000
Salary Expense
140,000
Land
750,000
Income Tax Expense
20,000
Notes Payable
450,000
Selling Expense
45,000
Inventory
200,000
Salaries Payable
40,000
Using good form, prepare a Balance Sheet for Ben & Terry’s Ice Cream.
174. Dunn, Inc., started the year with total assets of $1,400,000 and total liabilities of $240,000. Net income for
the year is $1,000,000 and dividends declared and paid during the year are $450,000.
A)
What is the amount of Dunn’s Total Stockholders’ Equity at the end of the year?
B)
Could Dunn have paid additional dividends during the year? Explain your answer.
A)
$1,710,000
Ben & Terry’s Ice Cream
Balance Sheet
As of December 31, 2013
Cash
$ 77,000
Accounts Payable
$ 50,000
Accounts Receivable
170,000
Salaries Payable
40,000
Inventory
200,000
Notes Payable
450,000
Prepaid Expenses
50,000
Common Stock
400,000
Land
750,000
Retained Earnings
307,000
Total Assets
$1,247,000
Total Liabilities & Owners’
Equity
$1,247,000