Exam 2: A Closer Look at the Financial Statements

Below are several accounts from Norel Company's accounting records. Total assets, end of year \ 115,000 Total liabilities, end of year 36,000 Contributed capital, end of year 12,000 Retained earnings, beginning of year 23,000 Dividends for the period 31,000 Net income 75,000 The amount of retained earnings at the end of the year is:

What type of assets are included in short-term investments?

Which one of the following groups of accounts contains only assets?

Give an example of a prepaid expense. Why would a company use this account?

Distinguish between the amounts reported on the income statement compared to the amounts reported on the statement of cash flows.

Which expense is associated with the use of patents?

Property, plant and equipment may include which of the following?

Explain the difference between net income and cash flow from operations.

The information below was taken from the 2018 annual report of Jena Corp. Beginning cash balance \ 12,000 ? \ 5,000 Net cash flow from operating activities 7,987 ? 9,100 Net cash flow from investing activities 2,450 4,330 ? Net cash flow from financing activities ? (9,612) (7,500) Ending cash balance \ 11,000 ? \ 12,500 Which of the following is the missing amount for the net cash flow from financing activities for 2018?

Which one of the following groups of accounts contains only assets?

Given below are several accounts from Caterpillar Company's accounting records. Cash \ 15,000 Accumulated depreciation 7,000 Retained earnings, beginning of year 22,000 Contributed capital 25,000 Patents 2,000 Dividends 5,000 Net income for the year was $40,000. How much is total shareholders' equity at the end of the year?

Kelly Company has total assets, liabilities, and shareholders' equity of $32,000, $17,000, and $15,000, respectively at the beginning of 2018. If Kelly reports revenues of $130,000, expenses of $80,000, and pays dividends of $30,000, how much is shareholders' equity at the end of 2018?

Which one of the following statements is true?

Where in a company's financial statements would you locate the 'book value' of the company?

Use the information provided from Haloid Company's accounting records to answer questions For the Years Ended December 31, 2018, and 2017 Assets 2018 2017 Cash \ 80 \ 60 Accounts receivable 40 40 Short-term investment in property 40 60 Property, plant, and equipment Total assets Liabilities and Shareholders' Equity Accounts payable \ 85 \ 90 Contributed capital 310 300 Retained earnings 115 80 Total liabilities \& shareholders' equity \ 510 \ 470 Income Statement: Sales revenue \ 850 Expenses \ 800 Net Income \ -How is it possible that Haloid reports "property" in two different places on its balance sheet?

Below is all of the account information from Chamber Company's balance sheet, with the exception of Retained Earnings. Cash \ 13,000 Inventory 16,000 Equipment 51,000 Accounts Payable 17,000 Long-term Payable 10,000 Contributed capital 30,000 Using this information, please calculate the following: A. The total amount of retained earnings for Chamber Company. B. The total amount of shareholders' equity for the company at the end in the year.

On which financial statements will you find a company's financial position at a specific point in time?

The following is the balance sheet of Able Corporation immediately prior to deciding how to finance the purchase of a $300 addition to its building. Able Corporation Balance Sheet December 31, 2018 Assets Cash \ 310 Accounts receivable 260 Building 380 Land 370 Total assets \ 1,320 Liabilities and Shareholders' Equity Accounts payable \ 190 Long-term bonds payable 620 Contributed capital 340 Retained earnings 170 Total liabilities \& shareholders' equity \ The bonds payable contract agreement requires current assets to be twice as much as current liabilities. Assume the $300 addition to the building is to be paid in cash and financed by issuing more stock. Calculate and explain the maximum cash that Able can pay and still honor its debt agreement.

On the balance sheet, a company should report the cost of intangible assets:

If the beginning and ending balances in retained earnings are $15,000 and $10,000, respectively, and dividends during the year are $8,000, then net income for the year is: