Exam 1: An Introduction to Accounting

Tandem Company borrowed $32,000 of cash from a local bank. Which of the following choices accurately reflects how this event affects the company's financial statements?

Indicate how this event affects the accounting equation. Use the following letters to record your answer in the box shown below each element. If an event increases one account and decreases another account within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.Increase = I Decrease = D Not Affected = NAPerez Company paid $220,000 cash in salaries to its employees.

At the beginning of Year 2, X Company had assets of $300, liabilities of $150, and common stock of $50. During Year 2, the company earned revenue of $500, incurred expenses of $200, and paid dividends of $50. All transactions were cash transactionsThe amount of net income reported on X Company's December 31, Year 2 income statement would be

Which of following illustrates how earning $4,000 cash for providing services to customers affects the financial statements?

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues cash. 4) Paid expenses of $250. 5) Paid a $50 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750 cash. 4) Incurred expenses of $360. 5) Paid dividends of $100.What is the amount of retained earnings that will be reported on Packard's Year 2 balance sheet?

Which type of accounting information is intended to satisfy the needs of external users of accounting information?

Northern Corporation invested $800 cash in South Company stock.Which of the following describes the effects of this transaction on Northern Corporation's books?

What is meant by the term "stakeholders?"

Rosemont Company began operations on January 1, Year 1, and on that date issued stock for $60,000 cash. In addition, Rosemont borrowed $50,000 cash from the local bank. The company provided services to its customers during Year 1 and received $35,000. It purchased land for $70,000. During the year, it paid $10,000 cash for salaries and $9,000 cash for supplies that were used up in its operations. Stockholders were paid cash dividends of $8,000 during the year. Required: List the transactions from the information above (for example, issued common stock for $60,000) and indicate in which section of the statement of cash flows each transaction would be reported.What would the amount be for net cash flows from operating activities?What would be the end-of-year balance for the cash account?What would be the amount of the total assets for the Rosemont Company at the end of Year 1?What would be the end-of-year balance for the retained earnings account?

Fill in the missing information by determining the amounts represented by letters a - d. $\text { Income statement }$ Revenue \ a Expense 6,200 Iet income \ b $\text { Statement of Changes in Stockholders' Equity }$ Beginning common stock \ 0 Plus: Issuance of common stock 11,000 Ending common stock 11,000 Beginning retained earnings \ 0 Add: net income 3,500 Ending retained earnings \ Total stockholders' equity \

Which of the following shows the effects of paying a cash dividend on the balance sheet and income statement?

The Campbell Company began operations on January 1, Year 1 and on that date issued $60,000 of common stock for cash. In addition, the company borrowed $40,000 from the bank. It provided services to its customers during Year 1 and received $72,000 cash. During the year, it paid $80,000 cash for land, $50,000 for salaries, and $10,000 in cash dividends to the stockholders. Required: Write an accounting equation and record the effects of each transaction under the appropriate heading. (Use specific accounting titles below the statement elements.) Enter 0 for items not affected.Prepare an income statement and a balance sheet for the Year 1 accounting period.

If the total stockholders' equity is $150,000 and liabilities are $75,000, what are total assets?

Indicate how this event affects the accounting equation. Use the following letters to record your answer in the box shown below each element. If an event increases one account and decreases another account within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.Increase = I Decrease = D Not Affected = NAEpstein Company paid a $20,000 cash dividend to its stockholders. $\quad$ $\quad$ $\quad$ $\quad$$\text { Balance Sheet }$ $\text { Assets }=\text { Liabilities }+\quad \text { Stockholders' Ecuity }$

Financial accounting standards are known collectively as GAAP. What does that acronym stand for?

Give three examples of asset use transactions.

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?

Which of the following is an accurate depiction of the accounting equation?

At the time of liquidation, Fairchild Company reported assets of $200,000, liabilities of $120,000, common stock of $90,000 and retained earnings of ($10,000). What amount of Fairchild's assets are the shareholders entitled to receive?

The following transactions apply to Wilson Fitness Center for Year 2. Started the business by issuing $48,000 of common stock for cashProvided services to clients and received $65,500 cashBorrowed $10,500 from the bankPaid $8,500 for rent of equipmentPurchased land for $15,000Paid $46,600 of salary expensePaid cash dividends of $4,000 to stockholders Required:What are the total assets of the business at the end of Year 2?Prepare a statement of cash flows for Year 2.