Exam 2: Financial Statements and the Annual Report

The balance sheet of Jobston Inc.includes the following items: Cash \ 22,400 Accounts receivable 11,700 Inventory 23,300 Frepaid insurance 1,040 Land 80,000 Accounts payable 47,500 Sal aries payable 1,200 Capital stock 84,040 Retained earnings 5,700 ​ ​ -Read the information about Jobston, Inc.What is Jobston's working capital?

Which of the following events will cause a company's current ratio to decrease?

Which of the following would appear on a multiple-step income statement but not on a single-step income statement?

Which of the following categories on a statement of cash flows is used to report the cash flow effects of transactions involving a company's stock?

Funds raised from operating activities should be invested in assets that can be used to carry on business operations.

The lack of a common depreciation method makes it impossible to compare the performance companies using different methods.

For each item listed, select the section of the balance sheet in which the item would be reported. -Computer used within the business

Jones, Inc., a manufacturer of tires, has given you its most recent annual report in an effort to obtain a sizable loan.The company is very profitable and appears to have a sound financial position.Based on a report presented on prime-time television last night, you are aware that Jones is a defendant in several lawsuits related to its defective tires that cause vehicles to overturn.The information presented on television is an example of financial information that is

Under current accounting principles, how is net income on the income statement measured?

Match the following characteristics with the statements about each qualitative characteristic's importance. -Accounting information must be verifiable and faithfully represent actual transactions.

Although businesses engage in a wide variety of activities, all of these activities can be categorized into three types.Which of the following choices best reflects these three types of business activities?

Liquidity relates to a company's ability to do which of the following?

The following balance sheet items from Fasoli, Inc.are listed for December 31, 2016: Accounts payable \ 32,650 Interest payable 2,200 Accounts receivable 26,500 Land 250,000 Accumulated depreciation-buil dings 40,000 Marketable securities 15,000 Merchandise inventory 112,900 Accumulated depreciation-equipment 12,500 Notes payable, due April 15,2017 6,500 Office supplies 200 Notes payable, due December 31,2020 251,630 Paid-in capital in excess of par value 75,000 Buil dings 150,000 Patents 45,000 Capital stock, \ 1 par value 200,000 Prepaid rent 3,800 Cash 60,990 Retained earnings 113,510 Equipment 84,500 Sal aries payable 7,400 Income taxes payable 7,500 -Read the information about Fasoli, Inc. Required: Prepare the Stockholders' Equity section of the classified balance sheet, including the total stockholders' equity amount.

Presented below are the condensed balance sheets of Fellsmere Corporation at December 31, 2017 and 2016.Net income for the years ending December 31, 2016 and 2015 is $346,000 and $109,000, respectively. December 31,2017 December Current assets \ 2,228,186 \ 2,544,683 Property, plant, \& equipment (net) 530,589 376,647 Intangibles and other assets 131,206 118,121 Total assets Current liabilities \ 1,429,674 \ 1,003,906 Long-term obligations 3,360 7,240 Warranty and other liabilities 112,971 98,081 Total liabilities \ 1,546,605 \ 1,109,227 Stockholders' equity: Common stock \ 1,566 \ 501,631 Additional paid-in capital 365,986 799,483 Retained earnings 980,509 634,509 Accumulated other comprehensive loss (4,085) \ 1,343,976 Total stockhol ders' equity (5,489) \ 1,930,224 Total liabilities and stockholders' equity \ 2,889,981 \ 3,039,451 ​ -Read the information about Fellsmere Corporation. Required: (A) Did Fellsmere's current ratio increase or decrease from 2016 to 2017? Make any necessary calculations and explain your answer.Which financial statement users are most concerned with this ratio? (B) The balance sheets show a large increase in retained earnings during 2017.Identify the possible reason(s) for this increase.

Match the selected items from a classified balance sheet and multiple-step income statement to the section in which they would appear on the classified balance sheet or the income statement. -Cost of goods sold

The excess of current assets over current liabilities is referred to as working capital.

Obligations related to operating activities that will be paid within the company's operating cycle must be reported as current liabilities on a classified balance sheet.

____________________ have claims to an entity's economic resources.

Coglin, Inc.incurred a net loss of $20,000 for 2016.The balance sheet at December 31, 2016, for Coglin, Inc., includes the following items: Cash \ 23,000 Accounts receivable 13,000 Inventory 45,000 Frepaid insurance 1,000 Land 14,000 Building 80,000 Accounts payable 55,000 Salaries payable 2,000 Capital stock 100,000 Retained earnings 25,000 ​ A)Determine Coglin's current ratio and working capital. B)Beyond the information provided in your answers to "A," what does the composition of Coglin's current assets tell you about its liquidity. C)What other information would one need to fully access Coglin's liquidity?

Which of the following is a noncurrent asset?