Exam 1: Accounting As a Form of Communication

The natural progression in items from one statement to another and preparation of financial statements is best represented by the following order:

Canyon Corporation The accountant for Canyon Corporation prepared the following list from the company's accounting records for the year ended December 31,2017: ​ Retained earnings ? Prepaid expenses \ 3,000 Cash \ 7,000 Common stock 40,000 Accounts payable 15,000 Accounts receivable 17,000 Sales revenue 125,000 Interest income 500 Cost of sales 70,000 Sal ary expense 4,000 Land 75,000 Income tax expense 200 Notes payable 15,000 Selling expense 45,000 Inventory 20,000 Sal aries payable 5,000 ​ -Read the information for Canyon Corporation and determine the following amounts. A) Total assets at the end of 2017 ._____ B) Total liabilities at the end of 2017 ._____ C) Total stockholders' equity at the end of 2017 .______

The inflow of assets resulting from the sale of products and services is called a(n)

Discuss the four steps in the ethical decision model used by accountants.Expand the discussion to include questions that you would ask to analyze the key elements in the situation.

A partnership is a business owned by two individuals;if three or more individuals organize a business,it must be established as a corporation.

Which one of the following items appears on a balance sheet?

Which one of the following is not an external user of financial information?

A department store is an example of a manufacturer.

Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000.If Sawaddee's total liabilities increased by $31,000 and its owners' equity decreased by $53,000 during the year,what was the amount of its total assets at the end of the year?

External users of accounting information include present and potential stockholders,bankers and other creditors,and management.

Domenico Enterprises purchased land for $2,000,000 in 2000.In 2017,an independent appraiser assessed the value at $4,400,000.What amount should appear on the financial statements in 2017 with respect to the land?

The outflow of assets resulting from the sale of products and services is called a(n)

What is the name of the branch of accounting concerned with providing managers and administrators with information to facilitate the planning and control of business operations?

Bondholders are external users of a company's accounting information.

Lewis Corporation reported the following information for the year ended December 31,2017: Net income \ 10,000 Dividends 6,000 Retained eamings at December 31,2017 25,000 What was the economic effect of the payment of Lewis's dividends?

Gym Corporation reported the following information at December 31,2017: A)Calculate Gym Corporation's total assets. B)Calculate Gym Corporations' net income for 2017. C)Calculate Gym Corporations' total stockholders' equity at the end of 2017. Accounts payable \ 40,000 Dividends declared and paid \ 10,000 Cash 75,000 Expenses 60,000 Inventories 18,000 Revenue 75,000

The income statement is a statement that summarizes revenues and expenses for a period.

Which of the following represents the proper order of the financial decision framework?

Canyon Corporation The accountant for Canyon Corporation prepared the following list from the company's accounting records for the year ended December 31,2017: ​ Retained earnings ? Prepaid expenses \ 3,000 Cash \ 7,000 Common stock 40,000 Accounts payable 15,000 Accounts receivable 17,000 Sales revenue 125,000 Interest income 500 Cost of sales 70,000 Sal ary expense 4,000 Land 75,000 Income tax expense 200 Notes payable 15,000 Selling expense 45,000 Inventory 20,000 Sal aries payable 5,000 ​ -Read the information for Canyon Corporation and prepare an income statement in good form.

Presented below are condensed data from the financial statements of Gallo Factory for 2017 and 2016.The figures are expressed in thousands.Use this information to answer the questions that follow. Statement A 2017 2016 Total current assets \ 82,309 \ 80,080 Property, plant, and equipment (net of accumulated depreciation) 63,451 62,724 Investments 303 1,061 Other assets 3,438 2,606 Total assets \1 49,501 \1 46,471 Total current liabilities \ 33,928 \ 28,668 Long-term debt 20,491 25,676 Deferred income taxes and contingencies 4,174 5,208 Total liabilities \ 58,593 \ 59,552 Total stockholders' equity \ 90,908 \ 86,919 Total liabilities and stockhol ders' equity \ 149,501 \ 146,471 Statement B 2017 2016 Net sales \ 209,203 \ 174,206 Cost of sales 136,225 114,284 Gross profit \ 72,978 \ 59,922 Selling, general, and administrative expenses 63,895 53,520 Other income (expense) 693 (118) Income (loss) before income taxes \ 9,776 \ 6,284 Income tax expense \ 3,534 \ 3,388 Net income (loss) 6,242 \ 3,896 -Required: Which statement indicates the financial position of the company? What information is provided on that statement that indicates the "financial position" of the company? Explain.