Question 1 -
Identify the financial statement (Balance Sheet, Income Statement, Statement of Retained Earnings, and/or Statement of Cash Flow) in which decision makers can find the following information. Hint: In some cases, more than one statement will report the needed data.
- Common shares
- Income tax payable
- Dividends
- Income tax expense
- Ending balance of retained earnings
- Revenue
- Cash spent to acquire equipment
- Selling, general and administrative expenses
- Adjustments to reconcile net income to net cash provided by operations
- Ending cash balance
- Current liabilities
- Net income
Question 2 -
Fill in the missing amounts which correspond with a letter, for each company.
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Alpha
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Beta
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Delta
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Beginning
|
|
|
|
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Assets
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$78
|
$30
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F
|
|
Liabilities
|
47
|
19
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$2
|
|
Common shares
|
6
|
1
|
2
|
|
Retained earnings
|
A
|
10
|
3
|
|
Ending
|
|
|
|
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Assets
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B
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$48
|
$9
|
|
Liabilities
|
$48
|
30
|
G
|
|
Common shares
|
6
|
1
|
2
|
|
Retained earnings
|
27
|
D
|
4
|
|
Dividends
|
3
|
2
|
0
|
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Income Statement
|
|
|
|
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Revenues
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$216
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E
|
$20
|
|
Expenses
|
211
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$144
|
19
|
|
Net Income
|
C
|
9
|
1
|
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Missing Amount
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Solution
|
|
A
|
|
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B
|
|
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C
|
|
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D
|
|
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E
|
|
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F
|
|
|
G
|
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At the end of the year, which company has the highest net income? Which company has the highest percentage of net income to revenue?
Hint: A statement of retained earnings will help you with your calculations.
Question 3 -
Prepare journal entries for the following transactions which occurred at Stark Corporation:
- The owner, Tony Stark, invested cash of $12,000 and office equipment valued at $7,500 into the business, receiving common shares in exchange.
- Purchased supplies for cash, $1,000.
- Paid $750 for one month's rent on the store.
- Billed a client, Ultron, $1,500 for services rendered.
- Tony Stark received a dividend of $300.
Question 4 -
Dr. Li's Family Dental has the following trial balance:
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Dr. Li's Family Dental Trial Balance December 31, 2016
|
|
Debit
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Credit
|
|
Cash
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$6,000
|
|
|
Accounts receivable
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13,000
|
|
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Supplies
|
4,000
|
|
|
Equipment
|
22,000
|
|
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Land
|
50,000
|
|
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Accounts payable
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$19,000
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Note payable
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|
20,000
|
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Share capital
|
|
10,000
|
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Retained earnings
|
|
8,000
|
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Service revenue
|
|
70,000
|
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Salary expense
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21,000
|
|
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Rent expense
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10,000
|
|
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Interest expense
|
1,000
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|
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TOTAL
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$127,000
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$127,000
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Compute the following amounts for Dr. Li's dental practice:
- Total assets
- Total liabilities
- Net income or loss during December
- Total shareholders' equity
Question 5 -
During October 2016, Paws Veterinary Clinic completed the following transactions:
Record each transaction in the journal. Key each transaction by date. Explanations are not required.
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Oct.
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1
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Paws received $30,000 cash and issued common shares to shareholders
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4
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Purchased supplies, $1,000, and equipment, $2,600 on account
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5
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Performed checkup services, and received cash, $1,500
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|
7
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Paid cash to acquire land for an office site, $22,000
|
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11
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Performed a surgery on a sick cat, and billed the customer $500
|
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16
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Paid for the equipment, purchased Oct 4 on account
|
|
17
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Paid the telephone bill, $95
|
|
18
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Received partial payment from client on account, $250
|
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22
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Paid the water and electricity bills, $400
|
|
29
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Received $2,000 cash for conducting a workshop on "Healthy Cat Living"
|
|
31
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Paid employee salary, $1,300
|
|
31
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Declared and paid dividends of $1,500
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1. Prepare the trial balance of Paws at October 31, 2016.
Evaluation
Financial Accounting focuses heavily on finding solutions to numerical problems. With that in mind, most units will include a number of problems. For each problem, you will need to provide more than a simple numerical response. Your solutions should thoroughly address the issue and present the findings in a meaningful format similar to those developed within the chapters and as part of the review exercises solutions. Part value may be assigned for incorrect responses providing evidence of understanding of the principles exist.