Exam 1: Business Decisions and Financial Accounting

Following is a list of financial statement items and amounts for Vantage Service as of 12/31/Year 1,the end of its first year in operation. Accounts Receivable 40,000 Accounts Payable 30,000 Cash 10,000 Common Stock 20,000 Notes Payable 20,000 Equipment 50,000 Sales Revenue 100,000 Fuel Expense 15,000 Rent Expense 20,000 Advertising Expense 5,000 Salaries and Wages Expense 20,000 Retained Earnings ? Dividends 10,000 Required: Prepare the Income Statement for the year ended December 31,Year 1. Prepare the statement of retained earnings for the year ended December 31,Year 1. Prepare the balance sheet for the year ended December 31,Year 1.

Internal users of financial data include:

Cape Co.started business this year.For this year,it had revenues of $240,000,expenses of $180,000 and cash flows from operating activities of $48,000,and paid dividends of $6,000.What is the amount of Retained Earnings at the end of Cape's first year of operations?

A company might report negative cash flows from financing activities when:

Match the business activity to the appropriate category. -Company payment of a dividend

Borrowing money from a bank is a financing activity on the statement of cash flows.

To determine whether generally accepted accounting principles (GAAP)were followed in the preparation of financial statements,an examination of:

Expenses are: