Exam 1: Financial Statements and Business Decisions

Madrid Company has provided the following data (ignore income taxes): 2010 revenues were $77,500. 2010 net income was $33,900. Dividends declared and paid during 2010 totaled $5,700. Total assets on December 31,2010 were $217,000. Total stockholders' equity on December 31,2010 was $123,000. Retained earnings on December 31,2010 were $83,000. Which of the following is correct?

How is net income in the income statement different than cash flow from operations in the cash flow statement?

Which private sector body was given the primary responsibility to determine detailed auditing standards?

Indicate on which financial statement you would expect to find each of the following.If an item can be found on more than one statement,list each statement. Cash Balance Sheet Notes payable ------ Wages expense ------ Cost of goods sold ------ Sales revenue ------ Inventory ------ Income tax expense ------ Dividends ------ Retained earnings ------ Accounts payable ------ Rent expense ------

When would a company report a net loss on the income statement?

Which of the following transactions affects both retained earnings and net income?

Laker Company has provided the following information for its most recent year of operation: Cash collected from customers totaled $99,300. Cash borrowed from banks totaled $42,700. Cash paid to employees totaled $23,300. Cash paid for interest totaled $3,100. Cash received from selling an investment in Husky stock totaled $73,000. Cash payments to banks for repayment of money borrowed totaled $9,700. Cash paid for operating expenses totaled $11,200. Land costing $75,000 was sold for $75,000 cash. Cash paid for dividend payments to stockholders totaled $7,700. How much was Laker's net cash flow from financing activities?

Stockholders' equity on the balance sheet consists of contributed capital and retained earnings.

Which of the following best describes assets?

Which of the following statements is correct?

Which financial statement would you utilize to determine whether a company will be able to pay liabilities which are due in 30 days?

Which of the following items is reported as an expense on the income statement?

A company's retained earnings increased $375,000 last year and its assets increased $973,000.The company declared a $79,000 cash dividend during the year.What was last year's net income?

Which of the following describes the amount of insurance expense reported on the income statement?

In what order would the items on the balance sheet appear?

Which of the following would increase retained earnings?

Rose Corporation began operations at the start of 2010.During 2010,it made cash and credit sales totaling $500,000 and collected $420,000 in cash from its customers.It purchased inventory costing $250,000,paid $15,000 for dividends and the cost of goods sold was $210,000.The corporation incurred the following expenses during 2010: Salary expense \ 80,000 Interest expense 5,000 Insurance expense 4,000 Supplies expense 6,000 Income tax expense 34,000 Requirements: 1.Prepare an income statement showing revenues,expenses,pretax income,income tax expense,and net income for the year ended December 31,2010. 2.Based on the above information,what is the amount of accounts receivable on the balance sheet prepared as of December 31,2010? 3.Based on the above information,what is the amount of retained earnings on the balance sheet prepared as of December 31,2010?

Which of the following would be reported in the financing section of a cash flow statement?

Which of the following would not be found within the investing section of the statement of cash flows?

Which of the following best describes the balance sheet?