Exam 1: An Introduction to Accounting

On January 1,2015,Chavez Company had beginning balances as follows: Assets = $12,500 Liabilities = $4,500 Common Stock = $3,000 During 2016,Chavez paid dividends to its stockholders of $2,000.Given that ending retained earnings was $6,000,what was Chavez's net income for the 2016 accounting period?

Use the following information to prepare an income statement for Penelope Company for the period ending December 31,2015.All transactions were for cash.Precede the amount with a minus sign if the transaction reduces that section of the income statement. A)Received revenue from services provided to customers,$30,500. B)Paid $19,000 cash for land. C)Issued $16,000 of common stock. D)Paid dividends to stockholders,$3,000. E)Paid operating expenses,$25,400.

The transaction,"provided services for cash," affects which two accounts?

In a market,creditors are resource providers.

Fieldstone Company was founded on January 1,2015.During 2015,the company experienced the following events: 1.Received cash revenue of $25,500 2.Paid cash expenses of $20,000 3.Issued common stock for $30,000 cash 4.Paid cash dividend of $2,000 to owners. Required: a)Write an accounting equation and record effects of each accounting event under appropriate general ledger account headings,showing dollar amounts of increases and decreases and totals at the end of the year.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected. b)Prepare the 2015 income statement and balance sheet for Fieldstone Company.

The types of resources needed by a business are financial,physical,and labor resources.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Epstein Co.paid a $20,000 cash dividend to its owners.

The value created by a business may be called assets.

Use the following information to answer questions Packard Company engaged in the following transactions during 2015,its first year in operations: (Assume all transactions are cash transactions. ) 1)Acquired $950 cash from the issue of common stock. 2)Borrowed $420 from a bank. 3)Earned $650 of revenues. 4)Paid expenses of $250. 5)Paid a $50 dividend. During 2016,Packard engaged in the following transactions: (Assume all transactions are cash transactions. ) 1)Issued an additional $325 of common stock. 2)Repaid $220 of its debt to the bank. 3)Earned revenues of $750. 4)Incurred expenses of $360. 5)Paid dividends of $100. -The total in Packard's retained earnings account before closing in 2015 is

Which of the following would not describe the effects of an asset source transaction on a company's financial statements?

Retained Earnings at the beginning and ending of the accounting period was $300 and $800,respectively.If revenues were $1,100 and dividends paid to stockholders were $200,expenses for the period must have been

Use the following information to answer questions Packard Company engaged in the following transactions during 2015,its first year in operations: (Assume all transactions are cash transactions. ) 1)Acquired $950 cash from the issue of common stock. 2)Borrowed $420 from a bank. 3)Earned $650 of revenues. 4)Paid expenses of $250. 5)Paid a $50 dividend. During 2016,Packard engaged in the following transactions: (Assume all transactions are cash transactions. ) 1)Issued an additional $325 of common stock. 2)Repaid $220 of its debt to the bank. 3)Earned revenues of $750. 4)Incurred expenses of $360. 5)Paid dividends of $100. -The amount of retained earnings on Packard's 2016 balance sheet is

Use the following information to answer questions Lexington Company engaged in the following transactions during 2015,its first year in operation: (Assume all transactions are cash transactions) 1.Acquired $6,000 cash from issuing common stock. 2.Borrowed $4,400 from a bank. 3.Earned $6,200 of revenues. 4.Incurred $4,800 in expenses. 5.Paid dividends of $800. Lexington Company engaged in the following transactions during 2016: 1.Acquired an additional $1,000 cash from the issue of common stock. 2.Repaid $2,600 of its debt to the bank. 3.Earned revenues,$9,000. 4.Incurred expenses of $5,500. 5.Paid dividends of $1,280. -The amount of total assets on Lexington's 2015 balance sheet was

Indicate whether each of the following statements about the types of transactions is true or false. _______ a)An asset source transaction increases total assets and increases claims to assets. _______ b)The issuance of stock to owners for cash would be an example of an asset exchange transaction. _______ c)Purchasing equipment for cash is an example of an asset use transaction. _______ d)Paying a dividend to stockholders is an example of an asset use transaction. _______ e)Making a payment on a bank loan is an example of an asset exchange transaction.

If Ballard Company reported assets of $500 and liabilities of $200,Ballard's stockholders' equity totaled

All of a business's temporary accounts appear on the income statement.

Mayberry Company paid $30,000 cash to purchase land.As a result of this business event,

Each of the following requirements is independent of the others. a)Valdez Corporation has liabilities of $95,000 and equity of $115,000.What is the amount of Valdez's assets? _________________________________________________ b)Global Company has assets of $320,000 and liabilities of $95,000.What is the amount of Global's equity? ______________________________________________________ c)Brown Company has assets of $90,000 and liabilities of $25,000.What is the amount of Brown's claims? _____________________________________________________________

Name and briefly describe each of the four financial statements.

Stosch Company's balance sheet reported assets of $40,000,liabilities of $15,000 and common stock of $12,000 as of December 31,2015.If Retained Earnings on the December 31,2016 balance sheet is $18,000 and Stosch paid a $14,000 dividend during 2016,then the amount of net income for 2016 was which of the following?