Exam 1: Accounting As a Form of Communication

Las Palmas Company reported the following items on its financial statements for the year ending December 31,2017: Sales \ 560,000 Cost of goods sold \ 400,000 Salary expense 40,000 Interest expense 30,000 Dividends 30,000 Income tax expense 25,000 How much will be reported as retained earnings on Las Palmas' balance sheet at December 31,2017,if this is the first year of operations?

When an entity's revenues exceed its expenses for a period of time,the entity will report net income.

Clip Joint Company is ready to sell its bonds.Which one of the following financial questions is most relevant to the issue of the bonds and that investors will most likely want answered before they purchase the bonds?

A ____________ is a certificate that represents a corporation's promise to repay a certain amount of money and interest in the future.

United Airlines is an example of

Tentco reported the following amounts in various statements included in its 2017 annual report.(All amounts are stated in millions of dollars. ) Net income for 2017 \ 142 Cash dividends declared in 2017 15 Retained earnings, December 31,2016 95 REQUIRED: (1)Prepare a statement of retained earnings for the year ended December 31,2017. (2)Assume that Tentco presents a statement of stockholders' equity rather than a statement of retained earnings in its annual report.Explain how the information differs between the two statements.

From an ethical standpoint,if various alternatives are available to report a transaction,what are some of the questions an accountant should ask about the alternatives?

Which of the following best describes the term "equity"?

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 revenues for 2017._________ B) Total expenses for 2017 ._________ C) Net income for 2017 ._______

Since there is a lack of a profit motive in nonbusiness entities,they do not need information provided by an accounting system.

Leary Corporation's end-of-year balance sheet consisted of the following amounts: Cash \ 25,000 Accounts receivable \4 6,000 Property, plant, and 69,000 Long-term debt 41,000 equipment Capital stock 107,000 Accounts payable 22,000 Retained earnings ? Inventory 33,000 - What is Leary's retained earnings balance at the end of the current year?

List the names of three companies with which you are familiar that are manufacturers or producers.Also list the names of three companies that are retailers.Finally,provide the names of three service companies.

Which of the following statements is true regarding a bond?

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) Stockholders' equity at the end of 2017 ._______ B) Retained earnings at the end of 2017 .___________ C) Name two events that might cause stockhol ders' equity to decrease.

Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000.If Sawaddee's total assets increased by $80,000 and its total liabilities increased by $57,000 during the year,what is the amount of Sawaddee's owners' equity at the end of the year?

Leary Corporation's end-of-year balance sheet consisted of the following amounts: Cash \ 25,000 Accounts receivable \ 46,000 Property, plant, and equipment 69,000 Long-term debt 41,000 Capital stock 107,000 Accounts payable 22,000 Retained earnings ? Inventory 33,000 - What is Leary's total liabilities balance at the end of the current year?