Exam 1: Accounting As a Form of Communication

Canyon Corporation The accountant for the Canyon Corporation prepared the following list from the company's accounting records for the year ended December 31,2014: Read the information for Canyon Corporation.Using good form,prepare an income statement for Canyon Corporation.

To which of the following entities must a company report if it sells its stock on the organized stock market?

Owners of corporations are called ____________________.

Presented below are condensed data from the financial statements of Gallo Factory for 2014 and 2013.The figures are expressed in thousands.Use this information to answer the questions that follow. Required: Which statement indicates the financial position of the company? What information is provided on that statement that indicates the "financial position" of the company? Explain.

Lewis Corporation reported the following information for the year ended December 31,2014: What was the economic effect of the payment of Lewis' dividends?

The concept that assumes that assets are recorded at the amount to acquire them is called the _________________________.

Mobile Power Corp.reported the following information for the year ended December 31,2014. What was the retained earnings balance for Mobile Power at December 31,2013?

If a company prepares a statement of stockholders' equity,net income is added to retained earnings on this statement.

Dimension Inc.had net income for 2014 of $24,000.It declared and paid a $13,000 cash dividend in 2014.If the company's retained earnings for the end of the year was $39,600,what was the company's retained earnings balance at the beginning of 2014?

You are a potential stockholder and are concerned that a particular company you are ready to invest in might have too much debt.Which financial statement would provide you information needed in order to evaluate your concern?

On January 1,2014,A-Best Company's balance in retained earnings was $70,000.At the end of the year,December 31,2014,the balance in retained earnings was $94,000.During 2014,the company earned net income of $40,000.How much were dividends?

Which one of the following is not an external user of financial information?

___________________ means the presentation of information is free from bias toward a particular result.

______________________ consists of all activities necessary to provide the members of an economic system with goods and services.

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

The balance sheet is linked to the retained earnings statement by the ending retained earnings balance.

The beginning balance of retained earnings was $630,000,and the ending balance was $650,000.The company declared and paid dividends of $60,000. A)Determine the amount of net income for the year. B)What information would one find on the income statement in addition to net income?

Which of the following statements would be true if you own stock in a company?

The following accounting principles and assumptions are included in the conceptual framework of accounting: For each situation in A through C below,identify which assumption or principle applies by selecting from the list provided above,and explain why that assumption or principle applies.

In 2014,you invested $12,000 along with 5 other investors in a new theatre,Rock-On,that offers Broadway play productions.Because you live out of state,you have not been actively involved in the daily affairs of the theatre.On January 10,2015,you are excited because you received $12,000 as a dividend after the end of the 1st year of the theatre's existence.Included with your $12,000 check are financial statements and some supplemental information regarding the accounting.The supplemental information explains: (1)During the last three months of 2014,an aggressive advertising campaign resulted in the sale of 600 season tickets for the 2015 productions.Each season ticket cost $120 and the resulting $72,000 was included in 2014 income. (2)Along with the advertising campaign,the general manager was able to secure pledges of $7,500 for advertising by local merchants in the playbills for the first two productions for 2015.This amount is included as advertising revenue in the 2014 financial statements. REQUIRED: Are there any problems related to the supplementary disclosures? If so,explain and indicate what effects (over- or understatements)these items will have on the financial statements.