1). During the fiscal year ended 2014, a company had revenues of $340,000, cost of goods sold of $215,000, and an income tax rate of 30 percent on income before income taxes. What was the company's 2014 net income?

a. $87,500 b. $102,000 c. $37,500 d. $340,000

2.)Atlantic Corporation reported the following amounts at the end of the first year of operations: common stock $270,000; sales revenue $940,000; total assets $740,000; dividends declared $65,000; and total liabilities $410,000. What are Atlantics' retained earnings at the end of the year and what amount of expenses were incurred during the year?

Retained earnings are $60,000 and expenses incurred totaled $880,000.

Retained earnings are $60,000 and expenses incurred totaled $815,000.

Retained earnings are $330,000 and expenses incurred totaled $610,000.

Retained earnings are $330,000 and expenses incurred totaled $600,000.

3.)

3.

Madrid Company has provided the following data (ignore income taxes):

2014 revenues were $99,500.

2014 net income was $36,400.

Dividends declared and paid during 2014 totaled $8,200.

Total assets at December 31, 2014 were $242,000.

Total stockholders' equity at December 31, 2014 was $168,000.

Retained earnings at December 31, 2014 were $99,000.

Which of the following is not correct?

2014 expenses were $63,100.

Retained earnings increased $36,400 during 2014.

Total liabilities at December 31, 2014 were $74,000.

Common stock at December 31, 2014 was $69,000.

4.

At the beginning of 2014, a corporation had assets of $610,000 and liabilities of $470,000. During 2014, assets increased $46,000 and liabilities increased $4,000. What was stockholders' equity on December 31, 2014

$90,000

$652,000

$428,000

$182,000

5.Which of the following properly describes the impact on the financial statements when a company borrows $34,000 from a local bank?

Stockholders' equity increased $34,000.

Net income decreased $34,000.

Assets decreased $34,000.

Liabilities increased $34,000

6

Husky Company has provided the following information for its most recent year of operation:

Cash collected from customers totaled $91,300.

Cash borrowed from banks totaled $35,700.

Cash paid to employees for salaries totaled $34,100.

Cash received from selling Husky common stock to stockholders totaled $61,000.

Cash payments to banks for repayment of money borrowed totaled $9,500.

Cash paid to suppliers totaled $9,900.

Land costing $39,000 was sold for $39,000 cash.

Cash paid for dividends to stockholders totaled $5,300.

How much was Husky's cash flow from financing activities?

$81,900

$96,700

$75,000

$87,200

7

During 2014, Rock Company's cash balance increased from $77,000 to $92,100. Rock's net cash flow from operating activities was $38,100 and its net cash flow from financing activities was $12,700. How much was Rock's net cash flow from investing activities?

A net cash flow of $41,300.

A net cash flow of ($35,700).

A net cash flow of ($65,900).

A net cash flow of $65,900.

8Which of the following describes the primary objective of the balance sheet?

To measure the net income of a business up to a particular point in time.

To report the difference between cash inflows and cash outflows for the period.

To report the financial position of the reporting entity at a particular point in time.

To report the market value of assets, liabilities, and stockholders' equity at a particular point in time.

9.Which of the following accounts is not a liability on the balance sheet?

Retained earnings.

Notes payable.

Accounts payable.

Interest payable.

10.What financial statement would you look at to determine the dividends declared by a business?

Income statement.

Statement of stockholders' equity.

Statement of cash flows.

Balance sheet.

11Which of the following statements describes the balance sheet?

It reports a company's revenues and expenses.

Assets are generally reported on the balance sheet at the cost incurred to acquire them.

Stockholders' equity includes only retained earnings.

It reports a company's cash flow from operations.

12Which of the following are the components of stockholders' equity on the balance sheet?

Common stock and liabilities.

Common stock and assets.

Retained earnings and dividends.

Common stock and retained earnings.

13Lena Company has provided the following data (ignore income taxes): 2014 revenues were $99,000. 2014 expenses were $47,800. Dividends declared and paid during 2014 totaled $9,500. Total assets at December 31, 2014 were $177,000. Total liabilities at December 31, 2014 were $89,000. Common stock at December 31, 2014 was $28,000. Which of the following is correct?

2014 net income was $41,700.

Total stockholders' equity at December 31, 2014 was $236,000.

Retained earnings at December 31, 2014 were $60,000.

Retained earnings at December 31, 2014 were $41,700.

14Which of the following is the amount of revenue reported on the income statement of a retail company?

The cash collected from customers during the current period.

Both cash and credit sales for the period.

Cash sales for the period and collections from customers.

Cash sales and stockholders' investments.

15Which of the following items is reported as an expense on the income statement?

Dividends declared.

Cost of goods sold.

Dividends paid.

Accounts payable.

16Which of the following has primary responsibility to develop Generally Accepted Accounting Principles?

Financial Accounting Standards Board.

Company Executives.

Securities & Exchange Commission.

Public Company Accounting Oversight Board.

17Which of the following statements is false?

A positive net income results in an increase in retained earnings.

The ending retained earnings balance from the statement of retained earnings is reported on the balance sheet.

The change in the cash balance on the statement of cash flows added to the beginning cash balance equals the ending cash balance.

The dividends reported on the statement of retained earnings are also reported as dividend expense on the income statement.

18Which of the following best describes the purpose of an audit?

To prove the accuracy of an entity's financial statements.

To lend credibility to an entity's financial statements.

To audit every transaction that an entity entered into.

To establish that a corporation's stock is a sound investment.

19Which of the following reflects the impact of a transaction where $370,000 cash was invested by stockholders in exchange for stock?

Assets and retained earnings each increased $370,000.

Assets and revenues each increased $370,000.

Stockholders' equity and assets each increased $370,000.

Stockholders' equity and revenues each increased $370,000.

20

A company's January 1, 2014 balance sheet reported total assets of $116,000 and total liabilities of $43,000. During January 2014, the following transactions occurred: (A) the company issued stock and collected cash totaling $26,000; (B) the company paid an account payable of $5,600; (C) the company purchased supplies for $2,400 with cash; (D) the company purchased land for $46,000 paying $13,000 with cash and signing a note payable for the balance. What is total stockholders' equity after the transactions above?

	$26,000.
	$73,000.
	$192,400.
	$99,000.