1. The balance sheet consists of assets, liabilities, and equity. Define each category, and provide two examples of accounts reported within each category. 2 GAAP is based on the concept of accrual accounting, Define and describe accrual accounting Analysts attempt to identify transitory items in an income statement. Define transitory items. What is the purpose of identifying transitory items? 4 What is the statement of stockholders' equity? What useful information does it contain? s What is the statement of cash flows? What useful information does it contain? 6 Define and explain the concept of financial statement articulation. What insight comes from understanding articulation? Q1 02 03 Q4 Do not use or delete Do not use or delete (2) dy Type here to search N D E M ANSWERS 1 Which of the following is included as a component of stockholders' equity? A) Buildings 2. 3 B) Retained earnings 4 C) Prepaid property taxes D) Accounts payable 5 6 E) Dividends 2 As inventory and property plant and equipment on the balance sheet are consumed, they are reflected: 7 8 A) As a revenue on the income statement 9 B) As an expense on the income statement C) As a use of cash on the statement of cash flows D) On the balance sheet because assets are never consumed E) Both Band C because the financial statements articulate 3 During fiscal 2016, Mattel had sales of $5,456,650, total expenses of $5,138,628 and gross profit of $2,554,391. What was Mattel's cost of sales for 2016? ($ in thousands) A) $ 2,102,065 thousand B) $ 5,138,628 thousand c) $ 2,902,259 thousand D) $ 903,944 thousand E) There is not enough information to calculate the cost of sales, Q1 22 03 04 Do not use or delete (2) Do not use or delete Learn More ADDITIONAL INFORMATION If you need to make a quick edit before renewing your subscription, learn more about the Office Web Apps. C3 fa Buildings B D E G M N 4 During fiscal 2016,Kohl's had sales of $18,686 million, Cost of merchandise sold of $11,944 million, and gross profit of $6,741 million. O What was net income for 2016? A) $ 6,741 million B) S 11,944 million c) s 5,299 million D) S 18,686 million E) There is not enough information to calculate the amount. 5 in 2016, Nordstrom, Inc. reported the following (in millions): 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Current Current Assets Liabilities $3,242 $3,029 Long-tery Equity Liabilities $3,959 $870 What amount did Nordstrom report as total assets? A) $ 4,616 million B) $ 3,950 million C) $ 7,307 million D) $ 13,170 million E) None of the above 45 46 6 During fiscal year-end 2016,Kohl's Corporation reports the following (in $ millions): net income of $556, retained earnings at the end of the year of Q2 03 Q4 Do not use or delete Do not use or delete (2) + Ready ONAL INFORMATION I you Buildings B D F G E H 6 During fiscal year-end 2016, Kohl's Corporation reports the following (in $ millions): net income of $556, What dividends did the firm pay in fiscal year ended January 28, 2017? A) $ 683 million B) $ 1,669 million C) $ 363 million D) $-0- E) There is not enough information to calculate the amount. Buildings X HA M N Q R S U v w AR MC AD e of $556, retained earnings at the end of the year of $12,522 and retained earnings at the beginning of the year of $12,329. Assume that there were no other retained earnings transactions during fiscal 2016 E) There is not enough information to calculate the amount. 7 How would cash collected on accounts receivable affect the balance sheet? A) Increase liabilities and decrease equity B) Decrease liabilities and increase equity c) Increase assets and decrease assets D) Increase assets and increase equity 8 How would a purchase of inventory on credit affect the income statement? A) It would increase liabilities B) It would decrease retained earnings C) It would increase assets D) Both A and C, above E) None of the above 9 Carl's Bakery, Inc., began operations in October 2017. The owner contributed cash of $18,000 and a delivery truck with fair value of $24,000 to the company. Which of the following describes how these transactions would affect the company's equity accounts? A) Increase contributed capital by $42,000 B) Increase earned capital by S42,000 C) Increase contributed capital by $18,000 and earned capital by $24,000 D) Increase earned capital by $18,000 and contributed capital by $24,000 E) None of the above Q1 Do not use or delete Do not use or delete (2) Q2 Type here to search 0 File Home Insert Page Layout O PROTECTED VIEW Be careful files from the Internet can contain viruses. Unless you need to edit, it's safe to stay in Protected View Enable Editing SUBSCRIPTION EXPIRED Most of the features of Cecel have been disabled Reactivate ADOMONAL INFORMATION you need to make a quick edit before renewing your subscription, learn more about the Office Web Apps Learn More E10 X V =IF010. "Your answer here"IF(010-Do not use or delete 102, "Correct", "Try again!"}} H D Instruction: Enter your answer in the cell highlighted in yellow 1 2 3 66 4 6 4 Gross Sales Retained Earnings (beginning) Sales returns, allowance and discounts COGS Cash (beginning balance) Dividend declared and paid 5 6 7 B 100 Capital Stock (beginning) 34 Selling, administrative & General expense 20 Gain from disposal of land 68 Interest expense 100 Income Taxes 12 2 W 9 10 Calculate: 12 Net Sales Gross Margin Income from Operations Income before Income Taxes Net income Retained earnings (ending) Your answer here Your answer bere Your answer bere Your answer bere Your answer bere Your answer bere 13 14 15 16 17 1 19 22 01 02 03 Do not use or delete Do not use or delete 621 D14 X H 1) 100 20 Assets Liability Shareholders' Equity Your answer here 4 5 6 7 8 9 10 11 12 13 2) Assets: Cash Inventory 9 17 Your answer here 15 16 17 Property, Plant, and Equipment Less: Accumulated Depreciation Total Assets -55 31 19 20 21 22 23 Cash Inventory Prepaid expenses Retained Earnings Intangible assets PP&E Unearned Revenue 800 900 150 230 170 750 130 es 02 02 03 04 Do not use or delete Do not use or delete (2) Ready 17 Inventory Your answer here Property, Plant, and Equipment Less: Accumulated Depreciation Total Assets -55 31 3) Cash Inventory Prepaid expenses Retained Earnings Intangible assets PP&E Unearned Revenue 800 900 150 230 170 750 130 Calculate: Current Assets Your answer here Total Assets Your answer here Company ABC purchased a machine on 1/1/2017 for $20,000. During year 2017, ABC recorded depreciation expense of $4000; during year 2018, ABC recorded depreciation expense $3500 The book value of the machine on 12/31/2018 is Your answer here Q4 Do not use or delete Do not use or delete (2) 01 02 Q3 Type here to search