Assume a company has Year 1 ending total assets of $50,000, total liabilities of $48,000 and total stockholders equity of $2,000. Which of the follow is true in regards to this scenario?

The company does not rely on debt to operate the business.

The company experienced significant net income during the year.

Most assets are owned by creditors in this scenario.

Most assets have been earned through business operations.

Assume a company has Year 1 beginning common stock of $10,000 and Year 2 ending stockholders' equity of $150,000. Which of the following is true in regards to this scenario?

Multiple Choice

The Company has likely incurred heavy losses over the last two years.

Revenues have exceeded expenses over the last two accounting cycles.

This is likely a poor investment for the stockholders of the Company.

Expenses have exceeded revenues over the last two accounting cycles.