Excercise 2-12, problem 2-5
Determine the pro computers (for use in the business) 8. Sold old equipment PROBLE L09 Exercise 2-11 Basic Elements of Financial Reports Most financial reports contain the following list of basic clements. For each clement, identify th person(s) who prepared the element and describe the information a user would expect to find in Problem 2-1 Joseph Knapp, a analyze the office of each of the fo postage, stationer t. Some information is veriable; other information is subjectively chosen by manage ment. Comment on the verifiability of information in each element 1. Management discussion and analysis 2. Product/markets of company Required 1. What did Jo taken as a res 2. Would this i estate comp MULTI-CONCEPT EXERCISES Problem 2-2 The following c 1. Display fixtu L03 5-7 Exercise 2-12 Financial Statement Classification EXAMPLE 2-4, 2-7,2-9 Potential stockholders and lenders are interested in a company's financial statements. Identify the statement-balance sheet (BS), income statement (IS), or retained earnings statement (RE)-on which each of the following items would appear 3. Merchandis 4. Incorporati 5. Cost of a fr 6. Office supp 7. Wages and 8. Computer 9. Computer 1. Accounts payable 2. Accounts receivable 3. Advertising expense 1 1Land held for future expansion 12. Loan payable 13, Office supplies 14. Patent 4. Bad debt expense 5. Bonds payable 6. Buildings 15. Patent amortization expense 16. Prepaid insurance 17. Retained earnings 18. Sales 19. Utilities expense 7, Cash Required 8. Common stock For each cost, expense on the 10. Dividends 20. Wages payable cost would app Los.6 EXAMPLE 2-6,2-7 Exercise 2-13 Single- and Multiple-Step Income Statement Some headings and/or items are used on either the single- or multiple-step Some are used on both. Identify each of the following items as single-step (S both formats (B), or not used on either income statement (N). Problem 2 The following Ruth Corporat 7. Net inc 2. Cost of goods sold 3. Selling expenses 4. Total revenues lated des 5. Utilities expense 6. Administrative expense $300,000, pa Colorado sig 1,600 tefollowing as of December 31, 2017, and December 31, 2016: a. Working capital b. Current ratio Required 1. Prepar 2. What beginning and end of the year. Explain the change in the company's liquidity from the beginning to the end of 2017 2. On the basis of your answers to (1), comment on the company's relative liquidity at the Probler Compara Problem 2-5 Working Capital and Current Ratio The balance sheet of Stevenson Inc. includes the following items Lo4 Accounts payable Salaries payable $23,000 13,000 45.000 800 Accounts receivable 100,000 5,700 Capital stock Prepaid insurance leaned earnings Required Req The 201c 1. Determine the current ratio and working capital 2. Beyond the information provided in your answers to (1), what does the composition of the current assets tell you about Stevenson's liquidity? 3. What other information do you need to fully assess Stevenson's liquidity? Los Problem 2-6 Single-Step Income Statement The following income statement items, arranged in alphabetical order, are taken from the records of Shaw Corporation for the current year Advertising expense Cost ef goods sold s 1,500 2.415 29,200 Interest expense Interest revenue Rent revenue Salaries and wages s 1,400 1.340 6,700 Depreciation expense-office 2.900 1,540 ncome tax expense 12,560 s auto Supplies expenso-office 2.250
