Intermediate Accounting Exam 1- Chapter 1 Problem Set with Complete Solutions!

The financial statement that reports assets, liabilities, and owners' equity is the - ANSWER-balance sheet If liabilities total $150,000 and owners' equity totals $50,000, the assets must total - ANSWER-200,000 Compute net income: Sales revenue $10,000, Wage expense $4,000, Accounts payable $1,000 and Utilities expense $2,000 - ANSWER-4,000 Compute total assets: Cash $10,000, Accounts receivable $3,000, Accounts payable $4,000, and Equipment $20,000 - ANSWER-33,000 Which is the logical order in which to construct the financial statements? - ANSWER-income statement, retained earnings, balance sheet The income statement shows information for a point in time such as the end of the business day on December 31, 2015 T or F - ANSWER-false The balance sheet shows information for an entire year such as the year ending December 31, 2015 T or F - ANSWER-false Sales less what equals Gross Margin or Gross Profit - ANSWER-Cost of goods sold Given the following account balances, prepare an income statement. Show Gross Margin, Income Before Taxes and Net Income General and Administrative Expenses $20,000 Sales $120,000 Taxes $15,000 Marketing Expense $5,000 Cost of Goods Sold $50,000 - ANSWER-Gross Margin - (sales - cogs) * 70,000 Income Before Taxes - (Gross Margin - expenses) * (70,000 - 20,000 - 5,000) = 45,000 Net Income (Income before taxes - taxes) * 45,000 - 15,000 = 30,000 Assets will always equal liabilities plus owners' equity T or F - ANSWER-True A company sells furniture to a customer for $10,000 in September. The customer is going to pay for the furniture in October. In which month should the company record sales? - ANSWER-September If beginning stockholders' equity = $50,000 and the following transactions occur during the fiscal year, what is ending stockholders' equity • Net income was $10,000 • Dividends declared were $1,000 • Accounts receivable collected were $4,000 • Common stock was issued for a total of $12,000 • A delivery truck was purchased for $25,000 cash Ending Stockholders' Equity = __________________ - ANSWER-SE + CS + Revenues + Retained Earnings - Expenses - Dividends - (50,00