C214 Pre-Test UPDATED Questions with 100% Correct Answers | Updated & Verified
1. What is included in the Income Statement and NOT in the Statement of Cash Flows(answer) Depreciation Expense 2. Computation of Net Income: A co. sold products in 2014 for $120k and collected $100k cash and re- mainder in 2015. Co. incurred $70k expenses for 2014 and paid $100k which included $30k for expenses incurred in 2013. What is net income for 2014?- : Computation of Net Income (R-E=NI) $50,000 Net Income = $120k - $70k = $50k, or Revenues - Expenses Incurred = Net Income 3. Retained Earning Statement: The beginning retrained earnings on 1/14/14 is $25k. The NI for 2014 is $50k and the dividend payout ratio is 25% of NI. What are retained earnings on 12/31/14(answer) Retained Earning Statement: $62,500 Retained earnings on12/31/14 = $25k + $50k - (.25x$50k) = $62,500 4. Retained Earnings: Firm reported RE of $300 in 12/31/12. For 12/31/13 firm reports RE of $400 and pays dividends of $25. What is NI in 2013(answer) Retained Earnings: Answer $125 Logic is $300 from $400 is $100 plus the $25 dividend totals out to $125. 300 + NI - 25 = 400: NI=125, so 300+125-25=400 5. Balance Sheet: Basic equation for the Balance Sheet is(answer) Balance Sheet: Equity = Assets - Liabilities, or it can
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