ACT 205 Lecture Notes - Lecture 2: Retained Earnings, Net Income, Income Statement

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skykangaroo617

28 Jan 2018

School

CSU

Department

Accounting

Course

ACT 205

Professor

Sally Plasterer Whitney

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Document Summary

Periodic reports published by the company for the purpose of providing information to external users. How successful was the company in running its operations. Compares revenues and expenses for a period of time: month, quarter, or year. If revenue > expenses = net income (profit) *no single piece of company information better explains companies" stock price performance than net income. ***we put negative numbers (net losses) in brackets. Summarizes changes in stockholders" equity over an interval of time. This is the only place we will see dividends. Dividends are not an expense (they are not shown on the income statement) Stockholders" equity = common stock + retained earnings. Change in stockholders" equity = change in common stock + net income - dividends. The cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends. Retained earnings = beginning balance + net income - dividends = ending balance.

Related Questions

15 ACCOUNT QUESTIONS! I NEED HELP WITH ASAP! THANK YOU SOMUCH!

1. A company reported total stockholders' equity of $290,000 onits Dec 31, 2015, balance sheet. The following information isavailable for the year ended Dec 31, 2016:

Revenues	$620,000
Expenses	330,000
Liabilities, on December 31, 2016	144,000

3. Samores Company sold merchandise on account for $3,000 toCookie Company with credit terms of 2/10, n/30. Five days later,Cookie Company returned $1,000 of merchandise that was damaged,along with a check to settle the account.

What entry does Samores Company make upon receipt of thecheck?

Select one:

Cash		1,960
Sales Returns and Allowances		1,040
	Accounts Receivable		3,000

Cash		2,000
	Accounts Receivable		2,000

Cash		1,960
Sales Returns and Allowances		1,000
Sales Discounts		40
	Accounts Receivable		3,000

Cash		2,940
Sales Discounts		60
	Accounts Receivable		3,000

What are the total assets of the company on December 31,2016?

Select one:

A. $420,000

B. $184,000

C. $724,000

D. $ 38,000

8. The following inventory was available for sale during theyear for Thomasina Tools:

Beginning inventory	10 units at $80
First purchase	15 units at $110
Second purchase	30 units at $140
Third purchase	20 units at $130

Thomasina Tools has 25 units on hand at the end of the year.

What is the dollar amount of inventory at the end of the yearaccording to the first-in, first-out method?

Select one:

A. $3,300

B. $3,150

C. $3,900

D. $5,950

9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:

Beginning inventory	10 units at $41
First purchase	15 units at $55
Second purchase	30 units at $70
Third purchase	25 units at $65

Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.

What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $4,340

B. $9,920

C. $3,465

D. $6,200

12. Determine Sales revenue for Ozzie Company with the followingdata:

Cost of Goods Sold	$840,000
Operating Expenses	210,000
Sales Discounts	15,000
Sales Returns and Allowances	97,500
Net Income	265,000

Select one:

A. $1,192,500

B. $1,222,500

C. $1,417,500

D. $1,387,500

17. Determine Sales revenue for Ozzie Company with the followingdata:

Cost of Goods Sold	$840,000
Operating Expenses	210,000
Sales Discounts	15,000
Sales Returns and Allowances	97,500
Net Income	265,000

Select one:

A. $1,192,500

B. $1,222,500

C. $1,417,500

D. $1,387,500

18. M. Fields Company reported the following year-endamounts:

Total Sales	$33,600
Sales Discounts	600
Sales Returns	?
Cost of Goods Sold	21,000
Gross Profit	4,350

What is the companyâs Sales Returns for the year?

Select one:

A. $ 7,650

B. $ 2,160

C. $10,860

D. $ 2,970

19. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:

Purchases During Sept 2016		Sales During Sept 2016
Sept 7	120 units @ $224	Sept 12	70 units
Sept 17	70 units @ $176	Sept 22	110 units
Sept 25	100 units @ $168	Sept 29	90 units

What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?

Select one:

A. $22,080

B. $26,480

C. $26,000

D. $28,640

24. On which financial statements would you look to find thetotal costs of merchandise that remains and the total that has beensold?

Select one:

A. Balance sheet and income statement

B. Statement of cash flows and balance sheet

C. Balance sheet and statement of cash flows

D. Statement of stockholders' equity and balance sheet

25. Which statement is true of the statement of stockholders'equity?

Select one:

A. It shows a company's stock issuances and dividends paid toshareholders.

B. It reports a company's assets, liabilities, and equities.

C. It reports a company's cash flows from operating activities,investing activities, and financing activities.

D. It reports a company's revenue and expenses for a period.

26. On September 1, the beginning inventory for Koppel Companywas 110 units at $200 each. Purchases and sales during Septemberwere:

Purchases During Sept 2016		Sales During Sept 2016
Sept 7	120 units @ $224	Sept 12	70 units
Sept 17	70 units @ $176	Sept 22	110 units
Sept 25	100 units @ $168	Sept 29	90 units

What is the cost of ending inventory for Koppel Company onSeptember 30 if the periodic LIFO costing method is used?

Select one:

A. $22,080

B. $26,480

C. $26,000

D. $28,640

27. The following hammers were available for sale during theyear for Waiculus Tools:

Beginning inventory	10 units at $80
First purchase	15 units at $100
Second purchase	30 units at $120
Third purchase	25 units at $130

Waiculus Tools has 30 hammers on hand at the end of theyear.

What is the dollar amount of cost of goods sold for the yearaccording to the first-in, first-out method?

Select one:

A. $3,150

B. $3,950

C. $5,300

D. $3,900

29. Nickster Company purchased $8,000 worth of merchandise, FOBshipping point. Transportation costs were an additional $700. Thecompany later returned $1,500 worth of merchandise and paid theinvoice within the 2% cash discount period.

The total amount paid for this merchandise is:

Select one:

A. $7,040

B. $8,526

C. $7,070

D. $7,056

30. The following amounts and costs of platters were availablefor sale by Utah Pottery during 2016:

Beginning inventory	10 units at $82
First purchase	15 units at $110
Second purchase	30 units at $140
Third purchase	25 units at $130

Utah Pottery has 35 platters on hand at the end of the year.

How much is cost of goods sold in dollars at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $5,580

B. $3,465

C. $9,920

D. $3,720

31. Current assets are usually listed in the order of their:

Select one:

A. Lack of liquidity: least liquid to most liquid

B. Size: smallest to largest

C. Liquidity: most liquid to least liquid

D. Size: largest to smallest

34. Which of the following assets would not be classified as acurrent asset?

Select one:

A. Supplies

B. Equipment

C. Accounts receivable

D. Prepaid rent

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ACT 205 Lecture Notes - Lecture 2: Retained Earnings, Net Income, Income Statement

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