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ACCT200 EXAM 1 | Questions And Answers Latest {} A+ Graded | 100% Verified
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ACCT200 EXAM 1 | Questions And Answers Latest {2024- 2025} A+ Graded | 100%Verified
11) Stosch Company's balance sheet reported assets of $40,000, liabilities of $15,000 and common stock
of $12,000 as of December 31, Year 1. If Retained Earnings on the balance sheet as of December 31,
Year 2, amount to $18,000 and Stosch paid a $14,000 dividend during Year 2, then the amount of net
income for Year 2 was which of the following? - 19,000
Explanation: If assets on December 31, Year 1 totaled $40,000, total claims (including liabilities, common
stock, and retained earnings) on that date must have also been $40,000. If liabilities were $15,000 and
common stock was $12,000, retained earnings on December 31, Year 1 must have been $13,000. At the
end of Year 2, the company reported $18,000 in retained earnings, a $5,000 increase. During Year 2,
Stosch paid a $14,000 cash dividend, which reduced retained earnings. Therefore, Year 2 net income
must have been $5,000 greater than the dividend paid. $14,000 + $5,000 = $19,000.
14) If a company's total assets increased while liabilities and common stock were unchanged, then: -
Revenues were greater than expenses
19) On January 1, Year 2, Chavez Company had beginning balances as follows:
Assets
=
$
12,500
Liabilities
=
$
4,500
Common Stock
=
$
, 3,000
During Year 2, Chavez paid dividends to its stockholders of $2,000. Given that ending retained earnings
was $6,000, what was Chavez's net income for the Year 2? - 3,000
Explanation: On January 1, Year 2:
Assets = Liabilities + Common Stock + Retained Earnings
$12,500 = $4,500 + $3,000 + Retained Earnings
Retained Earnings = $5,000
22) At the end of Year 2, retained earnings for the Baker Company was $3,500. Revenue earned by the
company in Year 2 was $1,500, expenses paid during the period were $800, and dividends paid during
the period were $500. Based on this information alone, retained earnings at the beginning of Year 2
was: - 3,300
Explanation: Beginning Retained Earnings + Revenue − Expenses − Dividends = Ending Retained Earnings
Beginning Retained Earnings + $1,500 − $800 − $500 = $3,500
Beginning Retained Earnings = $3,300
30) The year-end financial statements of Calloway Company contained the following elements and
corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000;
Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. - 16,500
Explanation: Beginning retained earnings + Revenue − Expenses − Dividends = Ending retained earnings
$3,500 + $22,000 − Expenses − $1,500 = $7,500
Expenses = $16,500
38) During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and
paid a $150 cash dividend to its owners. Based on this information alone, which of the following is not
correct? - D) Cash inflow from operating activities was $200.
Explanation: Revenue minus expenses equal net income ($1,950 − $1,600 = $350). Total assets increased
by $200 ($1,950 − $1,600 − $150). Cash from operating activities increased by $350 ($1,950 − $1,600).
Cash from financing activities decreased by $150.
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