Reading 30: Financial Reporting Mechanics LOS e习题精选 balance, reported, following, 2010

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LOS e: Explain the relationships among the income statement, balance sheet, statement of cash flows, and statement of owners’ equity.

Alpha Company reported the following financial statement information:

December 31, 2006:
	Assets	$70,000
	Liabilities	45,000
December 31, 2007:
	Assets	82,000
	Liabilities	55,000
During 2007:
	Stockholder investments	3,000
	Net income	?
	Dividends	6,000

Calculate Alpha’s net income for the year ended December 31, 2007 and the change in stockholders’ equity for the year ended December 31, 2007.

Net income

Change in stockholders' equity

A) ($3,000) $2,000 increase

B) $5,000 $2,000 decrease

C) $5,000 $2,000 increase

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Stockholders’ equity, as of December 31, 2006, was $25,000 ($70,000 assets – $45,000 liabilities) and stockholders’ equity, as of December 31, 2007, was $27,000 ($82,000 assets – $55,000 liabilities). Stockholders’ equity increased $2,000 during 2007. Net income for 2007 was $5,000 ($27,000 ending equity + $6,000 dividends – $3,000 stockholder investments – $25,000 beginning equity).

 

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Wichita Corporation reported the following balances as of December 31, 2007:

Cash	$?
Accounts payable	16,000
Accounts receivable	58,000
Additional paid-in capital	42,000
Common stock	19,600
Inventory	12,000
Plant and equipment	26,800
Notes payable	20,000
Retained earnings	32,000

Calculate Wichita’s cash and total assets as of December 31, 2007 based only on these entries.

Cash

Total assets

A) $32,800 $129,600

B) $16,000 $129,600

C) $32,800 $113,600

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Liabilities plus equity are equal to $129,600 ($16,000 accounts payable + $20,000 notes payable + $19,600 common stock + $42,000 additional paid-in capital + $32,000 retained earnings). Since assets must equal liabilities plus equity, cash must equal $32,800 ($129,600 total assets – $58,000 accounts receivable – $12,000 inventory – $26,800 plant and equipment).

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Beta Company reported the following financial statement information:

December 31, 2006:
	Assets	$58,000
	Liabilities	28,000
December 31, 2007:
	Assets	?
	Liabilities	38,000
During 2007:
	Stockholder investments	15,500
	Net income	18,000
	Dividends	7,750

Calculate Beta’s total assets and stockholders’ equity as of December 31, 2007.

Total assets

Stockholders' equity

A) $93,750 $55,750

B) $93,750 $30,000

C) $79,250 $55,750

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Stockholders’ equity, as of December 31, 2006, was $30,000 ($58,000 assets – $28,000 liabilities) and stockholders’ equity, as of December 31, 2007, was $55,750 ($30,000 beginning equity + $15,500 stockholder investments + $18,000 net income – $7,750 dividends). Total assets, as of December 31, 2007, are $93,750 ($38,000 liabilities + $55,570 stockholders’ equity).