Investments during 2014 (12,000) Net income in 2014 $ 27,000 2. A. Total assets, beginning of year = $55,000 + $36,000 = $91,000 B. liabilities, end of year = $110,000 $81,000 = $29,000 – C. Net income = $81,000 + $34,000 - $55,000 - $16,000 = $44,000 Revenue during the year = $44,000 + $168,000 = $212,000 PART IV TYPES OF ACCOUNTS (10 points) — Stockholders’ Account Liability Revenue Expense Equity Common Stock X Rent Expense X Equipment X Retained Earnings X Dividends (X) Accounts Receivable X Mortgage Payable X Accounts Payable X Sales Revenue X Cash X PART V MATCHING: BALANCE SHEET CLASSIFICATIONS (18 points) — 1. H 6. H 11. A 16. G 2. E 7. H 12. A 17. F 3. D 8. E 13. A 18. H 4. G 9. C 14. F 5. A 10. E 15. C PART VI RATIOS (12 points) — 1. Current ratio for 2014 = $180,000 ÷ $75,000 = 2.4 times 2. Debt to assets for 2014 = ($75,000 + $90,000) ÷ $550,000 = 30% 3. Working capital for 2014 = $180,000 $75,000 = $105,000 – 4. Earnings per share for 2014 = $134,000 ÷ 40,000 = $3.35 per share
Investments during 2014 (12,000) Net income in 2014 $ 27,000 2. A. Total assets, beginning of year = $55,000 + $36,000 = $91,000 B. liabilities, end of year = $110,000 – $81,000 = $29,000 C. Net income = $81,000 + $34,000 - $55,000 - $16,000 = $44,000 Revenue during the year = $44,000 + $168,000 = $212,000 PART IV — TYPES OF ACCOUNTS (10 points) Account Liability Stockholders’ Equity Revenue Expense Common Stock X Rent Expense X Equipment X Retained Earnings X Dividends (X) Accounts Receivable X Mortgage Payable X Accounts Payable X Sales Revenue X Cash X PART V — MATCHING: BALANCE SHEET CLASSIFICATIONS (18 points) 1. H 6. H 11. A 16. G 2. E 7. H 12. A 17. F 3. D 8. E 13. A 18. H 4. G 9. C 14. F 5. A 10. E 15. C PART VI — RATIOS (12 points) 1. Current ratio for 2014 = $180,000 ÷ $75,000 = 2.4 times 2. Debt to assets for 2014 = ($75,000 + $90,000) ÷ $550,000 = 30% 3. Working capital for 2014 = $180,000 – $75,000 = $105,000 4. Earnings per share for 2014 = $134,000 ÷ 40,000 = $3.35 per share
Test-Bank-for-Accounting-Tools-for-Business-Decision-Making-5th-Edition-by-Kimmel.docx