HCS 380 week 1

Question 1

  Your answer is correct.

Match the word or phrase with the best description of it.

(a)       An expression about whether financial statements conform with generally accepted accounting principles.
(b)       A business that raises money by issuing shares of stock.
(c)       The portion of stockholders’ equity that results from receiving cash from investors.
(d)       Obligations to suppliers of goods.
(e)       Amounts due from customers.
(f)       A party to whom a business owes money.
(g)       A party that invests in common stock.
(h)       A business that is owned jointly by two or more individuals but does not issue stock.

Question 2

  Your answer is correct.

Match each of the following forms of business organization with a set of characteristics: sole proprietorship, partnership, corporation.

(a)       Shared control, tax advantages, increased skills and resources.
(b)       Simple to set up and maintains control with owner.
(c)       Easier to transfer ownership and raise funds, no personal liability.

Question 3

  Your answer is correct.

The annual report provides financial information in a variety of formats, including the following.

Management discussion and analysis (MD&A)
Financial statements
Notes to the financial statements
Auditor’s opinion

For each of the following, state in what area of the annual report the item would be presented. If the item would probably not be found in an annual report, state “Not disclosed.”

(a)   The total cumulative amount received from stockholders in exchange for common stock.    
(b)   An independent assessment concerning whether the financial statements present a fair depiction of the company’s results and financial position.    
(c)   The interest rate that the company is being charged on all outstanding debts.    
(d)   Total revenue from operating activities.    
(e)   Management’s assessment of the company’s results.    
(f)   The names and positions of all employees hired in the last year.    
Question 4The following items and amounts were taken from Nash’s Trading Post, LLC’s 2017 income statement and balance sheet.Cash$ 84,500Retained earnings120,000Cost of goods sold435,000Salaries and wages expense114,000Prepaid insurance7,800Inventory64,000Accounts receivable87,000Sales revenue580,000Notes payable6,100Accounts payable49,000Service revenue4,500Interest expense1,700  
  HYPERLINK “javascript:void(0)” o “Collapse question part” (a)Your answer is correct.  In each case, identify whether the item is an asset, liability, stockholders’ equity, revenue, or expense item.CashRetained earningsCost of goods soldSalaries and wages expensePrepaid insuranceInventoryAccounts receivableSales revenueNotes payableAccounts payableService revenueInterest expenseSHOW LIST OF ACCOUNTSSHOW ANSWERLINK TO TEXTAttempts: 2 of 3 used   
  HYPERLINK “javascript:void(0)” o “Collapse question part” (b)Your answer is correct.  Prepare an income statement for Nash’s Trading Post, LLC for the year ended December 31, 2017.Nash’s Trading Post, LLCIncome Statement$$$

Question 5

  Your answer is correct.

During 2017, its first year of operations as a delivery service, Flounder Corp. entered into the following transactions.

1.   Issued shares of common stock to investors in exchange for $137,000 in cash.
2.   Borrowed $55,000 by issuing bonds.
3.   Purchased delivery trucks for $63,000 cash.
4.   Received $18,000 from customers for services performed.
5.   Purchased supplies for $6,600 on account.
6.   Paid rent of $5,900.
7.   Performed services on account for $10,700.
8.   Paid salaries of $26,700.
9.   Paid a dividend of $11,500 to shareholders.

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders’ Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced, see Illustration 3-3 for example.) 

    Assets = Liabilities + Stockholders’ Equity
    Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Bonds Payable + Common Stock + Retained Earnings
                                Revenues Expenses Dividends    
(1)   $   $   $   $   $   $   $   $   $   $    
    $   $   $   $ $   $   $   $   $   $