Exam_1_Review_Answers - CHAPTERS 1 AND 2 Multiple Choice 1...

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CHAPTERS 1 AND 2 Multiple Choice 1. c 4. c 7. c 10. a 13. a 2. b 5. d 8. b 11. b 14. b 3. a 6. b 9. d 12. b Matching: Financial Statement Analysis 1. D 5. A 2. E 6. C 3. F 7. H 4. B 8. G Short Problems A. Ending stockholders’ equity, 12/31/07 ...................................... $175,000 Beginning stockholders’ equity, 1/1/07 ..................................... 150,000 Increase in stockholders’ equity ................................................. 25,000 Dividends paid during 2007 ...................................................... 30,000 55,000 Investments during 2007 .......................................................... 15,000 Net income in 2007 ................................................................... $ 40,000 B. Total liabilities, $25,000 (Beginning of year). Total stockholders’ equity, $45,000 (End of year). Expenses during the year, $40,000. Types of Accounts Stockholders’ Asset Liability Equity 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Balance Sheet Classification 1. G 6. E 11. F 16. H
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2. E 7. C 12. E 17. C 3. A 8. H 13. D 18. G 4. E 9. H 14. A 5. D 10. A 15. F Ratios 1. The current ratio for 2007 is 3.5 times . $150,000 $525,000 = 3.5 times. 2. The debt to total assets ratio for 2007 is 40% . $1,375,000 $400,000 + $150,000 = 40% 3. The working capital for 2007 is $375,000 . $525,000 - $150,000 = $375,000 4. The earnings per share for 2007 is $15 . 00 $10,0 $150,000 = $15 CHAPTER 3 AND 4 Multiple Choice 1. a 4. a 7. d 10. d 2. c 5. c 8. b 11. b 3. d 6. a 9. a Journal Entries Account(s) Account(s)
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