Ch04QuizSol - Advertising expense 24,000 Common shares...

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Quiz #4 - Chapter 4 - Solution 1. (5 pts) You are reviewing a set of financial statements and come across the following headings. Indicate with an "X" the financial statement you would expect to find the heading listed on. Assume the direct format of the cash flow statement is being used. Some items may appear on more than one statement or not at all. Income Statement Balance Sheet Statement of Stockholders' Equity a. Earnings per share x b. Dividends paid x c. Accumulated depreciation x d. Prepaid insurance x e. Wages payable x f. Cost of goods sold x g. Sales revenue x h. Interest expense x i. Interest payable x j. Contributed capital x x 2. (5 pts) Information about Iron Horses, which sells motorcycles, is shown below:
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Unformatted text preview: Advertising expense 24,000 Common shares outstanding, 1/1 20,000 Common shares outstanding, 10/1 40,000 Cost of goods sold 660,000 Depreciation expense 28,000 Income tax expense 20,000 Income tax payable 14,000 Interest expense 10,000 Payments to owners 30,000 Retained earnings 70,000 Salaries expense 120,000 Sales revenue 900,000 Compute (a) gross profit: $900,000 - 660,000 = $240,000 (b) net income: $240,000 - 24,000 - 28,000 - 120,000 - 10,000 - 20,000 = $38,000 (c) earnings per share for the period (assume an annual period): $38,000 / ((20,000 * 9/12) + (40,000 * 3/12)) = $1.52...
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This note was uploaded on 11/30/2010 for the course ACC 310F taught by Professor Verduzco during the Spring '07 term at University of Texas.

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