Exam 1 Fall 2017 (2).docx

D assets increase by 10000 and stockholders equity

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D. Assets increase by $10,000 and stockholders’ equity increases by $10,000. E. Liabilities increase by $10,000 and stockholders’ equity decreases by $10,000.
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6. Which of the following items would not be found as a debit or credit in a journal entry? A. Rent Expense B. Supplies expense C. Cash D. Dividends E. Net Income 7. On January 1, 2016, Miller Corporation had retained earnings of $8,000,000. During 2016, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued common stock for $1,000,000. What were Miller's retained earnings on December 31, 2016? ___________________________________ 8. Which of the following statements is correct? A. Revenues are reported on the income statement regardless of whether the customer has paid for the goods or services. B. Expenses are reported on the income statement for the period only if they are paid for. C. Net income includes a deduction for dividend payments made to stockholders. D. Net income normally equals the net cash generated by operations. E. None of the above 9. Joe Company's retained earnings increased $20,000 during 2016. What was Joe’s 2016 net income or loss given that Joe’s declared $25,000 of dividends during 2016? ________________________________________ 10. The following information was obtained from the Pamela Corporation’s September financial statements. Determine the company’s retained earnings on September 30. Income Statement Revenues Expenses $5,480,000 Net Income $320,000 Statement of Retained Earnings Beginning Balance $100,000 Net Income Subtotal Dividends $120,000 Ending Balance ????????? Balance Sheet Assets Liabilities $2,500,000 Stockholders’ Equity Common Stock $1,200,000 Retained Earnings ????????? Total Stockholders’ Equity Total Liabilities and Stockholders’ Equity $4,000,000 11. On September 4, the Laura Corporation’s managers purchase $4,000 of supplies on account. How does this event affect the company’s assets, liabilities, and stockholders’ equity? A. Assets increase by $4,000 and stockholders’ equity increases by $4,000. B. Total assets, total liabilities, and total stockholders’ equity do not change. C. Liabilities increase by $4,000 and stockholders’ equity decreases by $4,000.
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