Flex-Mat started the year with total assets of $160,000 and total liabilities of $90,000

1. Flex-Mat started the year with total assets of $160,000 and total liabilities of $90,000. During the year, the business recorded $210,000 in revenues, $120,000 in expenses, and dividends of $35,000. Stockholders' equity at the end of the year was

$125,000

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($160,000 - $90,000) + ($210,000 - $120,000) - $35,000 = $125,000.

SE = (Total Assets - Total Liabilities) + (Revenues - Expenses) - Dividends

2. If total liabilities increased by $95,000 and stockholders' equity increased by $45,000 during a period of time, then total assets must change by what amount and direction during that same period?

$140,000 increase

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$95,000 + $45,000 = $140,000.

Liabilities Inc + SE inc = Assets Changed

3. Goodman Auto started the year with total assets of $300,000 and total liabilities of $175,000. During the year, the business recorded $475,000 in revenues, $275,000 in expenses, and dividends of $30,000. The net income reported by Goodman Auto for the year was

$200,000

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$475,000 - $275,000 = $200,000

Revenues - Expenses = Net Income

4. Al's Automotive started the year with total assets of $250,000 and total liabilities of $180,000. During the year, the business recorded $375,000 in revenues, $200,000 in expenses, and dividends of $35,000. Stockholders' equity at the end of the year was

$210,000

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Stockholders' equity = ($250,000 - $180,000) + ($375,000 - $200,000) - $35,000

SE = (Total Assets - Total Liabilities) + (Revenues - Expenses) - Dividends

5. If total liabilities decreased by $60,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

$40,000 decrease

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($60,000) + $20,000 = ($40,000)

6. Patterson Corporation began the year with retained earnings of $325,000. During the year, the company issued $500,000 of common stock, recorded expenses of $1,500,000, and paid dividends of $90,000. If Patterson's ending retained earnings was $350,000, what was the company's revenue for the year?

$1,615,000

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$350,000+$90,000+$1,500,000-$325,000=$1,615,000

NEW Retained Earnings + Paid Dividends + Expenses - OLD Retained Earnings = Revenue

7. Maxwell Flooring started the year with total assets of $160,000 and total liabilities of $75,000. During the year, the business recorded $250,000 in revenues, $100,000 in expenses, and dividends of $30,000. The net income reported by Maxwell Flooring for the year was

$150,000

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Revenues - Expenses = Net Income

8. In which of the following sequences are the financial statements usually prepared?
   
   Balance sheet, statement of cash flows, income statement and retained earnings statement
   
   
   Income statement, retained earnings statement, balance sheet, and statement of cash flows
   
   
   Balance sheet, retained earnings statement, statement of cash flows, and income statement
   
   
   Income statement, balance sheet, retained earnings statement, and statement of cash flows

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Net income (from the income statement) is a required input for the retained earnings statement, ending retained earnings (from the retained earnings statement) is a required input for the balance sheet and the ending cash balance (from the balance sheet) is a required input for the statement of cash flows.

9. What section of a cash flow statement shows the cash spent on new equipment during the past accounting period?

Investigating section

10. Sullivan Lighting pays their employees on the last day of each month. Graham Music pays their employees every other Friday. When creating their financial documents on Wednesday, August 31, 2016, the accountant at Graham Music records wages payable, whereas the accountant at Sullivan Lighting does not. Why?

Graham Music owes wages to employees that have not been paid yet, whereas Sullivan Lighting has paid all of their employees in full.