Reference no: EM13859202

Problem 1: Determining Retained Earnings and Net Income Using the Balance Sheet

The following information is reported for Kinney Corporation at the end of 2013.

Accounts Receivable	823,000	Retained Earnings	$?
Accounts Payable	11,000	Supplies Inventory	9,000
Cash	8,000	Equipment	138,000
Common Stock	110,000

a. Compute the amount of retained earnings at the end of 2013.

b. If the amount of retained earnings at the beginning of 2013 was $30,000, and $12,000 in cash dividends were declared and paid during 2013, what was its net income for 2013?

Problem 2:

Analyzing Transactions Using the Financial Statement Effects Template

Record the effect of each of the following independent transactions using the financial statements effects template provided. Confirm that Assets = Liabilities + Equity for each transaction.

Problem 3:

Identifying and Classifying Financial Statement Items

For each of the following items, identify whether they would most likely be reported in the balance sheet (B) or income statement (I).

(a) Machinery
(b) Supplies Expense
(c) Prepaid Advertising
(d) Advertising Expense
(e) Common Stock
(f) Factory Buildings
(g) Receivables
(h) Taxes Payable
(i) Taxes Expense
(j) Cost of Goods Sold
(k) Long-Term Debt
(I) Treasury Stock

that Assets = Liabilities + Equity for each transaction.

Problem 4:

Analyzing Transactions using the Financial Statement Effects Template

Report the effects for each of the following independent transactions using the financial statement effects template provided.

Journalizing Business Transactions

Prepare journal entries for each of the following transactions.

(a) Issue stock for $1,000 cash

(b) Purchase inventory for $500 cash

(c) Sell inventory from (b) for $2,000 on credit

(d) Record $500 for cost of inventory sold in (c)

(e) Receive $2,000 cash on receivable from (c)