Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 2 Basic Accounting Concepts 79

Company G: Capital stock of $60,000 was issued, but no dividends were paid.

Company H: Capital stock of $60,000 was issued, and dividends of $40,000 were paid.

One item is omitted from each of the following summaries of balance sheet and income state-

ment data for four different corporations, O, P, Q, and R.

OP Q R

Beginning of the year:

Assets $300,000 $190,000 $100,000 (d)

Liabilities 195,000 90,000 80,000 $450,000

End of the year:

Assets $675,000 $250,000 $120,000 $930,000

Liabilities 375,000 70,000 105,000 510,000

During the year:

Additional issue of capital stock (a) $ 44,000 $ 10,000 $150,000

Dividends $ 30,000 16,000 (c) 225,000

Revenue 187,500 (b) 175,000 420,000

Expenses 135,000 104,000 177,000 480,000

Determine the amounts of the missing items, identifying them by letter. (Suggestion:First

determine the amount of increase or decrease in stockholders’ equity during the year.)

Use the following data (in millions) for Campbell Soup Co.for the year ending August 1, 2004,

to answer the following questions.

Retained earnings August 3, 2003 $5,254

Retained earnings August 1, 2004 5,642

Net cash from operating activities 1,106

Net decrease in cash 3

a. Determine the net increase or decrease in retained earnings during 2004.

b. If dividends in 2004 are $259, what was the net income or loss for Campbell Soup for the

year ending August 1, 2004?

Financial information related to Thorstad Interiors for June and July of 2007 is as follows:

June 30, 2007 July 31, 2007

Notes payable $30,000 $45,000

Land 51,000 75,000

Capital stock 18,000 27,000

Retained earnings??

Cash 54,000 81,000

a. Prepare balance sheets for Thorstad Interiors as of June 30 and July 31, 2007.

b. Determine the amount of net income for July, assuming that dividends of $6,000 were

paid.

c. Determine the net cash flows from operating activities.

d. Determine the net cash flows from investing activities. (continued)

Exercise 2-14

Missing amounts from balance
sheet and income statement
data

Goals1, 3, 5

a. $172,500

Exercise 2-15

Net income, retained earn-
ings, and dividends

Goals3, 5

a. $388 increase

Exercise 2-16

Balance sheet, net income,
and cash flows

Goals3, 5

b. $33,000