FIN 419 Week 3 Individual Assignment – Assignments from the Readings

FIN 419 Week 3 Individual Assignment – Assignments from the Readings

FIN 419 Week 3 Individual Assignment – Assignments from the Readings
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Week 3 – Assignments from the Readings
Chapter 2: Problem 2.1
Briefly discuss the form and informational content of each of these statements.
1. The income statement for the year ended December 31, 2006 for Technica, Inc. shows a net profit. Further, Technica has the ability to pay dividends to stockholders.
2. Balance sheets for December 31, 2006 and 2005 show excess current assets over current liabilities which are demonstrating liquidity. Fixed assets are $270,000 out of $408,300, more than half of the total assets. The firm repurchased 500 shares of common stock since the 2006 balance is 19,500 and the 2005 balance reflects 20,000. Technica is financed via common stock, long-term debt, short-term debt, and retained earnings.
3. Statement of retained earnings for the year ended December 31, 2006 reflects a net profit of $42,900. In addition, Technica paid $20,000 in cash dividends. Retained earnings reflect an increase from $50,200 in January to $73,100 in December; this indicates that Technica retained $22,900.
Chapter 2: Problem 2.2
1 2
Account name Statement Type of account
Account payable BS CL
Accounts receivable BS CA
Accruals BS CL
Accumulated depreciation BS FA
Administrative expense IS E
Buildings BS FA
Cash BS CA
Common Stock (at par) BS SE
Cost of goods sold IS E
Depreciation IS E
Equipment BS FA
General expense IS E
Interest expense IS E

FIN 419 Week 3 Individual Assignment – Assignments from the Readings
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