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Chadwick Associates retained $850,000 of net income in the business in Year 1. If $75,000 was appropriated to satisfy the restrictive covenant of a loan agreement, what are the effects of the appropriation on the financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net incomeA. = + − = B.(75,000)= +(75,000) − = (75,000) FAC.(75,000)= +(75,000) −75,000=(75,000)(75,000) FAD.(75,000)= +(75,000) − =

Franklin Corporation reported net income of $75,000 in Year 1. The company had 100,000 shares of $12 par value common stock outstanding and a market price of $18 per share. What is Franklin’s price-earnings ratio?

On January 1, Year 2 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.What is the amount of uncollectible accounts expense recognized on the Year 2 income statement?

Domino Company ages its accounts receivable to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $42,470 and $3,290, respectively. During Year 2, the company wrote off $2,540 in uncollectible accounts. In preparation for the company’s estimate of uncollectible accounts expense for Year 2, Domino prepared the following aging schedule: Number of Days Past DueReceivables Amount% Likely to be UncollectibleCurrent$ 65,0001%0 to 3025,6005%31 to 606,26010%61 to 903,12025%Over 902,80050%Total$ 102,780 What amount will be reported as uncollectible accounts expense on the Year 2 income statement?

Which of the following best describes how each share of par value stock issued is reported in the Common Stock account?

Hancock Medical Supply Company, earned $160,000 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $128,000 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1?

At the time that Kirby Company issued a 2-for-1 stock split, the company had 5,000 shares of $6 par value common stock outstanding. Stockholders’ equity also included $15,000 of paid in capital in excess of par value–common and $22,000 of retained earnings. Which of the following statements regarding the impact of the stock split is true?

Rocco Corporation decides to issue a 7.5% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution is made at the time the market value of the stock is $50 a share. How will the entry to record this transaction affect the company’s stockholders’ equity accounts? Common StockPaid-in Capital in Excess of Par Value–CommonRetained EarningsA.$ 200,000$ 300,000$(50,000)B.$ 15,000 $(15,000)C.$ 15,000$ 60,000$(75,000)D.$ 100,000 $(100,000)

At the time of liquidation, Fairchild Company reported assets of $200,000, liabilities of $120,000, common stock of $70,000 and retained earnings of $10,000. What is the maximum amount of Fairchild’s assets that the shareholders are entitled to receive?

What effect will the declaration and distribution of a stock dividend have on net income and cash flows? Net IncomeCash FlowsA.NoneNoneB.NoneDecreaseC.IncreaseNoneD.DecreaseDecrease