Question : 41. Which of the following equations best describes the income statement? A. Assets : 1228423

41. Which of the following equations best describes the income statement? 
A. Assets – Liabilities = Stockholders’ Equity
B. Net income = Revenues + Expenses
C. Net income = Revenues – Expenses.
D. Retained earnings = Net Income + Dividends

42. Lena Company has provided the following data (ignore income taxes):
2010 revenues were $99,000.
2010 expenses were $47,800.
Dividends declared and paid during 2010 totaled $9,500.
Total assets on December 31, 2010 were $177,000.
Total liabilities on December 31, 2010 were $89,000.
Contributed capital on December 31, 2010 was $28,000.
Which of the following is correct? 
A. 2010 net income was $41,700.
B. Total stockholders’ equity on December 31, 2010 was $236,000.
C. Retained earnings on December 31, 2010 were $60,000.
D. Retained earnings on December 31, 2010 were $41,700.

43. Lena Company has provided the following data (ignore income taxes):
2010 revenues were $99,000.
2010 expenses were $47,800.
Dividends declared and paid during 2010 totaled $9,500.
Total assets on December 31, 2010 were $177,000.
Total liabilities on December 31, 2010 were $89,000.
Contributed capital on December 31, 2010 was $28,000.
Which of the following is not correct? 
A. 2010 net income was $51,200.
B. Total stockholders’ equity on December 31, 2010 was $88,000.
C. Retained earnings increased $41,700 during 2010.
D. Retained earnings on December 31, 2010 were $41,700.

44. Madrid Company has provided the following data (ignore income taxes):
2010 revenues were $77,500.
2010 net income was $33,900.
Dividends declared and paid during 2010 totaled $5,700.
Total assets on December 31, 2010 were $217,000.
Total stockholders’ equity on December 31, 2010 was $123,000.
Retained earnings on December 31, 2010 were $83,000.
Which of the following is not correct? 
A. 2010 expenses were $43,600.
B. Total liabilities on December 31, 2010 were $94,000.
C. Retained earnings increased $33,900 during 2010.
D. Contributed capital on December 31, 2010 was $40,000.

45. Madrid Company has provided the following data (ignore income taxes):
2010 revenues were $77,500.
2010 net income was $33,900.
Dividends declared and paid during 2010 totaled $5,700.
Total assets on December 31, 2010 were $217,000.
Total stockholders’ equity on December 31, 2010 was $123,000.
Retained earnings on December 31, 2010 were $83,000.
Which of the following is correct? 
A. 2010 expenses were $37,900.
B. Total liabilities on December 31, 2010 were $11,000.
C. Retained earnings increased $28,200 during 2010.
D. Contributed capital on December 31, 2010 was $206,000.

46. Which of the following is the amount of revenue reported on the income statement of a retail company? 
A. The cash collected from customers during the current period.
B. Both cash and credit sales for the period.
C. Cash sales for the period.
D. Cash sales and stockholders’ investments.

47. On January 1, 2010 Miller Corporation had retained earnings of $8,000,000. During 2010, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued stock for $1,000,000. What were Miller’s retained earnings on December 31, 2010? 
A. $7,000,000
B. $9,500,000
C. $9,000,000
D. $7,500,000

48. What are the categories of cash flows that appear on a statement of cash flows? 
A. Cash flows from investing, financing, and service activities.
B. Cash flows from operating, production, and internal activities.
C. Cash flows from financing, production, and growth activities.
D. Cash flows from operating, investing, and financing activities.

49. When would a company report a net loss on the income statement? 
A. When revenues are less than the sum of expenses plus dividends during an accounting period.
B. If assets decreased during an accounting period.
C. If liabilities increased during an accounting period.
D. When expenses exceeded revenues for an accounting period.

50. Which of the following describes the amount of insurance expense reported on the income statement? 
A. The amount of cash paid for insurance in the current period.
B. The amount of cash paid for insurance in the current period less any unpaid insurance at the end of the period.
C. The amount of insurance used up (incurred) in the current period to help generate revenue.
D. The amount of cash paid for insurance that is reported within the statement of cash flows.