1. Presented below are data for Wildhorse Co. 2017 2018 Assets, January 1 $8,855
ID: 2510207 • Letter: 1
Question
1. Presented below are data for Wildhorse Co.
2017
2018
Assets, January 1
$8,855
$9,717
Liabilities, January 1
4,870
?
Stockholders' Equity, Jan. 1
?
?
Dividends
1,611
1,219
Common Stock
1,456
1,304
Stockholders' Equity, Dec. 31
?
?
Net Income
1,910
1,306
Stockholders' Equity at January 1, 2018 is
A. $5,740
B. $3,985
C. $4,284
D. $5,895
2. During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods?
Average Cost
LIFO
A. Yes No
B. Yes Yes
C. No No
D. No Yes
3. Bonita Industries has the following items at year-end:
Cash in bank
$44,000
Petty cash
550
Short-term paper with maturity of 6 months
10,200
Postdated checks
1,940
Bonita should report cash and cash equivalents of
A. $54,750
B. $44,550
C. $52,750
D. $56,690
4. Presented below are data for Sheridan Company
2017
2018
Assets, January 1
$6849
?
Liabilities, January 1
?
$4109
Stockholders' Equity, Jan. 1
?
$4127
Dividends
847
972
Common Stock
904
968
Stockholders' Equity, Dec. 31
?
3401
Net Income
1032
?
Net income for 2018 is
A. $182 income
B. $726 income
C. $246 loss
D. $726 loss
2017
2018
Assets, January 1
$8,855
$9,717
Liabilities, January 1
4,870
?
Stockholders' Equity, Jan. 1
?
?
Dividends
1,611
1,219
Common Stock
1,456
1,304
Stockholders' Equity, Dec. 31
?
?
Net Income
1,910
1,306
Explanation / Answer
Solution:
All the question are independent, so I am solving Problem 1 for Wildhorse Co.
Problem 1 –
Stockholder’s Equity at January 1, 2018 is the ending Stockholders’ Equity at Dec 31, 2017
We can calculate Stockholders Equity at Dec 31, 2017 by using the 2017 data:
$$
Beginning Stockholders Equity Jan 1
(Assets Jan 1 $8,855 - Jan 1 Liabilities $4870)
$3,985
Plus: Net Income for the year 2017
$1,910
Less: Dividend
($1,611)
Stockholders Equity Dec 31
$4,284
Hence, the Stockholders Equity Jan 1, 2018 = $4,284
The correct option is C. $4,284
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining parts.
$$
Beginning Stockholders Equity Jan 1
(Assets Jan 1 $8,855 - Jan 1 Liabilities $4870)
$3,985
Plus: Net Income for the year 2017
$1,910
Less: Dividend
($1,611)
Stockholders Equity Dec 31
$4,284
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