Question

In: Accounting

2. The following selected accounts and account balances were taken from the records of Nowell Company....

2. The following selected accounts and account balances were taken from the records of Nowell Company. Except as otherwise indicated, all balances are as of December 31, 2018, before the closing entries were recorded.

Consulting revenue $ 9,300
Cash 8,400
Cash received from common stock issued during 2017 3,600
Travel expense 550
Dividends 1,200
Cash flow from investing activities 3,000
Rent expense 1,450
Payment to reduce debt principal 18,200
Retained earnings, January 1, 2018 14,300
Salary expense 2,500
Cash flow from operating activities 2,350
Common stock, December 31, 2018 10,700
Other operating expenses 1,800

  1. Prepare the income statement Nowell would include in its 2018 annual report.

Income Statement
For the Year Ended December 31, 2018
not attempted not attempted
Expenses
not attempted not attempted
not attempted not attempted
not attempted not attempted
not attempted not attempted
not attempted not attempted
Total expenses 0
not attempted $0

  1. Identify the accounts that should be closed to the Retained Earnings account. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

  • Consulting revenue checked
  • Supplies expense unchecked
  • Travel expenses unchecked
  • Salaries payable unchecked
  • Dividends unchecked
  • Cash unchecked
  • Rent expense unchecked
  • Salary expense unchecked
  • Other operating expense unchecked

  1. c-1. Determine the Retained Earnings account balance at December 31, 2018.

  2. c-2. Which of the following statement(s) is true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

Net income does not include revenue of the current year.unanswered

  • Retained earnings does not include current year net income, but only the balance from previous years.unanswered
  • Retained earnings not only includes current year net income, but also the balance from previous years and reductions for dividends.unanswered
  • Retained earnings does not include the balance from previous years, but only the reductions for dividends.unanswered
  • Net income only includes revenues and expenses for the current year.unanswered

Solutions

Expert Solution


ekkarill92 answered 1 year ago
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