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What is included in the Income Statement and NOT in the Statement of Cash Flows? -
Depreciation Expense
Computation of Net Income:
A co. sold products in 2014 for $120k and collected $100k cash and remainder in 2015. Co.
incurred $70k expenses for 2014 and paid $100k which included $30k for expenses
incurred in 2013. What is net income for 2014? - Computation of Net Income (R-E=NI)
$50,000
Net Income = $120k - $70k = $50k, or
Revenues - Expenses Incurred = Net Income
Retained Earning Statement:
The beginning retrained earnings on 1/14/14 is $25k. The NI for 2014 is $50k and the
dividend payout ratio is 25% of NI. What are retained earnings on 12/31/14? - Retained
Earning Statement:
$62,500
Retained earnings on12/31/14 =
$25k + $50k - (.25x$50k) = $62,500
Retained Earnings:
Firm reported RE of $300 in 12/31/12. For 12/31/13 firm reports RE of $400 and pays
dividends of $25. What is NI in 2013? - Retained Earnings:
Answer $125
Logic is $300 from $400 is $100 plus the $25 dividend totals out to $125.
300 + NI - 25 = 400: NI=125, so
300+125-25=400
BalanceSheet:
Basic equation for the Balance Sheet is? - Balance Sheet:
Equity = Assets - Liabilities, or it can also be seen as
Assets = Liabilities + Equity
Investment:Simple Interest:
An investment of $10k made today at 8% simple interest for 3 yrs and 9 mo. will yield in
principle and interest of? - Interest: Simple Interest
$13,000
Principal + Interest = $10,000 + (10k x .08x3.75) = $13k
Investment returns:
A stock will be worth $36 at EOY and will pay dividend of $2.25.
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