3.For each financial statement item listed in 1 through 5 below, identify the best description by selecting from itemsathroughfbelow. You may use each letter more than once or not at all. Write the letter ‘X’ for each item for which no description is listed.
Descriptions
a.Amount of net income or loss less distributions to the owners of the company
b.Must be settled within one year
c.Converted to cash within one year
d.Amount of owners’ investment
e.Portion of equity to which dividends reduce
f.Land used as a site for production
1.
Current liability
2.
The property part of property, plant, and equipment
3.
Retained earnings
4.
Contributed capital
5.
Current asset
4.For each statement listed in 1 through 5 below, state whether it is correct or not by writing ‘Yes’ or ‘No’ in the space provided.
1.Property differs from plant and equipment in that property has no physical substance, while plant and equipment does.
2.Current assets of a major retailer, such as Sears, typically exceed 50 percent of total assets because of merchandise inventory.
3.Goodwill is common on many major U.S. companies’ balance sheets because of the numerous mergers and acquisitions that occur.
4.Yard Mart Company owes $4,700. If Yard Mart uses assets listed in the current asset section of the balance sheet to pay off this debt next year, Yard Mart must report the $4,700 in the current liability section of its balance sheet.
5.Haloid, Inc. issued common stock for cash. This is an investing activity.
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