Financial Statements
What financial statement should you prepare first?
Income Statement
Sempra has a working capital of -$4,391 million for 2024. What does that mean?
They do not have enough in current resources to pay off their current obligations.
Torero Corporation paid $7,000 in dividends. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Decrease Cash $7,000
Decrease R/E $7,000
*Increase Dividends $7,000 but that is not on the income statement, it is on the statement of stockholders' equity
Torero Corporation owes the government $7,500 in income taxes that they will pay next year. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Income Taxes Payable $7,500
Decrease R/E $7,500
Increase Income Tax Expense $7,500
What financial statement do dividends appear on?
Statement of Stockholders' Equity
What financial statement and what section of that financial statement would Unearned Revenue be listed in?
Balance Sheet - Current Liabilities
The total liabilities/total stockholders' equity for Resmed, Inc. is 0.37 for 2025. What does that mean?
For every $1 of equity, Resmed, Inc. has $0.37 of liabilities. Resmed, Inc.'s capital structure includes more funding from owners then nonowners.
Torero Corporation purchased $75,000 of equipment on account. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Equipment $75,000
Increase A/P $75,000
A company provides $3,500 in services to customers in December who previously paid in November. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Decrease Deferred Revenue $3,500
Increase R/E $3,500
Increase Revenue $3,500
What-A-Deal Corporation repairs bikes. On April 15, they performed bike repair services of $50,000 to a customer for $10,000 cash and the remainder on account. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Cash $10,000
Increase A/R $40,000
Increase R/E $50,000
Increase Revenue $50,000
What financial statement and what section of that financial statement would Depreciation Expense be listed in?
Income Statement - Operating expenses
Given the following information, what is the gross margin for Sempra (express as percentage):
Natural Gas Revenue $7,141 million; Cost of Natural Gas $1,132 million; Operation and Maintenance $5,336 millions; Dividends $500 million
84%
($7,141 - $1,132)/ $7,141
$6,009/$7,141
Torero Corporation collected $65,000 from customers they previously provided services to. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Cash $65,000
Decrease A/R $65,000
Gilbert Gliders started business on June 1,2025. At that time, the company purchased $5,000 of supplies for cash. At the end of June, the supplies were counted and totaled $1,000. What is the adjusting entry in the FSET on June 30, 2025?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Decrease Supplies $4,000
Decrease R/E $4,000
Increase Supplies Expense $4,000
$5,000 - x = $1,000
x = $4,000
DAILY DOUBLE! If you get it right, you get 600 points, if you get it wrong, you get -600 points.
What is my second favorite animal? *Hint it is at the San Diego Zoo, is very small, but has large ears, and a sandy color
Fennec Fox
Given the following information, what is the total assets for Torero Corporation:
Common Stock $3,000; Cash $15,000; Accounts Receivable $5,000; Accounts Payable $1,000; Supplies Expense $750; Notes Payable $25,000; Equipment $10,500; Accumulated Depreciation $500; Prepaid Property Taxes $500
$30,500
($15,000 + $5,000 + $10,500 - $500 +$500)
Cash + A/R + Equipment - Accumulated Depreciation + Prepaid Property Taxes
Given the following information for ResMed, Inc., what is the ROE for 2025 (Express your answer as a percentage to 1 decimal place):
Net Income 2025: $1,400,723
Net Income 2024: $1,020,951
Total Liabilities 2025: $2,206,532
Total Liabilities 2024: $2,008,351
Total Equity 2025: $5,967,859
Total Equity 2024: $4,864,043
ROE =25.9%
For every $1 of equity, Resmed, Inc. generated 25.9 cents (or $0.259) of profit.
ROE = Net Income / Average Stockholders' Equity
ROE = 1,400,723 / ((5,967,859 + 4,864,043)/2)
ROE = 1,400,723 / ((10,831,902)/2)
ROE = 1,400,723 / (5,415,951)
A company collects $500 upfront from a customer for services they are going to provide next month. What is the entry in the FSET when the company collects the $500?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Cash $500
Increase Deferred Revenue $500
On September 1, 2024, Winslow Transportation paid $4,900 for insurance that covers September 1, 2024 through March 31, 2025. What is the adjusting entry in the FSET on December 31, 2024, assuming no adjusting entries in prior months?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Decrease Prepaid Insurance $2,800
Decrease R/E $2,800
Increase Insurance Expense $2,800
[4,900 x (4/7)= 2,800]
On December 1, a company declares they are going to pay their shareholders a $15,000 cash dividend. They pay the dividend on December 15. What is the entry in the FSET on December 15?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Decrease Cash $15,000
Decrease Dividends Payable $15,000
*When they declared the dividend on December 1, they would have increased Dividends Payable, decreased R/E, and increased Dividends
Given the following information, what is the retained earnings balance for Torero Corporation:
Cash $15,000; Accounts Receivable $5,000; Supplies $500; Equipment $10,500; Accounts Payable $1,000; Notes Payable $25,000; Common Stock $3,000
$2,000
Total Assets = $15,000 + $5,000 + $500 + $10,500 = $31,000
Total Equity = Total Assets - Total Liabilities
Total Equity = $31,000 - $25,000 = $5,000
R/E = Total Equity - Common Stock
R/E = $5,000 - $3,000 = $2,000
Given the following information for Qualcomm, Inc., calculate the 2024 EPS and interpret it:
Net Income 2024: $10,142 million
Average Shares Outstanding 2024: 1,116,000,000
Average Shares Outstanding 2023: 1,117,000,000
$9.09, For every share of common stock outstanding (held by shareholders), Qualcomm, Inc. generated $9.09 of profit.
EPS = (net income – preferred dividends) / average # shares of common stock outstanding
EPS = $10,142 / (1,116) OR
$10,142,000,000 / 1,116,000,000
*Net income is in millions, and shares is in actual units
Torero Corporation sold $300,000 of inventory to customers on account. Previously, Torero Corporation paid $100,000 for that inventory. What is the entry in the FSET?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase A/R $300,000
Decrease Inventory $100,000
Increase R/E $200,000 [or Increase R/E $300,000 and Decrease R/E $100,000]
Increase Revenue $300,000
Increase COGS $100,000
Gilbert Gliders employs workers who earn salaries totaling $4,500 per five-day work week. The employees worked from Monday, September 29, through Friday, October 3, and were paid $4,500 on Saturday, October 4. What is the adjusting entry in the FSET on September 30?
Tell me all of the accounts impacted on both balance sheet and income statement, and if they increase or decrease and by what amount. Be specific with accounts (i.e. A/R not Noncash Assets)
Increase Salaries Payable $1,800
Decrease R/E $1,800
Increase Salaries Expense $1,800
$4500/5 = $900 x 2 days = $1,800
Monday Sept 29 and Tuesday Sept 30
In August, SD Theater Company collected $600,000 for season ticket packages for its 12 plays. Of the 12 plays, 3 are in September, 4 in October, 3 in November, and 2 in December. What is the ending balance of the deferred revenue account on October 31 (after all adjusting entries)?
$250,000
Beg $600,000
Earned: ($600,000/12 plays=$50,000) x 7 plays = $350,000
Remaining:$600,000 - $350,000 = $250,000
Alternatively: 5 plays remain x $50,000 = $250,000 left to earn