Financial Accounting Practice Test -
1. Using the information below prepare a classified balance sheet, income statement, and statement of retained earnings for Alpha Company as of December 31, 2013:
Cash $30,000 debit
Accounts Receivable $12,000 debit
Accounts Payable $16,000 credit
Common Stock $2par, 8,000 shares issued $16,000 credit
Additional Paid in Capital $ 8,000 credit
Equipment $24,000 debit
Accumulated Depreciation $12,000 credit
Retained Earnings $ 9,400 credit*
Sales $28,000 credit
Supplies Expense $ 2,200 debit
Rent Expense $14,800 debit
Dividends $ 4,000 debit
Depreciation Expense $ 2,400 debit
*Hint = Beginning balance
2. Based on the financial statements you prepared compute (show computations):
1. Current ratio
2. Earnings per share
3. Price earnings ratio
4. Return on equity
5. Net income ratio