Identify the item that best completes each of the descriptions below.

1. Chart    2. General ledger   3. Journal    4. Account    5. Source document

d. Increases and decreases in a specific asset, liability, equity, revenue, or expense are recorded in a(n) _____.

Henderson Industries has $\$ 500$ million of common equity on its balance sheet; its stock price is $\$ 60$ per share; and its market value added (MVA) is $\$ 130$ million. How many common shares are currently outstanding?

At the beginning of the year, Morgan Company had total assets of $425,000 and total liabilities of$260,000.

Required:

If, during the year, total liabilities increased by $85,000 and total stockholders’ equity decreased by$73,000, what is the amount of total assets at the end of the year?

At the beginning of the year, Morgan Company had total assets of $425,000 and total liabilities of$260,000.

Required:

If, during the year, total assets decreased by $52,000 and total stockholders’ equity increased by$35,000, what is the amount of total liabilities at the end of the year?

The following financial statement information is from five separate companies:

Required

1. Answer the following questions about Company A:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is the amount of liabilities on December 31, 2015?
2. Answer the following questions about Company B:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is net income for year 2015?
3. Calculate the amount of assets for Company C on December 31, 2015.
4. Calculate the amount of owner investments for Company D during year 2015.
5. Calculate the amount of liabilities for Company E on December 31, 2014.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

h. Unearned Revenue

Allocating kidneys to those with the highest net benefit (where net benefit is measured as the expected increase in life span from a transplant) is an attempt to maximize A. consumer surplus. B. producer surplus. C. profit. D. equity E. respect for elders.

Icarus Airlines is proposing to go public, and you have been given the task of estimating the value of its equity. Management plans to maintain debt at 30% of the company's present value, and you believe that at this capital structure the company's debtholders will demand a return of 6% and stockholders will require 11%. The company is forecasting that next year's operating cash flow (depreciation plus profit after tax at 40%) will be $68 million and that investment expenditures will be$30 million. Thereafter, operating cash flows and investment expenditures are forecast to grow by 4% a year. a. What is the total value of Icarus? b. What is the value of the company's equity?

When calculating the weighted average cost of capital, the costs of which of the following types of capital include a ($1 - T$) multiplier, where $T$ is the effective tax rate?

a. Debt capital

b. Equity capital

c. Both (a) and (b)

d. Neither (a) nor (b)

The stockholders' equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:

$$\begin{array}{c} \textbf{Stockholders' Equity}\\ \end{array}$$

$$\begin{array}{lrr} \text{Paid-In Capital:}\\ \hspace{10pt}\text{Common Stock-\$1 Par Value; 1,200 shares}\\ \hspace{20pt}\text{authorized, 400 shares issued and outstanding}\hspace{10pt}&\text{\$\hspace{23pt}400}\\ \hspace{10pt}\text{Paid-In Capital in Excess of Par-Common}&\underline{\text{\hspace{20pt}1,600}}\\ \hspace{10pt}\text{Total Paid-In Capital}&\text{\$\hspace{15pt}2,000}\\ \text{Retained Earnings}&\underline{\text{\hspace{10pt}120,000}}\\ \text{Total Stockholders' Equity}&\text{\underline{\underline{\$\hspace{5pt}122,000}}}\\ \end{array}$$

On April 30, 2018, the market price of Lakeside's common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.

Requirements

1. Journalize the declaration and distribution of the stock dividend.
2. Prepare the stockholders' equity section of the balance sheet as of May 31, 2018. Assume Retained Earnings are$120,000 on April 30, 2018, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

i. Services Revenue

A 3-for-2 stock split is being considered by Mammoth Corporation. The equity position of the stockholders is now displayed. Shares of the stock currently cost $120 each. Retained earnings consist of earnings available for Common Stock for the most recent period.

$$\begin{array}{lr} \text { Preferred stock } & \$ 1,000,000 \\ \text { Common stock (100,000 shares at } \$ 3 \text { par) } & 300,000 \\ \text { Paid-in capital in excess of par } & 1,700,000 \\ \text { Retained earnings } & 10,000,000 \\ \quad \text { Total stockholders' equity } & \$ 13,000,000 \end{array}$$

What consequences might the stock split have on Mammoth?

The following events relate to shareholders’ equity transactions of Wilson Supply Company during the first year of its existence. Present journal entries for each of the transactions. h. July 25: It pays the dividend on preferred stock declared on July 3.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

k. Notes Payable