C213 Final Exam All Possible Questions And Answers With Complete Solution

Identify components of a balance sheet. {Ans: The three main sections of the Balance Sheet are Assets, Liabilities, and Equity. Both assets and liabilities are further separated into current and long term based on whether the asset is expected to be consumed or the liability paid within a year. Assets expected to be consumed and liabilities expected to be paid within a year are current and those that will be consumed or paid after a year are long-term. Equity is separated into paid in capital (also referred to as capital stock) and retained earnings. Paid in capital is created when an owner buys stock from the firm. Retained earnings are the accumulated earnings of the firm (i.e., net income over time) that have not been paid back in dividends. Paid in capital also is referred to as contributed capital while retained earnings is earned capital.}Evaluating a historical income statement to project a future income statement. Projected growth for 2017 = 10% increase over 2016 sales. Step 1: Convert the income statement into a common-sized income statement. Step 2: Multiply 2016 sales by 1.10 (10% growth) to get the forecasted 2017 sales. Then multiply the projected 2017 sales by the