Q1 Earnings is another word for (revenue / receivables / ___________).
Earnings of a corporation belong to the (managers / ____________).
Earnings can either be distributed to the stockholders as (__________ / expenses / retained earnings) or kept in the business as (dividends / expenses / retained earnings).
Q2 Income statement: Revenues - Expenses = ________________
Balance sheet: Assets = __________ + ________________
Stockholders’ Equity = Contributed capital + ____________ + Other Equity
Statement of SE: Beg Retained Earnings + ____________ - Dividends = Ending RE
Q3 Net income is computed on the (___________ / SE / BS) and then transferred to the Statement of Stockholders’ Equity to increase (CC / ______ / Other SE). Ending retained earnings is reported on the Statement of Stockholders’ Equity and then transferred to the (IS / SE / BS).
Q4 Circle whether the account is reported on the Income Statement (IS), Statement of Stockholders’ Equity (SE), or the Balance Sheet (BS). Three amounts are reported on two statements.
a. Contributed capital (IS / _____ / _____)
e. Sales revenue (_____ / SE / BS)
b. Net income (_____ / _____ / BS)
f. Accounts receivable (IS / SE / _____)
c. Dividends (IS / SE / BS)
g. Wage expense (_____ / SE / BS)
d. Retained earnings (IS / SE / BS)
h. Bonds payable (IS / SE / _____)
Q5 Use PepsiCo’s 2010 statement of stockholders’ equity above to answer the following questions:
a. Contributed capital reported at the end of the accounting period is _____ million, which is the amount shareholders paid for (net income / dividends / ________________).
b. Retained earnings increased by (________ / dividends / issued shares) of __________ million and decreased by (net income / __________ / issued shares) of __________ million.
c. When the company issues shares of stock, total stockholders’ equity (__________ / decreases). When the company buys back shares of stock, total stockholders’ equity (increases / __________).