15. dividends declared and paid reduce a company’s retained earnings balance.\n a. true\n b. false\n16. the…

15. dividends declared and paid reduce a company’s retained earnings balance.\n a. true\n b. false\n16. the statement of cash flows, like the income statement, reports only operating activities of a company.\n a. true\n b. false\n17. independent auditors (cpas) render an opinion that the financial statements do or do not fairly present a company’s financial position, operating results, and cash flows.\n a. true\n b. false\n18. which of the following would appear on a multiple - step income statement but not on a single - step income statement?\n a. net income\n b. total expenses\n c. total revenues\n d. income before income taxes\nseikosen\nthe 2016 income statement of seikosen shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,400. seikosen’s stockholders’ equity was $280,000 at the beginning of the year and $320,000 at the end of the year. the company has 20,000 shares of stock outstanding at december 31, 2016.\n19. read the information about seikosen. what is seikosen’s net income?\n a. $80,000\n b. $32,190\n c. $130,800\n d. $46,400\n20. read the information about seikosen. what is seikosen’s profit margin (to the closest tenth of a percent)?\n a. 2.8\n b. 25.5\n c. 61.2\n d. 34.5

15. dividends declared and paid reduce a company’s retained earnings balance.\n a. true\n b. false\n16. the statement of cash flows, like the income statement, reports only operating activities of a company.\n a. true\n b. false\n17. independent auditors (cpas) render an opinion that the financial statements do or do not fairly present a company’s financial position, operating results, and cash flows.\n a. true\n b. false\n18. which of the following would appear on a multiple - step income statement but not on a single - step income statement?\n a. net income\n b. total expenses\n c. total revenues\n d. income before income taxes\nseikosen\nthe 2016 income statement of seikosen shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,400. seikosen’s stockholders’ equity was $280,000 at the beginning of the year and $320,000 at the end of the year. the company has 20,000 shares of stock outstanding at december 31, 2016.\n19. read the information about seikosen. what is seikosen’s net income?\n a. $80,000\n b. $32,190\n c. $130,800\n d. $46,400\n20. read the information about seikosen. what is seikosen’s profit margin (to the closest tenth of a percent)?\n a. 2.8\n b. 25.5\n c. 61.2\n d. 34.5

Answer

Brief Explanations:

  1. Dividends are paid out of retained earnings, so they reduce the retained - earnings balance.
  2. The statement of cash flows reports operating, investing, and financing activities, not just operating activities.
  3. Independent auditors (CPAs) give an opinion on whether financial statements fairly present a company's financial position, operating results, and cash flows.
  4. Income before income taxes is calculated in multiple - step income statements but not in single - step income statements.
  5. Net income = Operating revenues−Selling expenses−General and administrative expenses−Interest expense−Income tax expense. Substitute the values: $130800 - 37100-34900 - 900-11400=46500$.
  6. Profit margin = (Net income / Operating revenues)×100. Substitute net income = 46500 and operating revenues = 130800, profit margin=(46500 / 130800)×100≈35.5%.

Answer:

  1. a. True
  2. b. False
  3. a. True
  4. d. Income before income taxes
  5. d. $46500
  6. b. 35.5%