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1. Answer the following true/false questions by placing the letters T or F in the space beside each question. a. b. A company is being sued because it is alleged that its products have harmed some customers. Attorneys estimate there is a 33% chance the firm might lose $200,000 as a result of the suit. To report this uncertainty in the financial statements, the firm should report a loss and estimated liability of $66,000 this year. A company has the following account balances: Revenues, $120,000; Salary Payable, $7,000; Cost of Goods Sold, $50,000; Owner Withdrawals, $3,000; Rent Expense, $12,000; Gain on Sale of Land, $4,000; Accounts Receivable, $13,000; Cash, $15,000; and Advertising Expense, $8,000. Net income is $54,000. The Statement of Cash Flows reports all the cash receipts and disbursements of the firm for the accounting period, as well as promises to receive or pay cash in the same period. A firm gets $10,000 from its owners when it goes into business in Year One. It gets another $15,000 from a bank loan. Revenues for Year One total $70,000, expenses are $39,000, and dividends paid to the owners are $3,000. The retained earnings balance at the beginning of Year Two is $38,000. C. d. e. f. Dividend expense is reported on the Income Statement. Treasury Stock is reported as an Asset on the Balance Sheet. Accounts Receivable represents the amount of money to be received in the future resulting from the sale of a product or service on open account credit. g

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