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1. Use the following abbreviations to indicate on which statement you would find each item below. Some items may appear on more than one statement. Include all abbreviations that would apply (might be more than one). IS: Income statement SRE: Statement of retained earnings BS: Balance sheet 1. ____ Sales 2. ____ Vehicles 3. ____ Gain on sale of land 4. ____ Retained earnings 5. ____ Utilities Expense 6. ____ Capital stock 7. ____ Dividends paid 8. ____ Loss on sale of investment 9. ____ Income tax expense 10. ____ Net income 11. ____ Cash 2. The following relate to Farr Corporation for the month of April: Sales Revenue $160,000 Gain on the Sale of Land $15,000 Cost of Goods Sold $79,000 Tax Expense $12,000 Selling Expense $10,000 Dividends Paid $6,000 Loss on Lawsuit $14,000 a. Determine Farrs gross profit for the month of April. b. Determine Farrs net income for the month of April. c. If retained earnings at the beginning of April were $1,200,000, what would retained earnings be at the end of April? 3. Maverick Company has the following account balances at the end of December. Show that Mavericks balance sheet would balance using the accounting equation. Cash $18,000 Capital Stock $100,000 Inventory $16,000 Note Payable $65,000 Retained Earnings $39,000 Building $150,000 Equipment $20,000 4. Ramond Company has hired you to prepare financial statements for the year ending 12/31. On your first day of work, your assistant comes to you with several items that could be classified as expenses or could be classified as assets. Based on your knowledge of accounting so far, determine whether the following items should be recorded as an expense or an asset. a. On 12/31, Ramond paid $14,000 to rent office space for the next twelve months. b. On 10/1, Ramond paid $40,000 for insurance that covered the companys property for the last quarter of the year. c. On 6/1, Ramond purchased $27,000 in supplies, all of which were used by 12/31. d. On 12/31, Ramond purchased $5,000 worth of supplies for the coming month

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