Questions and Answers on Financial Accounting

Instructions: Using the background information on pages 2-4 (below), complete the following tasks.

1. 1. Prepare journal entries for listed transactions throughout the year.

1. 2. Prepare balances for all accounts to be used in financial statements.

1. 3. Prepare the following financial statements:
   1. 1. Income Statement
      2. Retained Earnings Statement
      3. Balance Sheet
      4. Cash Flow Statement (Indirect Method)

1. 4. Prepare the following financial ratios using the Income Statement and Balance Sheet:
   1. Current Ratio
   2. Quick Ratio
   3. Accounts Receivable Turnover
   4. Days Sales in Receivable
   5. Earnings Per Share
   6. Price Per Earnings Ratio (Assume Market Price = $12)