Question

2.   Identify on which of the four basic financial statements could the following information be obtained:

1. The balance due on company loans
2. The total sales dollars for the period
3. Taxes paid for the year
4. The amount paid out to stockholders as dividends
5. The value of inventory at the end of the year
6. Cash balance at the end of the year

Answer 1

(a) The balance due on company loans : This information can be obtained from the Balance sheet (in the liabilities section).

(b) Total sales dollars for the period: This information can be obtained from the Income statement.

(c) Taxes paid for the year: Taxes paid for the year can be obtained from the statement of cash flows in the operating activities section while tax expense for the year can be obtained from the income statement.

(d) Amount paid out to stockholders as dividends : Amount paid out to stockholders as dividends can be obtained from the statement of cash flows in the financing activities section while current year's dividend can be obtained from the statement of retained earnings or statement of changes in equity.

(e) Value of inventory at the end of the year: It can be obtained from the Balance sheet under the current assets section.

(f) Cash balance at the end of the year: It can be obtained from the statement of cash flows.