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    Prepared income statement questions for Hughes Co.

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    1------The following infrmation is available for Hughes Co.

    2010 2009 2008
    Net income $2,500 $1,700 $1,900
    Net Sales $37,000 $35,000 $32,000
    Total Assets $420,000 $395,000 $375,000

    From the information provided, calculate Hughes`s profit margin ratio for each of the three years. In 2009 economic conditions and a slowing economy impacted the results of operations. Comment on the results, assuming that the industry average for the profit margin ration is 7% for each of the three years

    2------The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

    True or False

    3-----All necessary numbers to prepare the income statement can be taken from the income statement columns of the work sheet, including the net income or net loss

    True or False

    4-----When expenses exceed revenues, there is a net loss and the Income Summary account would have a credit balance

    True or False

    5-----Current liabilities are cash and other resources that expected to be sold, collected or used within one year or the company`s operating cycle whichever is longer

    True or False

    6-----Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits

    True or False

    7-----Reversing entries

    a; Are optional

    b; Are mandatory

    c; Correct errors in journal entries

    d; Are required by GAAP

    e; Are prepared on the worksheet

    8------Revenue, expense, withdrawals, and Income Summary are called ( )
    accounts because they are closed at the end of each accounting period

    9------A company`s post-closing trial balance has a debit total of $475,000 and a credit total of $457,000. This indicates that ( ).

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    Solution Summary

    The problem set deals with topics under accounting.