Midterm Prep (Equations)

Question 1

straight line depreciation

Answer 1

(cost - residual)/life

Question 2

interest

Answer 2

I = prt –> interest = principle(rate)(time) –> time is # of months over 12

Question 3

retained earnings

Answer 3

beginning retained earnings +/- net income - dividends = ending retained earnings

Question 4

net income

Answer 4

revenues - expenses

Question 5

A = L + E

Answer 5

assets = liabilities + equity