The Following Information Comes from the Records of Morton Corporation

question 151

Essay

The following information comes from the records of Morton Corporation.Assume no additional investment by owners when answering the following questions: $\begin{array}{lll}&\text { Assets }&\text { Liabilities }& \text { Owners' Equity } \\\text { January 1, 2016}&\$98,000&\$54,000&\$\\\text {December 31, 2016 }&131,000 & & 84,000\end{array}$

A) What is the amount of owners' equity at January 1, 2016?
B) What is the amount of liabilities at December $31,2016 ?$
C) Assume that the company declared and paid dividends of $\$ 22,000$ during the year. How much net income did it earn during the year?

D) Assume that the company paid no dividends during the year. Without looking at the income statement, how can you tell if the company is profitable or not?

• A) What is the amount of owners' equity at January 1, 2016?
• B) What is the amount of liabilities at December \(31,2016 ?\)
• C) Assume that the company declared and paid dividends of \(\$ 22,000\) during the year. How much net income did it earn during the year?
• D) Assume that the company paid no dividends during the year. Without looking at the income statement, how can you tell if the company is profitable or not?

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Definitions:

Performance-Contingent Basis

A compensation or reward system where the payout or reward level depends on the achievement of specific performance targets or metrics.

Expectancy Theory of Motivation

A psychological theory suggesting that an individual's motivation is influenced by their expectation of achieving desirable outcomes through their actions.

Instrumentality

A person’s belief that various outcomes will occur as a result of task performance.

Expectancy Theory of Motivation

A theory suggesting that individuals are motivated to act in a certain way based on their expectation that their actions will lead to their desired outcome.