Questions and Answers of Survey of Accounting

Recent balance sheet information for two companies in the snack food industry, the Hershey Company (HsY) and Mondelez international, inc. (MDLZ), is as follows (in millions of dollars):a. Determine
Hasbro (Has) and Mattel, inc. (Mat), are the two largest toy companies in North America. Liability and stockholders’ equity data from recent balance sheets are shown for each company below (in
Costco Wholesale Corporation (COST) and Walmart stores inc. (WMt) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected
The following data are taken from the financial statements of Rise and Shine Company. Terms of all sales are 2/10, n/30.a. For Years 2 and 3, determine (1) the accounts receivable turnover and (2)
PepsiCo, inc. (PEP), the parent company of Frito-Lay™ snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years:a. Determine the (1)
The following data were taken from the comparative balance sheet of Icon Living, Inc., for the years ended December 31, 20Y9 and December 31, 20Y8:a. Determine for each year (1) the working capital,
Income statement data for Cascade Images Inc. for the years ended December 31, 20Y5 and 20Y4, are as follows:a. Prepare a comparative income statement with horizontal analysis, indicating the
Revenue and expense data for Tribal Technologies Co. are as follows:a. Prepare an income statement in comparative form, stating each item for both 20Y8 and 20Y7 as a percent of sales. Round to one
Alphabet (GOOG) is a technology company that offers users Internet search and e-mail services. Google also developed the Android operating system for use with cell phones and other mobile devices.
Lowe’s Companies Inc. (LOW) operates over 1,800 home improvement retail stores and is a competitor of The Home Depot (HD). The following data (in millions) were adapted from a recent financial
The Home Depot, Inc. (HD) operates over 2,200 home improvement retail stores and is a competitor of Lowe’s (LOW). The following data (in millions) were adapted from recent financial statements of
Using the data from E8-22, indicate the effects on net assets and EPS of the stock split.Using the data from E8-22Audrey’s Restaurant Corporation wholesales ovens and ranges to restaurants
The following information about the payroll for the week ended September 15 was obtained from the records of Simkins Mining Co.:Tax rates assumed:FICA tax, 7.5% of employee annual earningsState
Three different plans for financing a $5,000,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount,
Audrey’s Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Northwest. Audrey’s Restaurant Corporation, which had 50,000 shares of common stock outstanding, declared
The date of declaration, date of record, and date of payment in connection with a cash dividend of $600,000 on a corporation’s common stock are January 1, March 15, and June 14, respectively.
On August 7, Level Up Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 10,000 shares of $5 par common stock with a current market price of $7. Illustrate the effect on the
On January 29, The Stone Store Inc., a granite contractor, issued 150,000 shares of $20 par common stock for cash at $46 per share, and on May 31, it issued 200,000 shares of $8 par preferred stock
The following note accompanied the financial statements for Goodyear Tire and Rubber Company (GT):We have recorded liabilities totaling $316 million, including related legal fees expected to be
Ford Motor Company (F) disclosed the following estimated product warranty payable for two recent years.Ford’s sales in its automotive sector were $145,653 million in Year 2 and $141,546 million in
A Wrinkle in Time Inc. warrants its products for one year. The estimated product warranty is 1% of sales. Assume that sales were $625,000 for March. In April, a customer received warranty repairs
According to a summary of the payroll of PJW Co., $90,000 in earnings were subject to the 7.5% FICA tax. Also, $30,000 in earnings were subject to state and federal unemployment taxes.a. Compute the
An employee earns $24 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 43 hours during the week. Assume that the FICA tax rate is 7.5%
A business issued a 90-day, 5% note for $60,000 to a creditor for an accounts payable. Illustrate the effects on the accounts and financial statements of recording (a) The issuance of the
By the Month Inc. sold 32,000 annual magazine subscriptions for $10 during December 20Y4. These new subscribers will receive monthly issues, beginning in January 20Y5. By the Month Inc. issued a
When should the liability associated with a product warranty be recorded? Discuss.
When are short-term notes payable issued?
Marriott International Inc. (MAR) and Hilton Wordwide Holdings Inc. (HLT) operate hotels worldwide. The following data (in millions) were adapted from recent financial statements of Marriott and
JetBlue Airways Corporation (JBLU) operates passenger services throughout the United States. The following data (in millions) were adapted from recent financial statements of JetBlue.1. Compute the
Southwest Airlines (LUV) operates passenger services throughout the United States. The following data (in millions) were adapted from a recent financial statement of Southwest.Sales (revenue)
United Continental Holdings, Inc., (UAL), operates passenger service throughout the world.The following data (in millions) were adapted from a recent financial statement of United.Sales
Using the data from E7-3, indicate the effects of purchasing the land on the liquidity metric free cash flow and profitability metric asset turnover. Assume all costs were paid in cash and cash was
Assuming periods of rising prices, indicate the effects of selecting FIFO and LIFO on the liquidity metric days' sales in inventory and profitability metric return on sales.
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 8. Inventory Quantity Market Value per
The following is a partial balance sheet for Zabel Company:Instructions1. List any errors in the preceding balance sheet.2. Prepare a corrected balance sheet. ZABEL COMPANY Balance Sheet December 31,
The units of an item available for sale during the year were as follows: The units of an item available for sale during the year were as follows:There are 90 units of the item in the physical
Using the data in Exercise 6-7, assume that the allowance for doubtful accounts for Sun Valley Rides had a negative balance of $(6,650) as of December 31, 20Y3. Illustrate the effects of the
Sun Valley Rides is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in
MGM Resorts International (MGM) owns and operates casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. For a recent year, the MGM Resorts International reported accounts and notes
Boeing (BA) is one of the world’s major aerospace firms, with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management
A firm has consistently adjusted its allowance account at the end of the fiscal year by adding a fixed percent of the period’s sales on account. After 10 years, the balance in Allowance for
Boston Scientific Corporation (BSX) is a competitor of Synergy Pharmaceuticals Inc. (MBA 5-3). It was organized in 1979 and develops, produces, and sells medical devices. The following data (in
Synergy Pharmaceuticals Inc. (SGYPQ) is a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal therapies. The following data (in thousands) were
Insys Therapeutics Inc. (INYS) is a specialty pharmaceutical company focused on addressing unmet patient needs through novel drug delivery systems. The following data (in thousands) were adapted from
AcelRx Pharmaceuticals, Inc. (ACRX), develops therapies for pain relief for a variety of patients, including cancer and trauma patients. The following data (in thousands) were adapted from financial
The cash account for Highlander Diamond Co. on April 1, 20Y5, indicated a balance of $35,400. During April, the total cash deposited was $120,255, and checks written totaled $109,200. The bank
The following procedures were recently implemented by SUP Yoga Co.:a. Each cashier is assigned a separate cash register drawer to which no other cashier has access.b. All sales are rung up on the
The following bank reconciliation was prepared for Dakota Co.a. Identify the errors in the preceding bank reconciliation.b. Prepare a corrected bank reconciliation. DAKOTA CO. Bank Reconciliation For
The following data were accumulated for use in reconciling the bank account of Wolfpack Bread Inc. for August 20Y9:a. Cash balance according to the company’s records at August 31, $6,865.b. Cash
Identify each of the following reconciling items as: (a) An addition to the cash balance according to the bank statement, (b) A deduction from the cash balance according to the bank
The actual cash received from the day’s cash sales was $3,625, and the amount indicated by the cash register total was $3,640.a. What is the amount deposited in the bank for the day’s sales?b.
Honeybee Hippie is a retail store specializing in women’s clothing. The store has established a liberal return policy for the holiday season in order to encourage gift purchases. Any item purchased
Jittery Joe has recently been hired as the manager of Loyola’s Coffee, a national chain of franchised coffee shops. During his first month as store manager, Jittery encountered the following
Companies with low gross profit and markup percent's often have higher volumes of sales than companies with high gross profit and markup percent's.1. Comment on the preceding statement.2. The
Compare the gross profit percent, average markup percent, and ratio of sales to assets for Deere & Company (DE) and Caterpillar Inc. (CAT) using the results of MBA 4-7 and MBA 4-8. Comment on any
Caterpillar Inc. (CAT) produces and sells various types of equipment, including tractors, loaders, and mining equipment. The following data (in millions) were adapted from recent financial statements
Deere & Company (DE) produces and sells tractors, loaders, combines, lawnmowers, and a variety of other equipment. The following data (in millions) were adapted from recent financial statements
Compare the Target (TGT) results in MBA 4-5 with those of Walmart (WMT) shown in the chapter illustration on pages 169–170. Comment on the differences.Data from MBA 4-5Target Corp. (TGT) operates
Target Corp. (TGT) operates retail stores throughout the United States and is a major competitor of Walmart (WMT). The following data (in millions) were adapted from recent financial statements of
The following selected transactions were completed by SUP Co. during August of the current year:Aug. 3. Purchased merchandise on account for $16,700, terms FOB destination, 2/10, n/30.9. Issued debit
Schofield Co. sold merchandise on account to Bernard Retail Inc. for $10,000, terms 2/10, n/30. The cost of the merchandise sold was $7,500. Assume that Schofield Co. uses the gross method of
The following multiple-step, income statement was prepared for Carlsbad Company.a. Identify the errors in the preceding income statement.b. Prepare a corrected income statement. CARLSBAD COMPANY
On March 31, 20Y5, the balances of the accounts appearing in the ledger of Vibe Tribe Inc. are as follows:a. Prepare a multiple-step income statement for the year ended March 31, 20Y5.b. Compare the
The following expenses were incurred by a retail business during the year. In which expense section of the income statement should each be reported: (a) Selling, (b)
Based on the data presented in Exercise 4-13, illustrate the effects on the accounts and financial statements of Butler Co. for (a) The purchase, (b) The credit for damaged
Steritech Co., a furniture wholesaler, sells merchandise to Butler Co. on account, $86,000, terms 2/10, n/30. The cost of the merchandise sold is $51,600. Steritech Co. issues a credit memorandum for
Illustrate the effects on the accounts and financial statements of recording the following selected transactions:a. Sold $22,500 of merchandise on account, terms n/30, subject to a sales tax of 6%.
A retailer is considering the purchase of 100 units of a specific item from either of two suppliers.Their offers are as follows:A: $780 a unit, total of $78,000, 1/10, n/30, plus freight of $1,500.B:
Shepherd Company purchased merchandise on account from a supplier for $9,000, terms 2/10, n/30. Shepherd Company returned $1,500 of the merchandise before payment was made and received full credit.a.
For a recent year, Target Corporation (TGT) reported revenue of $71,879 million. Its gross profit was $20,754 million. What was the amount of Target’s cost of goods sold?
During the current year, merchandise is sold for $3,200,000. The cost of the goods sold is $2,688,000.a. What is the amount of the gross profit?b. Compute the gross profit percent.c. Will the income
What is the meaning of (a) 2/10, n/30; (b) n/90; (c) n/eom?
The following data (in millions) were taken from http://finance.yahoo.com.1. Match each of the following companies with the data for Company A, B, C, or D:Apple Inc. (AAPL)Facebook, Inc.
Cigna Corp. (CI) provides insurance services, and Deere & Company (DE) manufactures and sells farm and construction equipment. The following data (in millions) were adapted from recent financial
Walmart Stores Inc. (WMT) operates over retail stores throughout the world. In contrast, Alphabet Inc. (GOOG) is a technology company, formerly known as Google, that provides a variety of online
Compare The Gap Inc. (MBA 3-6) and American Eagle Outfitters Inc. (MBA 3-7) liquidity positions for Year 2. Comment on the differences.Data from MBA 3-6The Gap Inc. (GPS) operates specialty retail
American Eagle Outfitters Inc. (AEO) operates specialty retail stores, selling clothing such as denim, sweaters, t-shirts, and fleece outerwear that targets 15-to-25-year-old men and women. The
The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent
GameStop Corporation (GME) has over 7,000 retail stores worldwide and sells new and used video games. The following asset and liability data (in millions) were adapted from recent financial
Using the adjustment data listed in P3-2 for SLO Health Care, indicate the effects of each adjustment on the liquidity metric Quick Assets and the profitability metric Net Income – Accrual
Using the transactions listed in P3-1 for SLO Health Care, indicate the effects of each transaction on the liquidity metric Quick Assets and the profitability metric Net Income – Accrual Basis.Data
Adjustment data for SLO Health Care Inc. for January are as follows:1. Insurance expired, $450.2. Supplies on hand on January 31, $600.3. Depreciation on building, $1,150.4. Unearned rent revenue
SLO Health Care Inc. is owned and operated by Morgan Denby, the sole stockholder. During January 20Y6, SLO Health Care entered into the following transactions:Jan. 1 Received $13,500 from Glenn
The following balance sheet was prepared for Atlas Services Co.a. List any errors in the preceding balance sheet.b. Prepare a corrected balance sheet. ATLAS SERVICES cO. Balance Sheet For the Year
La-Z-Boy Inc. (LZB) is one of the world’s largest manufacturer of furniture and is best known for its reclining chairs. The following data (in thousands) were adapted from recent financial
Eleven-Eleven, Inc. creates guided meditation programs for individuals. On November 30, 20Y9, the balances of selected accounts of Eleven-Eleven, Inc. are as follows:Prepare a classified balance
For a recent year, Barnes & Noble Inc. (BKS) reported (in thousands) Property and Equipment of $2,682,981 and Accumulated Depreciation of $2,406,859.a. What was the book value of the fixed
If the net income for the current year had been $2,224,600 in Exercise 3-18, what would have been the correct net income if the proper adjustments had been made?Data from 3-18The accountant for
For a recent year, the balance sheet for The Campbell Soup Company (CPB) includes accrued expenses of $561 million. The income before taxes for the year was $1,293 million.a. Assume the accruals
At the end of August, the first month of the business year, the usual adjustment transferring rent earned of $36,750 to a revenue account from the unearned rent account was omitted. Indicate which
For a recent year, Microsoft Corporation (MSFT) reported short-term unearned revenue of $34,102 million. For the same year, Microsoft also reported total revenues of $89,950 million.a. Assuming that
The balance in the unearned fees account, before adjustment at the end of the year, is $1,375,000. What is the adjustment if the amount of unearned fees at the end of the year is $1,100,000? Indicate
The prepaid insurance account had a balance of $19,200 at the beginning of the year. The account was increased for $57,600 for premiums on policies purchased during the year. What is the adjustment
Answer each of the following independent questions concerning supplies and the adjustment for supplies.a. The balance in the supplies account, before adjustment at the end of the year, is $7,000.
Using the data from Exercises 3-1 and 3-2, prepare financial statements for February, including income statement, statement of stockholders’ equity, balance sheet, and statement of cash flows.Data
Using the data from Exercise 3-1, record the adjustments at the end of February to record the insurance expense and supplies expense. There was $300 of supplies on hand as of February 28. Identify
Alex Vera organized Succulent Express at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions:a. Terry Mason invested $30,000 in Succulent
Which of the following accounts would appear only in an accrual basis accounting system, and which could appear in either a cash basis or an accrual basis accounting system? (a) Common
Fees for services provided are billed to a customer during 20Y6. The customer remits the amount owed in 20Y7. During which year would the revenues be reported on the income statement under(a) The
Employees performed services in 20Y8, but the wages were not paid until 20Y9. During which year would the wages expense be reported on the income statement under (a) The cash basis? (b) The

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