New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
accounting
Financial Accounting Tools for business decision making 6th Edition Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso - Solutions
Identify the distinguishing features of an income statement for a merchandising company.
What types of businesses are most likely to use a perpetual inventory system?
Identify the accounts that are added to or deducted from purchases to determine the cost of goods purchased under a periodic system. For each account, indicate (a) Whether it is added or deducted, and (b) Its normal balance.
In the following cases, use a periodic inventory system to identify the item(s) designated by the letters X and Y.(a) Purchases – X – Y = Net purchases.(b) Cost of goods purchased – Net purchases + X.(c) Beginning inventory + X = Cost of goods available for sale.(d) Cost of goods available
Corliss Ford, director of marketing, wants to reduce the selling price of his company’s products by 15% to increase market share. He says, “I know this will reduce our gross profit rate, but the increased number of units sold will make up for the lost margin.” Before this action is taken,
Howard Paulson is considering investing in Stevenson Pet Food Company. Stevenson’s net income increased considerably during the most recent year, even though many other companies in the same industry reported disappointing earnings. Howard wants to know whether the company’s earnings provide a
On July 15, a company purchases on account goods costing $1,900, with credit terms of 2/10, n/30. On July 18, the company receives a $400 credit memo from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discount period assuming a
Presented here are the components in Korinek Company??s income statement. Determine the missingamounts.
Pocras Company buys merchandise on account from Wedell Company. The selling price of the goods is $900 and the cost of the goods sold is $590. Both companies use perpetual inventory systems. Journalize the transactions on the books of both companies.
Prepare the journal entries to record the following transactions on Graff Company’s books using a perpetual inventory system.(a) On March 2, Graff Company sold $800,000 of merchandise to Rodriguez Company, terms 2/10, n/30. The cost of the merchandise sold was $540,000.(b) On March 6, Rodriguez
From the information in BE5-3, prepare the journal entries to record these transactions on Rodriguez Company’s books under a perpetual inventory system.
Bangura Company provides this information for the month ended October 31, 2012: sales on credit $300,000; cash sales $150,000; sales discounts $5,000; and sales returns and allowances $19,000. Prepare the sales revenues section of the income statement based on this information.
Explain where each of these items would appear on a multiple-step income statement: gain on disposal of plant assets; cost of goods sold; depreciation expense; and sales returns and allowances.
Berry Company sold goods with a total selling price of $800,000 during the year. It purchased goods for $380,000 and had beginning inventory of $67,000. A count of its ending inventory determined that goods on hand was $50,000. What was its cost of goods sold?
Assume that Logan Company uses a periodic inventory system and has these account balances: Purchases $404,000; Purchase Returns and Allowances $13,000; Purchase Discounts $9,000; and Freight-in $16,000. Determine net purchases and cost of goods purchased.
Assume the same information as in BE5-8 and also that Logan Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $612,000. Determine the amounts to be reported for cost of goods sold and gross profit.
Modder Corporation reported net sales of $250,000, cost of goods sold of $150,000, operating expenses of $50,000, net income of $32,500, beginning total assets of $520,000, and ending total assets of $600,000. Calculate each of the following values and explain what they mean: (a) Profit margin
Delzer Corporation reported net sales $800,000; cost of goods sold $520,000; operating expenses $210,000; and net income $68,000. Calculate the following values and explain what they mean: (a) Profit margin ratio and (b) Gross profit rate.
Wasley Corporation reported net income of $346,000, cash of $67,800, and net cash provided by operating activities of $221,200. What does this suggest about the quality of the company’s earnings? What further steps should be taken?
Prepare the journal entries to record these transactions on Koeller Company’s books using a periodic inventory system.(a) On March 2, Koeller Company purchased $800,000 of merchandise from Reeves Company, terms 2/10, n/30.(b) On March 6, Koeller Company returned $95,000 of the merchandise
On October 5, Longhini Company buys merchandise on account from Okern Company. The selling price of the goods is $5,000, and the cost to Okern Company is $3,000. On October 8, Longhini returns defective goods with a selling price of $640 and a scrap value of $240. Record the transactions of
Assume information similar to that in 5-1. That is: On October 5, Longhini Company buys merchandise on account from Okern Company. The selling price of the goods is $5,000, and the cost to Okern Company is $3,000. On October 8, Longhini returns defective goods with a selling price of $640 and a
The following information is available for Jain Corp. for the year ended December 31, 2012:Other revenues and gains ...... $ 12,700Net sales ........... $552,000Other expenses and losses ...... 13,300Operating expenses ........ 186,000Cost of goods sold ......... 156,000Prepare a multiple-step
Crystal Lake Corporation’s accounting records show the following at yearend December 31, 2012:Purchase Discounts .... $ 5,900Beginning Inventory .... $31,720Freight-in .......... 8,400Ending Inventory ..... 27,950Freight-out ......... 11,100Purchase Returns ....... 3,600Purchases ........
This information relates to Percy Co.1. On April 5, purchased merchandise from Lyman Company for $28,000, terms 2/10, n/30.2. On April 6, paid freight costs of $700 on merchandise purchased from Lyman.3. On April 7, purchased equipment on account for $30,000.4. On April 8, returned some of April 5
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred. Sept. 6 Purchased calculators from Abacus Co. at a total cost of $1,650, terms n/30.9 Paid freight of $50
The following transactions are for Masland Company.1. On December 3, Masland Company sold $500,000 of merchandise to Parker Co., terms 1/10, n/30. The cost of the merchandise sold was $330,000.2. On December 8, Parker Co. was granted an allowance of $25,000 for merchandise purchased on December
On June 10, Harris Company purchased $9,000 of merchandise from Goetz Company, terms 3/10, n/30. Harris pays the freight costs of $400 on June 11. Goods totaling $600 are returned to Goetz for credit on June 12. On June 19, Harris Company pays Goetz Company in full, less the purchase discount. Both
The adjusted trial balance of Dredge Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2012: Sales Revenue $900,000; Freight-out $14,000; Sales Returns and Allowances $22,000; and Sales Discounts $13,500.InstructionsPrepare the sales revenues section of the
Presented below is information for Yu Co. for the month of January 2012.Cost of goods sold ...... $212,000Rent expense ........ $32,000Freight-out .......... 7,000Sales discounts ......... 8,000Insurance expense ........ 12,000Sales returns and allowances .... 20,000Salaries and wages expense ...
Financial information is presented here for two companies. Instructions(a) Fill in the missing amounts. Show all computations.(b) Calculate the profit margin ratio and the gross profit rate for each company.(c) Discuss your findings in part(b).
In its income statement for the year ended December 31, 2012, Misra Company reported the following condensed data.Administrative expenses ........ $465,000Loss on disposal of Cost of goods sold .. 987,000Plant assets ............. $ 83,500Interest expense .............. 71,000Net sales
In its income statement for the year ended June 30, 2009, The Clorox Company reported the following condensed data (dollars in millions). Selling and Research and administrative expenses .... $ 715Development expense ................ $ 114Net sales ................... 5,450Income tax expense
The trial balance of Pollard Company at the end of its fiscal year, August 31, 2012, includes these accounts: Beginning Inventory $18,700; Purchases $154,000; Sales Revenue $190,000; Freight-in $8,000; Sales Returns and Allowances $3,000; Freight-out $1,000; and Purchase Returns and Allowances
Below is a series of cost of goods sold sections for companies A, F, L, and V. InstructionsFill in the lettered blanks to complete the cost of goods soldsections.
Pardow Corporation reported sales revenue of $257,000, net income of $45,300, cash of $9,300, and net cash provided by operating activities of $23,200. Accounts receivable have increased at three times the rate of sales during the last 3 years.Instructions(a) Explain what is meant by high quality
This information relates to Edyburn Co.1. On April 5, purchased merchandise from Hansen Company for $27,000, terms 2/10, n/30.2. On April 6, paid freight costs of $1,200 on merchandise purchased from Hansen Company.3. On April 7, purchased equipment on account for $30,000.4. On April 8, returned
Janssen Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Janssen’s ledger showed Cash of $8,000 and Common Stock of $8,000.May 1 Purchased merchandise on account from Vanco Wholesale Supply for $8,000, terms 1/10, n/30.2 Sold
Hayes Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred.June 1 Purchased books on account for $1,040 (including freight) from Brooks Publishers, terms
At the beginning of the current season on April 1, the ledger of Thousand Oaks Pro Shop showed Cash $2,500; Inventory $3,500; and Common Stock $6,000. The following transactions were completed during April 2012.Apr. 5 Purchased golf bags, clubs, and balls on account from Ryder Co. $1,500, terms
Chapman Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2012, these accounts appeared in
An inexperienced accountant prepared this condensed income statement for McDowell Company, a retail firm that has been in business for a number of years. As an experienced, knowledgeable accountant, you review the statement and determine the following facts.1. Net sales consist of sales
The trial balance of Dealer's Choice Wholesale Company contained the accounts shown at December 31, the end of the company's fiscal year. Adjustment data:1. Depreciation is $8,000 on buildings and $7,000 on equipment. (Both are operating expenses.)2. Interest of $4,500 is due and unpaid on notes
At the end of Snyder Department Store’s fiscal year on November 30, 2012, these accounts appeared in its adjusted trial balance.Freight-in ........... $ 5,060Inventory (beginning) ........ 41,300Purchases ........... 613,000Purchase Discounts ........ 7,000Purchase Returns and Allowances ...
Reza Inc. operates a retail operation that purchases and sells snowmobiles, amongst other outdoor products. The company purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current
At the beginning of the current season on April 1, the ledger of Thousand Oaks Pro Shop showed Cash $2,500; Inventory $3,500; and Common Stock $6,000. These transactions occurred during April 2012.Apr. 5 Purchased golf bags, clubs, and balls on account from Ryder Co. $1,500, terms 3/10, n/60.7
Curtain Distributing Company completed these merchandising transactions in the month of April. At the beginning of April, the ledger of Curtain showed Cash of $9,000 and Common Stock of $9,000.Apr. 2 Purchased merchandise on account from Luebke Supply Co. $8,700, terms 2/10, n/30.4 Sold merchandise
Holiday Warehouse distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. During the month of July, the following merchandising transactions occurred.July 1 Purchased suitcases on account for $2,700 from Satchel Manufacturers, terms 2/15, n/30.3 Sold
At the beginning of the current season, the ledger of Highland Tennis Shop showed Cash $2,500; Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.Apr. 4 Purchased racquets and balls from Harris Co. $980, terms 2/10, n/30.6 Paid freight on Harris Co.
Parkland Department Store is located near the Lyndale Shopping Mall. At the end of the company’s fiscal year on December 31, 2012, the following accounts appeared in its adjusted trial balance.Accounts Payable .......... $ 73,300Accounts Receivable .......... 45,500Accumulated
A part-time bookkeeper prepared this income statement for Kritek Company for the year ending December 31, 2012. As an experienced, knowledgeable accountant, you review the statement and determine the following facts.1. Sales include $12,000 of deposits from customers for future sales orders.2.
The trial balance of Runway Fashion Center contained the accounts on the next page at November 30, the end of the company??s fiscal year. Adjustment data:1. Store supplies on hand total $3,100.2. Depreciation is $14,000 on the store equipment and $6,000 on the delivery equipment.3. Interest of
At the end of Ehlinger Department Store’s fiscal year on December 31, 2012, these accounts appeared in its adjusted trial balance.Freight-in ........... $ 7,200Inventory (beginning) ....... 40,500Purchases .......... 456,000Purchase Discounts ........ 12,000Purchase Returns and Allowances ..
Sandra McLellan operates a clothing retail operation. She purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided
At the beginning of the current season, the ledger of Highland Tennis Shop showed Cash $2,500; Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.Apr. 4 Purchased racquets and balls from Harris Co. $980, terms 2/10, n/30.6 Paid freight on Harris Co.
On December 1, 2012, Shiras Distributing Company had the following account balances. During December, the company completed the following summary transactions.Dec. 6 Paid $1,600 for salaries due employees, of which $600 is for December and $1,000 is for November salaries payable.8 Received $1,900
The financial statements for Tootsie Roll Industries appear in Appendix A at the end of this book.InstructionsAnswer these questions using the Consolidated Income Statement.(a) What was the percentage change in total revenue and in net income from 2008 to 2009?(b) What was the profit margin ratio
The financial statements of The Hershey Company appear in Appendix B, following the financial statements for Tootsie Roll in Appendix A.Instructions(a) Based on the information contained in these financial statements, determine the following values for each company.(1) Profit margin ratio for
The April 23, 2008, issue of the Wall Street Journal includes an article by Vanessa O’Connell entitled “Coach Profit Is Up but Margins Are Tightening.”InstructionsRead the article and answer the following questions.(a) Referring to the ratios that were presented in this chapter, interpret the
Recently, it was announced that two giant French retailers, Carrefour SA and Promodes SA, would merge. A headline in the Wall Street Journal blared, "French Retailers Create New Wal-Mart Rival."? While Wal-Mart's total sales would still exceed those of the combined company, Wal-Mart's international
Three years ago, Amy Blodgett and her brother-in-law Dennis Torres opened Megamart Department Store. For the first 2 years, business was good, but the following condensed income statement results for 2012 were disappointing. Amy believes the problem lies in the relatively low gross profit rate of
The following situation is presented in chronological order.1. Finley decides to buy a surfboard.2. He calls Surfing USA Co. to inquire about their surfboards.3. Two days later he requests Surfing USA Co. to make him a surfboard.4. Three days later Surfing USA Co. sends him a purchase order to fill
Margie Anunson was just hired as the assistant treasurer of Northshore Stores, a specialty chain store company that has nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Margie will manage. Her primary
There are many situations in business where it is difficult to determine the proper period in which to record revenue. Suppose that after graduation with a degree in finance, you take a job as a manager at a consumer electronics store called Pacifica Electronics. The company has expanded rapidly in
Access the FASB Codification at asc.fasb.org to prepare responses to the following (a) Access the glossary (“Master Glossary”) to answer the following.(1) What is the definition provided for inventory?(2) What is a customer?(b) What guidance does the Codification provide concerning reporting
Explain the difference between the “nature-of-expense” and “function-of-expense” classifications.
For each of the following income statement line items, state whether the item is a “by nature” expense item or a “by function” expense item.________ Cost of goods sold________ Depreciation expense________ Wages and salaries expense________ Selling expenses________ Utilities expense________
Gribble Company reported the following amounts in 2012: Net income, Euros 150,000; Unrealized gain related to revaluation of buildings, Euros 10,000; and Unrealized loss on available-for-sale securities, Euros (35,000). Determine Gribbles total comprehensive income for 2012.
The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available at Instructions(a) Is Zetar using a multiple-step or a single-step income statement format? Explain how you made your
Pryor Inc. needs to upgrade its diagnostic equipment. At the time of purchase, Pryor had expected the equipment to last 8 years. Unfortunately, it was obsolete after only 4 years. Justin Meyer, CFO of Pryor Inc., is considering leasing new equipment rather than buying it. What are the potential
In a recent newspaper release, the president of Franklin Company asserted that something has to be done about depreciation. The president said, “Depreciation does not come close to accumulating the cash needed to replace the asset at the end of its useful life.” What is your response to the
Carmelita is studying for the next accounting examination. She asks your help on two questions: (a) What is salvage value? (b) How is salvage value used in determining depreciable cost under the straight-line method? Answer Carmelita’s questions.
Contrast the straight-line method and the units-of-activity method in relation to (a) Useful life and (b) The pattern of periodic depreciation over useful life.
Distinguish between ordinary repairs and capital expenditures during an asset’s useful life.
How is a gain or a loss on the sale of a plant asset computed?
Folstein Corporation owns a machine that is fully depreciated but is still being used. How should Folstein account for this asset and report it in the financial statements?
What are the similarities and differences between depreciation and amortization?
During a recent management meeting, Steve Micke, director of marketing, proposed that the company begin capitalizing its marketing expenditures as goodwill. In his words, “Marketing expenditures create goodwill for the company which benefits the company for multiple periods. Therefore it
Alford Company hires an accounting intern who says that intangible assets should always be amortized over their legal lives. Is the intern correct? Explain.
Janis Ford, a business major, is working on a case problem for one of her classes. In this case problem, the company needs to raise cash to market a new product it developed. Mark Gordon, an engineering major, takes one look at the company’s balance sheet and says, “This company has an awful
Under what conditions is goodwill recorded? What is the proper accounting treatment for amortizing goodwill?
Often research and development costs provide companies with benefits that last a number of years. (For example, these costs can lead to the development of a patent that will increase the company’s income for many years.) However, generally accepted accounting principles require that such costs be
In 2009, Campbell Soup Company reported average total assets of $6,265 million, net sales of $7,586 million, and net income of $736 million. What was Campbell Soup’s return on assets ratio?
Lauren Rado, a marketing executive for Fresh Views Inc., has proposed expanding its product line of framed graphic art by producing a line of lowerquality products. These would require less processing by the company and would provide a lower profit margin. Tom Hogle, the company’s CFO, is
Give an example of an industry that would be characterized by (a) A high asset turnover ratio and a low profit margin ratio, and (b) A low asset turnover ratio and a high profit margin ratio.
Allman Corporation and Bryant Corporation operate in the same industry. Allman uses the straight-line method to account for depreciation, whereas Bryant uses an accelerated method. Explain what complications might arise in trying to compare the results of these two companies.
Guzman Corporation uses straightline depreciation for financial reporting purposes but an accelerated method for tax purposes. Is it acceptable to use different methods for the two purposes? What is Guzman Corporation’s motivation for doing this?
You are comparing two companies in the same industry. You have determined that Morris Corp. depreciates its plant assets over a 40-year life, whereas Kiram Corp. depreciates its plant assets over a 20-year life. Discuss the implications this has for comparing the results of the two companies.
Explain how transactions related to plant assets and intangibles are reported in the statement of cash flows.
These expenditures were incurred by Patnode Company in purchasing land: cash price $60,000; accrued taxes $5,000; attorney’s fees $2,100; real estate broker’s commission $3,300; and clearing and grading $3,500. What is the cost of the land?
Deutsch Company incurs these expenditures in purchasing a truck: cash price $24,000; accident insurance (during use) $2,000; sales taxes $1,080; motor vehicle license $300; and painting and lettering $1,700. What is the cost of the truck?
Alan Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2012. The truck is expected to have a salvage value of $4,000 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.
Erin Company purchased land and a building on January 1, 2012. Management’s best estimate of the value of the land was $100,000 and of the building $250,000. However, management told the accounting department to record the land at $230,000 and the building at $120,000. The building is being
On January 1, 2012, the Eugene Company ledger shows Equipment $36,000 and Accumulated Depreciation $13,600. The depreciation resulted from using the straight line method with a useful life of 10 years and a salvage value of $2,000. On this date, the company concludes that the equipment has a
Sabina Company had the following two transactions related to its delivery truck.1. Paid $38 for an oil change.2. Paid $400 to install special shelving units, which increase the operating efficiency of the truck.Prepare Sabina’s journal entries to record these two transactions.
Prepare journal entries to record these transactions: (a) Benton Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received. (b) Assume the same information as in part (a), except that accumulated
Clark Company sells office equipment on July 31, 2012, for $21,000 cash. The office equipment originally cost $72,000 and as of January 1, 2012, had accumulated depreciation of $42,000. Depreciation for the first 7 months of 2012 is $4,600. Prepare the journal entries to (a) Update depreciation to
In its 2009 annual report, McDonald’s Corporation reports beginning total assets of $28.46 billion; ending total assets of $30.22 billion; net sales of $22.74 billion; and net income of $4.55 billion.(a) Compute McDonald’s return on assets ratio.(b) Compute McDonald’s asset turnover ratio.
Tanya Company purchases a patent for $156,000 on January 2, 2012. Its estimated useful life is 6 years.(a) Prepare the journal entry to record amortization expense for the first year.(b) Show how this patent is reported on the balance sheet at the end of the first year.
Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2009 (in millions): other plant assets $965.8; land $221.6; patents and trademarks (at cost) $515.1; machinery and equipment $2,094.3; buildings $974.0; goodwill (at cost) $193.5; accumulated
Showing 4500 - 4600
of 107766
First
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Last
Step by Step Answers
Get 50% OFF
Claim Now
