Questions and Answers of Accounting Principles 14th Edition

The following are two independent situations. 1. Gambino Cosmetics acquired 10% of the 200,000 shares of common stock of Nevins Fashion at a total cost of $13 per share on March 18, 2022. On
Kruger Corporation has these long-term investments: common stock of Eidman Co. (10% ownership), cost $108,000, fair value $115,000; common stock of Pickerill Inc. (30% ownership), cost $210,000,
At December 31, 2022, the trading debt securities for Storrer,Inc. are as follows.Instructionsa. Prepare the adjusting entry at December 31, 2022, to report the securities at fair value.b. Show the
At December 31, 2022, available-for-sale debt securities for Storrer, Inc. are as follows. The securities are considered to be a long-term investment.Instructionsa. Prepare the adjusting entry at
What are consolidated financial statements?
Uttinger Company has these data at December 31, 2022, the end of its first year of operations.The available-for-sale securities are held as a long-term investment.Instructionsa. Prepare the adjusting
Kael Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August.Aug. 1 Established the petty cash fund by writing a check payable to the
Hawkeye Corporation's balance sheet at December 31, 2021, is presented below.During 2022, the following transactions occurred.1. On January 1, 2022, Hawkeye issued 1,200 shares of $40 par, 7%
Earnings per share computations related to IFRS and GAAP:a. Are essentially similar.b. Result in an amount referred to as earnings per share.c. Must deduct preferred (preference) dividends when
On May 1, 2022, Herron Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2022, and pay interest annually on May 1. Financial statements are prepared annually on
The leasing standards employed by IFRS:a. Rely more heavily on interpretation of the conceptual meaning of assets and liabilities than GAAP.b. Are more "rules based" than those of GAAP.c. Employ the
The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company's
The financial statements of Louis Vuitton are presented in Appendix F. The complete consolidated financial statements, including the notes to its financial statements, are available at the company's
Daisey Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum,
PepsiCo, Inc.'s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola,
Under IFRS:a. The entry to record estimated uncollected accounts is the same as GAAP.b. It is always acceptable to use the direct write-off method.c. All financial instruments are recorded at fair
At the end of 2022, Carpenter Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2023, the company learns that its receivable from Megan Gray is
Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2022. The company does not make entries to accrue interest except at December 31.Nov. 1
Terry Wade, the new controller of Hellickson Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings:All
The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company's
PepsiCo, Inc.'s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola,
Amazon.com, Inc. vs. Walmart Inc. CTll.3 Amazon.com Inc.'s financial statements are presented in Appendix D. Financial statements of Walmart Inc. are presented in Appendix E. The complete annual
The financial statements of Louis Vuitton are presented in Appendix F. The complete consolidated financial statements, including the notes to the financial statements, are available at the company's
If your school has a subscription to the FASB Codification, log in and prepare responses to the following.a. What is the definition of current liabilities?b. What is the definition of a contingent
Maria Garza's regular hourly wage rate is $35, and she receives a wage of 1½ times the regular hourly rate for work in excess of 40 hours. During a March weekly pay period, Maria worked 42 hours.
Employee earnings records for Slaymaker Company reveal these gross earnings for four employees through the pay period of December 15.For the pay period ending December 31, each employee's gross
Ramirez Company has the following data for the weekly payroll ending January 31.Employees are paid 1½ times the regular hourly rate for all hours worked in excess of 40 hours per week. FICA taxes
According to a payroll register summary of Frederickson Company, the amount of employees' gross pay in December was $850,000, of which $80,000 was not subject to Social Security taxes Aof 6.2% and
Explain how a 401(k) plan works.
The characteristics of a partnership include the following: (a) Association of individuals, (b) Limited life, (c) Co-ownership of property. Explain each of these terms.
This exercise is an introduction to the Big Four accounting firms, all of which are partnerships: Deloitte, EY, KPMG, and PwC. Instructions Select a firm that is of interest to you, go to
Stephen Wadson and Mary Shively, two professionals in the finance area, have worked for Morrisen Leasing for a number of years. Morrisen Leasing is a company that leases high-tech medical equipment
K. Decker, S. Rosen, and E. Toso are forming a partnership. Decker is transferring $50,000 of personal cash to the partnership. Rosen owns land worth $15,000 and a small building worth $80,000, which
You are an expert in the field of forming partnerships. Ronald Hrabik and Meg Percival want to establish a partnership to start "Pasta Shop," and the are going to meet with you to discuss their
Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $30,000 of personal cash and equipment worth $25,000 to the partnership. Nick owns land worth $28,000 and a small
Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and
Capital balances in Pelmar Co. are Lango $40,000, Oslo $30,000, and Fernetti $20,000. Fernetti has decided to leave the partnership. Lango and Oslo each agree to pay Fernetti $24,000 from partnership
Are the financial statements of a partnership similar to those of a proprietorship? Explain.
How does the liquidation of a partnership differ from the dissolution of a partnership?
On January 1, 2022, Geffrey Corporation had the following stockholders' equity accounts.Instructionsa. Journalize the transactions and the closing entries for net income and dividends.b. Enter the
Identify the items in Apple's financial statements that indicate Apple is not a partnership.
a. What is a dividend?b. "Dividends must be paid in cash ." Is this correct? Explain why or why not.
The stockholders' equity section of Apple lnc.'s balance sheet is shown in the Consolidated Statement of Financial Position in Appendix A. Apple's complete annual report, including the notes to the
After establishing their company's fiscal year-end to be October 31, Natalie and Curtis began operating Cookie & Coffee Creations Inc. on November 1, 2022. On that date, they issued both
The basic accounting for cash dividends and stock dividends:a. Is different under IFRS versus GAAP.b. Is the same under IFRS and GAAP.c. Differs only for the accounting for cash dividends between
The post-closing trial balance of Storey Corporation at December 31, 2022, contains the following stockholders' equity accounts.A review of the accounting records reveals the following.1. No errors
Knudsen Corporation was organized on January 1, 2021. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At
PepsiCo's financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including
Which of the following terms is used for equity under IFRS?a. Shareholders' equity.b. Capital and reserves.c. Shareholders' funds.d. All of the answer choices are correct.
On January 1, 2022, Ven Corporation had the following stockholders' equity accounts.InstructionsPrepare the stockholders' equity section of the balance sheet at (a) March 31, (b) June
(a) What are long-term liabilities? Give three examples. (b) What is a bond?
Swisher Company issued $2,000,000 of bonds on January 1, 2022. Instructions a. Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 98, and (3) 103.b.
Paris Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2022. The bonds were dated January 1 and pay interest annually on January 1. Paris Electric uses the straight-line method to amortize
On January 1, 2020, Glover Corporation issued $2,400,000 of 5-year, 8% bonds at 95. The bonds pay interest annually on January 1. By January 1, 2022, the market rate of interest for bonds of risk
The balance sheet for Miley Consulting reports the following information on July 1, 2022.Miley decides to redeem these bonds at 101 after paying annual interest. Prepare the journal entry to record
If a 7%, 10-year, $800,000 bond is issued at face value and interest is paid annually, what is the amount of the interest payment at the end of the first year period?
Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2022. The bonds pay interest annually.Instructions a. 1. Prepare the journal entry to record the issuance of the
Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022 and pay interest annually on January 1. Saberhagen Company uses the straight-line method
Hanschu Inc. issues an $800,000, 10%, 10-year mortgage note on December 31, 2022, to obtain financing for a new building. The terms provide for annual installment payments of $130,196. Prepare the
The following section is taken from Ohlman Corp.'s balance sheet at December 31, 2021.Bond interest is payable annually on January 1. The bonds are callable on any interest date.Instructionsa.
The following is taken from the Colaw Company balance sheet.Interest is payable annually on January 1. The bonds are callable on any annual interest date. Colaw uses straight-line amortization for
Presented below are long-term liability items for Lind Company at December 31, 2022. Prepare the long-term liabilities section of the balance sheet for Lind Company. Bonds payable, due 2024 Lease
The following are two independent situations.1. Longbine Corporation redeemed $130,000 face value, 12% bonds on June 30, 2022, at 102. The carrying value of the bonds at the redemption date was
On January 1, 2022, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds at $1,667,518. This price resulted in an effective-interest rate of 6% on the bonds. Lock uses the
Suppose the 2022 adidas financial statements contain the following selected data (in millions).Compute the following values and provide a brief interpretation of each.a. Debt to assets ratio.b. Times
If your school has a subscription to the FASB Codification, log in and prepare responses to the following: a. What is the definition of long-term obligation? b. What guidance does the
Jernigan Co. receives $300,000 when it issues a $300,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2022. The terms provide for annual installment payments
Moby Inc. is considering two alternatives to finance its construction of a new $2 million plant.Instructionsa. Issuance of 200,000 shares of common stock at the market price of $10 per share.b.
On January 1, 2022, Jade Company issued $2,000,000 face value, 7%, 10-year bonds at $2,147,202. This price resulted in a 6% effective-interest rate on the bonds. Jade uses the effective-interest
Dreiling Company borrowed $300,000 on January 1, 2022, by issuing a $300,000, 8% mortgage note payable. The terms call for annual installment payments of $40,000 on December 31.Instructions.a.
The adjusted trial balance for Karr Farm Corporation at the end of the current year contained the following accountsPrepare the long-term liabilities section of the balance sheet. Interest
Sweetwood Company issues $5 million, 10-year, 9% bonds at 96, with interest payable annually on January 1. The straight-line method is used to amortize bond discount.Instructionsa. Prepare the
(a) What is a lease agreement? (b) What are the two common types of leases?
Golden Inc. issues $4 million, 5-year, 10% bonds at 102, with interest payable annually on January 1. The straight-line method is used to amortize bond premium.Instructionsa. Prepare the journal
Hatfield Corporation reports the following amounts in its 2022 financial statements:Instructionsa. Compute the December 31, 2022, balance in stockholders' equity.b. Compute the debt to assets ratio
Benedict Company entered into an agreement to lease 12 computers from Haley Electronics, Inc. The present value of the lease payments is $186,300. Assuming that this is a finance lease, what entry
Presented below is the partial bond discount amortization schedule for Gomez Corp. Gomez uses the effective-interest method of amortization.a. Prepare the journal entry to record the payment of
On January 1, 2022, Throm Inc. entered into an agreement to lease 20 computers Drummond Electronics. The terms of the lease agreement require three annual rental payments of $20,000 (including 10%
Did Apple redeem any of its debt during the fiscal year ended September 28, 2019?
Adcock Company issued $600,000, 9%, 20-year bonds on January 1, 2022, at 103. Interest is payable annually on January 1. Adcock uses straight-line amortization for bond premium or
Gridley Company issued $800,000, 11%, 10-year bonds on December 31, 2021, for $730,000. Interest is payable annually on December 31. Gridley Company uses the straight-line method to amortize bond
De Weese Corporation issues $400,000 of 8%, 5-year bonds on January 1, 2022, at 105. Assuming that the straight-line method is used to amortize the premium, what is the total amount of interest
Lorance Corporation issued $400,000, 7%, 20-year bonds on January 1, 2022, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January
LRNA Company issued $380,000, 7%, 10-year bonds on January 1, 2022, for $407,968. This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annually on January 1.LRNA
Windsor Corporation issues $500,000 of 9%, 5-year bonds on January 1, 2022, at 104. If Windsor uses the effective-interest method in amortizing the premium, will the annual interest expense increase
On January 1, 2022, Frontier Corporation had $1,000,000 of common stock outstanding that was issued at par. It also had retained earnings of $750,000. The company issued 40,000 shares of common stock
Amazon.com, lnc.'s financial statements are presented in Appendix D.Financial statements of Walmart Inc. are presented in Appendix E. The complete annual reports of Amazon and Walmart, including the
Farley Inc. declares a $55,000 cash dividend on December 31, 2022. The required annual dividend on preferred stock is $10,000. Determine the allocation of the dividend to preferred and common
On January 1, 2022, Goodhue Inc. had the following stockholders' equity balances.During 2022, the following transactions and events occurred.1. Issued 60,000 shares of $2 par value common stock as a
The following stockholders' equity accounts arranged alphabetically are in the ledger of Westin Corporation at December 31, 2022.Instructionsa. Prepare a stockholders' equity section at December 31,
The stockholders' equity accounts of Gonzalez, Inc., at January 1, 2022, are as follows.InstructionsWith the class divided into groups, complete the following.a. Determine the retained earnings
SUPERVALU, one of the largest grocery retailers in the United States, is headquartered in Minneapolis. Suppose the following financial information (in millions) was taken from the company's 2022
During 2022, Roblez Corporation had the following transactions and events.1. Declared a cash dividend.2. Issued par value common stock for cash at par value.3. Completed a 2-for-l stock split in
The following information is available for Reinsch Corporation for the year ended December 31, 2022: cost of goods sold $205,000, sales revenue $350,000, other revenues and gains $50,000, and
Newland Company reported retained earnings at December 31, 2021, of $310,000. Newland had 200,000 shares of common stock outstanding at the beginning of 2022. The following transactions occurred
The following information is available for Norman Corporation for the year ended December 31, 2022: sales revenue $700,000, other revenues and gains $92,000, operating expenses $110,000, cost of
Ringgold Corporation has outstanding at December 31, 2022, 50,000 shares of $20 par value, cumulative, 6% preferred stock and 200,000 shares of $5 par value common stock. All shares were outstanding
What were the amounts of basic earnings per share of common stock that Apple reported in the years 2018 to 2019?
This financial information is available for Klinger Corporation.The weighted-average number of shares of common stock outstanding was 180,000 for 2021 and 150,000 for 2022. Instructions Calculate
At December 31, 2022, Millwood Corporation has 2,000 shares of $100 par value, 8%, preferred stock outstanding and 100,000 shares of $10 par value common stock issued. Millwood's net income for the

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