Questions and Answers of Accounting Principles 14th Edition

Huebner Corporation leases new equipment for 10 years on December 31, 2022. The present value of the lease payments is $192,000. After recording this lease, Huebner has assets of $1,800,000,
Talkington Electronics issues a $400,000, 8%, 15-year mortgage note on December 31, 2021. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note
Laudie Company issued $400,000 of 9%, 10-year bonds on January 1, 2022, at face value. Interest is payable annually on January 1, 2023.InstructionsPrepare the journal entries to record the following
Randle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2022.
Quigley Corporation's trial balance at December 31, 2022, is presented below. All 2022 transactions have been recorded except for the items described below.1. On January 1, 2022, Quigley issued 1,000
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 accounting for bonds payable is:a. Essentially the same under IFRS and GAAP.b. Differs in that GAAP requires use of the straight-line method for amortization of bond premium and discount.c. The
Eubank Corporation issues $500,000 of bonds for $520,000. (a) Prepare the journal entry to record the issuance of the bonds, (b) Show how the bonds would be reported on the balance sheet at
Price Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2022.
On January 1, 2022, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1.InstructionsPrepare journal entries to record the following.a. The
Kershaw Electric sold $6,000,000, 10%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and paid interest annually on January 1. The bonds were sold at 98.Instructionsa.
Meera Corporation issued 4,000, 8%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1. a. Prepare the journal entry to record the sale of these bonds on January
On January 1, 2022, Forrester Company issued $400,000, 8%, 5-year bonds at face value. Interest is payable annually on January 1.InstructionsPrepare journal entries to record the following.a. The
The following section is taken from Mareska's balance sheet at December 31, 2021.Interest is payable annually on January 1. The bonds are callable on any annual interest date.Instructions.a.
Amazon.com, Inc .'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 joint projects of the FASB and IASB could potentially:a. Change the definition of liabilities.b. Change the definition of equity.c. Change the definition of assets.d. All of the answers are
These transactions took place for Redeker Co.Instructions.Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31. 2021 May 1 Dec.
On January 10, 2022, Perez Co. sold merchandise on account to Robertsen Co. for $15,600, n/30. On February 9, Robertsen Co. gave Perez Co. a 10% promissory note in settlement of this account. Prepare
Suppose the financial statements of 3M Company report net credit sales of $20.0 billion. Accounts receivable (net) are $2.7 billion at the beginning of the year and $2.8 billion at the end of the
Vandiver Company had the following selected transactions.Apr. l, 2022 Accepted Goodwin Company's 12-month, 6% note in settlement of a $30,000 account receivable.July 1,
Kerwick Company had accounts receivable of $100,000 on January 1, 2022. The only transactions that affected accounts receivable during 2022 were net credit sales of $1,000,000, cash collections of
What percentage does Coca-Cola's 2019 allowance for doubtful accounts represent as a percentage of its gross trade accounts receivables?
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 website.Instructionsa.
The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2022.1. Paid $5,000 of accrued taxes at the time the plant site was acquired.2. Paid $200
Which of the following statements is correct?a. Both IFRS and GAAP permit revaluation of property, plant, and equipment and intangible assets (except for goodwill).b. IFRS permits revaluation of
PepsiCo, lnc.'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,
a. On January 1, 2022, Emporia Country Club purchased a new riding mower for $15,000. The mower is expected to have an 8-year life with a $3,000 salvage value. What journal entry would Emporia make
Research and development costs are:a. Expensed under GAAP.b. Expensed under IFRS.c. Expensed under both GAAP and IFRS.d. None of the answers choices is correct.
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method
On March 1, 2022, Westmorlan Company acquired real estate on which it planned to construct a small office building, by paying $75,000 in cash. An old warehouse on the property was demolished at a
At the beginning of 2020, Mazzara Company acquired equipment costing $120,000. It was estimated that this equipment would have a useful life of 6 years and a salvage value of $12,000 at that time.
On January 1, 2022, Evers Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $48,000. Related expenditures also paid in cash
Pinson Company and Estes Company are two proprietorships that are similar in many respects. One difference is that Pinson Company uses the straight-line method and Estes Company uses the
Chisenhall Company purchased land and a building on January 1, 2022. Management's best estimate of the value of the land was $100,000 and of the building $200,000. However, management told the
The intangible assets section of Sappelt Company at December 31, 2022, is presented here.The patent was acquired in January 2022 and has a useful life of 10 years. The franchise was acquired in
Financial Statement At December 31, 2022, Grand Company reported the following as plant assets.During 2023, the following selected cash transactions occurred.April 1 Purchased land for
Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January l, 2022, at a cost of $148,000. Over its 4-year useful life, the bus is expected to be
Ceda Co. has equipment that cost $80,000 and that has been depreciated $S0,000.InstructionsRecord the disposal under the following assumptions.a. It was discarded with no cash received.b. It was sold
Companies invest substantial sums to ensure that their product is well-known to the consumer. Test your knowledge of who owns some famous brands and their impact on the financial
The adjusted trial balance of Feagler Company for the year ended December 31, 2022, is as follows.Prepare a multiple-step income statement and an owner's equity statement for 2022, and a classified
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Goins Company in 2022. 1. Goins developed a new
On January 1, 2022, the Morgantown Company ledger shows Equipment $32,000 nd Accumulated Depreciation $9,000. The depreciation resulted from using the straight-line method with a useful life of 10
Here are selected 2022 transactions of Ridge Company. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $62,000 and had a useful life of 10 years with no
Gunkelson Company sells equipment on September 30, 2022, for $18,000 cash. The equipment originally cost $72,000 and as of January l , 2022, had accumulated depreciation of $42,000. Depreciation for
On January 1, 2022, the ledger of Accardo Company contains these liability accounts.During January, these selected transactions occurred.Jan. 5 Sold merchandise for cash totaling $20,520, which
These are selected 2022 transactions for Pedigo Corporation. Jan. 1 May l Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. Purchased a patent with an
Morgan Company's balance sheet at December 31, 2021, is presented below.During January 2022, these transactions occurred. (Morgan Company uses the perpetual inventory system.)1. Morgan paid $250
Medlen Company, has these account balances at December 31, 2022.In addition, Medlen is involved in a lawsuit. Legal counsel feels it is probable Medlen will pay damages of $25,000 in 2023.a. Prepare
Mann Hardware has four employees who are paid on an hourly basis plus time-and-a half for all hours worked in excess of 40 a week. Payroll data for the week ended March 15, 2022, are presented
Olathe Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,000 (cost $61,000 less accumulated depreciation $30,000). Its fair
Under IFRS, a contingent liability is:a. Disclosed in the notes if certain criteria are met. b. Reported on the face of the financial statements if certain criteria are met.c . The same as
Under IFRS, obligations related to warranties are considered:a. Contingent liabilities.b. Provisions.c. Possible obligations.d. None of the answer choices is correct.
For the year ended December 31, 2022, Denkinger Electrical Repair Company reports these summary payroll data.Denkinger's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state
Suppose the following financial data were reported by 3M Company for 2021 and 2022 (dollars in millions).a. Calculate the current ratio and working capital for 3M for 2021 and 2022.b. Suppose that at
Elliott's Hardware reported cost of goods sold as follows.Elliott's made two errors: (1) 2021 ending inventory was overstated $3,000, and (2) 2022 ending inventory was understated
Moreno Company publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $20 per year. During November 2022, Moreno sells 15,000 subscriptions beginning with the
Bao Company lost all of its inventory in a fire on December 26, 2022. The accounting records showed the following inventory-related data for November and December.Bao is fully insured for fire losses
Gallardo Co. is involved in a lawsuit as a result of an accident that took place September 5, 2022. The lawsuit was filed on November 1, 2022, and claims damages of $1,000,000.Instructionsa. At
At December 31, 2022, the following information was available for E. Hetzel Company: ending inventory $40,000, beginning inventory $56,000, cost of goods sold $270,000, and sales revenue $380,000.
Smart Watch Company reported the following income statement data for a 2-year period.Smart uses a periodic inventory system. The inventories at January 1, 2021, and December 31, 2022, are correct.
This information is available for Abdullah's Photo Corporation for 2020, 2021, and 2022.Instructionsa. Calculate the inventory turnover for 2020, 2021, and 2022. (Round to one decimal place.)b.
Elsa's Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Elsa's purchases of Xpert snowboards during September is shown below. During the same
Shereen Company reported the following information for November and December 2022.Shereen's ending inventory at December 31 was destroyed in a fire.Instructionsa. Compute the gross profit rate for
Pennington Company has a balance in its Accounts Payable control account of $9,250 on January 1, 2022. The subsidiary ledger contains three accounts: Hale Company, balance $3,000; Janish Company,
Sayaovang Company discovers in 2022 that its ending inventory at December 31, 2021, was $7,000 understated. What effect will this error have on (a) 2021 net income, (b) 2022 net
Presented below is the post-closing trial balance for Horner Co.The subsidiary ledgers contain the following information: (1) accounts receivable- B. Hannigan $2,500, I. Kirk $7,500, and T. Hodges
Cinderella Shoe Shop had goods available for sale in 2022 with a retail price of $120,000. The cost of these goods was $84,000. If sales during the period were $80,000, what is the ending inventory
Non-U.S companies that follow IFRS:a. Do not normally use the principles of internal control activities described in this text.b. Often offset cash with accounts payable on the balance sheet.c. Are
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
You are the assistant controller in charge of general ledger accounting at Linbarger Bottling Company. Your company has a large loan from an insurance company. The loan agreement requires that the
The Sarbanes-Oxley Act applies to:a. All U.S. companies listed on U.S. exchanges.b. All companies that list stock on any stock exchange in any country.c. All European companies listed on European
High-quality international accounting requires both high-quality accounting standards and:a. A reconsideration of SOX to make it less onerous.b. High-quality auditing standards.c . Government
On July 31, 2022, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the
The bank portion of the bank reconciliation for Langer Company at November 30, 2022, was as follows.The adjusted cash balance per bank agreed with the cash balance per books at November 30. The
What was Apple's balance in cash and cash equivalents at September 28, 2019? Did it report any restricted cash? How did Apple define cash equivalents?
Which of the following statements is false?a. Receivables include equity securities purchased by the company.b. Receivables include credit card receivables.c. Receivables include amounts owed by
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
One of Natalie's friends, Curtis Lesperance, runs a coffee shop where he sells specialty coffees and prepares and sells muffins and cookies. He is eager to buy one of Natalie's fine European mixers,
Winter Company's balance sheet at December 31, 2021, is presented below.During January 2022, the following transactions occurred. Winter uses the perpetual inventory method. Jan. 1 Winter
In recording a factoring transaction:a. IFRS focuses on loss of control.b. GAAP focuses on loss of control and risks and rewards.c. IFRS and GAAP allow partial derecognition.d. IFRS allows partial
T-lere is information related to Mingenback Company for 2022.Instructions.a. What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for
Presented below is an aging schedule for Halleran Company at December 31, 2021.At December 31, 2021, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000.Instructionsa.
Nordstrom issues its own credit cards. Assume that Nordstrom charges you $40 interest on an unpaid balance. Prepare the journal entry that Nordstrom makes to record this revenue.
In 2022, Wainwright Company has net credit sales of $1,300,000 for the year. It had a beginning accounts receivable (net) balance of $101,000 and an ending accounts receivable (net) balance of
At December 31, 2022, the trial balance of Darby Company contained the following amounts before adjustment.a. Based on the information given, which method of accounting for bad debts is Darby Company
At the beginning of the current period, Rose Corp. had balances in Accounts Receivable of $200,000 and in Allowance for Doubtful Accounts of $9,000 ( credit). During the period, it had net credit
The adjusted trial balance of Gibson Company for the year ended December 31, 2022, is as follows.InstructionsPrepare a multiple-step income statement, owner's equity statement, and a classified
On January 1, 2022, Harter Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Willingham Company. It is a
On December 31, 2021, when its Allowance for Doubtful Accounts had a zero balance, Ling Co. estimated that 2% of its net accounts receivable of $450,000 will become uncollectible and records the
How are uncollectible accounted for under the direct write-off method? What are the disadvantages of this method?
On December 1, 2022, Rodriguez Distributing Company had the following account balances.Dec. 6 Paid $1,600 for salaries and wages due employees, of which $600 is for December and $1,000 is for
Which of the following would not be included in the definition of inventory under IFRS?a. Photocopy paper held for sale by an office supply store.b. Stereo equipment held for sale by an electronics
Kern's Book 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
Big Box Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company's fiscal year on November 30,
Which of the following would not be a line item of a company eporting costs by nature?a. Depreciation expense.b. Salaries expense.c. Interest expense. d. Manufacturing expense.
PepsiCo, lnc.'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,
Which of the following would not be a line item of a company reporting costs by function?a. Administration.b. Manufacturing.c. Utilities expense.d. Distribution.
On September 1, Nixa Office Supply had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, the following transactions occurred.Sept.
Amazon.com, lnc.'s financial statements are presented in Appendix D. Financial statements of Walmart Inc. are presented in Appendix E. (Use Walmart's January 31, 2020, financial statements for
Which of the following statements is false?a. IFRS specifically requires use of a multiple-step income statement.b. Under IFRS, companies can use either a perpetual or periodic system.c. IFRS does

Showing 400 - 500 of 586