Questions and Answers of Accounting What Numbers

The balance sheets of Tully Corp. showed the following at December 31, 2020 and 2019: Required: a. If there have not been any purchases, sales, or other transactions affecting this equipment
For the payroll period ended on June 25, 2019, gross pay was $143,000, net pay was $102,000, FICA tax withholdings were $10,000, income tax withholdings were $25,000, and medical insurance
The balance of the Estimated Warranty Liability account was $25,000 on January 1, 2019, and $34,400 on December 31, 2019. Based on an analysis of warranty claims during the past several years, this
On July 1, 2019, $60 million face amount of 7%, 10-year bonds were issued. The bonds pay interest on an annual basis on June 30 each year. The market interest rates were slightly higher than 7% when
On April 15, 2019, Powell Inc. obtained a sixmonth working capital loan from its bank. The face amount of the note signed by the treasurer was $1,200,000. The interest rate charged by the bank was
On August 1, 2019, Colombo Co.’s treasurer signed a note promising to pay $2,400,000 on December 31, 2019. The proceeds of the note were $2,340,000.Required:a. Calculate the discount rate used by
At March 31, 2019, the end of the first year of operations at Lukancic Inc., the firm’s accountant neglected to accrue payroll taxes of $9,600 that were applicable to payrolls for the year then
Glennelle’s Boutique Inc. operates in a city in which real estate tax bills for one year are issued in May of the subsequent year. Thus, tax bills for 2019 are issued in May 2020 and are payable in
Kohl Co. provides warranties for many of its products. The January 1, 2019, balance of the Estimated Warranty Liability account was $35,200. Based on an analysis of warranty claims during the past
NightWoundsTime Brewing Co. distributes its products in an aluminum keg. Customers are charged a deposit of $60 per keg; deposits are recorded in the Keg Deposits account.Required:a. Where on the
Kirkland Theater sells season tickets for six events at a price of $378. For the 2019 season, 1,200 season tickets were sold.Required:a. Use the horizontal model (or write the journal entry) to show
Jessie Co. issued $2 million face amount of 7%, 20-year bonds on April 1, 2019. The bonds pay interest on an annual basis on March 31 each year.Required:a. Assume that market interest rates were
Alexi Co. issued $75 million face amount of 6%, 10-year bonds on June 1, 2019. The bonds pay interest on an annual basis on May 31 each year.Required:a. Assume that the market interest rates were
On August 1, 2011, Bonnie purchased $30,000 of Huber Co.’s 10%, 20-year bonds at face value. Huber Co. has paid the semiannual interest due on the bonds regularly. On August 1, 2019, market rates
On March 1, 2014, Catherine purchased $450,000 of Tyson Co.’s 10%, 20-year bonds at face value. Tyson Co. has regularly paid the annual interest due on the bonds. On March 1, 2019, market interest
Reynolds Co. issued $85 million face amount of 5% bonds when market interest rates were 4.72% for bonds of similar risk and other characteristics.Required:a. How much interest will be paid annually
Atom Endeavour Co. issued $210 million face amount of 8.5% bonds when market interest rates were 8.64% for bonds of similar risk and other characteristics.Required:a. How much interest will be paid
Enter the following column headings across the top of a sheet of paper: Enter the transaction or adjustment letter in the first column, and show the effect, if any, of each of the transactions or
Enter the following column headings across the top of a sheet of paper: Enter the transaction or adjustment letter in the first column and show the effect, if any, of each transaction or adjustment
See Exercise 5.20 for the related prepaid expense accounting.) On November 1, 2019, Gordon Co. collected $31,800 in cash from its tenant as an advance rent payment on its store location. The
The following summary data for the payroll period ended on April 10, 2018, are available for Brac Construction Ltd.:Gross pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The following summary data for the payroll period ended December 27, 2018, are available for Cayman Coating Co.:Gross pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hayden Co. has outstanding $40 million face amount of 7% bonds that were issued on January 1, 2013, for $40,600,000. The 20-year bonds mature on December 31, 2032, and are callable at 103 (that is,
Hurley Co. has outstanding $420 million face amount of 9% bonds that were issued on January 1, 2007, for $409,500,000. The 20-year bonds mature on December 31, 2026, and are callable at 102 (i.e.,
On January 1, 2019, Drennen, Inc., issued $5 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31
On January 1, 2019, Learned, Inc., issued $105 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December
This is an analytical assignment involving the interpretation of financial statement disclosures.) A review of the accounting records at Corless Co. revealed the following information concerning the
Assume that Home and Office City Inc. provided the following comparative data concerning long-term debt in the notes to its 2020 annual report (amounts in millions): Required: a. As indicated, Home
For each of the following items, calculate the amount of revenue or expense that should be recognized on the income statement for Pelkey Co. for the year ended December 31, 2019:a. Cash collected
Refer to the Consolidated Statements of Cash Flows in the Campbell Soup Company annual report within the appendix.Required:a. Identify the two most significant sources of cash from operating
The following information is available from the accounting records of Manahan Co. for the year ended December 31, 2019:Net cash provided by financing activities . . . . . . . . . . . . . . . . . . .
The financial statements of Pouchie Co. included the following information for the year ended December 31, 2019 (amounts in millions): Depreciation and amortization expense . . . . . . . . . . . . .
During the fiscal year ended June 30, 2020, Jones Co. had a 3-for-1 stock split. In its annual report for 2020, the company reported earnings per share for the year ended June 30, 2019, on a restated
For the year ended December 31, 2018, Finco Inc. reported earnings per share of $1.56.Required:a. During 2019, the company had a 3-for-1 stock split. Calculate the 2018 earnings per share that will
During the year ended December 31, 2020, Gluco Inc. split its stock on a 3-for-1 basis. In its annual report for 2019, the firm reported net income of $442,890 for 2019, with an average 155,400
During the fiscal year ended September 30, 2020, Worrell Inc. had a 2-for-1 stock split and a 5% stock dividend. In its annual report for 2020, the company reported earnings per share for the year
For several years Orbon Inc. has followed a policy of paying a cash dividend of $0.45 per share and having a 10% stock dividend. In the 2020 annual report, Orbonreported restated earnings per
This problem is based on the 2017 annual report of Campbell Soup Company in the appendix.Required:Find in the Selected Financial Data (also known as the Five-Year Review), or calculate, the following
McDonald?s Corp. McDonald?s conducts operations worldwide and is managed in three primary geographic segments: U.S., International Lead Markets (including Australia, Canada, France, Germany, and the
Refer to the selected financial data (fiveyear financial summary) in the Campbell Soup Company annual report in the appendix.Required:Compare the trend of the operating income (earnings before
A partially completed balance sheet for Blue Co. Inc. as of October 31, 2019, is presented. Where amounts are shown for various items, the amounts are correct. Required: Using the following data,
Anglin Inc. expects to incur a loss for the current year. The chairperson of the board of directors wants to have a cash dividend so that the company’s record of having paid a dividend during every
Altuve Co. was incorporated on January 1, 2019, at which time 250,000 shares of $1 par value common stock were authorized, and 140,000 of these shares were issued for $12 per share. Net income for
On April 10, 2019, Amelia Inc. purchased 1,800 shares of its own common stock in the market for $23 per share. On September 28, 2019, the company sold 700 of these shares in the open market at a
On May 4, 2019, Docker Inc. purchased 1,200 shares of its own common stock in the market at a price of $19.25 per share. On September 19, 2019, 700 of these shares were sold in the open market at a
On December 1, 2019, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and February, was received in cash from the company’s
You have been approached by Gary Gerrard, president and CEO of Gerrard Construction Co., who would like your advice on a number of business and accounting related matters. Your conversation with Mr.
Answer the following questions using data from the Campbell Soup Company annual report in the appendix:Required:a. Find the discussion of Property, Plant, and Equipment and depreciation methods used
Using a present value table, your calculator, or a computer program present value function, answer the following questions:Required:a. What is the present value of nine annual cash payments of
Renter Co. acquired the use of a machine by agreeing to pay the manufacturer of the machine $4,500 per year for 10 years. At the time the lease was signed, the interest rate for a 10-year loan was
Ambrose Co. has the option of purchasing a new delivery truck for $63,450 in cash or leasing the truck for $13,725 per year, payable at the end of each year for six years. The truck also has a useful
On January 1, 2019, Carey Inc. entered into a noncancelable lease agreement, agreeing to pay $14,000 at the end of each year for four years to acquire a new computer system having a market value of
The balance sheets of HiROE Inc. showed the following at December 31, 2020 and 2019: Required: a. If there have not been any purchases, sales, or other transactions affecting this equipment account
Moyle Co. acquired a machine on January 1, 2019, at a cost of $1,200,000. The machine is expected to have a five-year useful life, with a salvage value of $75,000. The machine is capable of producing
Grove Co. acquired a production machine on January 1, 2019, at a cost of $480,000. The machine is expected to have a four-year useful life, with a salvage value of $80,000. The machine is capable of
Porter Inc. acquired a machine that cost $720,000 on October 1, 2019. The machine is expected to have a four-year useful life and an estimated salvage value of $80,000 at the end of its life. Porter
Freedom Co. purchased a new machine on July 2, 2019, at a total installed cost of $132,000. The machine has an estimated life of five years and an estimated salvage value of $18,000.Required:a.
Early in January 2019, Tellco Inc. acquired a new machine and incurred $100,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned
During the first month of its current fiscal year, Green Co. incurred repair costs of $40,000 on a machine that had eight years of remaining depreciable life. The repair cost was inappropriately
Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net
Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $1,215,000 and
Using a present value table, your calculator, or a computer program present value function, calculate the present value of:a. A car down payment of $9,000 that will be required in two years, assuming
Barefoot Industrial acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $117,000 and has an estimated useful life of four years and an estimated salvage value of
Millco Inc. acquired a machine that cost $1,200,000 early in 2019. The machine is expected to last for eight years, and its estimated salvage value at the end of its life is $180,000.Required:a.
For each of the following expenditures, indicate the type of account (asset or expense) in which the expenditure should be recorded. Explain your answers.a. $3,700 for repairing damage that resulted
Crow Co. purchased some of the machinery of Hare Inc., a bankrupt competitor, at a liquidation sale for a total cost of $136,200. Crow?s cost of moving and installing the machinery totaled $12,300.
Backstreets Co. recently acquired all of Jungleland Inc.’s net assets in a business acquisition. The cash purchase price was $12.6 million. Jungleland’s assets and liabilities had the following
Refer to the information presented in Mini- Exercise 6.3. Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT 336DL earth mover on the straight-line method and reported
Gandolfi Construction Co. purchased a CAT 336DL earth mover at a cost of $1,000,000 in January 2019. The company’s estimated useful life of this heavy equipment is 8 years, and the estimated
Stucki Holdings Corp. incurred the following expenditures: $6,100 cost to replace the transmission in a company-owned vehicle; $21,600 cost of annual property insurance on the company’s production
Fesco Jewelers Ltd. purchased store fixtures, display cases, and a maximum-security commercial safe for a lump-sum price of $18,000 from a bankrupt competitor. Appraised values were as follows: store
Following are condensed income statements for Uncle Bill?s Home Improvement Center for the years ended December 31, 2020 and 2019: Uncle Bill was concerned about the operating results for 2020 and
a. If the beginning balance of the Inventory account and the cost of items purchased or made during the period are correct, but an error resulted in overstating the firm’s ending inventory balance
The inventory records of Cushing Inc. reflected the following information for the year ended December 31, 2019: Required: a. Assume that Cushing, Inc., uses a periodic inventory system. Calculate
The following data are available for Sellco for the fiscal year ended on January 31, 2020:Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600
Mower-Blower Sales Co. started business on January 20, 2019. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2019 were as follows: The December 31,
A portion of the current assets section of the December 31, 2019, balance sheet for Gibbs Co. is presented here: The company?s accounting records revealed the following information for the year
A portion of the current assets section of the December 31, 2020, balance sheet for Carr Co. is presented here: The company?s accounting records revealed the following information for the year
The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2020 and 2019: Required: a. Describe how the allowance amount at December 31, 2020, was
The following is a portion of the current assets section of the balance sheets of Avanti?s, Inc., at December 31, 2020 and 2019:? Required: a. If $10,800 of accounts receivable were written off
Branson Co. received its bank statement for the month ending May 31, 2019, and reconciled the statement balance to the May 31, 2019, balance in the Cash account. The reconciled balance was determined
Beckett Co. received its bank statement for the month ending June 30, 2019, and reconciled the statement balance to the June 30, 2019, balance in the Cash account. The reconciled balance was
Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance
Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance
On November 1, 2019, Wenger Co. paid its landlord $31,800 in cash as an advance rent payment on its store location. The six-month lease period ends on April 30, 2020, at which time the contract may
a. Use the horizontal model or write the journal entry to record the payment of a one-year insurance premium of $6,000 on March 1, 2019.b. Use the horizontal model or write the adjusting entry that
Agrico Inc. accepted a 10-month, 12.8% (annual rate), $9,000 note from one of its customers on May 15, 2019; interest is payable with the principal at maturity.Required:a. Use the horizontal model or
Annual credit sales of Nadak Co. total $680 million. The firm gives a 2% cash discount for payment within 10 days of the invoice date; 90% of Nadak’s accounts receivable are paid within the
On January 1, 2019, the balance in Kubera Co.’s Allowance for Bad Debts account was $25,160. During the year, a total of $65,700 of delinquent accounts receivable was written off as bad debts. The
On January 1, 2019, the balance in Tabor Co.’s Allowance for Bad Debts account was $26,800. During the first 11 months of the year, bad debts expense of $42,924 was recognized. The balance in the
Prepare a bank reconciliation as of August 31 from the following information:a. The August 31 balance shown on the bank statement is $9,050.b. There is a deposit in transit of $1,300 at August 31.c.
The beginning inventory was 900 units at a cost of $10 per unit. Goods available for sale during the year were 3,900 units at a total cost of $43,200. In May, 1,800 units were purchased at a total
The Allowance for Bad Debts account had a balance of $19,200 at the beginning of the year and $24,400 at the end of the year. During the year (including the year-end adjustment), bad debts expense of
The balance in Happ Inc.’s general ledger Cash account was $71,580 at September 30, before reconciliation. The September 30 balance shown in the bank statement was $63,780. Reconciling items
Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2019, financial statements: At December 31, 2018, total assets
A bookkeeper prepared the year-end financial statements of Giftwrap, Inc. The income statement showed net income of $216,000, and the balance sheet showed ending retained earnings of $810,000. The
Mindspin Labs Inc. is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the “service economy” by eliminating
Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2019. Assume that all balance sheet items reflect account balances at December 31, 2019, and that
Kimber Co. is in the process of liquidating and going out of business. The firm?s accountant has provided the following balance sheet and additional information: It is estimated that all but 20
The information presented here represents selected data from the December 31, 2019, balance sheets and income statements for the year then ended for three firms: Required:Calculate the missing

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