Questions and Answers of Accounting What The Numbers Mean

Firm N has a current ratio of 2.6 and current assets of $169,000.Required:Calculate Firm N’s current liabilities and working capital.
Firm O has a current ratio of 3.5 and current liabilities of $56,000.Required:Calculate Firm O’s current assets and working capital.
Firm P has accounts receivable of $19,000, cash of $11,000, property, plant, and equipment of $310,000, merchandise inventory of $26,000, accounts payable of $24,000, other accrued liabilities of
Firm Q has short term debt of $14,000, land of $85,000, merchandise inventory of $31,000, cash of $9,000, property, plant, and equipment of $330,000, accounts payable of $16,000, long-term debt of
Your friend Amber has approached you seeking advice concerning two investment opportunities that she is presently considering. Her classmate Simone has asked her for a loan of $5,000 to help
Your friend has two investment opportunities that she is considering and has asked for your advice regarding how she should proceed. One will have an 9% rate of return on an investment of $12,000;
a. Firm A has a margin of 7%, sales of $980,000, and ROI of 19.6%. Calculate the firm’s average total assets.b. Firm B has net income of $259,200, turnover of 0.9, and average total assets of
Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2023 and 2022 (in millions):Required:a. Calculate the working capital and current
At the beginning of the year, the net assets of Shannon Co. were $492,600. The only transactions affecting stockholders’ equity during the year were net income of $70,200 and dividends of
For the year ended December 31, 2022, Settles Inc. earned an ROI of 12.6%. Sales for the year were $120 million, and average asset turnover was 2.8. Average stockholders’ equity was $25
Following are the current asset and current liability sections of the balance sheets for Around square Inc. at August 31, 2023 and 2022 (in millions):Required:a. Calculate the working capital and
Jay Oullette, CEO of Bumper to Bumper Inc., anticipates that his company’s year-end balance sheet will show current assets of $300,000 and current liabilities of $200,000. Oullette has asked your
A company’s preclosing trial balance shows the following accounts and amounts:a. Calculate total assets on the balance sheet.b. Calculate total liabilities on the balance sheet.c. Calculate the
Use A for Assets; L for Liabilities; SE for Stockholders’ Equity; R for Revenues; and E for Expenses in your answers to parts a–f below:a. The debit side is the normal balance for which
a.Accounts Payable had a balance of $15,000 at the beginning of the month and $21,400 at the end of the month. During the month, purchases on account amounted to $34,600. Calculate the payments to
Prepare an answer sheet with the column headings shown after the following list of transactions. Record the effect, if any, of the transaction entry or adjusting entry on the appropriate balance
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 the transaction entry or
a. The Supplies account had a balance of $2,400 at the beginning of the month and $3,200 at the end of the month. The cost of supplies purchased during the month was $7,800. Calculate the cost of
On February 1, 2022, the balance of the retained earnings account of Blue Power Corporation was $132,000. Revenues for February totaled $47,000, of which $41,500 was collected in cash. Expenses for
Answer these questions that are related to the following Interest Payable T-account:a. What is the amount of the February 28 adjustment?b. What account would most likely have been credited for the
On May 1, 2022, Tabor Co. received an $21,000 note from a customer in settlement of an $21,000 account receivable from that customer. The note bore interest at the rate of 9% per annum, and the note
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
Selected information taken from the financial statements of Ford star Co. for the year ended December 31, 2022, follows:a. Calculate income from operations (operating income) for the year ended
Selected information taken from the financial statements of Verbeke Co. for the year ended December 31, 2022, follows:a. Calculate income from operations (operating income) for the year ended
Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co.a. Issued 800,000 shares
Set up a horizontal model in the following format:Required:a. Enter the beginning (July 28, 2019) and ending (August 2, 2020) account balances for Accounts Receivable, Inventories, and Payable to
On January 10, 2022, the first day of the spring semester, the cafeteria of The Defiance College purchased for cash enough paper napkins to last the entire 16-week semester. The total cost was
DeBauge Realtors Inc. is a realty firm owned by Jeff and Kristi DeBauge. The DeBauge family owns 100% of the corporation’s stock. The following summarized data (in thousands) are taken from the
Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2022, financial statements:At December 31, 2021, total assets were
The balance in Happ Inc.’s general ledger Cash account was $16,200 at August 31, before reconciliation. The August 31 balance shown in the bank statement was $14,900. Reconciling items included
At the beginning of the year, accounts receivable were $30,000 and the allowance for bad debts was $1,500. During the year, sales (all on account) were $100,000, cash collections were $94,000, bad
Sales during the year were 500 units. Beginning inventory was 400 units at a cost of $6 per unit. Purchase 1 was 200 units at $7 per unit. Purchase 2 was 100 units at $8 per unit.Required:Calculate
a. Use the horizontal model or write the journal entry to record the payment of a one-year insurance premium of $9,000 on May 1, 2022.b. Use the horizontal model or write the adjusting entry that
On September 1, 2022, a commercial tenant paid its landlord $18,000 in cash as an advance rent payment on its store location. The six-month lease period ends on February 28, 2023, at which time the
On January 1, 2022, the balance in Tabor Co.’s Allowance for Bad Debts account was $21,600. During the first 11 months of the year, bad debts expense of $24,910 was recognized. The balance in the
On January 1, 2022, 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
Agrico Inc. accepted an 8-month, 12% (annual rate), $7,000 note from one of its customers on July 15, 2022; interest is payable with the principal at maturity.Required:a. Use the horizontal model or
Annual credit sales of Nadak Co. total $240 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
Husemann Co.’s assets include notes receivable from customers. During fiscal 2022, the amount of notes receivable averaged $525,000, and the interest rate of the notes averaged 4.2%.Required:a.
a. Use the horizontal model or write the journal entry to record the payment of a one-year insurance premium of $4,800 on April 1, 2022.b. Use the horizontal model or write the adjusting entry that
On November 1, 2022, 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, 2023, at which time the contract may
Beckett Co. received its bank statement for the month ending June 30, 2022, and reconciled the statement balance to the June 30, 2022, balance in the Cash account. The reconciled balance was
The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2023 and 2022:Required:a. Describe how the allowance amount at December 31, 2023, was most
The following is a portion of the current assets section of the balance sheets of Avanti’s, Inc., at December 31, 2023 and 2022:Required:a. If $9,100 of accounts receivable were written off during
Branson Co. received its bank statement for the month ending May 31, 2022, and reconciled the statement balance to the May 31, 2022, balance in the Cash account. The reconciled balance was determined
A portion of the current assets section of the December 31, 2023, balance sheet for Carr Co. is presented here:The company’s accounting records revealed the following information for the year ended
A portion of the current assets section of the December 31, 2022, balance sheet for Gibbs Co. is presented here:The company’s accounting records revealed the following information for the year
Mower-Blower Sales Co. started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2022 were as follows:The December 31,
The following data are available for Sellco for the fiscal year ended on January 31, 2023:Required:a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions
The inventory records of Kuffel Co. reflected the following information for the year ended December 31, 2022:Required:a. Assume that Kuffel Co. uses a periodic inventory system. Calculate cost of
In 2019, Trader Co. acquired a parcel of land for a cash purchase price of $175,000 with the intention of building a retail store in the near future. In late 2020, in the midst of the COVID-19
In Exercise 1.1, you were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term.Data from in Exercise 1.1The balance in Happ Inc.’s
Stucki Holdings Corp. incurred the following expenditures: $5,700 cost to replace the transmission in a company-owned vehicle; $19,300 cost of annual property insurance on the company’s production
Gandolfi Construction Co. purchased a CAT 336DL earth mover at a cost of $1,200,000 in January 2022. The company’s estimated useful life of this heavy equipment is 10 years, and the estimated
Refer to the information presented in Mini-Exercise 6.4. Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT 336DL earth mover on the straight-line method and reported
Creations Unlimited purchased camera equipment for its photo studio on January 6, 2022, at a cost of $17,000. The equipment had a four-year useful life and an estimated salvage value of $3,000. The
Backstreets Co. recently acquired all of Jungleland Inc.’s net assets in a business acquisition. The cash purchase price was $9.4 million. Jungleland’s assets and liabilities had the following
Dorsey Co. has expanded its operations by purchasing a parcel of land with a building on it from Bibb Co. for $310,000. The appraised value of the land is $105,000, and the appraised value of the
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. $22,000 annual cost of routine repair and
Alpha Inc. and Beta Co. are sheet metal processors that supply component parts for consumer product manufacturers. Alpha has been in business since 1985 and is operating in its original plant
Prepare an answer sheet with the column headings that follow. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and
Millco Inc. acquired a machine that cost $1,800,000 early in 2022. 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.
Using a present value table, your calculator, or a computer program present value function, calculate the present value ofa. A car down payment of $16,000 that will be required in two years, assuming
Assume that fast-food restaurants generally provide an ROI of 10%, but that such a restaurant near a college campus has an ROI of 16% because its relatively large volume of business generates an
Early in January 2022, 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
Grove Co. acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of
Freedom Co. purchased a new machine on July 2, 2022, at a total installed cost of $198,000. The machine has an estimated life of five years and an estimated salvage value of $27,000.Required:a.
Porter Inc. acquired a machine that cost $720,000 on October 1, 2022. 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
Moyle Co. acquired a machine on January 1, 2022, at a cost of $1,500,000. The machine is expected to have a five-year useful life, with a salvage value of $300,000. The machine is capable of
The balance sheets of Tully Corp. showed the following at December 31, 2023 and 2022:Required:a. If there have not been any purchases, sales, or other transactions affecting this equipment account
The balance sheets of HiROE Inc. showed the following at December 31, 2023 and 2022:Required:a. If there have not been any purchases, sales, or other transactions affecting this equipment account
Renter Co. acquired the use of a machine by agreeing to pay the manufacturer of the machine $7,500 per year for 10 years. At the time the lease was signed, the interest rate for a 10-year loan was
On January 1, 2022, Carey Inc. entered into a noncancelable lease agreement, agreeing to pay $21,000 at the end of each year for four years to acquire a new computer system having a market value of
Answer the following questions using data from the Campbell Soup Company 2020 annual report:Required:a. Find the discussion of Property, Plant, and Equipment and depreciation methods used by
On December 1, 2022, Hocking Inc. obtained a four-month working capital loan from its bank. The face amount of the note signed by the treasurer was $100,000. The interest rate charged by the bank was
On December 1, 2022, 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
For the payroll period ended on May 28, 2022, gross pay was $119,000, net pay was $91,000, FICA tax withholdings were $7,000, income tax withholdings were $17,000, and medical insurance contributions
The balance of the Estimated Warranty Liability account was $25,000 on January 1, 2022, and $34,400 on December 31, 2022. Based on an analysis of warranty claims during the past several years, this
Vicki Co. issued $1 million face amount of 8%, 20-year bonds on April 1, 2022. The bonds pay interest on an annual basis on December 31 each year.Required:a. Assume that market interest rates were
On July 1, 2022, $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 May 15, 2022, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $600,000. The interest rate charged by the bank was 7%.
On August 1, 2022, Colombo Co.’s treasurer signed a note promising to pay $2,400,000 on December 31, 2022. The proceeds of the note were $2,340,000.Required:a. Calculate the discount rate used by
At September 30, 2022, the end of the first year of operations at Lukancic Inc., the firm’s accountant neglected to accrue payroll taxes of $4,700 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 2022 are issued in May 2023 and are payable in
Kohl Co. provides warranties for many of its products. The January 1, 2022, balance of the Estimated Warranty Liability account was $25,100. Based on an analysis of warranty claims during the past
Prist Co. had not provided a warranty on its products, but competitive pressures forced management to add this feature at the beginning of 2022. Based on an analysis of customer complaints made over
Theater sells season tickets for six events at a price of $378. For the 2022 season, 1,200 season tickets were sold.Required:a. Use the horizontal model (or write the journal entry) to show the
Jessie Co. issued $3 million face amount of 9%, 20-year bonds on July 1, 2022. The bonds pay interest on an annual basis on June 30 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, 2022. 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, 2014, Bonnie purchased $40,000 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, 2022, market rates
On March 1, 2017, 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, 2022, market interest
Reynolds Co. issued $75 million face amount of 6% bonds when market interest rates were 5.81% for bonds of similar risk and other characteristics.Required:a. How much interest will be paid annually
The following summary data for the payroll period ended on July 14, 2021, are available for Brac Construction Ltd:Required:a. Calculate the missing amounts and then determine the FICA tax withholding
Atom Endeavour Co. issued $190 million face amount of 6.5% bonds when market interest rates were 6.71% for bonds of similar risk and other characteristics.Required:a. How much interest will be paid
On November 1, 2022, Gordon Co. collected $31,800 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2023, at which time the
The following summary data for the payroll period ended December 27, 2021, are available for Cayman Coating Co:Additional information•For employees, FICA tax rates for 2021 were 7.65% on the first
Hayden Co. has outstanding $50 million face amount of 6% bonds that were issued on January 1, 2015, for $50,750,000. The 20-year bonds mature on December 31, 2034, and are callable at 102 (that is,
Hurley Co. has outstanding $420 million face amount of 9% bonds that were issued on January 1, 2010, for $409,500,000. The 20-year bonds mature on December 31, 2029, and are callable at 102 (i.e.,
On January 1, 2022, Drennen, Inc., issued $6 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
The balance sheet caption for common stock is the following:Required:a. Calculate the dollar amount that will be presented opposite this caption.b. Calculate the total amount of a cash dividend of

Showing 100 - 200 of 268