Questions and Answers of Essentials Of Accounting For Governmental

The first day of the fiscal year, a company issues an $700,000, 6%, 10-year bond that pays semiannual interest of $21,000 ($700,000 × 6% × ½ year), receiving cash of $700,000. Journalize the
Stone Energy Corporation’s 7.5% bonds due in 2022 were reported as selling for 77.00. Were the bonds selling at a premium or at a discount? Why is Stone Energy Corporation able to sell its bonds at
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:Year 1July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market
The following transactions were completed by Almeda Inc., whose fiscal year is the calendar year:Year 1July 1. Issued $75,000,000 of 10-year, 9% callable bonds dated July 1, Year 1, at a market
On the first day of the fiscal year, a company issues a $1,800,000, 6%, five-year bond that pays semiannual interest of $54,000 ($1,800,000 × 6% × ½), receiving cash of $1,725,151. Journalize the
Abioye Co. produces and distributes semiconductors for use by computer manufacturers. Abioye Co. issued $700,000 of 10-year, 9% bonds on May 1 of the current year at face value, with interest payable
On July 1, Year 1, Khatri Industries Inc. issued $18,000,000 of 10-year, 5% bonds at a market (effective) interest rate of 6%, receiving cash of $16,661,102. Interest on the bonds is payable
On the first day of its fiscal year, Jacinto Company issued $6,500,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable
On the first day of the fiscal year, a company issues a $4,200,000, 10%, five-year bond that pays semiannual interest of $210,000 ($4,200,000 × 10% × ½), receiving cash of $4,041,710. Journalize
O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of Six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of
Using the bond from Practice Exercise 14-3A, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar.Data from Exercise 14-3A,On the first
Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $35,000,000 of five-year, 7% bonds at a market (effective) interest rate of
The following financial data (in thousands) were taken from recent financial statements of Office Depot, Inc.:1. Determine the times interest earned ratio for Staples in Year 3, Year 2, and Year 1?
Using the bond from Practice Exercise 14-3B, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar.Data from Exercise 14-3B,On the first
Rushton Corp., a wholesaler of music equipment, issued $11,000,000 of 20-year, 9% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal
On the first day of the fiscal year, a company issues a $8,600,000, 11%, five-year bond that pays semiannual interest of $473,000 ($8,600,000 × 11% × ½), receiving cash of $8,932,035. Journalize
Using the bond from Practice Exercise 14-5A, journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar.Data from Exercise 14-5A,On the first
On January 1, Year 1, Wedekind Company issued a $170,000, five-year, 8% installment note to Shannon Bank. The note requires annual payments of $42,578, beginning on December 31, Year 1. Journalize
Using the bond from Practice Exercise 14-5B, journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar.Data from Exercise 14-5B,On the first
A $2,300,000 bond issue on which there is an unamortized discount of $107,500 is redeemed for $2,231,000. Journalize the redemption of the bonds.
A $1,900,000 bond issue on which there is an unamortized discount of $101,264 is redeemed for $1,979,000. Journalize the redemption of the bonds.
The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to more than 50 cities in the United States:a. Determine the times interest
On the first day of the fiscal year, a company issues $89,000, 6%, five-year installment notes that have annual payments of $21,128. The first note payment consists of $5,340 of interest and $15,788
Loomis, Inc. reported the following on the company’s income statement in two recent years:a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal
On the first day of the fiscal year, a company issues $35,000, 5%, five-year installment notes that have annual payments of $5,415. The first note payment consists of $1,750 of interest and $3,665 of
Iacouva Company reported the following on the company’s income statement for two recent years:a. Determine the times interest earned ratio for the current year and the prior year. Round to one
Sprout Company reported the following on the company’s income statement in two recent years:a. Determine the times interest earned ratio for the current year and the prior year. Round to one
Mahmood Products Inc. reported the following on the company’s income statement in two recent years:a. Determine the times interest earned ratio for the current year and the prior year. Round to one
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder Co. issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market
Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd Co. issued $80,000,000 of five-year, 9% bonds at a market (effective) interest rate of 12%, with interest
Hasbro, Inc., designs, manufactures, and markets toy products worldwide. Hasbro’s toys include Barbie® fashion dolls and accessories, Hot Wheels®, and Fisher-Price brands. For a recent year,
At the end of the current year, Accounts Receivable has a balance of $4,470,000, Allowance for Doubtful Accounts has a debit balance of $17,230, and sales for the year total $63,800,000. Bad debt
Best Buy is a specialty retailer of consumer electronics, including personal computers, entertainment software, and appliances. Best Buy operates retail stores in addition to the Best Buy, Media
Costco Wholesale Corporation operates membership warehouses that sell a variety of branded and private label products. Headquartered in Issaquah, Washington, it also sells merchandise online in the
Laughlin Enterprises issues a $130,000, 45-day, 6% note to Morrison Industries for merchandise inventory.a. Journalize Laughlin Enterprises’ entries to record:1. The issuance of the note.2. The
The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:Tax rates assumed:Social security, 6%Medicare, 1.5%State unemployment
Stan Stately’s weekly gross earnings for the present week were $2,400. Stately has two exemptions. Using the wage bracket withholding table in Exhibit 2 with a $81 standard withholding allowance
Candy Cane’s weekly gross earnings for the present week were $1,370. Mellow has one exemption. Using the wage bracket withholding table in Exhibit 2 with a $81 standard withholding allowance for
The following accounts, with the balances indicated, appear in the ledger of Codigo Co. on December 1 of the current year:The following transactions relating to payroll, payroll deductions, and
Stan Stately’s weekly gross earnings for the week ended April 22 were $2,400, and her federal income tax withholding was $407.58. Assuming that the social security rate is 6% and Medicare is 1.5%
The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year:The following transactions relating to payroll, payroll deductions, and
Candy Cane’s weekly gross earnings for the week ended May 23 were $1,370, and her federal income tax withholding was $187.88. Assuming that the social security rate is 6% and Medicare is 1.5% of
A business issued a 45-day note for $80,000 to a creditor on account. The note was discounted at 5%. Journalize the entries to record (a) The issuance of the note (b) The payment of the
Philip Morris international Inc., has numerous pages dedicated to describing contingent liabilities in the notes to recent financial statements. These pages include extensive descriptions of multiple
The payroll register of Calpton Co. indicates $11,340 of social security withheld and $2,835 of Medicare tax withheld on total salaries of $189,000 for the period. Federal withholding for the period
The payroll register of Shortman Co. indicates $3,240 of social security withheld and $810 of Medicare tax withheld on total salaries of $54,000 for the period. Retirement savings withheld from
PepsiCo, Inc., reported the following information about its long-term debt in the notes to a recent financial statement (in millions):Long-term debt is comprised of the following:a. How much of the
The payroll register of Calpton Co. indicates $11,340 of social security withheld and $2,625 of Medicare tax withheld on total salaries of $189,000 for the period. Earnings of $19,000 are subject to
An employee earns $22 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week. Assume further that the social security
The payroll register of Shortman Co. indicates $3,240 of social security withheld and $810 of Medicare tax withheld on total salaries of $54,000 for the period. Earnings of $5,000 are subject to
Nakajima Company provides its employees with vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $25,500 for the period. The pension plan requires a
Vandiver Company provides its employees vacation benefits and a defined benefit pension plan. Employees earned vacation pay of $62,000 for the period. The pension formula calculated a pension cost of
The payroll register for Schmidt Company for the week ended April 29 indicated the following:Salaries .......................................... $1,380,000Social security tax withheld
Gupta Industries sold $436,000 of consumer electronics during July under a nine-month warranty. The cost to repair defects under the warranty is estimated at 4.5% of the sales price. On November 11,
Basted Company reported the following current assets and liabilities for December 31 for two recent years:a. Compute the quick ratio on December 31 of both years.b. Interpret the company’s quick
Aloha Company reported the following current assets and liabilities for December 31 for two recent years:a. Compute the quick ratio on December 31 of both years.b. Interpret the company’s quick
A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year’s vacation pay is $138,000. a.
In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $4,391 million and a periodic pension cost of $208 million. Explain the meaning of the $4,391
Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 2.5% of sales. Assume that sales were $398,000 for January. In February, a customer received warranty
General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows:Presume that GM’s sales were $147,049 million in Year 2 and that the total paid on
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:a. Determine the quick ratio for December 31 of both years.b. Interpret the change in the quick ratio
The current assets and current liabilities for Apple Inc. and HP, Inc., are as follows at the end of a recent fiscal period:a. Determine the quick ratio for both companies. Round to one decimal
Melissa Shallowford contributed a patent, accounts receivable, and $15,000 cash to a partnership. The patent had a book value of $6,000. However, the technology covered by the patent appeared to have
Xi Lin contributed land, inventory, and $38,600 cash to a partnership. The land had a book value of $128,500 and a market value of $187,400. The inventory had a book value of $53,500 and a market
Black and Shannon have decided to form a partnership. They have agreed that Black is to invest $360,000 and that Shannon is to invest $120,000. Black is to devote one-half time to the business, and
Adriana Gonzalez and Sylvester Van Horne formed a partnership, dividing income as follows: 1. Annual salary allowance to Chen of $25,000.2. Interest of 5% on each partner’s capital balance on
Beau Dawson and Willow Macdonald formed a partnership, investing $276,000 and $92,000, respectively. Determine their participation in the year’s net income of $380,000 under each of the following
Bruce Delew and Nadia Comatof formed a partnership, dividing income as follows:1. Annual salary allowance to Delew, $18,000 and Comatof, $51,000.2. Interest of 5% on each partner’s capital balance
Using each of the five assumptions as to income division listed in Exercise 12-3, determine the income participation of Dawson and McDonald if the year’s net income is $136,000.Data From Exercise
Graig Thomas purchased one-half of Jan Hamilton’s interest in the Freidman and Hamilton partnership for $49,500. Prior to the investment, land was revalued to a market value of $189,200 from a book
Lynn Carpenter and Matthew Fredrick formed a partnership in which the partnership agreement provided for salary allowances of $58,000 and $41,000, respectively. Determine the division of a $33,000
Marquis Westbury invested $19,100 in the Ternton and Rainwater partnership for ownership equity of $119,000. Prior to the investment, equipment was revalued to a market value of $77,400 from a book
On November 1, the firm of Bowes, Simmons, and Ahmad decided to liquidate its partnership. The partners have capital balances of $69,000, $85,000, and $12,000, respectively. The cash balance is
Patel has a capital balance of $310,000 after adjusting assets to fair market value. Banks contributes $490,000 to receive a 60% interest in a new partnership with Patel. Determine the amount and
Todd has a capital balance of $170,600 after adjusting assets to fair market value. Zanetti Killingsworth contributes $45,500 to receive a 40% interest in a new partnership with Todd. Determine the
Exploit Media, LLC, has three members: WACS Partners, Elyse O'Reilly, and Encounter Newspaper, LLC. On January 1, 20Y2, the three members had equity of $275,000, $55,000, and $220,000, respectively.
Prior to liquidating their partnership, Cameron and Solivita had capital accounts of $44,000 and $92,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was
Prior to liquidating their partnership, Kim and Cheyenne had capital accounts of $304,000 and $190,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was
Prior to liquidating their partnership, Heller and Warren had capital accounts of $128,000 and $67,000, respectively. The partnership assets were sold for $49,000. The partnership had no liabilities.
After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson and Harry Barge have balances of $64,000 and $86,000, respectively. Lewan Gorman is to be
Prior to liquidating their partnership, Jacobs and Sanchez had capital accounts of $320,000 and $424,000, respectively. The partnership assets were sold for $52,000. The partnership had no
Schwartz and Beer, CPAs earned $9,338,000 during 20Y4 using 46 employees. During 20Y5, the firm grew revenues to $11,825,000 and expanded the staff to 55 employees.a. Determine the revenue per
Makeman Architects earned $4,400,000 during 20Y1 using 40 employees. During 20Y2, the firm reduced revenues to $3,894,000 and reduced the staff to 33 employees.a. Determine the revenue per employee
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Silver, Carillo, and Tingaley are $77,000, $51,800, and $25,900, respectively. Cash,
The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $64,000 and $99,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an
Squeeky Cleaning Services, LLC, provides cleaning services for office buildings. The firm has 10 members in the LLC, which did not change between 20Y8 and 20Y9. During 20Y9, the business terminated
Swilley Furniture Company has 50,000 shares of cumulative preferred 2% stock, $75 par, and 100,000 shares of $10 par common stock. The following amounts were distributed as dividends:Year 1
Internal Insight Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000 shares of cumulative preferred 2% stock, $60 par, and 100,000 shares of $10 par common. During its
Black Bear Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Black Bear Bike Corp. has declared the following annual dividends
Castillo Nutrition Company has 14,000 shares of cumulative preferred 1% stock, $130 par, and 70,000 shares of $5 par common stock. The following amounts were distributed as dividends:Year 1
On May 23, Washburn Realty Inc. issued for cash 45,000 shares of no-par common stock (with a stated value of $4) at $16. On July 6, Washburn Realty Inc. issued at par value 12,000 shares of preferred
On October 31, Pidgeon Inc., a marble contractor, issued for cash 320,000 shares of $5 par common stock at $12, and on November 19, it issued for cash 45,000 shares of preferred stock, $60 par at
The following selected accounts appear in the ledger of Upscale Construction Inc. at the beginning of the current year:Preferred 2% Stock, $80 par (200,000 shares authorized, 65,000 shares issued) .
Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication
On January 22, Micah Corporation issued for cash 125,000 shares of no-par common stock at $6. On February 14, Micah Corporation issued at par value 32,000 shares of preferred 2% stock, $55 par for
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows: Common Stock, $20 stated
Nav-Go Enterprises Inc. produces aeronautical navigation equipment. The stockholders’ equity accounts of Nav-Go Enterprises Inc., with balances on January 1, 20Y3, are as follows:Common Stock, $5
The declaration, record, and payment dates in connection with a cash dividend of $428,000 on a corporation’s common stock are February 28, April 1, and May 15. Journalize the entries required on
The declaration, record, and payment dates in connection with a cash dividend of $195,000 on a corporation’s common stock are February 1, March 18, and May 1. Journalize the entries required on
Top-Value Corporation has 900,000 shares of $26 par common stock outstanding. On September 2, Top-Value Corporation declared a 3% stock dividend to be issued November 30 to stockholders of record on

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