Questions and Answers of Financial Accounting 11th

Track Rack is a software development company that specializes in developing information systems to account for inventory. The company maintains an attractive website, which is one of its primary
Adriaan Taylor Corporation is a newly formed entity that engages in the purchase and resale of amphibious tour vehicles. Purchases for the first year of operation were as follows:Sales for this first
Ali Naeem was recently placed in charge ofi nventory accounting for Sialkot Surgical Supply. This company is located in Pakistan and deals in surgical supplies for global export. The company has been
Form a six-member team, evaluate the following fact situation, and complete the indicated requirements.Lynne Pastor is chief financial officer for Lots of AdvertisingT.h e company has received an
Joyce Cathey owns Southwest Golf Shop. She has reviewed the following preliminary financial data prepared for the year ending December 31, 20X8:Joyce has determined that the above data were based on
Determine the "type" and "basic accounting" approach for each of the following categories of investments. Investment level generally over 20% but not giving control Investment level usually over
This problem requires you to carefully reread and think about the book's brief discussion on emerging trends in fair value reporting. As you do so, edit the following incorrect comments to make them
Micro Detect Corporation was sued for securities fraud. It was alleged that the company deliberately overstated net income by failing to appropriately recognize losses on its trading securities.
Winsloe Corporation obtained an investment in the stock of Southern Rail. The intent of the investment was not to obtain control or to exert significant influence. Winsloe has no plans to trade the
Beckwith Boots invested $100,000 in 5-year bonds issued by Ace Brick Company. The bonds were purchased at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually.(a)
Devol Computing invested in $100,000 of face amount of 6-year bonds issued by Horton Micro Chip Company on January 1, 20X1. The bonds were purchased at 103, and bear interest at a stated rate of 8%
Petersen Stores invested in $100,000 of face amount of 4-year bonds issued by Erik Food Supply Company on January 1, 20X1. The bonds were purchased at 98, and bear interest at a stated rate of 8% per
Davis Steel Company acquired 30% of the stock of Reginald Metals Company. Davis acquired this investment for purposes of being able to exert significant influence over the strategic plans and
Packed Powder Corporation bought all of the stock of Snowfall Corporation from its existing shareholders on June 30, 20X4. Packed Powder paid Snowfall's shareholders a total of $2,000,000, which
Parrot Corporation bought all of the stock of Sparrow Corporation from its existing shareholders on January 1, 20X6. Parrot paid Sparrow's shareholders a total of $5,000,000, which was $2,000,000 in
Bitnec Corporation acquired three separate investments at the beginning of the year. Information about each acquisition, the dividends declared and paid during the year, income, and year end stock
Season Corporation had excess cash on hand on January 1, 20X1, and invested in three separate bond issues on that date. Each bond investment had a maturity date of December 31, 20X6, and a maturity
Season Corporation had excess cash on hand on January 1, 20X1, and invested in three separate bond issues on that date. Each bond investment had a maturity date of December 31, 20X6, and a maturity
Coastal Pine Corporation acquired 40% of the stock of Delta Shipping. Coastal Pine's investment is a long-term strategic investment. Coastal Pine anticipates that its investment will permit it to
Princeton Corporation purchased all of the stock of Stanford Corporation on July 1. Princeton paid 93,000,000 for this investment. Stanford's buildings had a fair value of $1,550,000. All other
Beginning and end ofy ear balance sheets for Jensen Corporation follow. Also shown is the income statement for 20X6. No investments were sold during the year, however, stock in Delta Corporation was
The following selected account balances were taken from the general ledger of Vance Corporation as of December 31, 20X7. Examine this information and prepare the property, plant, and equipment
Sonjay Motors recently purchased a new sign to be erected in front of its dealership. The sign company that produced the sign had a standard price for this item at $$25$,000, but Sonjay was able to
Evaluate the following costs and decide if each is a "capital expenditure" or not. Then, if a capital expenditure, decide which account the cost should be recorded in: Land, Land Improvement,
CityBank recently held an auction to dispose of various assets it had obtained through foreclosures and other loan settlements. Representatives of Advantage Metals attended the auction to bid on an
Evaluate the following features or comments and decide if the description would pertain to a capital lease or an operating lease. The lessee reports the leased asset on its balance sheet Payments are
On January 1, 20X3, Perkins Printing Corporation purchased a digital press for $1$1,450,000. It cost an additional $50$50,000 to deliver, install, and calibrate the press. This machine has a service
On January 1, 20X6, Outback Air purchased a new engine for one of its airplanes used to transport adventurers to remote regions of western Australia. The engine cost $750,000 and has a service life
On January 1, 20X1, Pagoda Pond Construction acquired a small excavator for $$85$,000. This device had a 4-year service life to Pagoda, at which time it is expected that the equipment will be sold
On January 1, 20X1, Floral Features purchased a delivery truck for $$65$,000. At the time of purchase, Floral Features anticipated that it would use the truck for 4 years, even though its physical
Examine the following list of items, and match each to the best corresponding description from the choices list. Each choice should be used only once.(1) Cost minus salvage value(2) Cost minus
The accounting firm of Haynes and Haynes was asked by one of its clients to help them properly account for various transactions related to plant and equipment. The client prepared the following list
On January 1, 20X2, The GenKota Winery purchased a new bottling system. The system has an expected life of 5 years. The system cost $$325$,000. Shipping, installation, and set up was an additional
Grant Price is conducting an audit of the property, plant, and equipment records of Wellron Corporation.Grant selected two specific assets for closer inspection. Grant has examined documentation
Dr. Matt Brown purchased a new X-ray machine for his dental practice. The machine cost $$275$,000, and has a $$10$,000 salvage value after 7 years.As shown in the text, spreadsheet software
Form a five-person team. Each team member should identify a public company and obtain its financial reports (available at www.sec.gov, or from the company website). If looking on the SEC website,
Scott Drilling Company owns an oil and gas drilling rig. The company is continually spending money to repair, maintain, refurbish, and upgrade this unit. Below is a listing of various costs incurred.
Robinson Corporation recently requested a contractor to prepare a proposal to refurbish the exterior of its office building. Robinson wanted to give its building a "face lift." The contractor
Ng's Shrimp Company owns a fishing vessel that originally cost $250,000, with a 20- year life, and no anticipated salvage value. Ng uses the straight-line depreciation method. Review the following
Wasson Farming Corporation owned many tractors. The company has usually contracted with a trucking company to haul the tractors to the tractor dealership for repairs. With the aging of the tractors,
Leonard Heinz was recently put in charge of the construction division of McMahan Industries. He has reviewed the plant assets and their related accounting records, and believes certain items are
McCurdy Oil acquired an existing oil well and all related equipment used in the production of oil. McCurdy paid $$2$,500,000, of which 20% was attributable to pumps, pipelines, and tanks. The oil
The general journal of Kevin Berry Industries included the following entries relating to various expenditures during 20X5. Review this information and prepare corresponding entries to record any
Tidwell Corporation's accounting staff was unsure how to account for certain expenditures relating to its property, plant, and equipment. As a result, the company has delayed recording entries
Pierce Corporation recently hired a new manager for its struggling construction division. The manager was given responsibility for streamlining operations and restoring profitability. Selling
Cousin's Bar-B-Q Restaurant recently remodeled its store. The remodel included obtaining all new kitchen equipment. Much of the older equipment was traded-in as partial consideration toward the
Out Back Mining purchased land for $$100$,000,000. The land is believed to contain significant zinc deposits.Preliminary estimates indicate that 250,000 metric tons will be available for extraction
Tweedy Pharmaceuticals engaged in the following activities during 20X6. Review each and prepare any entry that is needed to record the item, along with adjusting entries at December 31 to record
Form a group of four students, then decide who will do each of the following tasks:Student A — Explore USA generally accepted accounting principles to determine the specific standard that addresses
Determining if an obligation is a current liability requires careful consideration of certain conditions. Examine the following five conditions, and determine what other conditions must be met before
Server Planet operates a web hosting company. Examine the following items and prepare the current liability section of the company's December 31, 20X7, balance sheet.The beginning of year accounts
On October 1, 20X4, Farmer Engineering Services purchased a new laser surveying instrument. Farmer paid $5,000 down and executed the following promissory note:(a) Prepare the appropriate journal
On April 1, 20X7, Miller Oil Company purchased a pumping truck. The sole consideration was a $$100$,000 note due in one year. Interest of $$12$,000 was included the face amount of the note. If
Conroy Corporation has borrowed money under two different loans. Conroy's accounting department presented the following calculations to support the interest accrual calculations. Review the
The auditing firm of Rosellini and Rossellini was auditing the year-end financial statements of its client, City Center Foods. In the course of the audit, it was discovered that City Center was the
Riseva Corporation manufactures and sells energy efficient lighting systems. These systems include a complex dimmer module, and about 10% of all units sold require subsequent repair under the
Lawrence Bodine is employed by Baylor Health Systems. During the month of June, Lawrence worked 195 hours. 15 of these hours were overtime, and were required to be paid at 150% of the normal hourly
Wild Man Wilson hosts a television show where he gives investment opinions about companies to call-inviewers.Below is the transcript of a portion of one of his shows that focused on employee
Following are selected transactions or events of Amazon Company relating to its first month of operation.(a) Prepare any initial journal entries necessary to record the above transactions or
Following are selected borrowing transactions by Campus Housing Corporation.(a) Prepare journal entries necessary to record the above transactions.(b) Prepare year-end adjusting journal entries
Camo Max manufactures camouflage apparel for paintball enthusiasts. In the normal course of business, the company encounters various situations giving rise to contingencies. Evaluate the following
SFCC Corporation has 8 employees. Information about the October payroll follows:Additional information is as follows:SFCC is in a state without an income tax. Employees’ federal income tax
Form a four-person team. Each team member should identify a public company and obtain its financial reports (available at www.sec.gov, or from the company website). If looking on the SEC website,
On April 1, 20X4, Rojas purchased land by giving $$100$,000 in cash and executing a $$400$,000 note payable to the former owner. The note bears interest at 10% per annum, with interest being
Review the discussion on future value from the textbook, and complete the following requirements (you will find it helpful to access the future value tables within the online version of the
(a) Prepare basic calculations showing the current value of a $$25$,000 sum to be received in 4 years.You may assume that 6% is the appropriate discount rate. For this requirement, do not refer to
On January 1, 20X5, Juan Silvia borrowed $500,000 to purchase a new office building. The loan is to be repaid in 2 equal annual payments, beginning December 31, 20X5. The annual interest rate on the
The contractual conditions of specific bond issues vary. Therefore, it becomes important to understand exactly what is meant by the terminology used to describe a bond agreement. Every sentence in
Ace Brick company issued $100,000 of 5-year bonds. The bonds were issued at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually.(a) Prepare the journal entry to
Horton Micro Chip Company issued $100,000 off ace amount of6 -year bonds on January 1,20X1. The bonds were issed at 103, and bear interest at a stated rate of 8% per annum, payable semiannually. The
Erik Food Supply Company issued $100,000 of face amount of 4-year bonds on January 1, 20X1. The bonds were issued at 98, and bear interest at a stated rate of 8% per annum, payable semiannually. The
Standard Atlantic Shipping issued $5,000,000, face amount, of 7% bonds on January 1, 20X3. The bonds are 5-year bonds, and Interest is payable every 6 months. At the time of issue, the market rate of
Standard Pacific Shipping issued $5,000,000, face amount, of 5% bonds on January 1, 20X3. The bonds are 5-year bonds, and Interest is payable every 6 months. At the time of issue, the market rate of
My Chase is devoted to tracking the performance of amateur athletes. The company issued $1$1,000,000 face amount of 9% bonds. The bonds were dated January 1, 20X4, and pay interest on June 30 and
Clear Water Coffee issued $$100$,000 of 7% bonds on January 1, 20X1. The bonds were issued at par and pay interest on June 30 and December 31 of each year. By December 31, 20X5, the market rate of
Jacob Joseph has identified five different companies in which he is interested in investing, based upon their products and prospects. However, Jacob is concerned about a general economic downturn and
Mike Davis Company entered into two lease agreements. One lease was for office space and the other was for office equipment.The office space lease is not a capital lease. It is an operating lease
Each of the following scenarios is independent. Utilize the appropriate future value or present value table, and calculate the requested amount. Then, if available, utilize the related function in an
Rodriquez Oil and Gas borrowed $$1$,000,000 from a local bank to obtain funds needed for the construction of a new drilling rig. This "construction" loan was represented by a 2- year, 7%,
On January 1, 20X2, Paisley Corporation issued $$2$,000,000 face amount of 6% bonds. These bonds are dated January 1, and mature in 6 years, with semiannual interest payments. The market rate of
On January 1, 20X3, Daisy Corporation issued $$5$,000,000 face amount of 6% bonds. These bonds are dated January 1, and mature in 5 years, with semiannual interest payments. The market rate of
You will need a pair of dice for this problem! Form a four-person team. Each team member is assumed to be the CFO for a company that is considering issuing bonds. Each team member will roll the dice
Cold Creek Confections issued $$1$,000,000 of 6% bonds on January 1, 20X5. The bonds were issued at 86.15 (note that bonds are frequently priced in increments of 1/32, so this nomenclature is taken
Harold Frieze owns Euro Lighting, a lighting products store that specializes in energy efficient and aesthetically pleasing fixtures. Sales have grown rapidly due to recent consumer interest in
College Bookstore is facing increased competition from online resellers and electronic media forms. To combat eroding sales, management adopted new discounting policies as follows:Students are
Shirley Williams Apparel Store purchases clothing merchandise on account from various vendors. Below is an invoice from Terra Wear.(a) Prepare Shirley's journal entries for each of the following
Gerloff Supply sells cables, connectors, and other basic wiring components to audio video dealers across the country. Dealers with "preferred status" receive a 20% discount off of list price. All
Gunnison Creamery produces a variety of specialty ice creams and buys ingredients from many suppliers. Each supplier seems to have unique policies about discounts and freight terms. Gunnison Creamery
Partial information follows about net sales, net purchases, cost of goods sold, gross profit, total expenses, and net income for Slabaugh Company. Compute the missing values. NET SALES Sales Sales
Pitkin Health Care Products provides the following alphabetic list of accounts and their respective balances. All accounts have normal balances, and income statement account balances are for the year
Interiors With Oohs and Aahs sells custom home décor. Following is the corporation's income statement. Use this statement to prepare closing entries. No dividends were declared during the period.
J & S Pet Supplies uses a perpetual inventory system. Prepare journal entries necessary to record the purchase (for $$22$ on account) and resale (for $$39$ cash) of a50 pound bag of dog chow.
Stober's Lawn Sprinkler Company sells irrigation equipment. Below is information necessary to prepare Stober's income statement for the year ending December 31, 20X7. Stobler attributes 60% of the
Morton Corporation and Skyline Corporation each sell playground equipment. Morton Corporation's strategy is to focus on selling quality units at the best possible prices, while attempting to minimize
Seaside Village is a retirement community, and many residents work together on a local charitable auction to raise money to support community endeavors. Basically, volunteers solicit residents and
Professor Pacioli was recently asked the following five questions by his aspiring accounting students. Prepare a summary of the professor's reply to each question.(a) Professor, I cannot quite put my
Determine whether each of the following items is an:(a) Cash(b) Dividend to shareholders(c) Land(d) Accounts payable(e) Capital stock(f) Notes payable(g) Accounts receivable(h) Salaries(i) Rent(j)
Indicate the impact (increase/decrease/no change) for each of the following transactions on total assets, liabilities, and owners’ equity.(a) Paid the current month’s rent.(b) Provided services
Goudar Bloodcare is a blood donation center where eligible donors give a pint of blood about once every other month. Assess each of the following to decide if Goudar should record the item as an
Magee Corporation provided the following summary balance sheet information:Compute net income for the year ending December 31, 20X2, under each of the following independent scenarios:(a) Magee paid

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