Questions and Answers of Financial Accounting 11th

CUE Corporation was formed at the beginning of 20X2, and presents the following incomplete financial statements for three years. CUE has requested your help in completing the missing values for each
Think very broadly about accounting, its societal role, and its underlying premises, then provide a general answer to each of the following.(a) Whatis the role of accounting in society?(b) Is
As you study accounting, you will become increasingly familiar with a variety of generally accepted accounting principles. Already, you are beginning to appreciate some of the fundamental principles,
Review the following facts for four separate companies. Identify the two companies that lost money during the year, explaining how you reached your conclusion for each.COMPANY A Ending retained
Provide a carefully constructed narrative reply to each of the following requirements. You may consider using internet resources beyond your textbook to gather supporting information. Identify
Financial statements are typically prepared for a specific entity, or circumscribed area of accountability.There are a variety of legal forms of entities.(a) What is the fundamental accounting
Prepare Bisceglia’s income statement, statement of retained earnings, and balance sheet for the year ending December 31, 20X5. The following information is all that is available. Be sure to prepare
Sketchy Company provided the following very limited set of data. Use this information to determine net income for the years ending December 31, 20X1, 20X2, 20X3, and 20X4. The company was formed at
Bingo Corporation is a newly formed company. Below are the first 10 transactions that Bingo encountered.Prepare an income statement, statement of retained earnings, and balance sheet immediately
Winterbotham Corporation provided the following listing of financial statement elements and their respective balances. The periodic amounts relate to the year ending December 31, 20X5, and the
Efendi Company hired an accounting intern, Pat Morgan, to prepare its income statement, statement of retained earnings, and balance sheet. Pat indicated a reluctance to undertake this task due to a
Skousen Exploration Corporation was formed on January 1, 20X3. The company was formed by Cliff and Chris Skousen with the goal of conducting geophysical support services related to natural gas
Harish Company was formed on January 1,20X1. The company’s accountant prepared the following income statement, statement of retained earnings, and balance sheet at the conclusion of the first full
There are many corporations, and most of them have a relatively small group of shareholders. These are considered to be privately held entities, and it is difficult to obtain much financial
Perhaps you have watched the game show known as Jeopardy.’ Contestants must prepare a question that is answered by a given prompt. It is your turn to play Jeopardy” and your category is “tools
Review the following list of accounts, and indicate the debit/credit rules for the account, as well as the account’s normal balance. The first one is done as an example.(a) Cash(b) Capital Stock(c)
Mo Lambert formed a corporation to provide concrete construction work. His jobs typically involve building parking lots, drives, and foundations. Mo provided the following information about
Yorkston Corporation was formed in 1961. The company came into existence concurrent with the beginning of construction of super highways throughout the country. It seems the company’s founders had
Bikash Mishra recently formed a financial services and consulting firm in Nepal. He was very busy during the first month and has not yet had an opportunity to install his computerized accounting
The CEO of newly formed Targus Company printed a copy of the company’s general ledger prior to a recent plane flight. She settled into seat 7A next to where you were sitting. Once airborne, she
Professor Drebin’s Executive MBA students were recently discussing the benefits of a chart of accounts. Following is a transcript of the discussion. Most of the comments were correct, but two
The following narratives describe transactions impacting cash, accounts receivable, accounts payable, revenues, and selected expense accounts. Use T-accounts to analyze this activity and determine
Narmadha Narayan distributes electronic parts. Most transactions with customers are immediately paid with cash or check. But, Narayan has five major customers that have established accounts. These
Tom Pryor formed a management consulting firm specializing in cost management systems. Below are the transactions that occurred during the initial month of operation.Pryor consulting uses the
Paul Morris is a doctor of veterinary medicine specializing in horses. At the beginning of March, he incorporated his practice, and has completed his first month in business. He has come to you
Form a team with six other classmates. Each team member will assume an “organizational” function, as defined below. Each member should discharge their duties according to instructions from the
Morgan Corporation opened the year 20X6, with the following trial balance information:January's transactions are listed below:(a) Create the general ledger accounts, and enter the initial balances at
Moncrief Corporation is a small business operating in a state where a tax on income is contrary to the state’s constitution. In an effort to raise revenue, the state has imposed a tax on business
The following trial balance for Williams Corporation does not balance. You have conducted an extensive review to help Laura Williams find the nature of the problem. Below the trial balance is
There are numerous commercial accounting software packages, and they greatly simplify the drudgery of basic accounting tasks. Each software package has its unique features and strengths. Even a very
Problem I-01.05 provided the following data for Bingo Corporation. In that problem, financial statements were prepared after each transaction. This problem requires you to use T-accounts to capture
This chapter introduces important concepts in income measurement. Accountants oftentimes discuss these concepts using accounting “jargon” or “terminology. Effective business communication
Accounting “failures” occur when reported results are not presented in accordance with generally accepted accounting principles. These failures can produce significant financial losses to
The recognition of an expense usually occurs based on one of the following three intrinsic principles:(a) Associating Cause and effect(b) Systematic and rational allocation(c) Immediate recognition
Following are three separate transactions that pertain to prepaid items. Evaluate each item and prepare the journal entries that would be needed for the initial recording and subsequent end-of-20X3
Mohamed Bakar Alidini recently formed a business in the Republic of Yemen to process liquefied natural gas for export to other countries. Natural gas can be converted to a liquid by cooling it to
Stargate Publishing issues the Weekly Window . The company’s primary sources of revenue are sales of subscriptions to customers and sales of advertising in the Weekly Window. Stargate owns its
Creative Hearing Technologies of London recently introduced a Bluetooth enabled hearing aid that allows hearing-disabled users to not only hear better, but also interface with their cell phones and
Anthony Asher’s administrative assistant maintains a very simple computerized general ledger system. This system includes intuitive routines for recording receipts, payments, and sales on account.
Professor Wayne Campbell recently lectured on adjusting entries. As he did so, he prepared T-accounts on a marker board to illustrate the key points he was making.As he was erasing his illustrations
This chapter introduces many important terms and concepts. Certain of these terms and concepts are noted in the following listing. Find quotes/descriptions that explain/contrast each of the matched
Identification of items in need of adjustment is not automatic. It requires careful monitoring of the business environment, and can entail assessment of information found on various source documents
Plicta Motors is an automobile service center offering a full range of repair services for high performance cars. The following information is pertinent to adjusting entries that are needed for
Fenco Corporation's stock price recently collapsed on news that its chief financial officer resigned. It seems the company had deliberately failed to follow generally accepted principles in an
Examine each of the following fact scenarios, then prepare initial and end-of-year adjusting entries (when needed) assuming (a) use of a“balance sheet” approach versus (b) use of an “income
Roger Wilde is a CPA. He has numerous clients, one of which is Wedding World (WW). WW is a full service bridal consulting firm, and is interested in buying Wedding Wonders Photography Studio (WWPS).
Amber Nestor has an eye for quality. She recently formed an art gallery where she allows artists to display their artwork for sale. Customers buy the artwork through the gallery, but payments are
Reagan Sakai is in charge of financial management for Land Monitrix. Land Monitrix utilizes satellite technology and sophisticated mapping software to alert its customers to trespassing, illegal
Utilize the following worksheet to prepare the income statement, statement of retained earnings, and balance sheet for Himarios Corporation. For this problem, you do not need to prepare a classified
Some of the following accounts are real (permanent) accounts, and some are nominal (temporary) accounts.Which are which? Capital Stock Revenues Accumulated Depreciation Salaries Expense Accounts
Timber Creek prepared the following adjusted trial balance on December 31, 20X3. The company has completed preparation of financial statements and is now ready to prepare closing entries.(a) Prepare
Flowcharts are often used to document business activity. Rectangles represent "processes" and "documents" are represented by the boxes with a rolling bottom. Rearrange the following flowchart shapes
Traditions is an upscale university housing complex providing all the amenities of private townhouse living, and a full service 24-hour cafeteria for busy students. Prior to recording any adjusting
Liz Ross Corporation prepares a classified balance sheet that includes the following traditional sections:In which section of the classified balance sheet would the following accounts appear? Some of
Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa. He is interested in attracting additional investors to obtain financing for planned expansion. Some potential investors
Berry Corporation prepared the following preliminary trial balance. The trial balance and other information was evaluated by Delton Wiser, CPA. Delton has returned a list of proposed adjustments that
Examine the following trial balances, before and after adjustment:(a) Determine and record the apparent adjusting entries in journal entry format.(b) Prepare an income statement for the year ending
Wild River Rafting provides guided tours of the Rattlesnake River. Most of the company's business activity occurs during the summer season, so the company ends its fiscal year on August 31. Below is
Auditors frequently discover errors relating to recording and adjusting journal entries, and they must be able to clearly explain the necessary corrections to their clients in a nonconfrontational
On January 1, 20X7, Jacqueline Fernandez formed a corporation to purchase wheat harvesting equipment and provide contract support services to farmers throughout the Midwest. Information about the
Use this randomly arranged data to prepare a classified balance sheet for Imamani Corporation as of December 31, 20X5. Some of the accounts do not belong in the balance sheet, and 20% of the loan
Identify three companies with shares of stock that are publicly traded on an organized stock exchange. Obtain their most recent annual reports.For USA companies, those reports are required to be
Which of the following statements is false ?(a) Ownership of common stock gives the owner avoting right.(b) The stockholders’ equity section begins with apaid-in capital section.(c) The
ABC Corporation issues 1,000 shares of $10 par valuecommon stock at $12 per share. In recording thetransaction, credits are made to:(a) Common Stock $10,000 and Paid-in Capital inExcess of Stated
XYZ, Inc. sells 100 shares of $5 par value treasurystock at $13 per share. If the cost of acquiring theshares was $10 per share, the entry for the sale shouldinclude credits to:(a) Treasury Stock
M-Bot Corporation has 10,000 shares of 8%, $100par value, cumulative preferred stock outstanding atDecember 31, 2019. No dividends were declared in2017 or 2018. If M-Bot wants to pay $375,000 of
Orlando Company has a beginning balance in retainedearnings of $100,000 . During the year, it had a net lossof $20,000, paid cash dividends of $3,000, and issueda small stock dividend that had a
Katie Inc. reported net income of $186,000 during2019 and paid dividends of $26,000 on commonstock. It also has 10,000 shares of 6%, $100 par value,noncumulative preferred stock outstanding and
The ledger of JFK, Inc. shows common stock, common treasury stock, and no preferred stock. For this company, the formula for computing book value per share is:(a) total paid-in capital and retained
Items that are added back to net income in determiningnet cash provided by operating activities underthe indirect method do not include:(a) depreciation expense.(b) an increase in inventory.(c)
Cool Stools Corporation has income before taxes of$400,000 and a loss on discontinued operations of$100,000. If the income tax rate is 25% on all items, the statement of comprehensive income should
Use the same information as in Question 5, except that Hughes has a debit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. In this
Surguy Ltd has disclosed the following non‐current asset classes as at 30 June 2019.At 1 July 2019, the directors of Surguy Ltd decide to adopt the revaluation model and revalue the non‐current
Amorico Pty Ltd scrapped the following machines as worthless.Depreciation expense was recorded last on 31 December 2018.Required Prepare separate entries to record the disposal of the machines by
On 3 January 2017, Bennetti Ltd paid $33 000 for a machine with a useful life of 10 years and a residual value of $3000. On 31 December 2021, accumulated depreciation on the machine was $15 000. The
On 3 January 2019, Greskowiak Ltd exchanged a machine with a cost of $430 000 and accumulated depreciation of $150 000 for a new similar machine with a cash price of $460 000. Ignore GST.Required(a)
On 1 January 2016, Leibhardt Ltd acquired two identical pieces of equipment for a total cost of $540 000. It was estimated that each item would have a useful life of 8 years and a residual value of
Reipl Ltd uses the composite‐rate method to record depreciation of its store equipment. On 1 January 2019, the company owned the following store equipment (ignore GST).Required(a) Calculate the
During 2019, Truong Ltd disposed of four different non‐current assets. On 1 January 2019 the accounts were as follows.Truong Ltd depreciates its motor vehicles and machines by the straight‐line
On 1 July 2019, Weiland Pty Ltd owned several farming vehicles that had cost a total of $155 000. Accumulated depreciation on these vehicles to 1 July 2019 amounted to $73 000.On 30 September 2019,
On 30 June 2019, Wong Ltd reported the following information for equipment in its statement of financial position.Investigation of the property and plant records showed that the equipment consisted
Zhang Ltd acquired the business of Azzam Ltd for a cash outlay of $5 000 000 on 1 July 2019. The summarised balance sheet of Azzam Ltd on that date was as follows.Most of the assets were recorded at
The following information was obtained from the accounting records of Crothers Ltd.On 1 July 2019, vehicle A was traded in for vehicle B. The trade‐in price for vehicle A was determined to be $21
Deduhin Ltd acquired two new machines for cash on 1 January 2017. The cost of machine A was $400 000, and of machine B, $600 000. Each machine was expected to have a useful life of 10 years, and
On 2 January 2018, Gormly Ltd purchased a machine for $165 000. The machine had a useful life of 5 years and a residual value of $5000. Straight‐line depreciation is used. The machine is to be
Hanxhari Ltd has a policy of revaluing its motor vehicles to fair value. The details at 30 June 2020 relating to Hanxhari Ltd’s motor vehicles, which had previously been revalued upwards by $7000,
Jaensch Ltd reported the following non‐current assets at 30 June 2019.During the year 2019–20, the following transactions occurred.Required(a) Prepare journal entries to record the above
Khan Ltd entered into the following transactions during the year ended 31 December 2019. Ignore GST.RequiredPrepare entries in general journal form to record the above transactions. Jan. 4 Mar. 30
The beginning balance in the Machinery control account and Accumulated Depreciation account, and dates in the accounts for various machinery acquisitions and disposals during the year by Liu Ltd are
On 1 January 2017, Martini Ltd bought a machine for $109 000 cash; its useful life was 12 years and its residual value was $13 000. It was decided to depreciate the machine by the straightline
Below are extracts from the financial reports of Wollowiec Traders Ltd for the years ended 30 June 2019 and 30 June 2020.Additional information 1. The revaluation surplus at 30 June 2019 was raised
On 1 January 2017, Nicolaidis Ltd purchased two identical new machines at a total cost of $700 000. It was estimated that the machines would have a useful life of 10 years and a residual value of $50
Bittoto Ltd has four different intangible assets at the end of 2019. Facts concerning each are as follows:1. franchise. On 2 January 2019, Bittoto Ltd purchased a franchise to distribute a new
Coomans Ltd, which started operations on 1 October 2016, prepared the following account balances as at 30 June 2019.Details of machines owned at 30 June 2019 were as follows.Additional information 1.
On 1 July 2019, Frewville Ltd acquired the assets and liabilities of Glenunga Ltd. The assets and liabilities of Glenunga Ltd consisted of the following.In exchange for the business of Glenunga Ltd,
On 1 January 2019, Good Ltd acquired a block of land for $100 000 cash, and on the same day Better Ltd purchased the adjacent block, which was virtually identical to the block purchased by Good Ltd,
The following were among transactions of Raven Industries Ltd during the financial years ending 30 June 2019 and 30 June 2020.RequiredRecord in general journal form all the above transactions,
At 30 June 2020, the accountant for Braxton Brewery, Sue Robertson, is preparing the financial statements for the year ended on that date. To calculate the annual leave payable, the accountant had
At 30 June 2020, Ting Sun Electronics adjusted its Provision for Warranties so that it would be equal to 5% of sales for the year ended on that date. Sales for the year ended 30 June 2020 were $1 600
The following information relates to a debentures issue of Justice Ltd dated 1 January 2019.The company’s financial year‐end is 30 June.Required(a) Prepare general journal entries to record:i.

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