Questions and Answers of Financial Accounting 11th Edition

The condensed 2019 balance sheet of Honeywell International follows (dollars in millions):Outstanding were 712.6 million shares of common stock and no preferred stock. The following instructions are
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and prepare projected balance sheets and income statements for 2020 and 2021 for Walmart, the discount retail
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and prepare projected balance sheets and income statements for 2020 and 2021 for Accenture, the computer systems
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and prepare projected balance sheets and income statements for 2020 and 2021 for Verizon, the telecommunications
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and prepare a projected balance sheet and income statement for FedEx, the delivery service, for 2020. Assume that
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and prepare a projected balance sheet and income statement for DuPont, the chemical company, for 2020. Assume that
Compute the present value of $10,000 received at the beginning of each year over the following time periods at the following discount rates. Complete the following table: Time Periods
Barnhiser Goods needs $100,000 to finance a project. It is negotiating a loan, and the bank has offered several different payment schedules. Compute the effective interest rate on each schedule, and
Compute the present value of $10,000 received at the end of each year over the following time periods at the following discount rates. Complete the following table: Time Periods (Years) Compound
Compute the present value of $10,000 received at the end of the following time periods at the following discount rates. Complete the following table: Time Periods (Years) Compound Interest
The following information was taken from the IFRS-based 2019 financial statements published by Carrefour, a French retailer (in million euros):From the information above, estimate net cash from
Lynch Engineering Firm provided the following income statement for 2021 in its annual financial report:1. The company declared and paid a dividend of $550,000 in 2020 but did not declare any
The operating cash flows and balance sheet excerpts of Schlee and Associates for the period ending December 31, 2021, follow. Compute net income for the period ending December 31, 2021. OPERATING
Mick's Photographic Equipment began operations on January 1, 2020. During 2020, the company entered into the following transactions:1. Issued 50,000 shares of $15 par value common stock for $30 per
ISS Inc. began operations on January 1, 2021. It engaged in the following economic events during 2021:1. Issued 6,000 shares of no-par common stock for $10 per share.2. Purchased on account 20,000
Excerpts from the 2019 financial statements of General Mills are as follows ( dollars in millions):For 2019, compute estimates of cash receipts from customers and cash payments to suppliers. Assume
The following information was taken from the records of Dylan's Toys:Equipment with a cost of $8,000 was sold during 2021.a. How much equipment was purchased during 2021?b. How much cash was
Airbus, a global French aircraft manufacturer, prepares its financial statements in accordance with IFRS. On its 2019 income statement, it reported a net loss of approximately 1.3 billlion euros,
Starbucks is a relatively young, fast-growing company that is a pioneer and leader in its industry. Excerpts from its 2019 statement of cash flows are as follows (dollars in millions):INSTRUCTIONS:a.
The following information was taken from the 2019 annual report and statement of cash flows of Eli Lilly, a major pharmaceutical (dollars in millions):INSTRUCTIONS:a. Discuss the cash management
The following information was taken from the 2019 annual report of Hewlett-Packard, a leading technology manufacturer (dollars in millions):INSTRUCTIONS:a. Compute the missing dollar amounts.b.
In May, 2019, Uber Technologies, Inc., went public. Selected information from its 2020 statement of cash flows is provided below (dollars in billions).INSTRUCTIONS:a. What has happened to Uber's cash
Ruttman Enterprises began operations in early 2019. Summaries of the statement of cash flows for the years 2019, 2020, and 2021 follow:INSTRUCTIONS:a. Compute the missing dollar amounts.b. Briefly
The statement of cash flow for Facebook contained the following numbers ( dollars in millions):a. Explain how profit could decrease while cash from operations increased over the same time period.b.
Several transactions entered into by Travis Retail during 2021 follow:1. Received $50,000 for wine previously sold on account.2. Paid $55,000 in salaries and wages.3. Sold a building for $100,000.
Excerpts of statements of cash flows reported by Kraft Foods, Kellogg's, and General Mills, three companies in the food industry, are provided in the following table (dollars in millions):For each
The following information was taken from the 2019 statements of cash flow for Agilent Technologies and Advanced Micro Devices (dollars in millions):a. Compute the change in cash for both companies.b.
Cash flows from three well-known Internet companies are provided in the following chart (dollars in millions):INSTRUCTIONS:Describe the similarities and differences of the cash flow policies across
Pier 1 Imports reported cost of sales of $1.1 billion for fiscal 2019. Inventory increased during the year from $347.4 million to $347.6 million, and accounts payable (related to inventory purchases)
Pier 1 Imports reported retail sales for fiscal 2019 of $1.6 billion. During the year, accounts receivable decreased from $22.2 million to $21.2 million. Estimate the cash collected by Pier 1
Access the Data Analytic worksheet in at www.wiley.com/go/pratt/financialaccounting11e and create a table that includes statement of cash flow information for Fiat Chrysler and Tesla, competing motor
Madigan International is planning a major stock issuance in early 2022. During 2021, the company reported net income from operations of $865,000 before taxes. The following four items describe major
Kennington Company has outstanding debt that contains restrictive covenants limiting dividends to 15 percent of net income from continuing operations. During 2021, the company reported net operating
Laidig Industries has prepared the following unadjusted trial balance as of December 31, 2021:ADDITIONAL INFORMATION:1. A physical count of inventory on December 31, 2021, indicated that the company
Carrefour, a French retailer, publishes financial statements under IFRS, denominated in euros. Toyota, the Japanese automobile producer, publishes financial statements under U.S. GAAP, denominated in
It is December 2021, and Sharon Sowers, the CEO of Mallory Services, has decided to sell the clerical division. She has received an offer for $105,000 but is undecided about whether she wishes to
General Electric's 2019 annual report, which included a statement of comprehensive income, contained the following items (dollars in millions):INSTRUCTIONS:a. From top to bottom, list each item as it
This excerpt was taken from an income statement for McDonald's (dollars in millions):INSTRUCTIONS:a. Why is there a distinction between net earnings from continuing operations and net earnings
LTB Enterprises consists of four separate divisions: building products, chemicals, mining, and plastics. On March 15, 2021 , LTB sold the chemicals division for $625,000 cash. Financial information
In a three-year period, AT&T, the telecommunications provider, reported net income of $1.9 billion (Year 3), a net loss of $13 billion (Year 2), and net income of $7.7 billion (Year 1). Included
In the shareholders' equity section of its 2018 and 2019 balance sheets, H&R Block reported accumulated other comprehensive income balances of $(14.3) million and $(20.4) million, respectively.
The managers of Martin House are paid a salary and share in a bonus that is determined at the end of each year. The total bonus is determined by multiplying the company's income from operations by 25
When Anheuser-Busch Company recognized a $160 million charge on its income statement for the closure of Tampa Breweries, it consisted of a write-down of plant assets of $113.7 million, employee
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of International Paper and Weyerhaeuser, competing
Ratings agencies such as Moody's and Standard & Poor's rate securities to give investors an independent grading of the risks involved in financial transactions. A few years ago, both Moody's and
On its 2019 income statement, AT&T reports a 7.2 percent increase in revenue from $152 billion in 2018 to $163 billion in 2019. Yet net income dropped by 28 percent from $19.4 billion to $13.9
The components of 2019 comprehensive income for CVS Health and for Walgreens Boots Alliance, competing drugstore chains, are outlined as follows (dollars in millions):INSTRUCTIONS:a. Compute
Unilever Group, a Dutch-based consumer-goods company that publishes IFRS-based financial statements, reported a net profit on its 2019 income statement of 6.0 billion euros. That same year, the
Each year since 2014, Home Depot has purchased at least $7 billion of its own outstanding common stock , averaging over $8 billion per year, recording it all as treasury stock. The accumulated total
Google Inc. (now part of Alphabet Inc.) presented the following information in its statement of cash flows in a recent annual report (amounts in millions):The following information was taken from
When Walt Disney Co. declared a 4:1 split of its common stock, the announcement boosted the entertainment company's shares up by $3.50 per share.INSTRUCTIONS:a. What is a 4:1 stock split, and how did
The Wall Street Journal reported that shareholders of Kraft Foods, now part of KraftHeinz, "can afford to give management more time to improve its brands, sales margins, and earnings" because of the
The shareholders' equity section of Rudnicki Corporation contained the following balances as of December 31, 2020:During 2021, Rudnicki Corporation entered into the following transactions affecting
The 2019 statement of shareholders' equity of Starbucks, the coffee shop retailer, included the following information concerning common stock (in millions):INSTRUCTIONS:a. Compute the average prices
The following information came from the financial records of Maverick Corporation:Maverick began operations on January 1, 2015. The company has paid the following amounts in cash dividends over the
The following information was taken from the 2019 annual report of Coca-Cola ( dollar and share amounts in millions):a. At what average price did the company repurchase its shares in 2017?b. At what
Several independent transactions are as follows:1. 10,000 shares of no-par common stock are issued for $50 per share.2. 10,000 shares of $1 par value common stock are issued for $40 per share.3.
The following information was taken from the 2019 statement of shareholders' equity for Microsoft (dollars in billions).INSTRUCTIONS:a. Explain the nature of stock-based compensation expense.b. Why
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Ford and General Motors, competing motor vehicle manufacturers,
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Walmart and Dollar General, competing discount department
During the 2008-2009 financial crisis, the stock market plummeted, and many companies tried to take advantage of the depressed prices by buying back large amounts of their own stock. Amazon, for
On January 1, 2020, Tracy Supply purchased ten bonds on the open market, paying $9,260. The bonds had a total face value of $10,000, a stated interest rate of interest of 5 percent, and a time to
On January 1, 2020, Q-Mart entered into a five-year lease agreement requiring annual payments of $10,000 on December 31 of each year. The fair market value of the building was estimated by appraisers
Treadway Company issued bonds with a face value of $20,000 on January 1, 2020. The bonds were due to mature in five years and had a stated annual interest rate of 8 percent. The bonds were issued at
Coral Sands Marina issued 100 five-year bonds on July 1, 2021. The interest payments are due semiannually (January 1 and July 1) at an annual rate of 8 percent. The effective rate on the bonds is 6
Ficus Tree Farm issued five $1,000 bonds with a stated annual interest rate of 12 percent on January 1, 2021. The bonds mature on January 1, 2026. Interest is paid semiannually on June 30 and
Hartney Enterprises issued twenty $1,000 bonds on June 30, 2021, with a stated annual interest rate of 6 percent. The bonds mature in six years. Interest is paid semiannually on December 31 and June
During November 2017, Southwest Airlines issued five-year notes with a face value of $300 million. The stated interest rate on the notes was 2.8 percent, and proceeds from the issuance
The Wall Street Journal reported that many companies take advantage of the depressed market values of their own debt, and buy their own bonds at steep discounts below the debt's face value. Beazer
The Wall Street Journal reported that on a particularly strong day in the stock market, the prices of long-term bonds issued by companies such as Apple, Merck, Microsoft, and McDonald's all dropped
During fiscal 2020, Delta Airlines, which leases most of its aircraft, paid approximately $1.3 billion on its lease contracts-$269 million on financing leases and a little over $1 billion on
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Pfizer and Merck, competing drug manufacturers, on long-term
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Macy's and Dillards, competing firms in the apparel industry,
The 2019 IFRS-based balance sheet published by Volkswagen AG, the well-known German automaker, listed an account called "provisions" (divided into current and noncurrent categories) with a total
The following information was taken from the 2019 annual reports of Wal greens and CVS, competing drug store chains (dollars in millions):INSTRUCTIONS:Compute the conservatism ratios for both
The following information was taken from the 2019 annual report of Emerson, a leader in process management, technology, network power, and industrial automation (dollars in
DuPont, the giant chemical company, booked restructuring charges (expenses) on its income statement in 2019, 2018, and 2017. The 2019 charge was $138 million, which included a $34 million asset
Abbott Laboratories, a major pharmaceutical company, reported the following current liabilities in its 2019 and 2018 annual reports (dollars in millions):INSTRUCTIONS:a. Briefly describe the
Agilent Technologies Inc., a diversified technology company, sells extended warranties for the products and services provided to customers, deferring the revenue until future recognition. The
Norsums Department Store sells gift certificates that are redeemable in merchandise. During 2020, Norsums sold gift certificates for $88,000. Merchandise with the total price of $52,000 was redeemed
Lifschultz Fast Freight, which collapsed a few years ago when its owner died, once reported a book value of less than zero (i.e., reported liabilities exceeded reported assets). Yet the company's
On January 1, 2016, Lacey Treetoppers borrowed $300,000. The principal is to be paid back in annual payments of $20,000 on December 30 of each year.a. Assuming that Lacey has met all principal
The 2019 annual report for HCA Inc., a nationwide chain of hospitals, contains the following statement in the footnotes to the financial statements:Reserves for professional liability risks were $
Target Corporation's 2019 financial statements included the following items (dollars in millions):a. Assuming that accounts payable refers only to inventory suppliers, compute the cash payments made
United Airlines Holdings discloses two accounts on its financial statements entitled "Advanced ticket sales" and "Frequent flyer deferred revenue" with 2019 balances of $4.8 billion and $2.4 billion,
FedEx Corporation, a world leader in express mail services, reported the following in its May 31, 2019, financial statements (dollars in millions):The company's long-term debt contains restrictive
Eastman Chemical's 2019 annual report stated that the company's liabilities for environmental contingent liabilities were $287 million and $296 million for 2019 and 2018, respectively.a. Describe how
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Accenture and Amdocs, competing companies in the computer
The following information was taken from the 2019 annual report of Target Corporation (dollars in millions):a. Compute the inventory purchases made by Target during 2019. Record a single entry that
On January 1, 2020, Diversified Industries purchased Specialists Inc. for $1.8 million. The balance sheet of Specialists Inc. at the time of purchase follows:The total FMV of the individual assets of
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Verizon and T-Mobile, competing firms in the telecommunications
Apex Trucking purchased a truck for $ 100,000 on January 1, 2020. The useful life of the truck was estimated to be either five years or 200,000 miles. Salvage value was estimated at $20,000. Over the
Westmiller Construction Company purchased a new truck on December 31, 2020, for $48,000. The truck has an estimated useful life of three years and an estimated salvage value of $12,000. When the
Gidley Inc. purchased a piece of equipment on January 1, 2020. The following information is available for this purchase:INSTRUCTIONS:a. Compute the cost of the equipment that should be capitalized.b.
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Merck and Abbvie, competing drug manufacturers, on
The Boeing Company reported in its 2019 annual report $1,567 million in depreciation expense and $704 million in amortization expense for the year ending December 31, 2019.a. Describe how the
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of General Electric (GE) and Raytheon, competing firms in the
The following information was extracted from the December 31, 2020, balance sheets of four different companies:There were no transactions in equity securities during 2021, and as of December 31,
Lowery Inc. purchased new plant equipment on January 1, 2020. The company paid $920,000 for the equipment, $62,000 for transportation of the equipment, and $10,000 for insurance on the equipment
Mystic Lakes Food Company began investing in equity securities for the first time in 2020. During 2020, the company engaged in the following transactions involving equity securities. Assume that the

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