Questions and Answers of Financial Accounting 11th Edition

Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Microsoft and Apple, competing firms in the computer services
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Chevron and Imperial, competing firms in the oil and gas
Albertson's Locksmith Corporation started operations on January 1, 2019. Albertson's estimates uncollectibles using the percentage-of-credit-sales method. The following information pertains to the
TII Industries makes over-voltage protectors, power systems, and electronic products primarily for use in the communications industry. Several years ago, the company reported that it took "a
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of DuPont and LyondellBasell Industries, competing firms in the
The operating profits from 2017 to 2019 reported by each of Johnson & Johnson's primary business segments are provided below. Sales numbers for each of the segments are provided in ID5.14
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Caterpillar and AGCO, competing firms in the farm and
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Caterpillar and AGCO, competing companies in the farm and
At the end of 2020, Montvale Associates borrowed $120,000 from the Bay liner Bank. The debt covenant specified that Montvale's debt/equity ratio could not exceed 1.5: 1 during the period of the loan.
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of ExxonMobil and Imperial Oil, competing companies in the oil and
The following information was obtained from the 2020 financial reports of Hathaway Toy Company and Yakima Manufacturing:Assume that the only change to shareholders' equity during 2020 is due to net
Excerpted financial information from the records of The Gap Inc., a major clothing retailer, follows (dollars in millions):a. Compute the current ratio for each year.b. Compute the gross margin
You are considering investing in Eli Lilly, a major pharmaceutical company. As part of your investigation of Lilly, you obtained the following balance sheets for the years ended December 31, 2019 and
Burger chain Shake Shack announced third-quarter 2019 earnings of $10.3 million, on revenues that were over 31 percent higher than those of the same period in the prior year. Earnings per share
The following information was taken from the financial statements of Coca-Cola and PepsiCo (dollar amounts in millions).a. Compute return on equity, return on assets, capital structure leverage,
Excerpts from the 2019 financial report of Intel, a computer-processor manufacturer, are as follows (dollars in millions).From the information above, compute ROE, ROA, capital structure leverage,
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Becton Dickinson and ResMed, competitors in the medical
The following ratios were computed from the 2019 financial statements of Nordstrom and Macy's. Explain why Nordstrom has a higher ROE and a higher ROA.
Advanced Micro Devices, a global technology company, reported the following selected items as part of its 2019 annual report (dollars in millions):INSTRUCTIONS:Compute the following ratios:1. Current
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e.a. Create a table that compares the performance of Kohl 's and JC Penney, competing retail fashion stores, on
Excerpts from the fiscal 2019 financial report of Cisco Systems, a leading Internet networker, are provided below (dollars in millions).From the information below, compute ROE, ROA, capital structure
The following information was taken from the 2019 financial statements of Nordstrom and Macy's. Using this information, compute the following ratios for 2019: ROE, ROA, capital structure leverage,
Tony's Business is a small retailer that began operations on January 1, 2020. During 2020, the following transactions occurred:1. Tony contributed $20,000 of his own money to the business.2. $60,000
Condensed balance sheets for 2017 and 2018 and the 2018 income statement for Goodyear, the world's largest tire company, are as follows (dollars in millions).a. Assume that early in 2019 Goodyear is
The following balances were taken from the December 31, 2019, balance sheet of AT&T (dollars in millions):Early in 2020, AT&T considered the financial effects of several
The following balances were taken from the December 31, 2019, balance sheet of Manpower Inc., a world-leading workforce provider (dollars in millions):Early in 2020, Manpower considered the financial
The following balances were taken from the October 31, 2019, balance sheet of HP, Inc. (dollars in millions).INSTRUCTIONS:For each of the five events listed here, indicate how they would affect the
The balance sheet of Wal greens, a leading chain drugstore, as of August 31, 2019, appears as follows (dollars in millions):INSTRUCTIONS:Assume that the following eight transactions occurred the next
Prustate Insurance Company collected $240,000 from Jacobs Printing Corporation for a two-year fire insurance policy on May 31, 2020. The policy is in effect from June 1, 2020, to May 31,
The following cash T-account for Miller Manufacturing summarizes all the transactions affecting cash during 2020 with a December 31 closing date.a. Compute the ending cash balance.b. Prepare a
The following information was taken from the 2019 annual report of Bristol-Myers Squibb, a world-leading drug company (dollars in millions).Prepare an income statement, balance sheet, and statement
The following accounts and balances were taken from the records of American Airlines (dollars in millions).Identify each account as an income statement or balance sheet account. Where is each account
In the late 1990s, the Internet explosion sent the share values of well-known Internet companies soaring. Many of these companies took advantage of the high prices by making major share issuances and
Below are several transactions entered into by Rodman Consulting Company during 2020. Unless otherwise noted, all transactions involve cash.1. Purchased equipment for $150,000.2. Paid employees
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and create a statement that explains the change in Bed, Bath and Beyond's retained earnings balance during
During 2020, Brenda's Bookstore (BB) opened ten new locations in the greater metro area. During 2020, the following took place for these new locations:Revenue recognition: BB sold $90,000 of
The Atlantic Bears, a major league sports team, began the season with five home games to be played in March. Other financial information follows:• During January and February 2020, the team
RDP and Brothers purchased a panel truck for $25,000 on January 1, 2020. It estimated the life of the truck to be five years and estimated its value to be zero at the end of the five years, and it
Micro IT manufactures and sells computers. Each of its computers includes Micro IT software that is created by the company and included in the sales price of the computer. As part of the sales
Sales data for the fiscal years 2017, 2018, and 2019 for Advanced Micro Devices (AMD) follows (dollars in billions):According to the financial statements, sales increased by 26 percent from 2017 to
The 2019 annual report for Cisco Systems contains the following information (dollars in millions):On the income statement, Cisco reported that the cost of sales related to the inventory was $14.9
Celadon Trucking filed for bankruptcy in December 2019 due to an inability to cover its debt payments. As part of its agreement to borrow money from lenders, the company has debt restrictions that
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and compare and discuss the size of two large Internet information providers: U.S.-based Alphabet, which reports
Travel booking websites (like Expedia, Travelocity, and Priceline) make their money by charging a customer an amount (say, $ 1,000) that is larger than the amount they pay the airline or hotel that
Palomar Paper Products purchased land in 2002 for $15,000 cash. The company has held the land since that time. In 2020, Palomar purchased another tract of land for $ 15,000 cash. Assume that prices
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and compare and discuss the size of two large media companies: U.S.-based News Corp, which reports U.S. GAAP
Southwest Airlines is a major airline. The following information was taken from its 2019 annual report. Compute the missing amounts in the following table. Describe and evaluate the company's cash
Ted Tooney has operated a small service company for several years. The following information is from the financial statements prepared by Ted's accountant.INSTRUCTIONS:Assume that you have some
The information below was taken from the 2019 annual report of Cisco Systems, a worldwide leader in networking for the Internet. Compute the missing amounts in the following table. Describe and
The chief executive officer of Romney Heights has included the following information from the financial statements in a loan application submitted to Acme Bank. The company intends to acquire
Up until 2007, non-U.S. firms that published IFRS-based financial statements and wished to raise capital on the U.S. stock markets (e.g., New York Stock Exchange) were required to file with the SEC a
La-Z-Boy Incorporated included the following information in its 2019 annual report (dollars in millions).Define solvency and discuss how this information might be useful in assessing the company's
Excerpts from the financial statements for Kroger, a major supermarket retailer, are as follows (dollars in millions).INSTRUCTIONS:Organize these numbers into income statements and balance sheets.
At the end of 2020, a fast-growing advertising agency had a negative balance of $596 million in its retained earnings account. Compute the missing amounts in the following table, and comment on the
The following information was taken from the 2019 annual report-statements of cash flows- of United Technologies Corporation (UTC), a diversified manufacturing conglomerate (dollars in
Compute the missing values for the following chart. The first year of operations is 2017. 2020 2019 2018 2017 Assets: Cash $500 $200 $ 300 $ 300 Accounts
A 2018 balance sheet of Royal Dutch Shell, a huge oil and gas company that prepares financial statements using IFRS, reported the following dollar amounts (in millions).First, format these balance
The following information was taken from the 2019 annual reports-statements of cash flows-of TJ Maxx, Pier One, and Pepsico (dollars in millions).INSTRUCTIONS:Each of these companies shows a
Excerpts from the annual report of AT&T, Inc., are as follows.Compute the missing values and briefly discuss AT&T's sources and uses of cash during the three-year period. Statement of Cash
In BE2-2, Caterpillar's current assets consisted primarily of cash and short-term investments of $8.3 billion, accounts receivable of $17.9 billion, inventory of $11.1 billion, and miscellaneous
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting11e and extract the data necessary to compare Pfizer and Merck on the five fundamental measures of financial
A summary of a recent balance sheet for Caterpillar is as follows (dollars in billions):What amount and what percentage of Caterpillar's assets were financed by (1) Current liabilities, (2)
Access the Data Analytic worksheet at www.wiiey.com/go/pratUfinancialaccounting11e and extract the data necessary to compare Nordstrom and Macys on the five fundamental measures of financial
Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialaccounting 11e and compute the rate of growth from 2017 to 2018 and from 2018 to 2019 in "Sales" (from the income
Excerpts from the 2019 financial statements for Goodyear are as follows (dollars in millions):INSTRUCTIONS:Assume that you have some capital to invest and that you are considering an equity
Billionai re investor Warren Buffett was once quoted in the Financial Post as saying, "The reaction of weak management to weak operations is often weak accounting."INSTRUCTIONS:What does he mean?
Assume Cummings, Inc., a leading diesel engine manufacturer, enters into the following transactions during 2020.1. Purchased inventory on account.2. Purchased plant machinery by issuing long-term
The following information refers to the financial records of McDonald's Corporation over a three-year period (dollar amounts in millions except share price).a. Compute dividends declared as a
Many companies selling stock to the public for the first time-initial public offerings (IPOs)-are not yet profitable. According to a report issued by the research firm Sageworks, almost half of the
Merck, a major pharmaceutical, generated $9.78 billion in net income for the year ended December 31, 2019.1. The company paid $5.82 billion in dividends during 2019.2. Merck stock was selling for
The following pages contain the consolidated balance sheets and statements of income and cash flows taken from the 2019 annual report of the retail powerhouse Amazon.INSTRUCTIONS:Analyze the
The following sales information concerning Johnson & Johnson's primary business segments appeared in the company's 2019 SEC Form 10-K (dollars in millions).INSTRUCTIONS:a. Which of the three
South Korea- based consumer electronics giant Samsung was accused by analysts of aggressively writing off some assets in the first quarter of 2019 to minimize its profits. Korea News Plus reported
The following information was taken from the 2019 annual report of Emerson Electric Co., a leader in the network power sector (dollars in millions):a. Compute total accounts receivable as of the end
CIT Group is a holding company for consumer and commercial financial services companies that provide lending products to customers. The following information concerning the Allowance for Loan Losses
The footnotes to the 2019 financial statements of Citigroup, the holding company for Citibank, contained the following information (dollars in millions). "Provision for credit losses" refers to bad
The information below was taken from the footnotes of JPMorgan Chase's 2019 annual report. The December 31, 2019, balance in the allowance account was $13,123 (dollars in
Excerpts from the operating sections of the 2019 statement of cash flows for AT&T and Toyota are provided below. AT&T publishes U.S. GAAP-based financial statements in U.S. dollars, and
Kyocera is a Japanese telecommunications company that publishes IFRS-based financial statements. On its March 31, 2019, statement of cash flows (indirect method) in the operating section it reported
Although downsized in recent years, General Electric is still a large, diversified company. Outlined below are current accounts receivable by operating division, as reported in the company's 2019
In a press release discussing third-quarter financial results, the construction management and consulting firm Hill International specifically cited an increase in bad debt expense as a drag on
A partner from a major accounting firm made the following comment when asked about the accounting methods used by companies in the software industry: "Accounting policies that have adverse short-term
The following information was taken from the footnotes in the 2019 annual report of Johnson & Johnson:a. From information in the footnote alone, indicate whether Johnson & Johnson is a
The following information was taken from the records of Eli Lilly, a major pharmaceutical (dollars in millions).Assume that ending inventory was overstated by $500 in 2017, understated by $150 in
John Deere uses the LIFO inventory cost flow assumption, reporting inventories on its 2019 balance sheet of $5.975 billion and a LIFO reserve of approximately $ 1.670 billion. What would be Deere's
When the Wall Street Journal reported that "Chevron Corporation took a charge of $1.96 billion", it noted that the charge was related to lower prices for crude oil and refined products. The article
Marian's Furs specializes in full-length mink coats. As of January 1, Marian had four top-of-the- line coats. Although the four coats are equivalent, they were purchased the previous year at
The 2019 statement of cash flows for Macy's reports (dollars in millions) net cash from operating activities of $1,735 (2019), $1,976 (2018), and $1,801 (2017). Included on the statement of cash
Amazon.com described its inventory policies in the 2019 annual report as follows:InventoriesInventories, consisting of products available for sale, are primarily accounted for using the first-in,
ExxonMobil, a multinational integrated oil and gas company, reported the following information in its 2019 annual report:Due to slackening global demand for crude oil, as well production disputes
Central Incorporated has two items in inventory as of December 31 , 2020. Each item was purchased for $40. Company management chose to write down Item 1 to $28, which at year-end was assessed to be
Due to slackening global demand for crude oil, as well production disputes between two large oil-producing countries (Saudi Arabia and Russia), crude oil prices plummeted in world markets in 2020. A
In its 2019 annual report, the Unilever Group, which published IFRS-based financial statements, reported the following in the inventory footnote (in million euros)."During 2019, a total expense of
The following table was taken from the 2019 annual report of Merck & Company, a major U.S. pharmaceutical company (dollars in millions).INSTRUCTIONS:a. How much did market value accounting impact
O'Leary Enterprises began investing in short-term equity securities in 2020. The following information was extracted from its 2020 internal financial records.INSTRUCTIONS:Compute the effect on
The following was taken from the 2019 annual report of General Motors (dollars in millions):In a footnote, GM reported that it purchased $2,400 of securities in 2019 and that unrealized gains and
On the 2019 income statement, Bristol-Myers Squibb included a $156 million line item called net unrealized gain/(loss) on equity investments held. During 2019, the company maintained a port-folio of
The 2019 annual report of The Coca-Cola Company shows the following information (dollars in millions):INSTRUCTIONS:a. What does the financial statement presentation tell you about the business model
The following information relates to the activity in the short-term investment account of Lido International, which held no short-term investments as of January 1:a. Prepare journal entries for each
The 2019 IFRS-based financial statements of Airbus Group, the French-based airline manufacturer, included the following account information (in million euros):INSTRUCTIONS:a. Explain the meaning of

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