Questions and Answers of Financial Accounting 13th Edition

Quimby Sports Authority purchased inventory costing $30,000 by signing a 6% short-term, one-year note payable. The purchase occurred on July 31, 2021. Quimby pays annual interest each year on July
Travis Publishing completed the following transactions for one subscriber during 2021: RequirementJournalize these transactions (explanations not required).Then report any liability on the
Centennial Publishing completed the following transactions for one subscriber during 2021: RequirementJournalize these transactions (explanations not required). Then report any liability on the
Sherlock Sports Authority purchased inventory costing $30,000 by signing a 4%, short-term, one-year note payable. The purchase occurred on July 31, 2021. Sherlock pays annual interest each year on
Barnacle Sales, Inc.’s, comparative income statements and balance sheets show the following selected information for 2020 and 2021: Requirements1. Calculate the company’s accounts payable
Green Earth Homes, Inc., builds environmentally sensitive structures. The company’s 2021 revenues totaled $2,770 million. At December 31, 2021 and 2020, the company had, respectively, $663 million
On September 1, 2022, The Shoppes at Forest Lake, Inc., purchased inventory costing $63,000 by signing an 8%, six-month, short-term note payable. The company will pay the entire note (principal and
Robson Electronics completed these selected transactions during March 2021: a. Sales of $2,050,000 are subject to an accrued warranty cost of 9%. The accrued warranty payable at the beginning of
Fresno Transportation owns a fleet of 50 semi-trucks. The original cost of the fleet was $7,500,000. Fresno uses straight-line depreciation for the fleet for accounting purposes, and MACRS
Diamond Security Systems’ revenues for 2021 totaled $27.5 million. As with most companies, Diamond is a defendant in lawsuits related to its products. Note 14 of the Diamond annual report for 2021
The following transactions of Smooth Sounds Music Company occurred during 2021 and 2022: Requirement1. Record the transactions in Smooth Sounds’ journal. Explanations are not required.
Western Electronics completed these selected transactions during March 2021: a. Sales of $2,400,000 are subject to an accrued warranty cost of 9%. The accrued warranty payable at the beginning
At December 31, 2021, Filbert Corporation’s adjusted trial balance shows the following balances:Filbert Corporation provides multi-year warranties with its products. Half of the Accrued Warranty
The following transactions of Melody Music Company occurred during 2021 and 2022:Requirement 1. Record the transactions in Melody Music Company’s journal. Explanations are not required.
At December 31, 2021, Jackson Corporation’s adjusted trial balance shows the following balances: Jackson Corporation provides multi-year warranties with its products. Half of the Accrued
Gravel Corporation borrowed $250,000 from a bank on January 1, 2022, by signing a 10%, six-month note. The journal entry made by Gravel on January 1, 2022, will debit.a. Interest Expense for $25,000
Tolbert Plumbing Products Ltd. reported the following data in 2021 (in millions):Compute Tolbert’s leverage ratio, debt ratio, and times-interest-earned ratio, and write a sentence to explain what
Examine the following selected financial information for The Deal Corporation and Simple Stores, Inc., as of the end of their fiscal years ending in 2021: 1. Complete the table, calculating all
Yancy Corp. issued 6% seven-year bonds payable with a face amount of $110,000 when the market interest rate was 6%. Yancy’s fiscal year-end is December 31. The bonds pay interest on January 1 and
Starlight Drive-Ins Ltd. borrowed money by issuing $5,000,000 of 7% bonds payable at 95.5 on July 1, 2021. The bonds are 10-year bonds and pay interest each January 1 and July 1.1. How much cash did
Windsor Company borrowed money by issuing $3,000,000 of 6% bonds payable at 102.9 on July 1, 2021. The bonds are five-year bonds and pay interest each January 1 and July 1.1. How much cash did
Regal, Inc., includes the following selected accounts in its general ledger at December 31, 2021: Prepare the liabilities section of Regal’s balance sheet at December 31, 2021, to show how the
Pearce Corporation issued $580,000 of 6%, 10-year bonds payable on March 31, 2022. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Pearce
Leon Corporation issued $400,000 of 10%, 10-year bonds payable on January 1, 2022. The market interest rate at the date of issuance was 8%, and the bonds pay interest semiannually (on June 30 and
EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2021 revenues totaled $2,780 million. At December 31, 2021 and 2020, the company had, respectively, $656
On January 31, 2021, Dunkin Logistics, Inc., issued five-year, 3% bonds payable with a face value of $8,000,000. The bonds were issued at 93 and pay interest on January 31 and July 31. Dunkin
Winter Ltd. is authorized to issue $2,500,000 of 4%, 10-year bonds payable. On December 31, 2021, when the market interest rate is 5%, the company issues $2,000,000 of the bonds. Winter amortizes
On June 30, 2021, the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond
On January 1, 2020, Kittle Corporation issued five-year, 4% bonds payable with a face value of $2,500,000. The bonds were issued at 95 and pay interest on January 1 and July 1. Kittle amortizes bond
The board of directors of Mailroom Plus authorized the issue of $8,000,000 of 6%, 10-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May 31,
Robson Corporation issued 5%, 10-year bonds with a face value of $1,000,000 at a price of 98 on July 1, 2021. The bonds pay interest each January 1 and July 1. Robson uses the straight-line
Green Earth Homes, Inc., builds environmentally sensitive structures. The company’s 2021 revenues totaled $2,770 million. At December 31, 2021 and 2020, the company had, respectively, $663 million
Energy Ltd. is authorized to issue $3,000,000 of 1%, 10-year bonds payable. On December 31, 2021, when the market interest rate is 8%, the company issues $2,400,000 of the bonds. Energy amortizes
On June 30, 2021, the market interest rate is 9%. Randall Corporation issues $600,000 of 10%, 15-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond
Cheyenne Company sells $400,000 of 14%, 10-year bonds for 92.613 on April 1, 2021. The market rate of interest on that day is 15.5%. Interest is paid each year on April 1.The entry to record the sale
On January 1, 2020, Ditchey Corporation issued five-year, 6% bonds payable with a face value of $3,500,000. The bonds were issued at 96 and pay interest on January 1 and July 1. Ditchey amortizes
Coldwell Transportation owns a fleet of 60 semi-trucks. The original cost of the fleet was $9,000,000. Coldwell uses straight-line depreciation for the fleet for accounting purposes, and MACRS
The accounting records of Burgess Foods, Inc., include the following items at December 31, 2021:Requirements 1. Show how each relevant item would be reported on the Burgess Foods classified
Holloway Corporation issued 8%, 10-year bonds with a face value of $2,000,000 at a price of 96 on July 1, 2021. The bonds pay interest each January 1 and July 1. Holloway uses the straight-line
Cheyenne Company sells $400,000 of 14%, 10-year bonds for 92.613 on April 1, 2021. The market rate of interest on that day is 15.5%. Interest is paid each year on April 1.Cheyenne Company uses the
On January 1, 2023, Fergus Corporation issued $800,000, 10%, five-year bonds. The bond interest is payable on January 1 and July 1. The bonds sold for $864,887. The market rate of interest when the
The board of directors of Canterbury Plus authorized the issue of $9,000,000 of 7%, 15-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May 31,
The Juice Company reported the following comparative information at December 31, 2021, and December 31, 2020 (amounts in millions and adapted): Requirements1. Calculate the following ratios for
On February 28, 2021, Dolphin Corp. issued 10%, 20-year bonds payable with a face value of $2,100,000. The bonds pay interest on February 28 and August 31. The company amortizes bond discount using
On December 31, 2021, Mainland Corporation issues 6%, 10-year convertible bonds payable with a face value of $4,000,000. The semiannual interest dates are June 30 and December 31. The market interest
On February 28, 2021, Shark Corp. issued 10%, 10-year bonds payable with a face value of $1,500,000. The bonds pay interest on February 28 and August 31. The company amortizes bond discount using the
On December 31, 2021, Herndon Corporation issues 6%, 10-year convertible bonds payable with a face value of $1,000,000. The semiannual interest dates are June 30 and December 31. The market interest
Greco Lake Resort reported the following on its balance sheet at December 31, 2021: On July 1, 2022, the resort expanded operations and purchased additional equipment for cash at a cost of
Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2021: Requirements 1. Compute the net profit margin
On January 2, 2021, Drake Furnishings purchased display shelving for $8,100 cash, expecting the shelving to remain in service for five years. Drake depreciated the shelving on a
Examine the excerpt of a footnote from Albrecht Corporation’s September 30, 2021, annual report to follow.1. What are Albrecht’s largest two categories of property and equipment as of September
On January 1, 2020, Northeast Transportation Company purchased a used aircraft at a cost of $58,900,000. Northeast expects the plane to remain useful for five years (7,200,000 miles) and to have a
Grafton Company purchased a new car for use in its business on January 1, 2020. It paid $29,000 for the car. Grafton expects the car to have a useful life of four years with an estimated residual
Grafton Company purchased a new car for use in its business on January 1, 2020. It paid $29,000 for the car. Grafton expects the car to have a useful life of four years with an estimated residual
Assume that on September 30, 2020, EuroAir, an international airline based in Germany, purchased a Jumbo aircraft at a cost of €45,000,000 (€ is the symbol for the euro). EuroAir expects the
Oscar Optical Corporation provides a full line of designer eyewear to consumers. Oscar reported the following information for 2021 and 2020: Compute return on assets (ROA) for 2021 and 2020.
On January 1, 2020, Worldwide Manufacturing purchased a machine for $810,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was
Jackson Petroleum, a giant oil company, holds reserves of oil and gas assets. At the end of 2021, assume the cost of Jackson’s oil reserves totaled $180 billion, representing 10 billion barrels of
In 2021, Ambrosia Corporation reported $100 million in sales, $18 million in net income, and average total assets of $200 million. What is Ambrosia’s return on assets in 2021?
Matchtonio Corporation is thinking of buying a new machine that will cost $87,000. The machine’s estimated useful life is seven years, while its estimated residual value is $9,000. Matchtonio uses
During 2021, Silverspring Systems, Inc., purchased two other companies for $10 million in cash. Also during 2021, Silverspring made capital expenditures of $8.6 million in cash to expand its market
During 2021, Chang’s Book Store paid $481,000 for land and built a store in Newark, New Jersey. Prior to construction, the city of Newark charged Chang’s $1,200 for a building permit, which
Lussertown Company is considering the purchase of a laser engraving machine that will allow it to offer personalization of its products. The laser engraving machine would be purchased for $30,000 and
Presley Pizza bought a used Ford delivery van on January 2, 2021, for $22,000. The van was expected to remain in service for four years (80,000 miles). At the end of its useful life, Presley
On January 1, 2021, Little City Bar & Grill purchased a building, paying $58,000 cash and signing a $110,000 note payable. The company paid another $62,000 to remodel the building. Furniture and
Handley Grocery Corporation reported the following information in its comparative financial statements for the fiscal year ended January 31, 2021: Requirements1. Compute the net profit margin
On January 1, 2020, Stockton Manufacturing purchased a machine for $910,000. The company expected the machine to remain useful for eight years and to have a residual value of $80,000. Stockton
On January 2, 2021, Ellet Furniture purchased display shelving for $8,900 cash, expecting the shelving to remain in service for five years. Ellet depreciated the shelving on a
Concord Truck Company is a large trucking company. The company uses the units-of-production (UOP) method to depreciate its trucks. To follow are facts about one Mack truck in the company’s fleet.
Mineral Mines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In addition to the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000
Assume Alfonso Corporation completed the following transactions: a. Sold a store building for $670,000. The building had cost Alfonso $1,600,000, and at the time of the sale, its accumulated
During 2021, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit, which
Lima Pizza bought a used Toyota delivery van on January 2, 2021, for $18,600. The van was expected to remain in service for four years (57,000 miles). At the end of its useful life, Lima management
Forest Lake Resort reported the following on its balance sheet at December 31, 2021: On July 1, 2022, the resort expanded operations and purchased additional equipment for cash at a cost of
Caribbean Sales, Inc., sells electronics and appliances. The excerpts that follow are adapted from Caribbean’s financial statements for 2021 and 2020: Requirements 1. How much was
Savanaugh Stores, Inc., sells electronics and appliances. The excerpts that follow are adapted from Savanaugh’s financial statements for 2021 and 2020. Requirements 1. How much was
On January 1, 2021, Black Iron Bar & Grill purchased a building, paying $56,000 cash and signing a $101,000 note payable. The company paid another $60,000 to remodel the building. Furniture and
Bargain Basement Corporation operates general merchandise and food discount stores in the United States. The company reported the following information for the three years ending December 31,
On January 1, 2020, Lincoln Manufacturing purchased a machine for $930,000. The company expected the machine to remain useful for eight years and to have a residual value of $110,000. Lincoln
One Stop Shop Corporation operates general merchandise and food discount stores in the United States. The company reported the following information for the three years ending December 31,
Canyon Truck Company is a large trucking company. The company uses the units-of-production (UOP) method to depreciate its trucks. To follow are facts about one Mack truck in the company’s fleet.
At the end of 2020, Stretch Energy had total assets of $17.3 billion and total liabilities of $9.7 billion. Included among the assets were property, plant, and equipment with a cost of $4.9 billion
At the end of 2020, Solar Power had total assets of $17.8 billion and total liabilities of $9.1 billion. Included among the assets were property, plant, and equipment with a cost of $4.5 billion and
Transcontinental is a major telecommunication conglomerate. Assume that early in 2021, Transcontinental purchased equipment at a cost of 6 million euros (€6 million). Management expects the
Borzani Corporation reported net income of $52 million for 2021. Depreciation expense for the year totaled $18 million. Borzani depreciates plant assets over eight years using the straight-line
At December 31, 2021, Waco Travel Agency has an Accounts Receivable balance of $93,000. Allowance for Uncollectible Accounts has a credit balance of $870 before the year-end adjustment. Service
Identify the missing amount for each of the following situations: a. b. C. Total Assets $ ? 85,000 350,000 Total Liabilities $300,000 50,000 ? + Stockholders' Equity $360,000 ? 275,000
Calculate the missing amount in the accounting equation for each company (amounts in billions):Which company appears to have the strongest financial position? Explain your reasoning. Smythe Real
The following are the assets and liabilities of Jill Carlson Realty Company, as of January 31, 2021. Also included are revenue, expense, and selected stockholders’ equity figures for the year ended
MacKensie Services Corporation began 2021 with total assets of $230 million and ended 2021 with total assets of $365 million. During 2021, MacKensie earned revenues of $394 million and had expenses
Journey Corporation began 2021 with retained earnings of $270 million. Revenues during the year were $460 million, and expenses totaled $380 million. Journey declared dividends of $64 million. What
Collinswood Company’s comparative balance sheet at January 31, 2022, and 2021, reports the following (in millions):RequirementsThe following are three situations related to Collinswood Company’s
Assume Island Coffee Roasters Corporation ended the month of August 2022 with these data:RequirementPrepare the income statement and the statement of retained earnings for Island Coffee Roasters
At December 31, 2021, Jackson Corporation has cash of $52 million, accounts receivable of $23 million, and long term assets of $45 million. The company owes accounts payable of $21 million and has a
Sullivan Corporation ended its fiscal year on September 30, 2021, with cash of $78 million, accounts receivable of $27 million, property and equipment of $27 million, and other long-term assets of
Python Legal Services, Inc., ended 2020 with cash of $16,000. During 2021, Python earned net income of $115,000 and had adjustments to reconcile net income to net cash provided by operations totaling
The following data come from the financial statements of Mitchell Company for the year ended March 31, 2022 (in millions):Requirements1. Prepare Mitchell Company’s cash flow statement for the year
At December 31, 2021, Landy Products has cash of $24,000, receivables of $18,000, and inventory of $80,000. The company’s equipment totals $182,000. Landy owes accounts payable of $22,000 and
Iris Baer, MD, opened a medical practice. The business completed the following transactions:After these transactions, how much cash does the business have to work with? Use a T-account to show your
The assets and liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2021, and revenues and expenses for the year ended on that date are as follows:Beginning retained earnings was $364,600,

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