Questions and Answers of Financial Accounting 16th Edition carl

What do the following data, taken from a comparative balance sheet, indicate about the company’s ability to borrow additional long-term debt in the current year as compared to the preceding year?
The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following:Income before income tax expense was $5,280,000 and income taxes were $1,305,000 for the current year.
The following information was taken from Tyson Company’s balance sheet:Fixed assets (net) ........................................................................$ 774,000Long-term liabilities
A company reports the following:Cost of merchandise sold ...............................................................$680,400Average merchandise inventory
A company reports the following:Cost of merchandise sold ............................................$558,000Average merchandise inventory
The following items are reported on a company’s balance sheet:Cash.................................................... $320,000Marketable securities .........................170,000Accounts
Ken Jones, an architect, opened an office on April 1, 20Y4. During the month, he completed the following transactions connected with his professional practice:a. Transferred cash from a personal bank
A company reports the following:Sales .........................................................................$1,460,000Average accounts receivable (net)...........................
Kroger, a grocery store chain, recently had a price-earnings ratio of 7.6, while the average price-earnings ratio in the grocery store industry was 18.6. What might explain this difference?
A company reports the following:Sales ..................................................$6,862,000Average accounts receivable (net)......365,000Determine (a) The accounts receivable
A company reports the following:Income before income tax expense .................$6,000,000Interest expense .......................................................300,000Determine the time interest
A company reports the following:Income before income tax expense...................................................... $4,300,000Interest
A company reports the following:Sales............................................... $6,480,000Average total assets .......................2,400,000Determine the asset turnover ratio. Round to
A company reports the following:Sales ..........................................$5,580,000Average total assets.................. 3,100,000Determine the asset turnover ratio. Round to one decimal
A company reports the following income statement and balance sheet information for the current year:Net income .................................................................................$
A company reports the following:Net income .............................................................$460,000Preferred dividends .................................................$40,000Shares of
Using the following data for Up-in-the-Air Travel Service as well as the statement of owner’s equity shown in Practice Exercise 1-5A, prepare a report form balance sheet as of April 30,
The income statement of a proprietorship for the month of February indicates a net income of $17,500. During the same period, the owner withdrew $25,500 in cash from the business for personal
The complexity of the current business and regulatory environment has increased the demand for individuals in all fields of business who have the ability to analyze business transactions and
Ken Jones, an architect, opened an office on April 1, 20Y4. During the month, he completed the following transactions connected with his professional practice:a. Transferred cash from a personal bank
Chris P. Bacon is the chief accountant for CV Industries, a large manufacturing company. In addition to its normal business activities, the company has excess warehouse space that it rents out to
On June 1, 20Y6, Hannah Ellis established an interior decorating business, Whitworth Designs. During the month, Hannah completed the following transactions related to the business:June 1. Hannah
On October 1, 20Y6, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:Oct. 1. Jay transferred
For the past several years, Samantha Hogan has operated a part-time consulting business from her home. As of July 1, 20Y9, Samantha decided to move to rented quarters and to operate the business,
Financial statements from an end-of-period spreadsheet. Based on the data in Exercise 4-25, prepare an income statement, statement of owner’s equity, and balance sheet for Alert Security Services
Based on the data in Exercise 4-25, prepare the two closing entries for Alert Security Services Co.Exercise 4-25Alert Security Services Co. offers security services to business clients. Complete the
The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period are shown in Problem 7-1A.Problem 7-1AInstructions1. Record the inventory, purchases, and cost of
Best Buy is a specialty retailer of consumer electronics, including personal computers, entertainment software, and appliances. Best Buy operates retail stores in addition to the Best Buy, Media
Financial statement data for years ending December 31 for Schultze-Solutions Company follow:a. Determine the accounts receivable turnover for 20Y2 and 20Y1. Round accounts receivable turnover to one
Using the data in Exercise 9-11, assume that the allowance for doubtful accounts for Performance Bike Co. had a debit balance of $28,400 as of December 31. Journalize the adjusting entry for
Autumn Designs & Decorators issued a 120-day, 5% note for $93,000, dated April 13 to Zebra Furniture Company on the account. a. Determine the due date of the note.b. Determine the maturity
Backwoods Mining Co. acquired mineral rights for $53,200,000. The mineral deposit is estimated at 19,000,000 tons. During the current year, 2,500,000 tons were mined and sold.a. Determine the amount
Financial assets include stocks and bonds. These are fairly simple securities that can often be valued using quoted market prices. However, there are more complex financial instruments that do not
Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, 20Y6. The following transactions relate to securities acquired by Forte Inc., which has a
Booking Holdings Inc. is a leading provider of online travel and related services, provided to consumers and local partners through six primary brands: Booking.com, KAYAK, priceline.com, agoda.com,
What are the major advantages of the indirect method of reporting cash flows from (used for) operating activities?
State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows:a. Retired $300,000 of bonds, on which there was $4,000 of
In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. Form 10-K is a company’s annually required filing with the Securities and
Eastlund Corporation’s accumulated depreciation—equipment account increased by $6,320, while $2,450 of patent amortization was recognized between balance sheet dates. There were no purchases or
The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current
Paneous Corporation’s comparative balance sheet for current assets and liabilities was as follows:Adjust net income of $351,000 for changes in operating assets and liabilities to arrive at net cash
A long-term investment in bonds with a cost of $500,000 was sold for $600,000 cash. (a) What was the gain or loss on the sale? (b) What was the effect of the transaction on cash
Featherstone Inc. reported the following data:Net income $296,000Depreciation expense 113,100Gain on disposal of equipment 58,200Decrease in accounts receivable 71,300Decrease in accounts payable
Yeoman Inc. reported the following data:Net income $170,000Depreciation expense 29,000Loss on disposal of equipment 11,850Increase in accounts receivable 10,490Increase in accounts payable
Takaki Inc. reported net income of $53,000 for 20Y7. The liability and equity accounts from the company’s comparative balance sheet are as follows:During the year, the company declared dividends of
Cosmat Inc. reported net income of $128,000 for 20Y9. The liability and equity accounts from the company’s comparative balance sheet are as follows:During the year, the company retired bonds
Burkhalter Inc. reported the following on the company’s statement of cash flows in Year 2 and Year 1:Seventy percent of the net cash flows used for investing activities was used to replace existing
Garfunkel Inc. reported the following on the company’s statement of cash flows in Year 2 and Year 1:Eighty percent of the net cash flows used for investing activities was used to replace existing
On March 31, Clementine Repair Service extended an offer of $350,500 for land that had been priced for sale at $388,500. On April 15, Clementine Repair Service accepted the seller’s counteroffer of
Indicate whether each of the following types of transactions will either (a) Increase owner’s equity (b) Decrease owner’s equity:1. expenses2. owner’s investments3. owner’s
Tech Support Services has the following unadjusted trial balance as of January 31, 20Y8:The debit and credit totals are not equal as a result of the following errors:a. The cash entered on the trial
The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.Problem 7-1AInstructions1. Record the inventory, purchases, and cost
The following were selected from among the transactions completed by Essex Company during July of the current year:July 3. Purchased merchandise on account from Hamling Co., list price $72,000, trade
Identify each of the following reconciling items as: (a) An addition to the cash balance according to the bank statement(b) A deduction from the cash balance according to the bank statement(c)
Selected transactions for Essex Company during July of the current year are listed in Problem 6-3B.Data from Problem 6-3BThe following were selected from among the transactions completed by
Journalize the entries to record the following:a. Check is issued to establish a petty cash fund of $1,290.b. The amount of cash in the petty cash fund is now $303. Check is issued to replenish the
Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:Apr. 15. Received $1,800 from Joe Brown and wrote off the remainder owed of $2,700
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9Exhibit 9
Based on the data in Exercise 7-15 and assuming that cost was determined by the FIFO method and lower of cost or market was determined on an individual item-by-item basis, show how the merchandise
The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records:a. Estimate the cost of the merchandise destroyed.b. Briefly describe the
Based on the following data, estimate the cost of the ending merchandise inventory:a. Estimate the cost of the merchandise destroyed.b. Briefly describe the situations in which the gross profit
Based on the following data, estimate the cost of the ending merchandise inventory: Sales $9,250,000 Estimated gross profit rate 36% Beginning merchandise inventory $ 180,000 Purchases
Based on the following data, estimate the cost of the ending merchandise inventory: Sales $1,450,000 Estimated gross profit rate 42% Beginning merchandise inventory $ 100,000 Purchases
The actual cash received from cash sales was $25,538, and the amount indicated by the cash register total was $25,670. Journalize the entry to record the cash receipts and cash sales.
The actual cash received from cash sales was $66,670, and the amount indicated by the cash register total was $66,341. Journalize the entry to record the cash receipts and cash sales.
Autumn Designs & Decorators issued a 120-day, 5% note for $93,000, dated April 13 to Zebra Furniture Company on account.a. Determine the due date of the note.b. Determine the maturity value of
At the end of the current year, the accounts receivable account has a debit balance of $2,700,000 and sales for the year total $32,400,000. Determine the amount of the adjusting entry to provide for
The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:Jan. 21. Sold merchandise on account to Black Tie Co., $28,000.
A business issued a 45-day note for $80,000 to a creditor on account. The note was discounted at 5%. Journalize the entries to record (a) The issuance of the note (b) The payment of the
Tri-City Ironworks Co. reported $44,500,000 for equipment and $29,800,000 for accumulated depreciation—equipment on its balance sheet.Does this mean (a) That the replacement cost of the
A building acquired at the beginning of the year at a cost of $1,193,000 has an estimated residual value of $220,000 and an estimated useful life of 40 years. Determine (a) The
The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years:Assume
On December 31, it was estimated that goodwill of $1,600,000 was impaired. In addition, a patent with an estimated useful economic life of 15 years was acquired for $594,000 onAugust 1.a. Journalize
Apple Inc. designs manufactures and markets personal computers and related software. Apple also manufactures and distributes music players (iPod) and mobile phones (iPhone) along with related
Assume the same facts as in Exercise 10-27, except that the book value of the press traded in is $108,500. (a) What is the amount of cash given? (b) What is the gain or loss on the
Tonya Latirno is a staff accountant for Cannally and Kennedy, a local CPA firm. For the past 10 years, the firm has given employees a year-end bonus equal to two weeks’ salary. On November 15, the
Marvin Turner was discussing summer employment with Tina Song, president of Motown Construction Service:Tina: I’m glad you’re thinking about joining us for the summer. We certainly can use the
Exchange Commission (SEC). It includes the company’s financial statements and accompanying notes. The Form 10-K can be obtained either (a) by referring to the investor relations section of the
WBM Motorworks is a manufacturer of high-end touring and off-road motorcycles. On November 30, the company was sued by a customer who was injured when the front shock absorber on the WBM Series 3
The current assets and current liabilities for Apple Inc. and HP, Inc., are as follows at the end of a recent fiscal period:* These represent prepaid expense and other nonquick current assets.a.
Taye Barrow, M.D., and James Robbins, M.D., are sole owners of two medical practices that operate in the same medical building. The two doctors agree to combine the assets and liabilities of the two
The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3:The balance in Yost’s capital
After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $42,000, $7,500, and $36,500, respectively.
Castillo Nutrition Company has 14,000 shares of cumulative preferred 1% stock, $130 par, and 70,000 shares of $5 par common stock. The following amounts were distributed as dividends:Year
The following selected accounts appear in the ledger of Upscale Construction Inc. at the beginning of the current year:During the year, the corporation completed a number of transactions affecting
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows:The following selected
Nav-Go Enterprises Inc. produces aeronautical navigation equipment. The stockholders’ equity accounts of Nav-Go Enterprises Inc., with balances on January 1, 20Y3, are as follows:The following
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows:Common Stock, $20 stated value
Xentec Inc. has decided to expand its operations to owning and operating golf courses. The following is an excerpt from a conversation between the chief executive officer, Peter Kilgallon, and the
You hold a 25% common stock interest in YouOwnIt, a family-owned construction equipment company. Your sister, who is the manager, has proposed an expansion of plant facilities at an expected cost of
JED Capital Inc. makes investments in trading securities. Selected income statement and balance sheet items for the years ended December 31, Year 2 and Year 3, are as follows:Determine the missing
On January 23, 15,000 shares of Aurora Company’s common stock are acquired at a price of $25 per share plus a $150 brokerage commission. On April 12, a $0.50-per-share dividend was received on the
On September 12, 3,000 shares of Denver Company’s common stock are acquired at a price of $40 per share plus a $300 brokerage commission. On October 15, an $0.80-pershare dividend was received on
How does the accounting for a dividend receive differ for equity investments of less than 20% ownership and equity investments of between 20%–50% ownership?
On December 31, 20Y7, Valur Co. had the following available-for-sale investment disclosure within the Current Assets section of the balance sheet: There were no purchases or sales of
Teasdale Inc. manufactures and sells commercial and residential security equipment. The partial balance sheets for December 31, 20Y7, and 20Y8 are as follows:The available-for-sale investments at
Yard Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Yard Spray Inc. reacquired 42,000 shares of its common stock at
Pressure Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended January 31, 20Y2:Retained earnings, February 1, 20Y1. . . . . . . . . . . . . . . . .
The following Stockholders’ Equity section of the balance sheet is prepared as of the end of the current year:a. List the errors in the preceding statement of stockholders’ equity.b. Prepare a
PickApart Arts, Inc., had earnings of $565,300 for the year. The company had 55,000 shares of common stock outstanding during the year and issued 23,000 shares of $50 par value preferred stock. The

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