Questions and Answers of Financial Accounting Information

Comparative figures for Samsung, Apple, and Google follow. Required 1. Compute the times interest earned ratio for the most recent two years for Samsung using the data shown. 2. Is Samsung?s times
What is the combined amount (in percent) of the employee and employer Social Security tax rate? (Assume wages do not exceed $127,200 per year.)
On November 7, 2018, Mura Company borrows $160,000 cash by signing a 90-day, 8% note payable with a face value of $160,000.(1) Compute the accrued interest payable on December 31, 2018;(2) Prepare
Keesha Co. borrows $200,000 cash on November 1, 2018, by signing a 90-day, 9% note with a face value of $200,000.1. On what date does this note mature?2. How much interest expense results from this
On October 29, 2017, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $127,200 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 3.1% and SUTA
Review the chapter?s opening feature about Tim Westergren and the business he founded, Pandora. Assume that he is considering expanding the business to Europe and that the current abbreviated income
Merger Co. has 10 employees, each of whom earns $2,000 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $127,200 paid to each employee, and FICA
On September 11, 2017, Home Store sells a mower (that costs $200) for $500 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On July 24, 2018, the mower
Mest Company has nine employees. FICA Social Security taxes are 6.2% of the first $127,200 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes
Hitzu Co. sold a copier costing $4,800 with a two-year parts warranty to a customer on August 16, 2018, for $6,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copier
For the year ended December 31, Lopez Company implements an employee bonus program based on company net income, which the employees share equally. Lopez’s bonus expense is computed as $14,563.1.
Sylvestor Systems borrows $110,000 cash on May 15, 2018, by signing a 60-day, 12% note.1. On what date does this note mature?2. Suppose the face value of the note equals $110,000, the principal of
Refer to Google’s balance sheet in Appendix A. What “accrued” expenses (liabilities) does Google report at December 31, 2016?
Refer to Samsung’s balance sheet in Appendix A. List Samsung’s current liabilities as of December 31, 2016.
ReGreen receives $60,000 cash in advance for a sustainability consulting job that consists of three phases.(1) Record the cash received in advance on March 31.(2) Record the revenue earned for the
Volvo Group reported the following information in a recent year for its product warranty costs along with provisions and utilizations of warranty liabilities (amounts in millions). 1. Prepare
Organic Farmers Co-Op borrows $100,000 cash on December 1, 2018, by signing a 180-day, 12% note with a face value of $100,000.1. How much interest expense results from this note in 2018? (Assume a
Tano Company issues bonds with a par value of $180,000 on January 1, 2018. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in
Paulson Company issues 6%, four-year bonds, on December 31, 2018, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries
Dobbs Company issues 5%, two-year bonds, on December 31, 2018, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and preparejournal entries to
On January 1, 2018, Shay Company issues $700,000 of 10%, 15- year bonds at a price of 97¾. Six years later, on January 1, 2024, Shay retires 20% of these bonds by buying them on the open market at
Refer to the bond details in Problem 10-4A. Ellis Company issues 6.5%, five-year bonds dated January 1, 2018, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are
On January 1, 2018, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on
Use the information in Exercise 10-10 to prepare the journal entries for Eagle to record the loan on January 1, 2018, and each of the four payments from December 31, 2018, through December 31, 2021.
Ike issues $180,000 of 11%, three-year bonds dated January 1, 2018, that pay interest semiannually on June 30 and December 31. They are issued at $184,566. Their market rate is 10% at the issue
On January 1, 2018, MM Co. borrows $340,000 cash from a bank and in return signs an 8% installment note for five annual payments of $85,155 each, with the first payment due one year after the note is
Compute the debt-to-equity ratio for each of the following companies. Which company appears to have a riskier financing structure? Explain. Atlanta Company Spokane Company $ 549,000 1,830,000 Total
Stanford issues bonds dated January 1, 2018, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in
Use the following comparative figures for Apple and Google.Required1. Compute the book value per common share for each company using these data.2. Compute the basic EPS for each company using these
Quatro Co. issues bonds dated January 1, 2018, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature
Refer to the statement of cash flows for Samsung in Appendix A. For the year ended December 31, 2016, what was the amount for repayment of long-term borrowings and debentures?
The equity sections from Hovo Corporation?s 2017 and 2018 balance sheets follow. The following transactions and events affected its equity during year 2018. Feb. 15 Declared a $0.40 per share cash
Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2018, at a price of $95,952. The annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31.1.
Refer to the statements for Google in Appendix A. For the year ended December 31, 2016, what was its debt-to equity ratio? What does this ratio tell us?
On January 1, 2018, Brussels Enterprises issues bonds at par dated January 1, 2018, that have a $3,400,000 par value, mature in 4 years, and pay 9% interest semiannually on June 30 and December 31.1.
Heineken N.V. reports the following information for its loans and borrowings as of December 31, 2016, including proceeds and repayments for the year ended December 31, 2016 (euros in millions). 1.
On January 1, Renewable Energy issues bonds that have a $20,000 par value, mature in eight years, and pay 12% interest semiannually on June 30 and December 31.1. Prepare the journal entry for
Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders? equity during its first year of
Use Apple’s financial statements in Appendix A to answer the following.1. How many shares of Apple common stock are issued and outstanding at (a) September 24, 2016, and (b) September 26, 2015?2.
Balthus Corp. reports the following components of stockholders? equity on December 31, 2017. Jan. 10 It completed the following transactions related to stockholders? equity in year 2018. Mar. 2
Kohler Corporation reports the following components of stockholders? equity on December 31, 2017. Jan. 1 In year 2018, the following transactions affected its stockholders? equity accounts. Jan. 5
Rainwater Harvester uses straight-line depreciation for its solar panel costing $45,000, with an estimated five-year life and a $5,000 salvage value. At the beginning of its third year, the company
On January 2, 2018, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each of the following separate
Lok Co. reports net sales of $5,856,480 for 2017 and $8,679,690 for 2018. End-of-year balances for total assets are 2016, $1,686,000; 2017, $1,800,000; and 2018, $1,982,000. (a) Compute Lok’s total
Refer to the statement of cash flows for Google in Appendix A for the fiscal year ended December 31, 2016, to answer the following.1. What amount of cash is used to purchase property and equipment
On January 1, 2018, Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of the net assets purchased equals $1,800,000.1. What is the amount of goodwill that
Milano Gallery purchases the copyright on an oil painting for $418,000 on January 1, 2018. The copyright legally protects its owner for 10 more years. The company plans to market and sell prints of
Refer to Samsung’s balance sheet in Appendix A. What does it title its plant assets? What is the book value of its plant assets at December 31, 2016?
Key comparative figures for Samsung, Apple, and Google follow. Net Salos Cost of Sales In millions W201,866,745 w120,277,715 215,639 90,272 Samsung Apple ... 2$ 131,376 35,138 2$ Google..
Barga Co.’s net sales for 2017 and 2018 are $730,000 and $1,095,000, respectively. Its year-end balances of accounts receivable follow: December 31, 2017, $65,000; and December 31, 2018,
The following selected transactions are from Springer Company.2017Nov. 1 Accepted a $4,800, 90-day, 8% note dated this day in granting Steve Julian a time extension on his past-due account
On January 1, Wei Company begins the accounting period with a $30,000 credit balance in Allowance for Doubtful Accounts.a. On February 1, the company determined that $6,800 in customer accounts was
Net Zero Products, a wholesaler of sustainable raw materials, estimates uncollectible accounts using the allowance method at December 31. It prepares the following aging of receivables analysis. a.
Aneko Company reports the following ($000s): net sales of $14,800 for 2018 and $13,990 for 2017; end-of-year total assets of $19,100 for 2018 and $17,900 for 2017. Compute its total asset turnover
Rayya Co. purchases and installs a machine on January 1, 2018, at a total cost of $105,000. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage
On April 2, 2018, Montana Mining Co. pays $3,721,000 for an ore deposit containing 1,525,000 tons. The company installs machinery in the mine costing $213,500, with an estimated seven-year life and
Each member of a team is to participate in estimating uncollectibles using the aging schedule and percents shown in Problem 7-3A. The division of labor is up to the team. Your goal is to accurately
Sherman Co. began operations on January 1, 2017, and completed several transactions during 2017 and 2018 that involved sales on credit, accounts receivable collections, and bad debts. These
Refer to the balance sheet of Google in Appendix A. Does it use the direct write-off method or allowance method in accounting for its accounts receivable? What is the realizable value of its
Fair Trader, a wholesaler of artistic works from developing regions, reports its year-end unadjusted trial balance, which shows accounts receivable of $16,800, allowance for doubtful accounts of
Prepare journal entries for the following selected transactions of Danica Company for 2017.2017Dec. 13 Accepted a $9,500, 45-day, 8% note dated December13 in granting Miranda Lee a time extension on
Refer to the information in Exercise 7-11 and prepare the journal entries for the following selected transactions of Danica Company for 2018.2018Jan. 27 Received Lee’s payment for principal and
Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2018, at a total cash price of $900,000
Nagy Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January 1, 2018, at a total cash price of $1,800,000 for a building,
Refer to the financial statements of Apple in Appendix A to answer the following.1. What percent of the original cost of Apple’s property and equipment remains to be depreciated as of (a)
Comparative figures for Apple and Google follow. Required 1. Compute total asset turnover for the most recent two years for Apple and Google using the data shown. 2. In the current year, which
In January 2018, Mitzu Co. pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is
In January 2018, ProTech Co. pays $1,550,000 for a tract of land with two buildings. It plans to demolish Building A and build a new shop in its place. Building B will be a company office; it is
Comparative figures for Samsung, Apple, and Google follow. Required 1. Compute total asset turnover for the most recent two years for Samsung using the data shown. 2. Is Samsung?s asset turnover
Access the Yahoo! 10-K report for the year ended December 31, 2016, filed on March 1, 2017, at SEC.gov.Required1. What amount of goodwill is reported on Yahoo!’s balance sheet? What percentage of
On January 2, 2018, the Matthews Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years, during which time it
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.2017Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and
Mercury Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business.2017Jan. 1 Paid $25,860 cash plus $1,810 in sales tax for a
Each team member is to become an expert on one depreciation method to facilitate teammates’ understanding of that method. Follow these procedures:a. Each team member is to select an area of
On January 2, 2018, the Matthews Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years, during which time it
Yoshi Company completed the following transactions and events involving its delivery trucks.2017Jan. 1 Paid $20,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a
York Instruments completed the following transactions and events involving its machinery.2017Jan. 1 Paid $107,800 cash plus $6,470 in sales tax for a new machine. The machine is estimated to have a
On January 2, 2018, the Matthews Band acquires sound equipment for concert performances at a cost of $65,800. The band estimates it will use this equipment for four years. It estimates that after
A fleet of refrigerated delivery trucks is acquired on January 5, 2018, at a cost of $830,000 with an estimated useful life of eight years and an estimated salvage value of $75,000. Compute the
In early January 2018, NewTech purchases computer equipment for $154,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $25,000. Prepare a
Selected ledger account balances for Business Solutions follow. Required 1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2019. Compute
Refer to the December 31, 2016, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable, titled as “Trade Receivables,” as a current or noncurrent asset?
Refer to the financial statements of Samsung in Appendix A. What is the amount of Samsung’s accounts receivable, titled as “Trade Receivables,” on its December 31, 2016, balance sheet?
The following selected transactions are from Ohlm Company. 2017Dec. 16 Accepted a $10,800, 60-day, 8% note dated this day in granting Danny Todd a time extension on his past-due account
Refer to the financial statements and notes of Apple in Appendix A. In its presentation of accounts receivable on the balance sheet, how does it title accounts receivable? What does it report for
Liang Company began operations on January 1, 2017. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad
Key figures for Samsung follow. 1. Compute its accounts receivable turnover for the current year. 2. How long does it take on average for Samsung to collect receivables in the current year? 3. In
Hovak Company has credit sales of $4,500,000 for year 2018. At December 31, 2018, the company?s Allowance for Doubtful Accounts has an unadjusted debit balance of $3,400. Hovak prepares a schedule of
Jarden Company has credit sales of $3,600,000 for year 2018. On December 31, 2018, the company?s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a
Comparative figures for Apple and Google follow. Required 1. Compute the accounts receivable turnover for (a) Apple and (b) Google for each of the two most recent years using the data shown. 2.
At December 31, 2018, Ingleton Company reports the following results for the year. In addition, its unadjusted trial balance includes the following items. Required 1. Prepare the adjusting entry
At December 31, 2018, Hawke Company reports the following results for its calendar year. In addition, its unadjusted trial balance includes the following items. Required 1. Prepare the adjusting
Use Apple’s financial statements in Appendix A to answer the following.1. What is the amount of Apple’s accounts receivable as of September 24, 2016?2. Compute Apple’s accounts receivable
Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $44,000 during the first three months
EcoMart establishes a $1,050 petty cash fund on May 2. On May 30, the fund shows $312 in cash along with receipts for the following expenditures: transportation-in, $120; postage expenses, $369; and
Apple’s statement of cash flows in Appendix A describes changes in cash and cash equivalents for the year ended September 24, 2016. What total amount is provided (used) by investing activities?
Santana Rey created Business Solutions on October 1, 2018. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up
Access the September 24, 2016, 10-K report for Apple, Inc. (ticker: AAPL), filed on October 26, 2016, from the EDGAR filings at SEC.gov.Required1. What products are manufactured by Apple?2. What
On January 1 of year 1, Mason Co. entered into a 3-year lease on a building. The lease contract requires annual (prepaid) rental payments of $21,000 each January 1 throughout the life of the lease

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