Questions and Answers of Financial Accounting Tools For Business

The comparative condensed balance sheets of Roadway Corporation are as follows.Instructionsa. Prepare a horizontal analysis of the balance sheet data for Roadway Corporation using 2024 as a base.b.
Rondo Corporation's comparative balance sheets are presented here.Rondo's 2025 income statement included net sales of $\$ 120,000$, cost of goods sold of $\$ 70,000$, and net income of \(\$
The events and transactions of Dever Corporation for the year ended December 31, 2025, resulted in the following data.Analysis reveals the following.1. All items recorded are before the applicable
During 2025, Hrabik Corporation had the following amounts, all before calculating tax effects: income before income taxes $\$ 500,000$, loss on operation of discontinued music division \(\$
Summary financial information for Gandaulf Company is as follows.Compute the amount and percentage changes in 2025 using horizontal analysis, assuming 2024 is the base year. Current assets Plant
The condensed financial statements of Murawski Company for the years 2024 and 2025 are presented as follows. (Amounts in thousands.)Compute the following ratios for 2025 and 2024.a. Current
Lendell Company has these comparative balance sheet data:Additional information for 2025:1. Net income was $\$ 25,000$.2. Sales on account were $\$ 375,000$. Sales returns and allowances amounted
Selected hypothetical comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in
Here is the income statement for Myers, Inc.Additional information:1. Common stock outstanding January 1,2025 , was 32,000 shares, and 40,000 shares were outstanding at December 31, 2025. (Use a
Panza Corporation experienced a fire on December 31, 2025, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following
Here are comparative financial statement data for Duke Company and Lord Company, two competitors. All data are as of December 31, 2025, and December 31, 2024.Instructionsa. Prepare 2025 income
The comparative statements of Wahlberg Company are presented here.All sales were on credit. Net cash provided by operating activities for 2025 was $\$ 220,000$. Capital expenditures were \(\$
Condensed balance sheet and income statement data for Jergan Corporation are presented here.Additional information:1. The market price of Jergan's common stock was $\$ 7.00, \$ 7.50$, and \(\$
The following financial information is for Priscoll Company.Additional information:1. Inventory at the beginning of 2024 was $\$ 115,000$.2. Accounts receivable (net) at the beginning of 2024 were
Selected hypothetical financial data of Target and Walmart for 2025 are presented here (in millions).Instructionsa. For each company, compute the following ratios. Assume all sales were on credit.1.
Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Financial statements of Apple are presented in
The Wall Street Journal contains an article by Michael Rapoport entitled "Has Kraft Heinz Made $\$ 24$ Billion Since Merger or $\$ 6$ Billion? It Depends."InstructionsRead the article and then
Grouper Company provides you with the following balance sheet information as of December 31, 2025.In addition, Grouper reported net income for 2025 of $\$ 16,000$, income tax expense of \(\$
Mobbe Company issued $500,000, 15-year, 7% bonds at 96.Instructionsa. Prepare the journal entry to record the sale of these bonds on January 1, 2025 .b. Suppose the remaining Discount on Bonds
Assume that the following are independent situations recently reported in the Wall Street Journal.1. General Electric (GE) $7 \%$ bonds, maturing January 28,2026 , were issued at 111.12 .2. Boeing
Kale Company issued $\$ 350,000$ of $8 \%, 20$-year bonds on January 1, 2025, at face value. Interest is payable annually on January 1.InstructionsPrepare the journal entries to record the
The following situations are independent of each other.InstructionsFor each situation, prepare the appropriate journal entry for the redemption of the bonds.a. Mikhail Corporation redeemed \(\$
Suppose McDonald's 2025 financial statements contain the following selected data (in millions).InstructionsCompute the following values and provide a brief interpretation of each.a. Working
Underwood Boutique reported the following financial data for 2025 and 2024.Instructionsa. Calculate the current ratio for Underwood Boutique for 2025 and 2024.b. Suppose that at the end of 2025 ,
Sehr Company issued \$500,000, 6\%, 30-year bonds on January 1, 2025, at 103. Interest is payable annually on January 1 . Sehr uses straight-line amortization for bond premium or
Motley Company issued $300,000, 8%, 15-year bonds on December 31, 2024, for $288,000. Interest is payable annually on December 31. Motley uses the straight-line method to amortize bond premium or
Woode Corporation issued $\$ 400,000,7 \%, 20$-year bonds on January 1, 2025, for $\$ 360,727$. This price resulted in an effective-interest rate of $8 \%$ on the bonds. Interest is payable
Hernandez Company issued $380,000, 7%, 10-year bonds on January 1, 2025, for $407,968. This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annually on January 1.
On January 1, 2025, the ledger of Romada Company contained these liability accounts.During January, the following selected transactions occurred.Jan. 1 Borrowed $\$ 18,000$ in cash from Apex Bank
Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2025, Ehler had the following transactions related to
The following section is taken from Hardesty's balance sheet at December 31, 2024.Interest is payable annually on January 1 . The bonds are callable on any annual interest date.Instructionsa.
On October 1, 2024, Kristal Corp. issued $\$ 700,000,5 \%, 10$-year bonds at face value. The bonds were dated October 1, 2024, and pay interest annually on October 1. Financial statements are
Malcolm Company sold $6,000,000, 7%, 15-year bonds on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on December 31. The bonds were sold at 98.Instructionsa. Prepare the
Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co.Instructionsa. Calculate each of the following ratios for 2025 and 2024 .1.
The following information is taken from Lassen Corp.'s balance sheet at December 31, 2024.Interest is payable annually on January 1 . The bonds are callable on any annual interest date. Lassen uses
Fong Corporation sold $\$ 2,000,000,7 \%, 5$-year bonds on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on January 1. Fong Corporation uses the straight-line method to
Saylor Co. sold $\$ 3,000,000,8 \%, 10$-year bonds on January 1, 2025. The bonds were dated January 1, 2025, and pay interest on January 1. The company uses straight-line amortization on bond
On January 1, 2025, Lachte Corporation issued $1,800,000 face value, 5%, 10-year bonds at $1,667,518$1,667,518. This price resulted in an effective-interest rate of 6%6% on the bonds. Lachte uses the
On January 1, 2025, Opal Company issued $2,000,000 face value, 7%, 10-year bonds at $\$ 2,147,202$. This price resulted in a $6 \%$ effective-interest rate on the bonds. Opal uses the effective
Laverne purchased a new piece of equipment to be used in its new facility. The $\$ 370,000$ piece of equipment was purchased with a $\$ 50,000$ down payment and with cash received through the
Hetty Grey has just approached a venture capitalist for financing for her new business venture, the development of a local ski hill. On July 1, 2024, Hetty was loaned $\$ 150,000$ at an annual
Aimes Corporation's balance sheet at December 31, 2024, is presented below.During 2025, the following transactions occurred. Aimes uses a perpetual inventory system.1. Aimes paid $\$ 2,500$
Refer to the financial statements of Apple Inc. in Appendix A.InstructionsAnswer the following questions.a. What were Apple's total current liabilities at September 26, 2020? What was the
On January 1, 2023, Picard Corporation issued $\$ 3,000,000,5$-year, $8 \%$ bonds at 97 . The bonds pay interest annually on January 1. By January 1, 2025, the market rate of interest for bonds
Microfinance is the process of lending small amounts of money to low-income or unemployed people who would otherwise not have access to banking services. It enables many of these people to operate
Treasury stock may be repurchased:a. to reissue the shares to officers and employees under bonus and stock compensation plans.b. to signal to the stock market that management believes the stock is
U-Bet Corporation has 10,000 shares of $8 \%, \$ 100$ par value, cumulative preferred stock outstanding at December 31, 2025. No dividends were declared in 2023 or 2024 . If U-Bet wants to pay \(\$
Which of these statements about stock dividends is true?a. Stock dividends reduce a company's cash balance.b. A stock dividend has no effect on total stockholders' equity.c. A stock dividend
Zealot Inc. has retained earnings of $\$ 500,000$ and total stockholders' equity of $\$ 2,000,000$. It has 100,000 shares of $\$ 8$ par value common stock outstanding, which is currently
The return on common stockholders' equity is usually increased by all of the following, except:a. an increase in the return on assets ratio.b. an increase in the use of debt financing.c. an increase
Thomas is nearing retirement and would like to invest in a stock that will provide a good steady income. Thomas should choose a stock with a:a. high current ratio.b. high dividend payout.c. high
Jackson Inc. reported net income of $\$ 186,000$ during 2025 and paid dividends of $\$ 26,000$ on common stock. It also paid dividends on its 10,000 shares of $6 \%, \$ 100$ par value,
If everything else is held constant, earnings per share is increased by:a. the payment of a cash dividend to common shareholders.b. the payment of a cash dividend to preferred shareholders.c. the
On April 10, Leury Corporation issues 3,000 shares of $\$ 5$ par value common stock for cash at $\$ 14$ per share. Journalize the issuance of the stock.
On June 1, Omar Corporation purchases 600 shares of its $5 par value common stock for the treasury at a cash price of $10 per share. Journalize the treasury stock transaction.
Giovanni Corporation has 70,000 shares of common stock outstanding. It declares a $\$ 2$ per share cash dividend on November 15 to stockholders of record on December 15. The dividend is paid on
The stockholders' equity section of Ynoa Corporation consists of common stock ($5 par) $\$ 3,000,000$ and retained earnings $\$ 1,000,000$. A $15 \%$ stock dividend ( 90,000 shares) is declared
Navarez Corporation has the following accounts at December 31: Common Stock, $\$ 2$ par, 50,000 shares issued, $\$ 100,000$; Paid-in Capital in Excess of Par-Common Stock $\$ 40,000$; Retained
Maci Co. had the following transactions during the current period.June 12 Issued 60,000 shares of $\$ 5$ par value common stock for cash of $\$ 370,000$.July 11 Issued 1,000 shares of $\$ 100$
On January 1, Chong Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $\$ 5$ per share. During the year, the following occurred.Apr. 1
a. Sparks Corporation has 3,000 shares of $8 \%$, $\$ 100$ par value preferred stock outstanding at December 31, 2025. At December 31, 2025, the company declared a $\$ 105,000$ cash dividend.
Knudsen Corporation was organized on January 1, 2024. During its first year, the corporation issued 2,000 shares of $\$ 50$ par value preferred stock and 100,000 shares of $\$ 10$ par value
The stockholders' equity accounts of Ripley Corporation on January 1, 2025, were as follows.During 2025, the corporation had the following transactions and events pertaining to its stockholders'
Top management of Cabo company is considering two alternative capital structures for 2025 . The first (the "no debt" structure) would be to have $\$ 1,000,000$ in assets and $\$ 1,000,000$ in
Tidal Corporation was organized on January 1, 2025. It is authorized to issue 20,000 shares of $6 \%, \$ 50$ par value preferred stock and 500,000 shares of no-par common stock with a stated value
The stockholders' equity accounts of Cyrus Corporation on January 1, 2025, were as follows.During 2025, the corporation had the following transactions and events pertaining to its stockholders'
On December 31, 2024, Jons Company had 1,300,000 shares of $\$ 5$ par common stock issued and outstanding. At December 31, 2024, stockholders' equity had the amounts listed here.Transactions during
The ledger of Waite Corporation at December 31, 2025, after the books have been closed, contains the following stockholders' equity accounts.A review of the accounting records reveals this
Layes Corporation has been authorized to issue 20,000 shares of $\$ 100$ par value, 7\%, noncumulative preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a \(\$
On January 1, 2025, Kimbel Inc. had these stockholders' equity balances.During 2025, the following transactions and events occurred.1. Issued 50,000 shares of $\$ 1$ par value common stock for \(\$
Spahn Company manufactures backpacks. During 2025, Spahn issued bonds at $10 \%$ interest and used the cash proceeds to purchase treasury stock. The following financial information is available for
On January 1, 2025, Tacoma Corporation had these stockholders' equity accounts.During the year, the following transactions occurred.Jan. 15 Declared a $\$ 0.50$ cash dividend per share to
Hawkeye Corporation's balance sheet at December 31, 2024, is presented as follow.During 2025, the following transactions occurred.1. On January 1 , Hawkeye issued 1,200 shares of $\$ 40$ par, \(7
Karen Noonan opened Clean Sweep Inc. on February 1, 2025. During February, the following transactions were completed.Instructionsa. Journalize the February transactions. (You do not need to include
The stockholders' equity section of Apple Inc.'s balance sheet is shown in the Consolidated Statement of Financial Position in Appendix A. The complete annual report, including the notes to its
VentureBeat.com has an article entitled "Startups: Should You Incorporate as a Public Benefit Corporation?"InstructionsDo an online search on VentureBeat and the title of the article. Read the
Which of the following is not reported in the statement of cash flows?a. The net change in stockholders' equity during the year.b. Cash payments for plant assets during the year.c. Cash receipts from
The following data are available for Bill Mack Corporation.Net cash provided by operating activities is:a. $\$ 160,000$.b. $\$ 220,000$.c. $\$ 240,000$.d. $\$ 280,000$. Net income
The following data are available for Retique!Net cash provided by financing activities is:a. $\$ 90,000$.b. $\$ 130,000$.c. $\$ 160,000$.d. $\$ 170,000$. Increase in accounts payable Increase
During the introductory phase of a company's life cycle, one would normally expect to see:a. negative cash from operations, negative cash from investing, and positive cash from financing.b. negative
The following is a summary of the Cash account of Covey Company.What amount of net cash provided (used) by investing activities should be reported in the statement of cash flows? Balance, Jan. 1
Engel, Inc. reported net income of $\$ 1.6$ million in 2025 . Depreciation for the year was $\$ 140,000$, accounts receivable increased $\$ 250,000$, and accounts payable increased \(\$
Goldberg Corporation reported net cash provided by operating activities of $\$ 410,000$, net cash used by investing activities of $\$ 200,000$ (including cash spent for equipment of \(\$
Furst Corporation had the following transactions.1. Paid salaries of $\$ 14,000$.2. Issued 1,000 shares of $\$ 1$ par value common stock for equipment worth $\$ 16,000$.3. Sold equipment (cost
Strong Corporation's comparative balance sheets are as follows.Additional information:1. Net income was $\$ 28,300$. Dividends declared and paid were $\$ 26,400$. Depreciation expense was \(\$
The income statement for the year ended December 31, 2025, for Kosinski Manufacturing Company contains the following condensed information.The $\$ 24,000$ loss resulted from selling equipment for
During 2025, Slivowitz Doubleday Company converted $\$ 1,700,000$ of its total $\$ 2,000,000$ of bonds payable into common stock. Indicate how the transaction would be reported on a statement of
In its 2019 statement of cash flows, what amount did Apple report for net cash(a) provided by operating activities,(b) used for investing activities, and(c) used for financing activities?
Harbinger Inc. reported sales of $2 million for 2025. Accounts receivable decreased $\$ 150,000$, and accounts payable increased $\$ 300,000$. Compute cash receipts from customers, assuming that
a. Photography reported net income of $\$ 100,000$ for 2025 . Included in the income statement were depreciation expense of $\$ 6,300$, patent amortization expense of $\$ 4,000$, and a gain on
Moskow Corporation issued the following statement of cash flows for 2025.a. Compute free cash flow for Moskow Corporation.b. Explain why free cash flow often provides better information than "Net
Rodriquez Corporation's comparative balance sheets are as follows.Additional information:1. Net income was $\$ 18,300$. Dividends declared and paid were $\$ 16,400$.2. Equipment which cost \(\$
Comparative balance sheets for International Company are as follows.Additional information:1. Net income for 2025 was $\$ 100,000$.2. Cash dividends of $\$ 55,000$ were declared and paid.3. Bonds
You are provided with the following information regarding events that occurred at Moore Corporation during 2025 or changes in account balances as of December 31, 2025.a. Depreciation expense was \(\$
The following account balances relate to the stockholders' equity accounts of Molder Corp. at year-end.A small stock dividend was declared and issued in 2025. The market price of the shares issued
The income statement of Munsun Company is presented here.Additional information:1. Accounts receivable decreased $\$ 380,000$ during the year, and inventory decreased $\$ 300,000$.2. Prepaid
The comparative balance sheets for Spicer Company as of December 31 are as follows.Additional information:1. Operating expenses include depreciation expense of $\$ 42,000(\$ 20,000$ of depreciation
The financial statements of Apple Inc. are presented in Appendix A.InstructionsAnswer the following questions.a. What was the amount of net cash provided by operating activities for the year ended,
Pete Kent and Maria Robles are examining the following summary of cash flows for Sullivan Company for the year ended January 31, 2025.Pete claims that this summary shows that Sullivan had a superb
Cool Stools Corporation has income before taxes of $\$ 400,000$ and a loss on discontinued operations of $\$ 100,000$. If the income tax rate is $25 \%$ on all items, the income statement

Showing 1 - 100 of 606