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financial accounting
Financial Accounting 12th edition C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr. - Solutions
Janet Black, the owner of Janet’s Catering, has delegated the management of the business to Danielle Vale, a friend. Black drops by to meet customers and check up on cash receipts, but Vale buys the merchandise and handles cash payments. Business has been very good lately, and cash receipts have
The cash data of Eddy Automotive for October 2018 follow:Eddy Automotive received the following bank statement on October 31, 2018:Additional data for the bank reconciliation include the following:a. The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance payment.b. The
Beaumont Independent School District (BISD) is a public school district in Beaumont, Texas. It has three high schools, six middle schools, and 16 elementary schools, serving approximately 21,000 students. In February, 2015, Patricia Lambert, former BISD Assistant Superintendent, was indicted for
The cash data of Duffy Automotive for May 2018 follow:Duffy Automotive received the following bank statement on May 31, 2018:Additional data for the bank reconciliation include the following:a. The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance payment.b. The
Mark Kershey, a former Smucker employee, was charged with defrauding the J.M. Smucker Company of more than $4.1 million over a 16-year period. Charges were filed in October 2014. In 2015, Kershey was sentenced to nearly five years in prison. Kershey was the chief airplane mechanic at the
Which of the following assets are not included in “cash equivalents” in a typical balance sheet?a. Foreign government securitiesb. Certain very low-risk equity securitiesc. U.S. government securitiesd. Time depositse. All of the above might be included in “cash equivalents.”
Which of the following is an example of poor internal control in an organization?a. The company rotates employees through various jobs.b. The accounting department compares goods received with the related purchase order.c. The mailroom clerk records daily cash receipts in the journal.d. Employees
If a bank reconciliation included a deposit in transit of $790, the entry to record thisreconciling item would includea. a credit to Cash for $790.b. a credit to Prepaid insurance for $790.c. a debit to Cash for $790.d. No entry is required.
If a bookkeeper mistakenly recorded a $73 deposit as $37, the error would be shown onthe bank reconciliation as aa. $36 deduction from the book balance.b. $37 addition to the book balance.c. $36 addition to the book balance.d. $37 deduction from the book balance.
Use the data from Exercise 4-27B to make the journal entries that McCall should record on February 28 to update his Cash account. Include an explanation for each entry.Data from Exercise 4-27BHarry McCall operates a roller skating center, McCall Rinks. He has just received the company’s monthly
Harry McCall operates a roller skating center, McCall Rinks. He has just received the company’s monthly bank statement at February 28 from Ridgeway National Bank, and the statement shows an ending balance of $755. Listed on the statement are an EFT rent collection of $305, a service charge of $7,
Lexitech Company’s check-book lists the following:The January bank statement shows:Requirement1. Prepare Lexitech’s bank reconciliation at January 31, 2018. Check No. Check Deposit Balance Date Item 1/1 $ 505 445 565 445 367 322 252 Tuscan Sandwiches Dividends received Hartford Co. FastMobil
Mary Jenson served as executive director of Downtown Bridgeport, an organization created to revitalize Bridgeport, Oregon. Over the course of 14 years, Jenson embezzled $295,000 through a variety of methods. Jenson deposited the organization’s cash receipts in her own bank account. She wrote
Harper Company manufactures a popular brand of footballs. Harper employs 147 workers and keeps time sheets that show how many hours the employees work each week. On Friday the shop foreman collects the time sheets, checks them for accuracy, and delivers them to the payroll department so it can
Identify the internal control weakness in the following situations. State how the person can hurt the company.a. Katie Parker is the purchasing agent for Salem Sports Equipment. Parker prepares purchase orders based on requests from division managers of the company. Parker faxes the purchase order
Use the data from Exercise 4-20A to make the journal entries that Patrick should record on March 31 to update his Cash account. Include an explanation for each entry.Data from Exercise 4-20AUse a bank reconciliation) Jim Patrick operates a roller skating center, Skatetown USA. He has just received
Use a bank reconciliation) Jim Patrick operates a roller skating center, Skatetown USA. He has just received the company’s monthly bank statement at March 31 from Ringley National Bank, and the statement shows an ending balance of $710. Listed on the statement are an EFT rent collection of $315,
Sangreen Company’s checkbook lists the following:The May bank statement shows:Requirement1. Prepare Sangreen’s bank reconciliation at May 31, 2019. Check Balance Date Check No. Item Deposit $ 505 475 625 5/1 Two Sisters Catering 622 $ 30 4 Dividends received $ 150 City Tire Co. Jiffy Lube
Ruth Bixby served as executive director of Uptown Allentown, an organization created to revitalize Allentown, Pennsylvania. Over the course of 13 years, Bixby embezzled $543,000 through a variety of methods. Bixby deposited the organization’s cash receipts in her own bank account. She wrote
Use these terms to complete the statements that follow. You can use a term more than once or not at all.a. When a company has recorded a deposit but the bank has not yet processed it, this item is a/an ________ .b. ________ occurs when management prepares misleading financial statements.c.
Constance Hermaine manages Springfield Manufacturing. Hermaine fears that a trusted employee has been stealing from the company. This employee receives cash from clients and also prepares the monthly bank reconciliation. To check up on the employee, Hermaine prepares her own bank reconciliation, as
After preparing Reese Corp.’s bank reconciliation in Short Exercise 4-10, make the company’s journal entries for transactions that arise from the bank reconciliation. Date each transaction October 31, 2018, and include an explanation with each entry.Data from Exercises 4-10The Cash account of
The Cash account of Reese Corporation had a balance of $3,540 at October 31, 2018. Included were outstanding checks totaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement. The bank statement, which came from Turnstone State Bank, listed an October 31 balance of
Donna Franks, an accountant for Southern Technologies Corporation, discovers that her supervisor, Elise Silverton, made several errors last year. Overall, the errors overstated the company’s net income by 40%. It is not clear whether the errors were deliberate or accidental. What should Franks do?
Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for “Under Armour” under Company Filings. When you see the list of filings for the company, select the Form 10-K for 2016. Be sure to retrieve the 2016 financial statements, not
Refer to Apple Inc.’s financial statements in Appendix A and online in the filings section of www.sec.gov. Assume that Apple completed the following selected transactions during 2016:a. Made company sales (revenue) of $215,639 million, all on account (debit Accounts Receivable, net; credit Net
Shabby Fitch is the president and principal stockholder of Shabby’s Bar & Grill, Inc. To expand, the business is applying for a $350,000 bank loan. To get the loan, Fitch is considering two options for beefing up the stockholders’ equity of the business:Option 1. Issue $200,000 of common
Ferritto opened an Italian restaurant. Business has been good, and Ferritto is considering expanding the restaurant. Ferritto, who knows little accounting, produced the following financial statements for Romano Castle, Inc., at December 31, 2018, the end of the first month of operations:In these
The Cheesecake Factory Incorporated (NASDAQ: CAKE) owns and operates over 200 restaurants, including The Cheesecake Factory, the Grad Lux Cafe, and the RockSugar Pan Asian Kitchen brand restaurants. It also operates two bakery production facilities. Millions of transactions occur at The Cheesecake
Backline Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Backline had to replace an inexperienced office worker in charge of bookkeeping because of some serious mistakes that had been uncovered in the accounting records. You have been hired to review
This question concerns the items and the amounts that two entities, Marion Co. and Ashland Hospital, should report in their financial statements. During November, Ashland provided Marion with medical exams for Marion employees and sent a bill for $48,000. On December 7, Marion sent a check to
The trial balance of Jubilee, Inc., at October 31, 2018, does not balance.Requirements1. Prepare a trial balance for the ledger accounts of Jubilee, Inc., as of October 31, 2018.2. Determine the out-of-balance amount. The error lies in the Accounts Receivable account. Add the out-of-balance amount
During the first month of operations (May 2018), Shreve Music Corporation completed the following selected transactions:a. The business received cash of $46,000 and a building with a fair value of $106,000. The corporation issued common stock to the stockholders.b. Borrowed $60,000 from the bank;
This problem can be used in conjunction with Problem 2-64B; see that problem for the relevant data.Requirements1. Journalize the transactions of Davis Computing, Inc. Explanations are not required.2. Prepare a T-account for each account. Insert in each T-account its September 30 balance as given
The following amounts summarize the financial position of Davis Computing, Inc., on September 30, 2018:During October 2018, Davis Computing completed these transactions:a. The company received cash of $3,500 and issued common stock.b. Performed services for a customer and received cash of $6,500.c.
The trial balance of Colby Design, Inc., follows:Clara Lancey, your best friend, is considering making an investment in Colby Design, Inc. Clara seeks your advice in interpreting the company’s information. Specifically, she asks how to use this trial balance to compute the company’s total
During the first month of operations (January 2018), Samuels Music Services Corporation completed the following selected transactions:a. The business received cash of $41,000 and a building with a fair value of $110,000. The corporation issued common stock to the stockholders.b. Borrowed $61,000
During the first month of operations, Cloutier Services, Inc., completed the following transactions:Requirements1. Record each transaction in the journal. Be sure to record the date in each entry. Explanations are not required.2. Post the transactions to the T-accounts, using transaction dates as
The following amounts summarize the financial position of Grueser Computing, Inc., on September 30, 2018:During October 2018, Grueser Computing completed these transactions:a. The company received cash of $3,700 and issued common stock.b. Performed services for a customer and received cash of
The trial balance of Baker Specialties, Inc., follows:Veronica Gomez, your best friend, is considering investing in Baker Specialties, Inc. Veronica seeks your advice in interpreting the company’s information. Specifically, she asks how to use this trial balance to compute the company’s total
Purchasing a building for $115,000 by paying cash of $25,000 and signing a note payable for $90,000 willa. decrease total assets and increase total liabilities by $25,000.b. increase both total assets and total liabilities by $115,000.c. decrease both total assets and total liabilities by
Girard Unlimited, a new company, completed these transactions.1. Stockholders invested $55,000 cash and inventory with a fair value of $30,000.2. Sales on account, $25,000. What will Girard’s total assets equal?a. $110,000b. $85,000c. $55,000d. $80,000
If a corporation purchases a delivery van for $35,000 cash, the net impact of this transaction will bea. A decrease in total assets of $35,000.b. An increase in total assets of $35,000.c. An increase in both assets and liabilities of $35,000.d. No impact on total assets.
Which statement is false?a. A trial balance lists all the accounts with their current balances.b. A trial balance can be taken at any time.c. A trial balance can verify the equality of debits and credits.d. A trial balance is the same as a balance sheet.
Olivia Matthews, Certified Public Accountant, operates as a professional corporation (P.C.). The business completed these transactions during the first part of May 2018:Requirements1. Journalize the transactions for Olivia Matthews, Certified Public Accountant. Explanations are not required.2. Post
Assume that All Towne Company reported the following summarized data at September 30, 2018. Accounts appear in no particular order; dollar amounts are in millions.Requirements1. Solve for Cash.2. Prepare the trial balance of All Towne at September 30, 2018. List the accounts in their proper
The trial balance of St. James, Inc., at September 30, 2018, does not balance.The accounting records hold the following errors:a. Recorded a $400 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct.b. Posted a $4,000 credit to Accounts Payable as $400.c. Did not
The accounts of Specialty Deck Service, Inc., follow with their normal balances at April 30, 2018. The accounts are listed in no particular order.Requirements1. Prepare the company’s trial balance at April 30, 2018, listing accounts in proper sequence, as illustrated in the chapter. For example,
The first seven transactions of Gallagher Advertising, Inc., have been posted to the company’s accounts:Requirement1. Prepare the journal entries that served as the sources for the seven transactions. Include an explanation for each entry. Determine the ending balance in each account. As
Cedar Point is an amusement park in Sandusky, Ohio, owned by Cedar Fair Entertainment Company. Over 3.5 million people visit Cedar Point each year between May and October. It covers 364 acres and has more than 150 rides and attractions, including 16 roller coasters. Cedar Point is the second oldest
Assume that Old Center Company reported the following summarized data at September 30, 2018. Accounts appear in no particular order; dollar amounts are in millions.Requirements1. Solve for Cash.2. Prepare the trial balance of Old Center at September 30, 2018. List the accounts in their proper
The trial balance of Addison, Inc., at September 30, 2018, does not balance:The accounting records hold the following errors:a. Recorded a $700 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct.b. Posted a $1,000 credit to Accounts Payable as $100.c. Did not
The accounts of Deluxe Patio Service, Inc., follow with their normal balances at April 30, 2018. The accounts are listed in no particular order.Requirements1. Prepare the company’s trial balance at April 30, 2018, listing accounts in proper sequence, as illustrated in the chapter. For example,
Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture, Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and Rent Expense. Record the following transactions directly in the T-accounts without using a journal. Use the letters to
Identify transactions, analyze impact on accounting equation, journalize transactions) Cedar Point is an amusement park in Sandusky, Ohio, owned by Cedar Fair Entertainment Company. Over 3.5 million people visit Cedar Point each year between May and October. It covers 364 acres and has more than
Purpleberry, Inc.’s, trial balance follows:Calculate these amounts for the business:1. Total assets2. Total liabilities3. Net income or net loss during December A1 Purpleberry, Inc. Trial Balance December 31, 2018 Balance Credit 3 Account Title 4 Cash 5 Accounts receivable 6 Supplies 7 Land 8
Assume that Harbor Marine Company reported the following summarized data at December 31, 2018. Accounts appear in no particular order; dollar amounts are in millions.Prepare the trial balance of Harbor Marine Company at December 31, 2018. List the accounts in their proper order. How much was the
Journalize the following transactions. Include dates and a brief explanation for each journal entry.July 1: Issued common stock for $13,000July 5: Performed services on account for $8,000July 9: Purchased office supplies on account for $600July 10: Performed services for cash of $3,100July 12:
Orman Consulting performed services for a client who could not pay immediately. Orman expected to collect the $4,600 the following month. A month later, Orman received $2,100 cash from the client.1. Record the two transactions on the books of Orman Consulting. Include an explanation for each
After operating for several months, architect Donovan Freeman completed the following transactions during the latter part of July:Journalize the transactions of Donovan Freeman, Architect. Include an explanation with each journal entry. Borrowed $64,000 from the bank, signing a note payable. Jul 15
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 answer. July 1 Baer invested $26,000 cash to start her medical practice. The business issued common stock
Ford’s Catering began with cash of $8,000. Ford then bought supplies for $2,500 on account. Separately, Ford paid $7,200 for equipment. Answer these questions.a. How much in total assets does Ford have?b. How much in liabilities does Ford owe?
Dan Crater opened a software consulting firm that immediately paid $28,000 for a computer system. Was Crater’s computer system an expense of the business? If not, explain.
For each of the following items, indicate whether that item would be considered to be a transaction at Gerbig Pet Grooming Corporation.a. A customer, Layne Gracen, gives Gerbig a check for $620 to prepay for her dog’s grooming appointments for the upcoming year.b. Gerbig pays $310 for last
Apply the accounting equation; evaluate business operations) This and similar cases in each chapter are based on the 2016 consolidated financial statements of Under Armour, Inc. You can retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching
This and similar cases in succeeding chapters are based on the consolidated financial statements of Apple Inc. shown in Appendix A and online in the filings section of www.sec.gov.Requirements1. Go online and do some research on Apple Inc. and its industry. Use one or more popular websites such as
A year out of college, you have $10,000 to invest. A friend has started Flowers Unlimited, Inc., and he asks you to invest in his company. You obtain the company’s financial statements, which are summarized at the end of the first year as follows:Visits with your friend turn up the following
Two businesses, Queens Service Corp. and Insley Sales Co., have sought business loans from you. To decide whether to make the loans, you have requested their balance sheets.Requirement1. Using only these balance sheets, to which entity would you be more comfortable lending money? Explain fully,
The Cheesecake Factory Incorporated (NASDAQ: CAKE) was started by Evelyn Overton when she sold cheesecakes from her basement in Detroit in the 1940s. Its first restaurant opened in Beverly Hills in 1978. Cheesecake Factory has been a publicly held corporation since 1993 and currently has 185
Summarized versions of Weaverton Corporation’s financial statements for two recent years are as follows.Requirement1. Complete Weaverton Corporation’s financial statements by determining the missing amounts denoted by the letters. If necessary, round numbers up to the nearest whole dollar. A1
The following data come from the financial statements of Tidal Wave Company for the year ended March 31, 2019 (in millions):Requirements1. Prepare Tidal Wave Company’s cash flow statement for the year ended March 31, 2019. Not all the items listed will appear on the cash flow statement.2. Which
The assets and liabilities of Full Moon Products, Inc., as of December 31, 2018, and revenues and expenses for the year ended on that date are as follows:Beginning retained earnings was $364,800, and dividends declared and paid totaled $108,000 for the year.Requirements1. Prepare the income
Hudson Alvarez is a realtor. He organized his business as a corporation on June 16, 2019. The business received $75,000 from Alvarez and issued common stock. Consider these facts as of June 30, 2019.a. Alvarez has $17,000 in his personal bank account and $44,000 in the business bank account.b.
The manager of Parker Design, Inc., prepared the company’s balance sheet as of March 31, 2018, while the company’s accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balance, so she plugged in the stockholders’ equity
Compute the missing amount (?) for each company. (Amounts are in millions.)At the end of the year, which company had the■ highest net income?■ highest percent of net income to revenues? Babble Co. Floralties, Inc. Drake Co. Beginning Assets.. $ 79 $35 Liabilities .. 51 15 5 Common stock.. 5 2
Summarized versions of Calabasa Corporation’s financial statements for two recent years are as follows.Requirement1. Complete Calabasa Corporation’s financial statements by determining the missing amounts denoted by the letters. If necessary, round numbers up to the nearest whole dollar. A1
The following data come from the financial statements of Mitchell Company for the year ended March 31, 2019 (in millions):Requirements1. Prepare Mitchell Company’s cash flow statement for the year ended March 31, 2019. Not all items listed will appear on the cash flow statement.2. What
The assets and liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2018, and revenues and expenses for the year ended on that date are as follows:Beginning retained earnings was $364,600, and dividends declared and paid totaled $107,000 for the year.Requirements1. Prepare the income
Apply underlying accounting concepts; evaluate business operations; construct a balance sheet) Brandon Hilton is a realtor. He organized his business as a corporation on June 16, 2019. The business received $65,000 cash from Hilton and issued common stock. Consider the following facts as of June
The manager of City News, Inc., prepared the company’s balance sheet as of May 31, 2018, while the company’s accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balance, so she plugged in the stockholders’ equity amount
Apply the accounting equation; evaluate business operations) Compute the missing amount (?) for each company. (Amounts are in millions.)At the end of the year, which company had the■ highest net income?■ highest percent of net income to revenues? Kennedy Corp. Caring Co. Childress, Inc.
Paulson Company had the following on the dates indicated:Paulson had no stock transactions in 2018, so the change in stockholders’ equity for 2018 was due to net income and dividends. If dividends were $75,000, how much was Paulson’s net income for 2018? Use the accounting equation and the
The stockholders’ equity of Kowalski Company at the beginning and end of 2018 totaled $122,000 and $140,000, respectively. Assets at the beginning of 2018 were $149,000. If the liabilities of Kowalski Company increased by $69,000 in 2018, how much were total assets at the end of 2018? Use the
Moody Instruments had retained earnings of $300,000 at December 31, 2017. Net income for 2018 totaled $200,000, and dividends declared for 2018 were $55,000. How much retained earnings should Moody report at December 31, 2018?a. $500,000b. $445,000c. $300,000d. $355,000Select the best choice from
Maynard Corporation began the year with cash of $135,000 and land that cost $25,000. During the year, Maynard earned service revenue of $260,000 and had the following expenses: salaries, $185,000; rent, $81,000; and utilities, $28,000. At year-end, Maynard’s cash balance was down to $31,000. How
Another name for the balance sheet is thea. Statement of operations.b. Statement of profit and loss.c. Statement of earnings.d. Statement of financial position.Select the best choice from among the possible answers given.
During February, assets increased by $83,000 and liabilities increased by $23,000. Equity must havea. Increased by $60,000.b. Increased by $106,000.c. Decreased by $106,000.d. Decreased by $60,000.Select the best choice from among the possible answers given.
Assume that a business is headed for certain bankruptcy and it is evident that its liabilities greatly exceed its assets. Which principle would be violated if its financial statements were prepared using standard U.S. GAAP?a. Entity assumptionb. Continuity assumptionc. Historical cost principled.
An organization’s investors and creditors will primarily use information provided by:a. the organization’s financial accounting system.b. the organization’s managerial accounting system.c. the Internal Revenue Service.d. the Financial Accounting Standards Board.Select the best choice from
During 2018, Brewster Company earned revenues of $146 million. Brewster incurred, during that same year, salary expense of $28 million, rent expense of $23 million, and utilities expense of $19 million. Brewster declared and paid dividends of $15 million during the year. At December 31, 2018,
This exercise should be used in conjunction with Exercises 1-39B through 1-41B.The owner of Island Coffee Roasters Corporation now seeks your advice as to whether she should cease operations or continue the business. Complete the report giving her your opinion of net income, dividends, financial
Refer to the data in Exercises 1-39B and 1-40B.Requirement1. Prepare the statement of cash flows of Island Coffee Roasters Corporation for the month ended August 31, 2019. Using Exhibit 1-11 as a model, show with arrows the relationships among the income statement, statement of retained earnings,
Refer to the data in Exercise 1-39B.Requirement1. Prepare the balance sheet of Island Coffee Roasters Corporation at August 31, 2019.Data from Exercise 1-39BAssume Island Coffee Roasters Corporation ended the month of August 2019 with these data: Payments of cash: Acquisition of equipment .. Cash
This exercise should be used with Exercise 1-37B.Requirements1. Prepare the income statement of Mary Burke Realty Company for the year ended March 31, 2018.2. What amount of dividends did Mary Burke Realty Company declare during the year ended March 31, 2018?Prepare a statement of retained
The following are the assets and liabilities of Mary Burke Realty Company, as of March 31, 2018. Also included are revenue, expense, and selected stockholders’ equity figures for the year ended on that date (amounts in millions):Requirement1. Construct the balance sheet of Mary Burke Realty
At December 31, 2018, Patterson Products has cash of $20,000, receivables of $17,600, and inventory of $78,000. The company’s equipment totals $186,000. Patterson owes accounts payable of $22,000 and long-term notes payable of $173,000. Common stock is $28,500. Prepare Patterson’s balance
Pillser, Inc.’s, comparative balance sheet at January 31, 2019, and 2018, reports the following (in millions):RequirementsThe following are three situations related to Pillser’s issuance of stock and declaration and payment of dividends during the year ended January 31, 2019. For each
Brandeberry, Inc., has current assets of $240 million; property, plant, and equipment of $390 million; and other assets totaling $130 million. Current liabilities are $100 million, and long-term liabilities total $360 million.Requirements1. Use these data to write Brandeberry’s accounting
Compute 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. Liabilities Stockholders' Equity Assets $35 23 Water Street Bank Pufferbelly Restaurant Blake Gift Shop $43 30 34
During 2018, Edwin Company earned revenues of $150 million. Edwin incurred, during that same year, salary expense of $34 million, rent expense of $23 million, and utilities expense of $16 million. Edwin declared and paid dividends of $16 million during the year. At December 31, 2018, Edwin had cash
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