Questions and Answers of Financial And Managerial Accounting

Genesis Company issued a $40,000, 5%, 10-year bond payable at 90 on January 1, 2025. Interest is paid semiannually on January 1 and July 1. Requirements 1. Journalize the issuance of the
Beck Company issued a $110,000, 6.5%, 15-year bond payable. Journalize the following transactions for Beck Company and include an explanation for each entry: a. Issuance of the bond payable at
Marina Booker is entering high school and is determined to save money for college. Booker feels she can save $6,000 each year for the next four years from her part-time job. If Booker is able to
On January 1, 2025, Kayaking Unlimited issues 9%, 20-year bonds payable with a face value of $200,000. The bonds are issued at 103 and pay interest on June 30 and December
Ochoa Corporation has the following data as of December 31, 2025: Compute the debt to equity ratio at December 31, 2025. Total Current Liabilities Total Current Assets Long-term Liabilities $ 49,020
The accounting records of Shepherd Communications include the following as of December 31, 2025: Requirements1. Report these liabilities on the Shepherd Communications balance sheet, including
Gecko Manufacturing issued 9%, 10-year bonds payable at 85 on December 31, 2025. At December 31, 2027, Gecko Manufacturing reported the bonds payable as follows: Gecko Manufacturing pays
The following transactions of Quality Home Supply occurred during 2025 and 2026: Requirements 1. Journalize the transactions in the Quality Home Supply general journal. Round to the nearest dollar.
The accounting records of Franco Wireless include the following as of December 31, 2025: Requirements 1. Report these liabilities on the Franco Wireless balance sheet, including headings and totals
Taniya, Inc.’s 2025 balance sheet reported the following items—with 2024 figures given for comparison: Net income for 2025 was $3,890. Compute Taniya, Inc.’s rate of return on common
On January 1, 2025, Teachers Credit Union (TCU) issued 7%, 20-year bonds payable with face value of $300,000. The bonds pay interest on June 30 and December 31. Requirements 1. If the
On January 1, 2025, Veterans Credit Union (VCU) issued 5%, 20-year bonds payable with face value of $800,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is
Italian Imports, Inc. recently reported the following stockholders’ equity: Suppose Italian Imports, Inc. split its common stock 2-for-1 in order to decrease the market price per share of its
Office Goods, Inc. completed the following treasury stock transactions in 2025: Requirements 1. Journalize these transactions. Explanations are not required. 2. How will Office Goods, Inc. report
Damaris Co. has the following classes of stock: Requirements 1. Damaris Co. declares cash dividends of $25,000 for 2025. How much of the dividends goes to preferred stockholders? How much goes to
Turtle Co. had beginning retained earnings of $800,000 on January 1, 2025. During the year, Turtle Co. declared and paid $65,000 of cash dividends and earned $240,000 of net income. In addition,
TLM Corporation’s accounting records include the following items, listed in no particular order, at December 31, 2025: The income tax rate for TLM Corporation is 21%. Prepare TLM Corporation’s
The Grove, Inc. issued $300,000 of 11%, 10-year bonds payable on January 1, 2025. The market interest rate at the date of issuance was 10%, and the bonds pay interest
Jack Allen, Inc. is authorized to issue 14%, 10-year bonds payable. On January 1, 2025, when the market interest rate is 16%, the company issues $500,000 of the bonds. The bonds pay interest
On January 1, 2025, Star Credit Union (SCU) issued 6%, 20-year bonds payable with face value of $500,000. The bonds pay interest on June 30 and December 31. Requirements 1. If the market
On January 1, 2025, Yamilet Corporation issued 6%, 20-year bonds payable with face value of $100,000. The bonds pay interest on June 30 and December 31. The issue price of the bonds is
The charter for KCAN-TV, Inc. authorizes the company to issue 100,000 shares of $4, no-par preferred stock and 500,000 shares of common stock with $1 par value. During its start-up phase, KCAN-TV,
Satellite Systems, Inc. completed the following stock issuance transactions: Requirements 1. Journalize the transactions. Explanations are not required. 2. How much paid-in capital did these
Sebastian Corporation had the following stockholders’ equity on November 30: On December 30, Sebastian Corporation purchased 275 shares of treasury stock at $14 per share. Requirements 1.
Arizona Corporation has two classes of stock: common, $2 par value; and preferred, $10 par value. Requirements 1. Journalize Arizona Corporation’s issuance of 2,000 shares of common stock
Damaris Corporation issued 4,000 shares of no-par common stock for $2 per share on January 13. Record the stock issuance.
Dodson Corporation issued 8,000 shares of $2 stated value common stock for $10 per share on July 7. Record the stock issuance.
Poplar Corporation issued 40,000 shares of $3 par value common stock in exchange for a building with a fair value of $180,000. Record the stock issuance.
Brooks Company reported these figures for 2025 and 2024: Requirements 1. Compute Brooks Company’s earnings per share for 2025. Assume the company paid the minimum preferred dividend during 2025.
The charter of Deshaun Corporation authorizes the issuance of 900 shares of preferred stock and 1,250 shares of common stock. During a two-month period, Deshaun Corporation completed these
Semaj, Inc. had beginning retained earnings of $110,000 on January 1, 2025. During the year, Semaj, Inc. declared and paid $80,000 of cash dividends and earned $60,000 of net income. Prepare a
Roth Corporation discovered in 2026 that it had incorrectly recorded in 2025 a cash payment of $50,000 for utilities expense. The correct amount of the utilities expense was
Alexia Corporation had net income for 2025 of $40,000. Alexia Corporation had 13,500 shares of common stock outstanding at the beginning of the year and 14,000 shares of common stock outstanding as
High Intensity Sports, Inc. has 12,000 shares of $2 par value common stock outstanding. High Intensity Sports, Inc. distributes a 5% stock dividend when the market value of its stock is $22 per
Rafael, Inc. had 310,000 shares of $1 par value common stock issued and outstanding as of December 15, 2025. The company is authorized to issue 1,400,000 common shares. On December 15, 2025, Rafael,
Stock transactions for Barker, Inc. follow: Journalize the transactions. Mar. 4 May 22 Sep. 22 Oct. 14 Issued 22,000 shares of $1 par value common stock at $18 per share. Purchased 1,400 shares of
Nature Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2025: Requirements 1. Identify the different classes of stock that Nature Specialists, Inc.
Deepak, Inc. has the following stockholders’ equity on December 31, 2025: Requirements 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and
Complete the following chart by inserting a check mark (U ) for each statement that is true. Decreases retained earnings Has no effect on a liability Increases paid-in capital by the same amount
Kwinten Corp. had the following stockholders’ equity at December 31, 2024:On June 30, 2025, Kwinten Corp. split its common stock 2-for-1. Prepare the stockholders’ equity section of the balance
The stockholders’ equity of Mountainside Occupational Therapy, Inc. on December 31, 2024, follows: On April 30, 2025, the market price of Mountainside Occupational Therapy, Inc.’s common stock
The following elements of stockholders’ equity are from the balance sheet of Holli Marketing Corp. at December 31, 2024: Holli Marketing Corp. paid no preferred dividends in
The balance sheet of Zheng Management Consulting, Inc. at December 31, 2024, reported the following stockholders’ equity .During 2025, Zheng Management Consulting, Inc. completed the following
Alford Manufacturing Co. completed the following transactions during 2025: Requirements 1. Record the transactions in Alford Manufacturing Co.’s general journal. 2. Prepare the Alford
Rusek Corp. earned net income of $118,000 and paid the minimum dividend to preferred stockholders for 2025. Assume that there are no changes in common shares outstanding during 2025. Rusek Corp.’s
Isbell, Inc.’s accounting records include the following for 2025: Assume Isbell, Inc.’s income tax rate is 21%. Prepare Isbell, Inc.’s multi-step income statement for the year ending December
The following information was taken from the records of Peña Motorsports, Inc. at November 30, 2025: Prepare a multi-step income statement for Peña Motorsports, Inc. for the fiscal year ended
Wilson Exploration Company reported these figures for 2025 and 2024: Compute rate of return on common stockholders’ equity for 2025 assuming no dividends were declared or paid to preferred
The charter for Jade, Inc. authorizes the company to issue 500,000 shares of common stock with $1 par value. During its start-up phase, Jade, Inc. completed the following
Amsterdam Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a fair value of $56,000. In addition, Amsterdam Corporation received cash for
Estes Corp. issued 4,000 shares of no-par common stock for $9 per share. Requirements 1. Record issuance of the stock if the stock: a. Is true no-par stock. b. Has a stated value
Rowena Media Corporation had the following income statement and balance sheet for 2025: Requirements 1. Compute the acquisition of plant assets for Rowena Media Corporation during 2025. The
Alonso Equipment, Inc. reported the following financial statements for 2025: Requirements 1. Compute the amount of Alonso Equipment, Inc.’s acquisition of plant assets. Assume the acquisition was
Fuchsia Toy Company reported the following comparative balance sheet: Requirements1. Compute the collections from customers during 2025 for Fuchsia Toy Company. Net Sales Revenue totaled
The income statement and additional data of Dedicated Corporation follow: a. Collections from customers are $15,500 more than sales. b. Dividend revenue, interest expense, and income tax expense
The income statement of Detta Plus, Inc. follows: Additional data follow: a. Acquisition of plant assets is $119,000. Of this amount, $100,000 is paid in cash and $19,000 by signing a note
The balance sheet of Stapleton Management Consulting, Inc. at December 31, 2024, reported the following stockholders’ equity: During 2025, Stapleton Management Consulting, Inc. completed the
The following information was taken from the records of Jeanie Motorsports, Inc. at November 30, 2025: Prepare a multi-step income statement for Jeanie Motorsports, Inc. for the fiscal year ended
The accounting records of Vinyl Sales, Inc. include the following accounts: Compute Vinyl Sales, Inc.’s net cash provided by (used for) operating activities during July 2025. Use the indirect
Aragorn Company reported these figures for 2025 and 2024:Requirements 1. Compute Aragorn Company’s earnings per share for 2025. Assume the company paid the minimum preferred dividend during 2025.
The records of Morton’s Color Engraving reveal the following: Compute cash flows from operating activities by the indirect method for year ended December 31, 2025. Net income Net sales
Morehead, Inc. is authorized to issue 200,000 shares of $1 par common stock. The company issued 77,000 shares at $3 per share. When the market price of common stock was $5 per share, Morehead, Inc.
Satchell Manufacturing Co. completed the following transactions during 2025: Requirements 1. Record the transactions in Satchell Manufacturing Co.’s general journal. 2. Prepare the Satchell
Teakell, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2025: Requirements 1. Identify the different classes of stock that Teakell, Inc. has outstanding. 2.
Bethney’s Learning Center has assembled the following data for the year ended June 30, 2025:Prepare the operating activities section of the business’ statement of cash flows for the year ended
Northeast Wireless, Inc. needed additional capital to expand, so the business incorporated. The charter from the state of Vermont authorizes Northeast Wireless, Inc. to issue 40,000 shares of 10%,
Connect Cellular accountants have assembled the following data for the year ended April 30, 2025: Prepare the operating activities section using the indirect method for Connect Cellular’s
Abraar and Nicholas are opening a furniture store. There are no competing furniture stores in the area. They must decide how to organize the business. They anticipate profits of $350,000 the first
Sweet Stuff Bakery, Inc. reported a prior-period adjustment in 2025. An accounting error caused net income of prior years to be overstated by $10,000. Retained Earnings at December 31, 2024, as
Levesque, Inc. had 45,000 shares of common stock and 6,000 shares of 15%, $25 par value preferred stock outstanding through December 31, 2025. Income from continuing operations for 2025 was $693,000,
JAK Equipment, Inc. reported the following data for 2025: Compute JAK Equipment, Inc.’s net cash provided by operating activities—indirect method. Income Statement: Net Income Depreciation
The 2025 income statement and comparative balance sheet of Majestic Mountains, Inc. follow: Additionally, Majestic Mountains, Inc. purchased land of $23,600 by financing it 100% with long-term notes
Mudd Vehicles, Inc. identified the following selected transactions that occurred during the year ended December 31, 2025: a. Issued 1,250 shares of $2 par common stock for cash of
Nana Henrietta Company expects the following for 2025: • Net cash provided by operating activities of $158,000. • Net cash provided by financing activities of $60,000. • Net cash
Mint, Inc. began 2025 with cash of $53,000. During the year, Mint, Inc. earned revenue of $597,000 and collected $621,000 from customers. Expenses for the year totaled $437,000, of which Mint, Inc.
Jerry’s Wedding Shops earned net income of $22,000, which included depreciation of $16,000. Jerry’s Wedding Shops acquired a $119,000 building by borrowing $119,000 on a long-term note
Rebeccanne, Inc. has assembled the following data for the year ended December 31, 2025: Prepare Rebeccanne, Inc.’s statement of cash flows using the indirect method. Include an accompanying
The comparative balance sheet of Melchor Educational Supply at December 31, 2025, reported the following:Melchor Educational Supply’s transactions during 2025 included the
The 2025 income statement and comparative balance sheet of Jayceon, Inc. follow: Additionally, Jayceon, Inc. purchased land of $24,500 by financing it 100% with longterm notes payable during 2025.
Cozy Mobile Homes reported the following in its financial statements for the year ended December 31, 2025: Requirements 1. Compute the collections from customers. 2. Compute payments for
The comparative balance sheet of Blessing Educational Supply at December 31, 2025, reported the following: Blessing Educational Supply’s transactions during 2025 included the
Tissier Rare Collectibles (TRC) was formed on January 1, 2025. Additional data for the year follows: a. On January 1, 2025, TRC issued common stock for $400,000. b. Early in January, TRC
Hodges Rare Collectibles (HRC) was formed on January 1, 2025. Additional data for the year follows: a. On January 1, 2025, HRC issued common stock for $425,000. b. Early in January, HRC made the
Bautista, Inc.’s 2025 financial statements reported the following items—with 2024 figures given for comparison: Net income for 2025 was $3,890, and interest expense was $210. Compute Bautista,
Peach Haven has excess cash of $25,000 at the end of the harvesting season. Peach Haven will need this cash in four months for normal operations.Requirements 1. What are some reasons why Peach
On January 1, 2025, Homer’s Restaurant decides to invest in Lake Como bonds. The bonds mature on December 31, 2030, and pay interest on June 30 and December 31 at 6% annually. The market rate of
On January 1, 2025, Beetle Company invests $15,000 in Reggae, Inc. stock. Reggae, Inc. pays Beetle Company a $500 dividend on August 1, 2025. Beetle Company sells the Reggae, Inc.’s stock on August
On January 1, 2025, Badri, Inc. decides to invest in 10,000 shares of Fanish stock when the stock is selling for $15 per share. On August 1, 2025, Fanish paid a $0.50 per share cash dividend to
On July 5, Washington Company recorded sales of merchandise inventory on account, $20,000. The sales were subject to sales tax of 6%. On August 15, Washington Company paid the sales tax owed to the
On December 31, 2024, Abba Company purchased $10,000 of merchandise inventory on a one-year, 10% note payable. Abba Company uses a perpetual inventory system. Requirements 1. Journalize the
On January 1, Petrov Company purchased equipment of $100,000 with a long-term note payable. The debt is payable in annual installments of $20,000 due on December 31 of each year. At the date of
On February 1, 2025, Snowflake Co. decides to invest excess cash of $20,000 by purchasing a Rainbow, Inc. bond at face value. At year-end, December 31, 2025, the fair value of the Rainbow, Inc. bond
On June 1, 2025, Caleb’s Restaurant decides to invest excess cash of $50,000 from the tourist season by purchasing a UAE, Inc. bond at face value. At year-end, December 31, 2025, UAE, Inc.’s bond
Ababuo & Co. owns vast amounts of corporate bonds. Suppose Ababuo & Co. buys $900,000 of FelixCo bonds at face value on January 2, 2025. The FelixCo bonds pay interest at the annual rate of
On June 1, Stitch Clothes collected cash of $80,000 on future annual subscriptions for a clothing subscription plan starting on July 1.Requirements 1. Journalize the transaction to record the
Hufflepuff purchased a bond on January 1, 2025, for $100,000. The bond has a face value of $100,000 and matures in 10 years. The bond pays interest on June 30 and December 31 at a 4% annual rate.
Lakeisha McKinney works at College of Seattle and is paid $20 per hour for a 40-hour workweek and time-and-a-half for hours above 40. Requirements 1. Compute McKinney’s gross pay for
River Company had the following partially completed payroll register: Requirements 1. Complete the payroll register. Round to two decimals. 2. Journalize River Company’s salaries and wages
Alamos Electronics reported the following amounts on its 2025 income statement: What is Alamos Electronics’ times-interest-earned ratio for 2025? (Round to two decimals.) Year Ended December 31,
Team Gaming completed the following transactions during 2025: Journalize the transactions (explanations are not required). Round to the nearest dollar. Oct. 1 Nov. 15 Dec. 31 Sold a six-month

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