Questions and Answers of Fundamental Accounting Principles 25th

Doctors Mobey, Oak, and Chegg have been in a group practice for several years. Mobey and Oak are family practice physicians, and Chegg is a general surgeon. Chegg receives many referrals for surgery
At the start of 2022, Santana Rey is considering adding a partner to her business. She envisions the new partner taking the lead in generating sales of both services and merchandise for Business
Ries, Bax, and Thomas invested $80,000, $112,000, and $128,000, respectively, in a partnership. During its first calendar year, the firm earned $249,000.RequiredPrepare the entry to close the
Albin, Peters, and Ramsey invested $164,000, $98,400, and $65,600, respectively, in a partnership. During its first calendar year, the firm earned $270,000.RequiredPrepare the entry to close the
Review Samsung’s 1938 to 1970 history at en.wikipedia.org/wiki/Samsung.1. Byung-Chull Lee, the founder, organized/started the company in what year? What was the original name?2. What was the
Anty and Jin form an LLC. Jin invests $3,000 cash, equipment with a market value of $6,000, and land with a market value of $40,000. Prepare the LLC’s journal entry to record Jin’s investment.
Part 1. Gibbs, Hook, and Chan are partners and share income and loss in a 5:1:4 ratio (in percents: Gibbs, 50%; Hook, 10%; and Chan, 40%). The partnership’s capital balances are as follows: Gibbs,
Lopez and Gomez are members in an LLC that reports net income of $130,000. An agreement states that Lopez receives a $20,000 salary allowance and Gomez receives a $50,000 salary allowance. Any
Pena LLC has two members, Sophia and Maria, who share net income and loss equally. Total equity of the business is $100,000, which is made up of Sophia, Member Equity, of $60,000, and Maria, Member
Camila, Dani, and Olivia are members of an LLC and share net income and loss equally. Olivia withdraws from the business when equity for each member is Camila, $18,000; Dani, $5,000; and Olivia,
Field, Brown & Snow are partners and share income and losses equally. The partners decide to liquidate the partnership when their capital balances are as follows: Field, $131,250; Brown,
General Ledger (GL) Assignments expose students to general ledger software similar to that in practice. GL is part of Connect, and GL assignments are auto-gradable and have algorithmic options.GL
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 28, 2019, and(b) September 29,
Use the following comparative figures for Apple and Google.Required1. Compute the basic EPS for each company using these data.2. Compute the dividend yield for each company using these data.3.
Prepare journal entries to record each of the following four separate issuances of stock.1. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash.2. A corporation issued
The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow.The following transactions and events affected its equity during the year.Jan.
Analyze each transaction from Exercise 13-4 by showing its effect on the accounting equation— specifically, identify the accounts and amounts (including + or −) for each transaction.Data From
Raphael Corporation’s balance sheet shows the following stockholders’ equity section.Required1. Determine the par values of the corporation’s preferred stock and its common stock.2. If two
Soltech Company’s balance sheet shows the following stockholders’ equity section.Required1. Determine the par values of the corporation’s preferred stock and its common stock.2. If two years’
Assume that Eventbrite decides to launch a new website to market discount bookkeeping services to consumers. This chain, named Aladin, requires $500,000 of start-up capital. The founder contributes
Refer to the information in Exercise 13-8. Assume that instead of distributing a stock dividend, Sharper did a 3-for-1 stock split. After the split, (1) Prepare the updated stockholders’
For each of the following statements regarding dividends, indicate whether it is true or false.1. Cash and stock dividends reduce retained earnings.2. Dividends payable is recorded at the time a cash
The stockholders’ equity section of TVX Company on February 4 follows.On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of
Refer to the bond details in Problem 14-4B.Required1. Prepare the January 1 journal entry to record the bonds’ issuance.2. Determine the total bond interest expense to be recognized over the
Refer to the bond details in Problem 14-3B.Required1. Compute the total bond interest expense over the bonds’ life.2. Prepare an effective interest amortization table like the one in Exhibit 14B.2
The following six-column table for Solutions Co. includes the unadjusted trial balance as of December 31.Required1. Complete the six-column table by entering adjustments that reflect the following
General Ledger (GL) Assignments For the following GL assignments, prepare journal entries highlighting the operating cycle of a merchandising company. A trial balance is automatically generated based
Rayya Co. purchases a machine for $105,000 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on
Refer to QS 10-7 and record the journal entries for equipment depreciation for the first year under straightline, units-of-production, and double-declining-balance.Data From QS 10-7Equipment costing
Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table contains the company’s unadjusted trial balance
Mo, Lu, and Barb formed the MLB Partnership by making investments of $67,500, $262,500, and $420,000, respectively. They predict annual partnership net income of $450,000 and are considering the
At December 31, the end of Chilton Communication’s third quarter, the following stockholders’ equity accounts are reported.In the fourth quarter, the following entries related to its equity are
Refer to the information in Problem 16-1A.RequiredPrepare the operating activities section of the statement of cash flows using the direct method for the current year.Data From Problem 16-1ALansing
Key figures for Apple and Google follow.Required1. Compute the recent two years’ cash flow on total assets ratios for Apple and Google.2. For the current year, which company has the better cash
Forten Company’s current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) All sales are credit sales, (2) All credits to Accounts
Gazelle Corporation’s current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) All sales are credit sales, (2) All credits to
Key comparative information for Samsung, Apple, and Google follows.Required1. Compute the recent two years’ cash flow on total assets ratio for Samsung.2. Is the change in Samsung’s cash flow on
Refer to the information reported about Forten Company in Problem 16-3A.RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 16A.1 using the indirect method. Identify
Review the chapter’s opener involving Vera Bradley and its founder, Barbara Bradley.Required1. In a business such as Vera Bradley, monitoring cash flow is always a priority. Explain how cash flow
Golden Corp.’s current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) All sales are credit sales, (2) All credits to Accounts
Satu Company’s current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) All sales are credit sales, (2) All credits to Accounts
Prepare the operating activities section of the statement of cash flows for GreenGarden using the indirect method. Annual Income Statement Data Selected Year-End Balance Sheet Data Sales $50,000
Refer to the information reported about Golden Corporation in Problem 16-6A.RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 16A.1 under the indirect method.
Cain Co. reports net cash provided by operating activities of $30,000. It also reports the following information under “Adjustments to reconcile net income to net cash provided by operating
Refer to the balance sheet data in QS 16-10 from Anders Company. During 2021, a building with a book value of $70,000 and an original cost of $300,000 was sold at a gain of $60,000. 1. How much
The following financial statements and additional information are reported. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (2) Compute the
Use the following information to prepare a statement of cash flows for the current year using the indirect method. MONTGOMERY INC. Comparative Balance Sheets At December 31 Current Year Prior Year
Use the following Cash account to determine (a) cash flows used by investing activities and (b) cash flows provided by financing activities. Cash Balance, Dec. 31, prior year Receipts from
Refer to the data in QS 16-7. 1. Assume that all common stock is issued for cash. What amount of cash dividends is paid during 2021? 2. Assume that no additional notes payable are issued in
Indicate where each item would appear on a statement of cash flows using the direct method by placing an x in the appropriate column. Noncash Not Statement of Cash Flows Investing and Financing
Use the following information for VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method. Cash balance at prior year-end... Increase in inventory....
Financial data from three competitors in the same industry follow.1. Rank the three companies from high to low on cash from operating activities.2. Which company has the largest cash outflow for
Refer to the information in Exercise 16-12. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021.Data From Exercise 16-12The following financial statements
Refer to information in Exercise 16-4. Use the direct method to prepare the operating activities section of Sonad’s statement of cash flows.Data From Exercise 16-4Using the following income
BTN Inc. reports operating expenses of $27,000. Its comparative balance sheet shows that accrued liabilities decreased $6,000 and prepaid expenses increased $2,000. Compute cash used in operating
Russell Co. reports sales revenue of $30,000 and interest revenue of $5,000. Its comparative balance sheet shows that accounts receivable decreased $4,000 and interest receivable increased $1,000.
Refer to the data in QS 16-7.1. How much cash is received from sales to customers for year 2021?2. What is the net increase or decrease in the Cash account for year 2021?Data From QS 16-7RequiredUse
Selected comparative financial statements of Tripoly Company follow.Required1. Compute trend percents for all components of both statements using 2015 as the base year. Round percents to one
Use the following selected data from Business Solutions’s income statement for the three months ended March 31, 2022, and from its March 31, 2022, balance sheet to complete the
Use Apple’s financial statements in Appendix A to answer the following.1. Using fiscal 2017 as the base year, compute trend percents for fiscal years 2017, 2018, and 2019 for total net sales, total
As Beacon Company controller, you are responsible for informing the board of directors about its financial activities. At the board meeting, you present the following information.After the meeting,
Identify which standard of comparison, (a) Intracompany, (b) Competitor, (c) Industry, or (d) Guidelines, best describes each of the following examples.1. Compare Ford’s return
Selected comparative financial statements of Korbin Company follow.Required1. Compute each year’s current ratio. Round ratios to one decimal.2. Express the income statement data in common-size
Selected comparative financial statement information of Bluegrass Corporation follows.Required1. Compute each year’s current ratio. Round ratios to one decimal.2. Express the income statement data
Key figures for Apple and Google follow.Required1. Compute common-size percents for each company using the data given. Round percents to one decimal.2. If Google paid a dividend, would retained
Each team is to select a different industry, and each team member is to select a different company in that industry and acquire its financial statements. Use those statements to analyze the company,
Compute trend percents for the following accounts using 2017 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favorable or
Key figures for Samsung follow (in $ millions).Required1. Compute common-size percents for Samsung using the data given. Round percents to one decimal.2. What is Samsung’s gross margin ratio on
Access the February 22, 2019, filing of the December 31, 2018, 10-K report of The Hershey Company (ticker: HSY) at SEC.gov and complete the following requirements.RequiredCompute or identify the
Compute the annual dollar changes and percent changes for each of the following items. Current Yr Prior Yr Cash $ 7,440 $ 8,000 Accounts receivable 54,000 18,000 Equipment, net 44,000 40,000 Land
Assume that Carla Harris of Morgan Stanley (MorganStanley.com) has impressed you with the company’s success and its commitment to ethical behavior. You learn of a staff opening at Morgan Stanley
Express the items from QS 17-5 in common-size percents.Data From QS 17-5Compute the annual dollar changes and percent changes for each of the following items. Current Yr Prior Yr Cash $ 7,440 $ 8,000
Simon Company’s year-end balance sheets follow. (1) Express the balance sheets in common-size percents. Round percents to one decimal. (2) Assuming annual sales have not changed in the
Use the following information to determine the prior year and current year trend percents for net sales using the prior year as the base year. $ thousands Current Yr Prior Yr Net sales.... $801,810
Refer to the data in QS 16-7.1. How much cash is paid to acquire inventory during year 2021?2. How much cash is paid for operating expenses (excluding depreciation) during year 2021? Data From
Identify whether each of the following items is included as part of general-purpose financial statements.a. Income statement b. Balance sheetc. Shareholders’ meetingsd. Financial statement
Refer to the information in QS 17-7. Determine the prior year and current year common-size percents for cost of goods sold using net sales as the base.Data From QS 17-7Use the following information
On January 1, 2021, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal payments of $50,091 each year on December
Brian, Joe, and Nate are the founders of Airbnb. Assume that the company currently has $250,000 in equity and is considering a $100,000 expansion to meet increased demand. The $100,000 expansion
Gomez issues $240,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $198,494 when the market rate is 8%.Required 1.
Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%.Required1.
Tano Company issues bonds with a par value of $180,000 on January 1, 2021. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in
Break into teams and complete the following requirements related to effective interest amortization for a premium bond. 1. Each team member is to independently prepare a blank table with proper
Selected results from Samsung, Apple, and Google follow.Required 1. Compute Samsung’s debt-to-equity ratio for the current year and the prior year. 2. Is Samsung’s financing structure
Ripkin Company issues 9%, five-year bonds dated January 1, 2021, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market
Key figures for Apple and Google follow.Required 1. Compute the debt-to-equity ratios for Apple and Google for both the current year and the prior year. 2. Use the ratios from part 1 to
Brussels Enterprises issues bonds at par dated January 1, 2021, that have a $3,400,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31.1. Record the entry
Use Apple’s financial statements in Appendix A to answer the following. Apple’s long- term debt is called “Term debt” under non-current liabilities. 1. Identify Apple’s long-term
SP 14 Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2022, for
Romero issues $3,400,000 of 10%, 10-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000.Required 1. Prepare
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448.Required1. Prepare the
Green Foods currently has $200,000 of equity and is planning an $80,000 expansion to meet increasing demand for its product. The company currently earns $50,000 in net income, and the expansion will
Prepare a statement of stockholders’ equity for Hulu Inc. for the year ended December 31 using the following data.. Beginning balances of $300 for Common Stock, $9,700 for Paid-In Capital in Excess
On December 31, Westworld Inc. has the following equity accounts and balances. Prepare the stockholders’ equity section of Westworld’s balance sheet. Preferred Stock ..... $7,000 Retained
Ali Co. uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Prepare a cash receipts journal like the one in Exhibit 7.7. Journalize the
Key figures for Samsung and Google follow.Required 1. Compute Samsung’s days’ payable outstanding for the most recent two years. 2. Assuming Samsung is not at risk of damaging its
Each member of the team is to assume responsibility for one of the following tasks. a. Journalizing in the purchases journal. b. Journalizing in the cash payments journal. c.
Refer to Exercise 7-3 and for each of the transactions identify the journal in which it would be recorded. Assume the company uses a sales journal, purchases journal, cash receipts journal, cash
Caesar Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Prepare a sales journal like the one in Exhibit 7.5. Journalize the

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