Questions and Answers of Fundamental Accounting Principles 25th

A Catering Company had a deluxe, portable barbecue with a book value of $7,000 at its December 31, 2016, year-end. The barbecue had an estimated remaining useful life of five years and a $200
On January 2, 2017, Crossfire acquired sound equipment for concert performances at a cost of $55,900. The rock band estimated that it would use this equipment for four years, and then sell the
Dean Carpet Stores owned an automobile with a $15,000 cost that had $13,500 accumulated depreciation as of December 31, 2017. Its fair value on this date was $3,000. On the same day, Dean exchanged
On April 3, 2017, David’s Chocolates purchased a machine for $71,200. It was assumed that the machine would have a five-year life and a $15,200 trade-in value. Early in January 2020, it was
On March 1, 2017, Wallace Company purchased a new machine with a suggested retail price of $123,000. The new machine was to replace an old machine that originally cost $90,000 and had $36,000 of
At its December 31, 2016, year-end, Athletic Apparel had a warehouse with an adjusted book value of $292,500 and an estimated remaining useful life of 15 years and residual value of $90,000. Because
On January 1, 2017, Kaldex Company purchased for $35,720 equipment with an estimated useful life of eight years and an estimated residual value at the end of its life of $4,200. Early in January
On January 4, 2017, Amber’s Boutique paid cash of $95,000 for a 10-year franchise. Prepare the entry to record the purchase of the franchise and the adjusting entry at December 31, 2017.
Assume Barrick Gold Corporation purchased mineral rights for a gold mine in Peru on October 1, 2017, by paying cash of $5,000,000 and incurring a non-current note payable for the $30,000,000 balance.
The Jazzy Antiques purchased the copyright on a watercolour painting for $177,480 on January 1, 2017. The copyright legally protects its owner for 19 more years. However, Jazzy plans to market and
On February 1, 2017, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $80,000 cash and Xie econtributed land valued at $120,000 and a small building valued at
Bill Ace and Dennis Bud are partners in an urban restaurant called Salt. Profit for the year ended March 31, 2017, is $120,000.a. How much profit should be allocated to each partner assuming there is
Liam and Katano formed a partnership to open a sushi restaurant by investing $95,000 and $105,000 respectively. They agreed to share profit based on an allocation to Liam of an annual salary
Len Peters and Beau Silver form a partnership to operate a catering business, called A Catered Affair. Peters invests $20,000 cash and Silver invests $30,000 cash on March 1, 2017. Prepare the
Lisa Montgomery and Joel Chalmers established a coffee bean distribution business. Their partnership shared profits and losses based on an agreement that gave Lisa a salary allowance of $45,000 and
Jenn Smith and Mike Yang have a small business consulting partnership. They share profits and losses as detailed in their partnership agreement that gave Jenn a salary allowance of $115,000 and Mike
Ramos and Bailey have a frozen yogurt shop in Victoria, BC. They are equal partners, with $30,000 in each of their partnership capital accounts. Bailey’s sister Kate is admitted to the partnership
Suppose on March 12, 2017, Kate agrees to pay Ramos and Bailey $12,000 each for a one-third interest in the existing Ramos–Bailey partnership. At the time Kate is admitted, each partner has a
Sam, Andrew, and Mary were partners in Gem Skateboard Company. The partners shared profits and losses 3:2:3, respectively. On April 1, 2017, the partnership showed the following account balances just
Linda, Sue, and Darlene are partners in Designs Unlimited. Their capital balances are $150,000, $140,000, and $250,000 respectively on March 15, 2017. They share profit and losses in the ratio of
Oliver, Peter, and Wendell are partners in NewTech Company an R&D firm specializing in cloud storage. Their capital balances are $30,000, $22,000, and $15,000, respectively, on November 23, 2017.
Hector, Wilson, and Stuart are partners in What’s Your Beef?, a local vegan burger chain, with capital balances of $25,000, $40,000, and $35,000, respectively. Based on their partnership agreement,
On April 21, 2017, Wilson agrees to invest $30,000 into Quest, a land development partnership in Niagara-on-the-Lake for a 20% interest in total partnership equity. At the time Wilson is admitted,
Keri & Nick Consulting’s partners’ equity accounts reflected the following balances on August 31, 2017:Lee and Kalpakian share profit/losses in a 2:3 ratio respectively. On September 1, 2017,
On June 17, 2017, Bishop agrees to invest $30,000 into an online custom T-shirt print shop business for a 40% interest in total partnership equity. At the time Bishop is admitted, the existing
Talent, a local HR consulting firm, has total partners’ equity of $760,000, which is made up of Hall, Capital, $600,000, and Reynolds, Capital, $160,000. The partners share profit/(losses) in a
On March 1, 2017, JenStar Hydroponics Inc. issued at par an $80,000, 6%, three-year bond. Interest is to be paid quarterly beginning May 31, 2017. JenStar’s year-end is July 31. A partial payment
Xtra-Gold Corporation had a $1,200,000, 5% bond available for issue on September 1, 2017. Interest is to be paid quarterly beginning November 30. All of the bonds were issued at par on October 1.
On March 1, 2017, VisionTech Inc.’s board of directors declared a 5% share dividend when the market price per share was $10.00. On November 15, 2017, the board of directors declared a 4:1 share
Westby Corp., a high school uniform manufacturer, was authorized to issue an unlimited number of common shares. During January 2017, its first month of operations, the following selected transactions
Vector Gaming Ltd. showed the following equity account balances on December 31, 2017:On January 2, 2018, Vector declared and distributed a 3:1 share split. Prepare a comparative equity section
Liberty Ventures Inc. reported $209,840 profit in 2017 and declared preferred dividends of $34,400. The following changes in common shares outstanding occurred during the year:Calculate the
Peter Puck Inc. showed the following adjusted information on May 31, 2017, its second year-end:a. Prepare the appropriate closing entries.b. Prepare a statement of changes in equity for the year
Bellevue Ltd. reported profit of $860,000 for its year ended December 31, 2017. Calculate earnings per share given the following additional information at December 31, 2017: Preferred shares, $2
Velor Ltd., a patio gas heater company, showed the following adjusted information on August 31, 2017, its second year-end:a. Prepare the appropriate closing entries.b. Prepare a statement of changes
Fierra Sceptre Inc. was authorized to issue 50,000 $1.50 preferred shares and 300,000 common shares. During 2017, its first year of operations, the following selected transactions occurred:Requireda.
Morris Inc. showed the following adjusted information on November 30, 2017, its second year-end:a. Prepare the appropriate closing entries.b. Prepare a statement of changes in equity for the year
The December 31, 2017, equity section of ZoomZoom Inc.’s balance sheet appears below.Required All the shares were issued on January 1, 2015 (when the corporation began operations). No dividends
White Pear Inc., an organic soap manufacturer, showed the following equity information as at December 31, 2017:Other information:a. The preferred shares had sold for an average price of $36.00.b. The
Information taken from Jamestown Corp.’s balance sheet as of April 1, 2017, follows:On April 1, Jamestown declares and distributes a 10% share dividend. The market value of the shares on this date
On March 1, 2017, Jagger Metal Corp. issued 8% bonds dated January 1, 2017. The bonds have a $900,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The
On January 1, 2017, British Software Ltd. issued $450,000 of 20-year, 8% bonds that pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value.a. How
Mainland Resources Inc. began operations on June 5, 2017. Journalize the following equity transactions that occurred during the first month of operations: June July 2017 5 15 16 17 18 30 1 Gave 4,000
Curtis Ltd. issued $100,000 of 8% bonds at face value on October 1, 2017. Interest is paid each March 31 and September 30. If Curtis’s tax rate is 40%, what is the annual after-tax borrowing
Barton Inc. changed the method of calculating depreciation on its equipment from straight-line to doubledeclining- balance during 2017. The cumulative effect of the change is an additional expense of
What is the primary difference between a share and a bond?
Vision HR Consulting began operations on January 1, 2017. Complete the following schedule with journal entries detailing the transactions during 2017 for Vision HR Consulting under two forms of
A $15,000 bond with a contract interest rate of 6% was issued on March 1, 2017. Calculate the cash paid on the first interest payment date if interest is paid:a. Annuallyb. Semiannually c.
On January 1, 2017, Winston Mining Corp. had 580,000 common shares issued and outstanding. On April 30, it issued an additional 220,000 shares and on October 1 it repurchased and cancelled 100,000
Holt Developments Ltd. put an asset in service on January 1, 2015. Its cost was $270,000, its predicted service life was six years, and its expected residual value was $27,000. The company decided to
Outdoor Equipment Inc. had 180,000 common shares issued and outstanding as at December 31, 2017. The shares had been issued for $9.80 each. On September 12, 2018, Outdoor repurchased and retired
On October 3, 2017, Synthetic Inc, a cell-phone protector company issued 4,000 of its preferred shares for cash of $15 each. On November 19 the company issued 3,400 preferred shares in exchange for
Sunray Solar Ltd is a growing company with a hot new marketing plan. On January 1, 2017, it had 127,650 shares outstanding and they issued an additional 44,500 shares during the year. The company
Invisible Marketing Ventures had 186,000 shares outstanding on January 1, 2017, and issued an additional 24,000 shares during the year. The common shareholders’ equity was $5,841,000 at the end of
Fisher Inc. began operations on January 1, 2017. During its first year, $750,000 of common shares were issued and a loss of $28,000 was realized. In 2018, Fisher’s second year of operations, an
Benson Inc. had a credit balance in Retained Earnings on December 31, 2017, of $48,000. During 2018, Benson recorded profit of $146,000 and declared and paid dividends of $47,000. During 2019, the
The equity sections from the 2017 and 2018 balance sheets of Fab-Form Industries Inc. appeared as follows:On March 16, June 15, September 5, and November 22, 2018, the board of directors declared
Mogul Ltd., a ski boot manufacturer, showed the following amounts for its year just ended October 31, 2017. Prepare a multi-step income statement assuming a tax rate of 25%. Cost of goods sold Gain
Assume the same information as in QS 11-14 except that the Equipment was sold for $85,000 on April 1, 2017. Prepare the journal entry to record the final distribution of cash.Data from in QS
Use the following information to prepare a statement of cash flows for the year ended October 31, 2017, using the indirect method. Sugar Bakery Inc. Income Statement For Year Ended October 31,
Use the following information to prepare a statement of cash flows for the year ended March 31, 2017, using the indirect method. Parker Consulting Income Statement For Year Ended March 31,
On October 1, 2017, Best Biopharma Inc. issued a $750,000, 7%, seven-year bond. Interest is to be paid annually each October 1.Requireda. Calculate the issue price of the bond assuming a market
Solar Energy Inc. issued a $900,000, 5%, five-year bond on October 1, 2017. Interest is paid annually each October 1. Solar’s year-end is December 31.Required Using the amortization schedule
The cost and fair value of non-strategic investments of International Journalist Corporation on December 31, 2017, and December 31, 2018, are as follows:Required1. Prepare the fair value adjustment
On January 1, 2017, Nickle Entertainment Inc. purchased a 4%, $50,000 Imax bond for $46,490. Interest is to be paid semiannually each June 30 and December 31. Nickle Inc. is planning to hold the bond
The following information for 2017 is extracted from Hartfield Limited, owner of a retail store:Calculate the cash inflow or outflow from operating activities. Profit ..... Accounts receivable
Wind Industries had selected unadjusted balances as shown below at year-end. A search on the Internet showed fair values on December 31, 2017, of: CashCo, $18; Wells, $0.70. Prepare the appropriate
On January 1, 2017, Gordon Activewear purchased a 12%, $40,000 Telus bond with a three-year term for $42,030. Interest is to be paid semiannually each June 30 and December 31. Gordon is planning to
Henderson Armour Inc. issued a $652,000, 14% 10-year bond on October 1, 2017, for cash of $697,701. Interest is to be paid quarterly. The annual market rate of interest is 12.75%. Assume a year-end
Drum Holdings Inc. collected $737,000 cash from customers during 2017. If beginning accounts receivable were $41,000 and credit sales totalled $705,000, what was the balance in ending accounts
Middleton Supplies Inc. had sales revenue of $805,000 during 2017. Accounts receivable at the beginning of the year were $20,000 but were $24,000 at the end of the year. How much cash was collected
a. Calculate the debt to equity ratio for 2016 and 2017, for the following 3 separate companies.b. Comment on whether the ratio for each has improved or weak-end from a risk perspective. Total Debt
Bonanza Graphics Inc. issued a $200,000, 8%, three-year bond on November 1, 2017, for cash of $194,792. Interest is to be paid quarterly. The annual market rate of interest is 9%. Assume a year-end
In the chapter opening vignette, it was mentioned that Lululemon Athletica had above-industry margins. Why should investors be concerned with gross margins? What information do gross margins provide
On January 2, 2017, Bella Software Corp. paid cash of $1,200,000 to acquire 704,000 of Domino Inc.’s 3,200,000 outstanding common shares. Assume that Bella has significant influence over Domino as
On January 2, 2017, Nassau Travel Corp. paid $500,000 cash to acquire 10,000 of Suffolk Corporation’s 40,000 outstanding common shares. Assume that Nassau has significant influence over Suffolk as
Organic Gardening Ltd. had operating expenses of $968,000 during 2017. Accrued liabilities at the beginning of the year were $27,000, and were $36,000 at the end of the year. Assuming all debits and
On February 1, 2017, Snappy Printing Inc. purchased 4% Telus bonds with a face value of $5,000 at 98 as a non-strategic investment. Interest is paid quarterly beginning May 1, 2017. The bonds mature
Laporte Engineering Company leased a machine on January 1, 2017, under a contract calling for four annual payments of $30,000 on December 31, 2017 through 2020. The machine becomes the property of
SweetFish Corp. issued bonds with a par value of $820,000 and a five-year life on May 1, 2017. The contract interest rate is 7%. The bonds pay interest on October 31 and April 30. They were issued at
On May 2, 2017, Sysco Industries Inc. acquired 1,200 common shares of Computer Web Corp. at $40.50 per share. Sysco’s intent is to sell the shares within eight to ten months. On August 7, Sysco
On January 1, 2017, the Pareto Company borrowed $80,000 in exchange for an interest-bearing note. The note plus interest compounded at an annual rate of 8% is due on December 31, 2019. Calculate the
On January 1, 2017, the $1,000,000 par value bonds of Sinclair Corporation with a carrying value of $950,000 are converted to 500,000 common shares. Journalize the conversion of the bonds.
On July 1, 2017, Lester Shoes Ltd. exercises a $4,000 call option on its outstanding bonds, which have a carrying value of $206,000 and par value of $200,000. Lester exercises the call option
On January 1, 2017, Ultra Vision Corp. issued $1,200,000 of 20-year 8% bonds that pay interest semiannually on June 30 and December 31. Assume the bonds were sold at (1) 98; and (2) 102. Journalize
Huskey Mining Corporation issued bonds with a par value of $90,000 on January 1, 2017. The annual contract rate on the bonds is 8%, and the interest is paid semiannually. The bonds mature after three
Maier Investment Corporation issued $700,000 of 6%, six-year bonds for $735,902 on July 1, 2017, the day the bonds were dated. The market interest rate was 5%. Interest is paid semiannually beginning
Bellevue Marketing Corp. issued $600,000 of 6%, four-year bonds for $579,224 on July 1, 2017, the day the bonds were dated. The market interest rate on this date was 7%. Interest is paid quarterly
On February 1, 2017, Swiss Travel Corp. issued $750,000 of 11%, eight-year bonds. Interest is to be paid quarterly. Calculate the issue price of the bonds if the market interest rate was:a.
On August 1, 2017, Billboard Inc. issued $520,000 of 10%, seven-year bonds. Interest is to be paid semiannually. Calculate the issue price of the bonds if the market interest rate was:a. 12% b.
Purity Vegetable Corp. issued $200,000 of 6% bonds on November 1, 2017, at par value. The bonds were dated October 1, 2017, and pay interest each April 1 and October 1. Record the issue of the bonds
On October 1, 2017, Eastern Timber Inc. has available for issue $840,000 bonds due in four years. Interest at the rate of 4% is to be paid quarterly. Calculate the issue price if the market interest
In each of the following cases, use the information provided about the 2023 operations of Prestige Water Corp. to calculate the indicated cash flow: Case A: Calculate cash received from
Rosetta Inc.’s records contain the following information about the 2023 cash flows.RequiredPrepare a statement of cash flows using the direct method and a note describing non-cash investing and
In each of the following cases, use the information provided about the 2023 operations of River Bungee Inc. to calculate the indicated cash flow: Case A: Calculate cash paid for
Use the following information to prepare a statement of cash flows for the year ended March 31, 2023, using the indirect method.*The change in Equipment was caused by a $20 purchase. **$30 of
The summarized journal entries below show the total debits and credits to the Zebra Corporation’s Cash account during 2023.RequiredUse the information to prepare a statement of cash flows for 2023.
Use the following information to prepare a statement of cash flows for the year ended October 31, 2023, using the indirect method.*$55 of machinery was purchased during 2023; there were no sales of
Refer to Spin Master’s balance sheet shown in Appendix II. First, find the Cash balances on December 31, 2019, and December 31, 2020, and calculate the change in Cash. Next, refer to Spin
Compute trend percents for the following accounts using 2020 as the base year. For each of the three accounts, state whether the situation as revealed by the trend percents appears to be favourable

Showing 200 - 300 of 1250