Questions and Answers of Fundamental Accounting Principles 25th

On September 5, 2023, Nelson Lumber purchased timber rights in Northern Quebec for $432,000, paying $96,000 cash and the balance by issuing a non-current note. Logging the area is expected to take
Jazzy Antiques purchased the copyright on a water colour painting for $177,480 on January 1, 2023. The copyright legally protects its owner for 19 more years. However, Jazzy plans to market and sell
Oki Company pays $264,000 for equipment expected to last four years and have a $29,000 salvage value. Prepare journal entries to record the following costs related to the equipment.1. Paid $22,000
Ocean Fishers Ltd. had a 22-foot fishing boat with an inboard motor that was purchased on April 9, 2015, for $77,000. The PPE subledger shows the following information regarding the boat:On June 27,
Macho Taco sold a food truck on March 1, 2023. The accounts showed adjusted balances on February 28, 2023, as follows:RequiredRecord the sale of the food truck assuming the cash proceeds were:a.
On October 6, 2023, Western Farms Co. traded in an old tractor for a new one, receiving a $68,000 trade-in allowance and paying the remaining $170,000 in cash. The old tractor cost $202,000, and
On January 2, 2023, Direct Shoes Inc. disposed of a machine that cost $96,000 and had been depreciated $50,450. Present the journal entries to record the disposal under each of the following
Candy Craze purchased and installed a machine on January 1, 2023, at a total cost of $296,800. Straight-line depreciation was taken each year for four years, based on the assumption of a seven-year
On January 4, 2023, 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, 2023.
Kane Biotech was preparing the annual financial statements and, as part of the year-end procedures, assessed the assets and prepared the following alphabetized schedule based on adjusted values at
Nova Scotia Telecom Company had a truck that was purchased on July 7, 2021, for $36,000. The PPE subledger shows the following information regarding the truck:A customized tool carrier was
Montalvo Bionics showed the following alphabetized unadjusted trial balance at April 30, 2023:Other information:1. All accounts have normal balances.2. The furniture was depreciated using the
Huang Hardware Inc. had the following transactions involving non-strategic investments during 2023:Required1. Prepare an amortization schedule for the Barker bond showing only 2023 and 2024.2.
Delta Corporation showed the following adjusted trial balance at its year-end, December 31, 2023:1Assume all balances are normal. 2Delta owns 36% of the outstanding shares of Tildon Inc. and is a
On January 1, 2023, Holiday Resorts Ltd. purchased 30% of Chapman Ltd.’s outstanding common shares. The balance in Holiday Ltd.’s Investment in Associate—Chapman Ltd. account was $500,000 as of
Irving Inc.’s non-strategic investment portfolio at December 31, 2022, consisted of the following:*The fair value adjustments were recorded on December 31, 2022.Irving Inc. had no debt and equity
Dynamic Express Inc. prepared the summary shown below regarding its investments on December 31, 2023, its year-end. Prepare the appropriate entry on December 31, 2023, to record the fair value
Pacific Fishing Inc.’s actively traded non-strategic investments as of December 31, 2023, are as follows:Pacific Fishing Inc. had no investments prior to 2023.Required1. Prepare the fair value
Canadian Tire, a major Canadian retailer, reported the following in its December 30, 2020, financial statements:No other investments were reported.Required1. On which financial statement would the
Wind Industries had selected unadjusted balances as shown below at year end. A search on the Internet showed fair values on December 31, 2023, of CashCo, $18; Wells, $0.70. Prepare the appropriate
On May 2, 2023, Systematic Industries Inc. acquired 1,200 common shares of Computer Gaming Corp. at $40.50 per share (including a transaction fee of $50). Systematic’s intent is to sell the shares
The cost and fair value of non-strategic investments of International Journalist Corporation on December 31, 2023, and December 31, 2024, are as follows:Required1. Prepare the fair value adjustment
Monkey Mortgage Inc. engaged in the following non-strategic investment transactions during 2023, all with intent to hold to maturity:Required1. Prepare an amortization schedule for the Jaguar bond
On January 1, 2023, Swift Current Corporation paid $2,540,240 to acquire bonds of Jasper Investment Corp with a par value of $2,520,000. The annual contract rate on the bonds is 7% and interest is
On January 1, 2023, White River Corporation paid $2,499,757 to acquire bonds of Precision Investment Corp with a par value of $2,480,000. The annual contract rate on the bonds is 7.5% and interest is
On January 1, 2023, Liu Corporation paid $241,960 to acquire bonds of Singh Investment Corp with a par value of $240,000. The annual contract rate on the bonds is 6% and interest is paid semiannually
On April 1, 2023, Joe Lite Corporation paid $851,560 to acquire bonds of Santos Electric Inc. with a par value of $860,000. The annual contract rate on the bonds is 6.5% and interest is paid
On January 1, 2023, Gordon Activewear purchased a 12%, $40,000 Telus bond with a three-year term for $42,030 (including transaction fees of $50). Interest is to be paid semiannually each June 30 and
Heritage Ltd. was organized on January 2, 2023. The following investment transactions and events occurred during the following months:Assume that Heritage has a significant influence over Port with
Refer to the information in QS 15-9. Show how the investment will be presented on the December 31, 2023, balance sheet, assuming the carrying value reflected the fair value.Data From QS 15-9On
On January 1, 2023, Nickle Entertainment Inc. purchased a 4%, $50,000 Imax bond for $46,490 (including transaction fees of $50). Interest is to be paid semiannually each June 30 and December 31.
On February 1, 2023, Snappy Printing Inc. purchased 4% Telus bonds with a face value of $5,000 for $4,900 (including transaction fees of $50) as a non-strategic investment. Interest is paid quarterly
On January 2, 2023, Nassau Travel Corp. paid $500,000 cash (including transaction fees of $50) to acquire 10,000 of Suffolk Corporation’s 40,000 outstanding common shares. Assume that Nassau has
On January 2, 2023, Bella Software Corp. paid cash of $1,200,000 (including transaction fees of $50) to acquire 704,000 of Domino Inc.’s 3,200,000 outstanding common shares. Assume that Bella has
Johnson Inc.’s non-strategic investment portfolio at December 31, 2022, consisted of the following:*The fair value adjustments were recorded on December 31, 2022.Johnson had no other debt and
A manufacturing company reports the following information.Required1. Compute raw materials inventory turnover for the most recent two years. 2. Is the current year change in raw materials
This chapter’s opener featured Suzy Batlle and her company Azucar Ice Cream Company.Required1. Suzy tries to buy raw materials just-in-time for their use in production. How does holding raw
National Motors Company advertised three alternatives for a 25-month lease on a new Tahoe: (1) Zero dollars down and a lease payment of $1,750 per month for 25 months, (2) $5,000 down and
Compute the selling price of 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments.The annual market rate for these bonds is 8%. Use present value tables B.1 and B.3 in
Ike issues $180,000 of 11%, three-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $184,566 when the market rate is 10%.Required1.
Compute the selling price of 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments.The annual market rate for these bonds is 10%. Use present value tables B.1 and B.3 in
Santana Rey created Business Solutions on October 1, 2021. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is
A manufacturing company reports the following information.Required 1. Compute raw materials inventory turnover for the most recent two years. 2. Is the current year change in raw materials
Refer to information in Exercises 19-6 and 19-7. Set up T-accounts for each of the following accounts, each of which started the month with a zero balance: Raw Materials Inventory, Work in Process
Zia Co. makes flowerpots from recycled plastic in two departments, Molding and Packaging. Zia uses the weighted average method, and units completed in the Molding department are transferred to the
Use information in Exercise 19-12 to prepare journal entries for the following events for the period.1. Raw materials purchases for cash.2. Direct materials used.3. Indirect materials used.Data From
Use information in Exercise 19-12 to prepare journal entries for the following events for the period.1. Direct labor used (recorded as factory wages payable).2. Indirect labor used (recorded as
Tasty Bakery applies overhead based on direct labor costs. The company reports the following costs for the year: Direct materials, $650,000; Direct labor, $3,000,000; Overhead applied,
Based on customer interest in February, Santana expands her computer workstation furniture business to include mass production of standardized desks and chairs. She uses the weighted average method
Apple allows customers to select different cases for the watches it produces and sells. Assume the following data for the newest Apple Watch.1. Compute cost per unit for an Apple watch with either
Google’s Fitbit division makes fitness trackers. Assume the following data from Google.1. Compute cost per unit for (a) A noncustom (standard) fitness tracker and (b) A custom tracker
Switch Co. manufactures a single product in two departments: Cutting and Assembly. Information for the Cutting process for January follows.Required1. Prepare the Cutting department’s production
Apple and Samsung make smartwatches. Assume the following data for each company for a recent week.1. Compute yield for the current week for both Apple and Samsung. Which company’s process
Refer to the data in Problem 20-3A. Assume that Tamar uses the FIFO method of process costing. The units started and completed for May total 19,200.Required1. Prepare the Forming department’s
Refer to the information in Problem 20-3B. Assume that Switch uses the FIFO method of process costing. The units started and completed for January total 210,000.Required1. Prepare the Cutting
Prepare a physical unit flow reconciliation with the following information. Blending Process Units of Product Beginning work in process inventory 150,000 .... Units started this period.... 310,000
Ho Chee makes ice cream in two sequential processes: Mixing and Blending. Direct materials enter production at the beginning of each process. The following information is available regarding its
Refer to the information in Exercise 20-4 and compute the department’s equivalent units of production for direct materials for each of the three separate assumptions a, b, and c using the FIFO
QualCo manufactures a single product in two departments: Cutting and Assembly. Information for the Cutting department for May follows.1. Compute equivalent units of production for both direct
Harson Co. manufactures a single product in two departments: Forming and Assembly. Information for the Forming department for May follows.1. Compute equivalent units of production for both direct
Refer to the information in QS 20-5. (a) Compute the number of units started and completed this period.(b) Compute the total equivalent units of production for conversion. The company uses the
A production department reports the following conversion costs. Equivalent units of production for conversion total 450,000 units this period. Calculate the cost per equivalent unit of production for
Refer to the information in Exercise 20-6. Assume that Fields uses the FIFO method of process costing.a. Calculate the number of units started and completed this period for the Forming department.b.
An ice cream maker reports the following. Compute the total equivalent units of production for conversion. The company uses the weighted average method. Conversion Units Percent Complete Beginning
The first production department of Stone Inc. reports the following for April. Compute the number of equivalent units of production for both direct materials and conversion for April using the
Refer to the information in QS 20-8. (a) Compute the number of units started and completed this period.(b) Compute the total equivalent units of production for conversion. The company uses the
Refer to the information in Exercise 20-8. (a) Compute the number of units started and completed this period for the first production department. (b) Compute the number of equivalent units
Refer to the information in QS 20-10. Calculate the Assembly department’s cost per equivalent unit of production for materials and for conversion for November. Use the weighted average method.Data
Refer to the information in Exercise 20-9. (a) Calculate the costs per equivalent unit of production for both direct materials and conversion for the department. (b) Assign costs to the
Refer to the information in QS 20-10. Assign costs to the Assembly department’s output—specifically, the units transferred out to the Painting department and the units that remain in process in
Hi-T Company uses the weighted average method of process costing. Information for the company’s first production process follows. All direct materials are added at the beginning of this process,
Refer to the information in QS 20-10. Prepare the November 30 journal entry to record the transfer of costs from the Assembly department to the Painting department. Use the weighted average
Midway Metal produces wire baskets in two departments, Bending and Painting. The Work in Process Inventory T-account for the Bending department is shown below. The 2,000 units in beginning work in
Refer to the information in QS 20-10. For the Assembly department: (a) Compute the number of units started and completed this period. (b) Compute the equivalent units of production for
The following data reports on the July production activities of the Molding department at Ash Company. Prepare the Molding department’s production cost report using the weighted average method.
Refer to the information in QS 20-10. Calculate the Assembly department’s cost per equivalent unit of production for materials and for conversion for November. Use the FIFO method.Data From QS
Refer to the information in Exercise 20-14. Prepare a production cost report using the FIFO method.Data From Exercise 20-14The following data reports on the July production activities of the Molding
Refer to the information in QS 20-10. Assign costs to the Assembly department’s output—specifically, the units transferred out to the Painting department and the units that remain in work in
Refer to the information in QS 20-10. Prepare the November 30 journal entry to record the transfer of costs from the Assembly department to the Painting department. Use the FIFO method.Data From QS
Refer to information in QS 20-18. Using the weighted average method, assign direct materials costs to the Molding department’s output—specifically, the units transferred out to the Packaging
Blue Sky Soda estimates total factory overhead costs of $4,200,000 and total direct labor costs of $2,800,000 for its first year of operations. During January, the company used $80,000 of direct
Sharpe Co. makes organic salsa in two production departments, Cooking and Bottling. Direct materials costs are added at the beginning of each process, and conversion costs are added evenly throughout
Re-Tire produces bagged mulch from recycled tires. Production involves shredding tires and packaging the pieces in the Bagging department. All direct materials enter in the Shredding process. A
Refer to the information in Exercise 20-24. Prepare journal entries dated June 30 to record (a) Raw materials purchases, (b) Direct materials used, (c) Indirect materials
Cool Scoops makes ice cream in two processes, Mixing and Packaging. During April, its first month of business, the packaging department transferred 50,000 units and $175,000 of production costs to
Trident Bikes uses a hybrid costing system and reports the following for its motorcycle assembly process.a. Compute the cost per unit for the Mega option.b. If the company has a target markup of 20%
Pro Power makes a protein powder in several processes. Packaging, the last department in the company’s production process, reports the following.1. Compute the cost per completed unit for both the
Connor Company sold 30,000 units of its only product for $28 per unit this year. Manufacturing and selling the product required $225,000 of fixed costs. Its per unit variable costs follow.For the
Refer to QS 21-23. Compute its product cost per unit under variable costing.Data From QS 21-23Vintage Company reports the following information. Compute its product cost per unit under absorption
Refer to the information in QS 23-19. Compute the variable overhead spending variance and the variable overhead efficiency variance and identify each as favorable or unfavorable.Data From QS
Kenshaw Company’s flexible overhead budget at an activity level of 1,000 units shows $10,000 in variable overhead costs and $5,000 in fixed overhead costs. Actual total overhead is $13,000. Compute
Refer to the information in Exercise 24-12. Assume that each of the company’s divisions has a target income at 7% of average assets. Compute residual income for each division.Data From Exercise
Eye Symmetry’s founder Max Stewart makes surfboards in different lengths. He must decide on the best sales mix. Assume Max has a capacity of 240 hours of direct labor time available each month, and
Kando Company currently pays $7 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $3 for direct materials, $2 for direct labor, and $1 for
JART manufactures and sells underwater markers. Its contribution margin income statement follows.A potential customer offers to buy 50,000 units for $3.20 each. These sales would not affect the
Ace produces and sells energy drinks. Its contribution margin income statement follows.A potential customer offers to buy 50,000 units for $3.00 each. These sales would not affect the company’s
Maya Co. currently buys a component part for $3 per unit. Maya estimates that making the part would require $2.25 per unit of direct materials and $1.00 per unit of direct labor. Maya normally
Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine’s capacity is 1,600 hours per year. Colt can sell up to 500 units of
FURY produces and sells skateboards. Its contribution margin income statement follows.A potential customer offers to buy 10,000 units for $42.00 each. These sales would not affect the company’s
MAX produces and sells power adapters. Its contribution margin income statement follows.A potential customer offers to buy 10,000 units for $5.80 each. These sales would not affect the company’s

Showing 500 - 600 of 1250