Questions and Answers of Glencoe Accounting First Year Course

On December 2, 2021, Miles executed and delivered to Proctor a negotiable promissory note for $1,000, payable to Proctor or order, due March 2, 2022, with interest at 14 percent from maturity, in
International Distributing Export Company (I.D.E.) was organized as a corporation on September 7, 2014, under the laws of New York and commenced business on November 1, 2014. I.D.E. formerly had been
Kevin Miller bought a house in Atlanta in 2016 and took out a mortgage. He lived in the house until 2019, when he accepted avjob in Chicago; from then on, he rented the house. He received a letter
a. On April 1, Mary Rich, at the solicitation of Super Fur Company, delivered a $13,000 mink coat to the company at its place of business for storage in its vaults until November 1. On the same day,
Ames leased an apartment to Boor at $200 a month, payable the last day of each month. The term of the written lease was from January 1, 2020, through April 30, 2021. On March 15, 2020, Boor moved
In 2009, Roy Martin and his wife, Alice, their son, Hiram, and Hiram’s wife, Myrna, acquired title to a 240-acre farm. The deed ran to Roy Martin and Alice Martin, the father and mother, as joint
In 1993, Ogle was the owner of two adjoining lots numbered 6 and 7 fronting at the north on a city street. In that year, she laid out and built a concrete driveway along and two feet in front of what
In 1978, a deed for land in Pitt County was executed and delivered by Joel and Louisa Tyson “unto M. H. Jackson and wife Maggie Jackson, for and during the term of their natural lives and after
Clayton and Margie Gulledge owned a house at 532 Somerset Place, N.W. (the Somerset property) as tenants by the entirety. They had three children: Bernis Gulledge, Johnsie Walker, and Marion Watkins.
On January 14, 2017, Eura Mae Redmon deeded land to her daughter, Melba Taylor, and two sons, W. C. Sewell and Billy Sewell, “jointly and severally, and unto their heirs, assigns and successors
In May 2011, Fred Parramore executed four deeds, each conveying a life estate in his land to him and his wife and a remainder interest in one-fourth of his land to each of his four children: Alney,
Sam and Eleanor Gaito purchased a home from Howard Frank Auman, Jr., in the spring of 2018. Auman had completed the construction of the house in November 2013. In the interim, three different parties
Maureen Miller operates T-Shirt Trends, a T-shirt specialty business. She established a petty cash fund on February 1 by writing Check 336 for $100. She also records all petty cash disbursements in a
The T-Shirt Trends Company purchased a delivery truck on October 12, 2009, at a cost of $78,900. The delivery truck has an estimated useful life of three years and an estimated disposal value of
T-Shirt Trends uses the allowance method of accounting for uncollectible accounts. At the end of the fiscal period, the following accounts appeared on T-Shirt’s trial balance. InstructionsOn
The Shoooot-It Camera Shop uses a one-year fiscal period beginning January 1. At the beginning of the fiscal period, the shop had a beginning inventory of film valued at $867.90 (526 rolls at $1.65
Frequently, notes that are issued or received in one fiscal period do not mature until the next fiscal period. As a result, the interest expense paid or the interest income received applies to two
Your company, National Paper Supplies, frequently borrows money for short periods from First Bank by issuing promissory notes.InstructionsIn your working papers, record the following transactions on
On June 15, Walter Cohen and Janice Connor agreed to combine their individual sole proprietorships into one firm organized as a partnership called Cohen & Connor Legal Services. The partners were
Elena Rodriguez started a business offering an exer cise facility and personal physical training. Elena has hired you as a financial consultant to help her set up her accounting system. She has
a. What does ethics mean?b. How can personal ethics help an individual face the dilemmas that are part of life’s complexities?
Make a list of the five ethical principles discussed in this chapter. Ask your friends how they think the principles might influence their everyday life. Report your results in class.
As the ethics officer for a national chain of coffeehouses, you must prepare a one- or two-page outline for a business ethics plan that covers the main issues you think are relevant to the
a. Explain the concepts of integrity, objectivity, and independence as related to the accounting profession.b. Explain the concepts of competence and confidentiality as related to the accounting
An ethical corporation makes a commitment to manage its roles in society— as a producer, employer, customer, and citizen—in a responsible manner. Implementing policies and practices in these
Sean McGee works as a graphics designer for a large design firm. In his job he utilizes dozens of expensive software programs that the company purchased for its employees to use to complete client
a. What is the purpose of a code of ethics for a professional organization?b. Name three professional accounting organizations that have codes of ethics for their members.
The Sarbanes-Oxley Act of 2002 requires that independent auditors report to the client’s audit committee, not to the client’s management. The audit committee is independent of the management.
Randy Simpson and Kyung Won worked as recruiters for a national job placement company. The company provided them a database of potential companies that might use a placement service as well as
Assume that the accountant for a drug manufacturing company made the decision to record the company’s ending drug inventory at an amount higher than its actual worth. How does this decision affect
Ask adults how they think the five principles of ethics influence professional behavior. Share your results in class.
Write a code of ethics to guide student behavior in school organizations. Interview students outside your class to get ideas.
Review the AICPA Preamble in the text. List two key points covered in each of the two paragraphs. Are the points important to your everyday behavior? Why or why not?
Information related to accounts requiring adjustments on the work sheet for the year ended December 31 for Magner’s Advertising Center follows. InstructionsIn your working papers, identify the
Ace Advertising Agency has the following information regarding supplies. The beginning balance in the general ledger account Supplies on August 1 was $214.00. On August 13 the agency purchased
The general ledger for Schellhorn’s Water Slide shows the following account balances on December 31, the end of the fiscal period.Instructions In your working papers:1. Prepare the Trial
The general ledger for Ryan’s Canoe Rentals shows the following account balances on December 31, the end of the fiscal period.Instructions In your working papers:1. Prepare the Trial Balance
John Dunn owns The Country Store, a small retail store. He uses a combination journal with the following columns. InstructionsUse the form provided in your working papers. For each of the
Craig Glasser is a physician who operates a family medical practice, Glasser Family Medical Center. He uses the combination journal found in your working papers. Instructions1. Record the
Sunset Surfwear is a small merchandise business specializing in a variety of surfwear items. Sunset Surfwear uses a combination journal with these amount columns. Instructions In your
Use the form in your working papers that is similar to the one below. For each item listed below, indicate by placing a check mark in the correct column whether the item is a prepaid expense,
The Villareal Corporation uses the accrual basis of accounting. Its fiscal period ends on December 31. On November 15, the Villareal Corporation borrowed $9,500 from the Second National Bank by
The Gore Paper Company uses the accrual basis of accounting. Its fiscal period ends on June 30. The following account balances appear in the company’s general ledger as of
On October 20, Pamela Wong, owner of Thunder Graphics Desktop Publishing, deposited the following in the checking account of the business.Cash: $800Checks: Boyden Company; drawn on National Bank of
Thunder Graphics Desktop Publishing pays its employees each week. The payroll register for the week ended December 17 is shown in your working papers. InstructionsOn the general journal form
Thunder Graphics Desktop Publishing has four employees. They are paid on a weekly basis with overtime paid for all hours worked over 40. The overtime rate is 1½ times the regular hourly rate of pay.
On January 1, T-Shirt Trends, a merchandising business, had the following balances in its general ledger and accounts receivable subsidiary ledger. InstructionsOn the forms provided in your
Business transactions for the month of March for T-Shirt Trends are presented below. A partial general ledger appears in your working papers.InstructionsOn the form provided in your working papers,
T-Shirt Trends, a retail merchandising store, uses special journals for recording its business transactions. On May 1, the store had the following balances in its general ledger and accounts
T-Shirt Trends, a retail merchandising business, uses special journals to record its business transactions.InstructionsOn the forms provided in your working papers:1. Record the July transactions in
A partially completed work sheet for T-Shirt Trends is shown in your working papers. Adjustments need to be made to the following items at year-end. InstructionsOn the form provided in your
The Cassenada Dance Company uses the accrual basis of accounting. Located in Seattle, Washington, the company’s fiscal year-end is July 31. Property taxes are paid in June and December. Total
T-Shirt Trends was organized as a publicly held corporation on September 1 and authorized to issue 10,000 shares of $100 par, $8 preferred stock, and 25,000 shares of $50 par common
Pamela Wong started her own business called Thunder Graphics Desktop Publishing. InstructionsUse the form provided in your working papers. For each of the following transactions:1. Identify the
Thunder Graphics Desktop Publishing had the following transactions. A partial list of the accounts used to record and report business transactions appear below. Instructions On the forms
Pamela Wong owns and operates Thunder Graphics Desktop Publishing. A partial list of the chart of accounts appears in your working papers.Instructions On the forms provided in your working
The balances in the general ledger accounts of Thunder Graphics are shown below. Instructions On the forms provided in your working papers:1. Open the accounts in the general ledger with
The final balances in the general ledger of Thunder Graphics Desktop Publishing at the end of May are listed below. Instructions Use the form in your working papers to prepare a work sheet
What happens when a partnership dissolves?
Barnes Construction is a homebuilder that wants to expand into commercial real estate. It has a client who owns 10 acres of land on which she wants to build an apartment complex. Barnes is looking
You are an accounting clerk for two dentists who are partners. The partners recently began a program to give a bonus to employees for making suggestions that are implemented and result in cost
Maurice Lance and Terry Klaus are partners in M&T Computer Solutions. Maurice wants to contribute more money to the partnership, but Terry is satisfied with his initial investment. Choose a
Information related to the operations of the Goldman and Jones partnership follows.InstructionsIn your working papers, prepare the Division of Net Income section of the income statement and the
a. What does a partnership income statement report?b. How may the income statement for a partnership differ from that of a sole proprietorship?
a. Explain what a statement of partners’ equity shows.b. How does a statement of changes in partners’ equity differ from a statement of changes in owner’s equity?
A partnership may be terminated by thea. Partners’ mutual agreement.b. Death of a partner.c. Admission of a new partner.d. All of the above.e. None of these answers
How is dissolution different from liquidation?
You and a partner operate a small sports center. A large national sports complex recently opened in a nearby mall, causing your business to drop sharply. You have decided to close the center and
a. What does a partnership balance sheet report?b. How does the balance sheet for a partnership differ from that of a sole proprietorship and a corporation?
Partners Gunther and Pertee share profits equally. In the process of ending the business, they sell all of the partnership’s noncash assets. The transactions for the sales follow.InstructionsRecord
A partnership’s capital accounts are changed ifa. Net income or net loss is recorded.b. Partners invest additional cash in the business.c. Partners withdraw cash from the business.d. All of the
For each of the following transactions, state whether partners’ capital is debited or credited.a. Sold an asset at a loss.b. Sold an asset at a gain.c. Sold an asset at book value.
OPEC is an alliance of 11 oil producing nations. It seeks to stabilize oil prices and help producers achieve a reasonable rate of return. OPEC members discuss oil production levels, pricing, demand,
a. When selling partnership accounts receivable at a loss, what accounts are affected?b. What happens to the partners’ capital accounts when noncash assets are sold at a loss?
When both a partnership and the partnership business end, this is called aa. Mutual understanding.b. Dissolution.c. Termination.d. Liquidation.
Why does the final partnership liquidation entry involve just one asset account?
You have been studying accounting for almost a year and have some ideas about what it takes to be an accountant. In the last two decades, computer technology has changed the profession from one
Joy Webster and Diana Ruiz have been in business since the beginning of the year. Now at the end of the year, they would like to know how the partnership has done in its first year of operation. Joy
a. What happens to the partners’ capital accounts when noncash assets are sold at a gain?b. What basis is used to distribute gains and losses from the sale of noncash assets?
The ________ shows the picture of a firm’s financial position at a point in time.a. Income statementb. Balance sheetc. Distribution of net incomed. None of the above
After selling all partnership assets and paying all creditors, the capital account balance of partner A is a $10,000 credit and of partner B is a $2,000 debit. What is the Cash in Bank balance? What
Guice and Ward decide to end their partnership on September 21. They share profits and losses equally. The account balances of the partnership as of that date follow. The partnership sold the
a. Which accounts remain on the ledger after all noncash assets have been sold and the partnership liabilities have been paid?b. When liquidating a partnership, what is the final transaction?
Defend the requirement that creditors must be paid before partners can distribute remaining cash in a liquidation process.
On January 1 Carol Farmer and Jim Romans formed a partnership, Research Consultants. Each partner invested $50,000 in cash on that date. The partnership agreement stated that the partners would share
On October 15 Martinez and Royka decide to end their partnership. Their assets consist of $10,000 in cash and inventory that cost $105,000 and was sold for $95,000. Their only liability is a note
As the new training director for a public accounting firm, you are to design and present a program to employees on the importance of ethical behavior. A list of terms, which you are to use in your
Richard Smooth and Carrie Over hill are partners in the firm of R&C Roofing. They agreed to divide net income or loss on the following basis: Smooth, ¾; Over hill, ¼. The completed work sheet
Define business ethics.
Chris Snyder is an audit supervisor for an accounting firm. She and her staff are scheduled to audit Gemma Industries. Gemma’s CEO invites Chris and her staff to arrive one day before the audit for
You are a stockholder of a corporation that manufactures sports apparel. The company recently moved its operations to a developing country where labor is cheaper. Employees work more than 16 hours
Your friend Samantha recently graduated with a degree in accounting. As a member of the American Institute of Certified Public Accountants, you encourage her to become a CPA and join the
a. How can a company communicate a code of ethics to its employees?b. Name five topics often addressed in a code of ethics.
What is the purpose of a code of ethics?
Your ability to work with a variety of ethnic, social, educational, and gender groups indicates your acceptance of cultural diversity.ON THE JOBAs the owner of Say it Right, an interpreting service,
a. List four goals of an ethically trained accountant.b. What role does the accountant play in maintaining public trust in the business community?
If you were on a committee to establish a student code of ethics for your school, what would you include in it?
Global ethics include concern for the future of humankind, respect for the planet, and recognition of diverse cultures. Such values are being addressed during the Decade of Education for Sustainable
a. How does acting ethically benefit an individual?b. How does a business benefit from acting ethically?
If you want to buy a vehicle but cannot pay cash, you need to borrow from a financial institution. To do so, you will be required to sign a legally binding note to make monthly payments for a

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