Questions and Answers of Horngrens Accounting 11th Canadian

On December 31, 2024, when the market interest rate is 12%, Benson Realty issues $600,000 of 9.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the
What is a debt security?
On January 1, 2024, Bark Company invests $10,000 in Roots, Inc. stock. Roots pays Bark a $400 dividend on August 1, 2024. Bark sells the Roots’ stock on August 31, 2024, for $10,450. Assume the
What is an equity security?
Barot’s 2024 financial statements reported the following items—with 2023 figures given for comparison:Net income for 2024 was $3,910, and interest expense was $240. Compute Barot’s rate of
On January 1, 2024, Chaucer’s Restaurant decides to invest in Lake Turner bonds. The bonds mature on December 31, 2029, and pay interest on June 30 and December 31 at 4% annually. The market rate
Strategic Investments completed the following investment transactions during 2024:Requirements1. Journalize Strategic’s investment transactions. Explanations are not required.2. Classify and
Captain Investments completed the following investment transactions during 2024:Requirements1. Journalize the entries for 2024. Explanations are not required.2. What account(s) and amount(s), if any,
On January 1, 2024, Bryant, Inc. decides to invest in 3,750 shares of Farrier stock when the stock is selling for $16 per share. On August 1, 2024, Farrier paid a $0.70 per share cash dividend to
On February 1, 2024, Bell Co. decides to invest excess cash of $16,800 by purchasing a Grant, Inc. bond at face value. At year-end, December 31, 2024, the fair value of the Grant bond was $19,600.
On June 1, 2024, Josh’s Restaurant decides to invest excess cash of $54,400 from the tourist season by purchasing a Jackrabbit, Inc. bond at face value. At year-end, December 31, 2024,
Peyton Investments completed the following investment transactions during 2024:Requirements1. Journalize Peyton’s investment transactions. Explanations are not required.2. Prepare a partial balance
Boston Today Publishers completed the following investment transactions during 2024 and 2025:Requirements1. Journalize Boston Today’s investment transactions. Explanations are not required.2. On
Montane Exploration Company reported these figures for 2024 and 2023:Compute the rate of return on total assets for 2024. (Round to two decimals.) Income Statement-partial: Interest Expense Net
Griffin purchased a bond on January 1, 2024, for $140,000. The bond has a face value of $140,000 and matures in 10 years. The bond pays interest on June 30 and December 31 at a 3% annual rate.
Money Man Investments completed the following transactions during 2024:Requirements1. Journalize Money Man’s transactions. Explanations are not required.2. Classify and prepare partial financial
Advance & Co. owns vast amounts of corporate bonds. Suppose Advance buys $1,100,000 of FermaCo bonds at face value on January 2, 2024. The FermaCo bonds pay interest at the annual rate of 3% on
Jetway Corporation generated excess cash and invested in securities as follows:Requirements1. Classify each of the investments made during 2024. (Assume the equity investments represent less than 20%
League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys $900,000 of CocoCorp bonds at face value on January 2, 2024. The CocoCorp bonds pay interest at the annual rate of 8%
The beginning balance sheet of Waterfall Source Co. included a $400,000 investment in Evan stock (20% ownership, Waterfall has significant influence over Evan). During the year, Waterfall Source
Captain Transfer Corporation generated excess cash and invested in securities as follows:Requirements1. Classify each of the investments made during 2024. (Assume the equity investments represent
Suppose that on January 6, 2024, East Coast Motors paid $280,000,000 for its 35% investment in Boxcar Motors. East Coast has significant influence over Boxcar after the purchase. Assume Boxcar earned
DVR Equipment, Inc. reported the following data for 2024:Compute DVR’s net cash provided by operating activities—indirect method. Income Statement: Net Income Depreciation Expense Balance
Preston Media Corporation had the following income statement and balance sheet for 2024:Requirements1. Compute the acquisition of plant assets for Preston Media Corporation during 2024. The business
Suppose Solomon Brothers purchases $500,000 of 6% bonds of Morin Corporation at face value on January 1, 2024. These bonds pay interest on June 30 and December 31 each year. They mature on December
Winding Road Cellular accountants have assembled the following data for the year ended April 30, 2024:Prepare the operating activities section using the indirect method for Winding Road Cellular’s
Suppose Hale and Sons purchases $800,000 of 3.5% bonds of Tyson Way Corporation at face value on January 1, 2024. These bonds pay interest on June 30 and December 31 each year. They mature on
Amazon.com, Inc. serves its customers through its retail Web sites, selling millions of unique products. In addition, the company manufactures and sells electronic devices including Kindle e-readers
Rouse Exercise Equipment, Inc. reported the following financial statements for 2024:Requirements1. Compute the amount of Rouse Exercise’s acquisition of plant assets. Assume the acquisition was for
Amy’s Learning Center has assembled the following data for the year ended June 30, 2024:Prepare the operating activities section of the business’s statement of cash flows for the year ended June
A-One Mobile Homes reported the following in its financial statements for the year ended December 31, 2024:Requirements1. Compute the collections from customers.2. Compute payments for merchandise
Julie Lopez Company expects the following for 2024:• Net cash provided by operating activities of $148,000.• Net cash provided by financing activities of $56,000.• Net cash used for investing
Accountants for Morganson, Inc. have assembled the following data for the year ended December 31, 2024:Prepare Morganson’s statement of cash flows using the indirect method. Include an accompanying
The 2024 comparative balance sheet and income statement of Appleton Group, Inc. follow. Appleton disposed of a plant asset at book value during 2024.Prepare the spreadsheet for the 2024 statement of
The 2024 income statement and comparative balance sheet of Rolling Hills, Inc. follow:Additionally, Rolling Hills purchased land of $21,100 by financing it 100% with long-term notes payable during
The comparative balance sheet of Jackson Educational Supply at December 31, 2024, reported the following:Jackson’s transactions during 2024 included the following:Requirements1. Prepare the
Dirtbikes, Inc. identified the following selected transactions that occurred during the year ended December 31, 2024:a. Issued 750 shares of $3 par common stock for cash of $17,000.b. Issued 5,100
American Rare Coins (ARC) was formed on January 1, 2024. Additional data for the year follow:a. On January 1, 2024, ARC issued no par common stock for $450,000.b. Early in January, ARC made the
Use the Sweet Valley data from Problem P-F:16-41B.Requirements1. Prepare the 2024 statement of cash flows by the direct method.2. How will what you learned in this problem help you evaluate an
The 2024 income statement and comparative balance sheet of Sweet Valley, Inc. follow:Additionally, Sweet Valley purchased land of $20,900 by financing it 100% with long-term notes payable during
The comparative balance sheet of Robeson Educational Supply at December 31, 2024, reported the following:Robeson’s transactions during 2024 included the following:Requirements1. Prepare the
Boundary Rare Coins (BRC) was formed on January 1, 2024. Additional data for the year follow:a. On January 1, 2024, BRC issued no par common stock for $475,000.b. Early in January, BRC made the
Classic Rare Coins (CRC) was formed on January 1, 2024. Additional data for the year follow:a. On January 1, 2024, CRC issued no par common stock for $525,000.b. Early in January, CRC made the
The 2024 comparative balance sheet and income statement of Attleboro Group, Inc. follow. Attleboro disposed of a plant asset at book value in 2024.Prepare the spreadsheet for the 2024 statement of
Diversion Rare Coins (DRC) was formed on January 1, 2024. Additional data for the year follow:a. On January 1, 2024, DRC issued no par common stock for $450,000.b. Early in January, DRC made the
This problem continues the Canyon Canoe Company situation from Chapter F:15. Canyon Canoe Company’s comparative balance sheet is shown below. 2025 amounts are assumed, but include several
LaSalle Exploration Company reported these figures for 2024 and 2023:Compute rate of return on common stockholders’ equity for 2024 assuming no dividends were declared or paid to preferred
The balance sheet of Goldstein Management Consulting, Inc. at December 31, 2023, reported the following stockholders’ equity:During 2024, Goldstein completed the following selected
Bianchi Company reported these figures for 2024 and 2023:Requirements1. Compute Bianchi Company’s earnings per share for 2024. Assume the company paid the minimum preferred dividend during 2024.2.
Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2024:Requirements1. Identify the different classes of stock that Tillman Comfort
Deerborn Manufacturing Co. completed the following transactions during 2024:Requirements1. Record the transactions in Deerborn’s general journal.2. Prepare the Deerborn’s stockholders’ equity
The following information was taken from the records of Chua Motorsports, Inc. at November 30, 2024:Prepare a multi-step income statement for Chua Motorsports for the fiscal year ended November 30,
The balance sheet of Cullins Management Consulting, Inc. at December 31, 2023, reported the following stockholders’ equity:During 2024, Cullins completed the following selected
Halborn Manufacturing Co. completed the following transactions during 2024:Requirements1. Record the transactions in Halborn’s general journal.2. Prepare the Halborn’s stockholders’ equity
The following information was taken from the records of Arizona Motorsports, Inc. at November 30, 2024:Prepare a multi-step income statement for Arizona Motorsports for the fiscal year ended November
Gullo Company reported these figures for 2024 and 2023:Requirements1. Compute Gullo Company’s earnings per share for 2024. Assume the company paid the minimum preferred dividend during 2024. Round
Ember Company purchased a building with a market value of $280,000 and land with a market value of $55,000 on January 1, 2024. Ember Company paid $15,000 cash and signed a 25-year, 12% mortgage
What is a bond payable?
Power Company issued a $1,000,000, 5%, five-year bond payable at face value on January 1, 2024. Interest is paid semiannually on January 1 and July 1.Requirements1. Journalize the issuance of the
Rocket Corp. earned net income of $153,040 and paid the minimum dividend to preferred stockholders for 2024. Assume that there are no changes in common shares outstanding during 2024. Rocket’s
Kelly May Bakery, Inc. reported a prior-period adjustment in 2024. An accounting error caused net income of prior years to be overstated by $1,000. Retained Earnings at December 31, 2023, as
Faccone Academy Surplus had 60,000 shares of common stock and 9,000 shares of 20%, $15 par value preferred stock outstanding through December 31, 2024. Income from continuing operations for 2024 was
The stockholders’ equity of Lakeside Occupational Therapy, Inc. on December 31, 2023, follows:On April 30, 2024, the market price of Lakeside’s common stock was $16 per share and the company
Wood Golf Club Corp. had the following stockholders’ equity at December 31, 2023:On June 30, 2024, Wood Golf Club split its common stock 2-for-1. Prepare the stockholders’ equity section of the
Clix Photographic Supplies, Inc.’s accounting records include the following for 2024:Assume Clix’s income tax rate is 21%. Prepare Clix’s multi-step income statement for the year ending
Owen Company issued a $110,000, 11%, 10-year bond payable at 94 on January 1, 2024. Interest is paid semiannually on January 1 and July 1.Requirements1. Journalize the issuance of the bond payable on
Wilkes Mutual Insurance Company issued a $100,000, 5%, 10-year bond payable at 111 on January 1, 2024. Interest is paid semiannually on January 1 and July 1.Requirements1. Journalize the issuance of
Sleep Well, Inc. is authorized to issue 9%, 10-year bonds payable. On January 1, 2024, when the market interest rate is 10%, the company issues $500,000 of the bonds. The bonds pay interest
On December 31, 2024, when the market interest rate is 6%, Benson Realty issues $700,000 of 6.25%, 10-year bonds payable. The bonds pay interest semiannually. Benson Realty received $713,234 in cash
Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425,000, and land, $125,000) on January 1, 2024. Kellerman signed a 20-year, 6% mortgage payable.
On January 1, 2024, Doctors Credit Union (DCU) issued 7%, 20-year bonds payable with face value of $200,000. The bonds pay interest on June 30 and December 31.Requirements1. If the market interest
On January 1, 2024, Electricians Credit Union (ECU) issued 8%, 20-year bonds payable with face value of $400,000. The bonds pay interest on June 30 and December 31. The issue price of the bonds is
The accounting records of Compass Wireless include the following as of December 31, 2024:Requirements1. Report these liabilities on the Compass Wireless balance sheet, including headings and totals
Ari Goldstein issued $300,000 of 11%, five-year bonds payable on January 1, 2024. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually.Requirements1. How
ABC Corporation’s accounting records include the following items, listed in no particular order, at December 31, 2024:The income tax rate for ABC Corporation is 21%.Prepare ABC’s income statement
Kingston, Inc. had beginning retained earnings of $135,000 on January 1, 2024. During the year, Kingston declared and paid $85,000 of cash dividends and earned $75,000 of net income. Prepare a
Taylor Corporation discovered in 2025 that it had incorrectly recorded in 2024 a cash payment of $70,000 for utilities expense. The correct amount of the utilities expense was $35,000.Requirements1.
Wyler, Inc.’s 2024 balance sheet reported the following items—with 2023 figures given for comparison:Net income for 2024 was $3,690. Compute Wyler’s rate of return on common stockholders’
What is a stock dividend?
What is a prior-period adjustment?
What is the price/earnings ratio, and how is it calculated?
Northern Communications has the following stockholders’ equity on December 31, 2024:Requirements1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred
The following elements of stockholders’ equity are from the balance sheet of Sneed Marketing Corp. at December 31, 2023:Sneed paid no preferred dividends in 2023.Requirements1. Compute the
Johnny’s Hamburgers issued 8%, 10-year bonds payable at 85 on December 31, 2024. At December 31, 2026, Johnny reported the bonds payable as follows:Johnny pays semiannual interest each June 30 and
The following transactions of Great Value Pharmacies occurred during 2024 and 2025:Requirements1. Journalize the transactions in the Great Value Pharmacies general journal. Round to the nearest
Relaxation, Inc. is authorized to issue 7%, 10-year bonds payable. On January 1, 2024, when the market interest rate is 12%, the company issues $300,000 of the bonds. The bonds pay interest
Brad Nelson, Inc. issued $600,000 of 7%, six-year bonds payable on January 1, 2024. The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually.Requirements1. How
The accounting records of Pack Leader Wireless include the following as of December 31, 2024:Requirements1. Report these liabilities on the Pack Leader Wireless balance sheet, including headings and
The following transactions of Johnson Pharmacies occurred during 2024 and 2025:Requirements1. Journalize the transactions in the Johnson Pharmacies general journal. Round to the nearest dollar.
Ludwig Corporation has the following data as of December 31, 2024:Compute the debt to equity ratio at December 31, 2024. Total Current Liabilities $36,210 Total Stockholders' Equity Total Current
At December 31, MediStat Precision Instruments owes $52,000 on Accounts Payable, Salaries Payable of $12,000, and Income Tax Payable of $10,000. MediStat also has $300,000 of Bonds Payable that were
Anderson Company issued $70,000 of 10-year, 9% bonds payable on January 1, 2024. Anderson Company pays interest each January 1 and July 1 and amortizes discount or premium by the straight-line
Pediatric Dispensary borrowed $390,000 on January 2, 2024, by issuing a 15% serial bond payable that must be paid in three equal annual installments plus interest for the year. The first payment of
On January 1, 2024, Roberts Unlimited issues 8%, 20-year bonds payable with a face value of $240,000. The bonds are issued at 1.04 and pay interest on June 30 and December 31.Requirements1.
On October 1, 2024, Modern Company purchased a patent for $153,600 cash. Although the patent gives legal protection for 20 years, the patent is expected to be used for only eight years.Requirements1.
Ajax Petroleum holds huge reserves of oil assets. Assume that at the end of 2024, Ajax Petroleum’s cost of oil reserves totaled $27,000,000, representing 3,000,000 barrels of oil.Requirements1.
Peter Company purchased equipment on January 1, 2024, for $28,000. Suppose Peter Company sold the equipment for $4,000 on December 31, 2025. Accumulated Depreciation as of December 31, 2025, was
The comparative financial statements of Newton Cosmetic Supply for 2024, 2023, and 2022 include the data shown here:Requirements1. Compute these ratios for 2024 and 2023:a. Acid-test ratio (Round to
Alpha Communication purchased equipment on January 1, 2024, for $27,500. Suppose Alpha Communication sold the equipment for $20,000 on December 31, 2026. Accumulated Depreciation as of December 31,
On October 31, 2024, Alternative Landscapes discarded equipment that had a cost of $26,920. Accumulated Depreciation as of December 31, 2023, was $25,000. Assume annual depreciation on the equipment

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