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intermediate accounting reporting
Intermediate Accounting 16th Edition Donald E. Kieso - Solutions
*P17-14 (L05) (Free-Standing Derivative) Warren Co. purchased a put option on Echo common shares on January 7, 2017, for $360. The put option is for 400 shares, and the strike price is $85 (which equals the price of an Echo share on the purchase date). The option expires on July 31, 2017. The
*P17-13 (L05) (Derivative Financial Instrument) Johnstone Co. purchased a put option on Ewing common shares on July 7, 2017, for $240. The put option is for 200 shares, and the strike price is $70. (The market price of a share of Ewing stock on that date is $70.) The option expires on January 31,
*P17-12 (L05) EXCEL (Derivative Financial Instrument) The treasurer of Miller Co. has read on the Internet that the stock price of Wade Inc. is about to take off. In order to profit from this potential development, Miller Co. purchased a call option on Wade common shares on July 7, 2017, for $240.
(L02,4) (Equity Securities—Statement Presentation) Fernandez Corp. invested its excess cash in securities during 2017. As of December 31, 2017, the securities portfolio consisted of the following common stocks.Security Quantity Cost Fair Value Lindsay Jones, Inc. 1,000 shares $ 15,000 $ 21,000
(L02) EXCEL (Equity Investments) Castleman Holdings, Inc. had the following equity investment portfolio at January 1, 2017.Evers Company 1,000 shares @ $15 each $15,000 Rogers Company 900 shares @ $20 each 18,000 Chance Company 500 shares @ $9 each 4,500 Equity investments @ cost 37,500 Fair value
(L02,4) (Gain on Sale of Investments and Comprehensive Income) On January 1, 2017, Acker Inc. had the following balance sheet.The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fair value of Acker Inc.’s available-for-sale
(L02,3) (Fair Value and Equity Methods) Brooks Corp. is a medium-sized corporation specializing in quarrying stone for building construction. The company has long dominated the market, at one time achieving a 70% market penetration. During prosperous years, the company’s profits, coupled with a
(L01) (Available-for-Sale and Held-to-Maturity Debt Securities Entries) The following information relates to the debt securities investments of Wildcat Company.1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $300,000 at 100 plus accrued interest.Interest is
(L02) (Equity Securities Entries) McElroy Company has the following portfolio of investment securities at September 30, 2017, its most recent reporting date.Investment Securities Cost Fair Value Horton, Inc. common (5,000 shares) $215,000 $200,000 Monty, Inc. preferred (3,500 shares) 133,000
(L02) EXCEL (Equity Securities Entries and Disclosures) Parnevik Company has the following securities in its investment portfolio on December 31, 2017 (all securities were purchased in 2017): (1) 3,000 shares of Anderson Co. common stock which cost $58,500, (2) 10,000 shares of Munter Ltd. common
(L01) (Debt Investments) Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.12/31/17 12/31/18 12/31/19 Amortized cost $491,150 $519,442 $550,000 Fair value 497,000 509,000 550,000
(L01,2) (Debt and Equity Investments) Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.Feb. 1, 2017 Sharapova Company common stock, $100 par, 200 shares $ 37,400 April 1
(L01) (Available-for-Sale Debt Securities) On January 1, 2017, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Novotna Company
(L01) (Debt Securities) Presented below is an amortization schedule related to Spangler Company’s 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $108,660.Cash Interest Bond Premium Carrying Amount Date Received Revenue Amortization of Bonds
(L04) (EPS with Stock Dividend and Discontinued Operations) Christina Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Christina employs a fiscal year ending May 31.Income from operations before income taxes for Christina was
(L05) (Computation of Basic and Diluted EPS) The information below pertains to Barkley Company for 2018.Net income for the year $1,200,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,000,000 6% convertible, cumulative preferred
(L04,5) GROUPWORK (Computation of Basic and Diluted EPS) Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2018. Austin has compiled the information listed
(L04) (Basic EPS: Two-Year Presentation) Melton Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2017, and May 31, 2018. The income from operations for the fiscal year ended May 31, 2017, was $1,800,000 and income
(L03) (Stock-Based Compensation) Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 5,000
(L03) EXCEL (Stock-Option Plan) Berg Company adopted a stock-option plan on November 30, 2016, that provided that 70,000 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $9 a share. The market price was $12 a share on
(L01) EXCEL (Entries for Conversion, Amortization, and Interest of Bonds) Volker Inc. issued $2,500,000 of convertible 10-year bonds on July 1, 2017. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $54,000, which is
(LO1,2,3) GROUPWORK (Entries for Various Dilutive Securities) The stockholders’ equity section of Martino Inc.at the beginning of the current year appears below.Common stock, $10 par value, authorized 1,000,000 shares, 300,000 shares issued and outstanding $3,000,000 Paid-in capital in excess of
(LO1,2,3,4) (Analysis and Classification of Equity Transactions) Penn Company was formed on July 1, 2015. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock. Penn Company has a July 1–June
(LO3,4) (Stock and Cash Dividends) Earnhart Corporation has outstanding 3,000,000 shares of common stock with a par value of $10 each. The balance in its Retained Earnings account at January 1, 2017, was $24,000,000, and it then had Paid-in Capital in Excess of Par—Common Stock of $5,000,000.
(LO3) WRITING (Stock Dividends and Stock Split) Oregon Inc. $10 par common stock is selling for $110 per share.Four million shares are currently issued and outstanding. The board of directors wishes to stimulate interest in Oregon common stock before a forthcoming stock issue but does not wish to
(LO1,2,3,4) (Stockholders’ Equity Section of Balance Sheet) The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2017.In 2017, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. In 2018,
(LO3) GROUPWORK (Dividends and Splits) Myers Company provides you with the following condensed balance sheet information.Assets Liabilities and Stockholders’ Equity Current assets $ 40,000 Current and long-term liabilities $100,000 Equity investments 60,000 Stockholders’ equity Equipment (net)
(LO3) (Cash Dividend Entries) The books of Conchita Corporation carried the following account balances as of December 31, 2017.Cash $ 195,000 Preferred Stock (6% cumulative, nonparticipating, $50 par) 300,000 Common Stock (no-par value, 300,000 shares issued) 1,500,000 Paid-in Capital in Excess of
(LO2,3,4) GROUPWORK (Treasury Stock—Cost Method—Equity Section Preparation) Washington Company has the following stockholders’ equity accounts at December 31, 2017.Common Stock ($100 par value, authorized 8,000 shares) $480,000 Retained Earnings 294,000 Instructions(a) Prepare entries in
(LO2) EXCEL (Treasury Stock—Cost Method) Before Gordon Corporation engages in the treasury stock transactions listed on the next page, its general ledger reflects, among others, the following account balances (par value of its stock is $30 per share).Paid-in Capital in Excess of Par—Common
(LO1) (Stock Transactions—Lump Sum) Seles Corporation’s charter authorized issuance of 100,000 shares of $10 par value common stock and 50,000 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of
(LO1,2,3,4) (Equity Transactions and Statement Preparation) Hatch Company has two classes of capital stock outstanding:8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’equity.Preferred Stock, 150,000 shares $ 3,000,000 Common
(LO2,4) (Treasury Stock Transactions and Presentation) Clemson Company had the following stockholders’ equity as of January 1, 2017.Common stock, $5 par value, 20,000 shares issued $100,000 Paid-in capital in excess of par—common stock 300,000 Retained earnings 320,000 Total stockholders’
(L01,2,3,4) EXCEL GROUPWORK (Equity Transactions and Statement Preparation) On January 5, 2017, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It
(L06) (Debtor/Creditor Entries for Continuation of Troubled Debt with New Effective Interest) Crocker Corp.owes D. Yaeger Corp. a 10-year, 10% note in the amount of $330,000 plus $33,000 of accrued interest. The note is due today, December 31, 2017. Because Crocker Corp. is in financial trouble, D.
(L06) (Restructure of Note under Different Circumstances) Halvor Corporation is having financial difficulty and therefore has asked Frontenac National Bank to restructure its $5 million note outstanding. The present note has 3 years remaining and pays a current rate of interest of 10%. The present
*P 14-12 (L06) (Debtor/Creditor Entries for Continuation of Troubled Debt) Daniel Perkins is the sole shareholder of Perkins Inc., which is currently under protection of the U.S. bankruptcy court. As a “debtor in possession,” he has negotiated the following revised loan agreement with United
(L01) WRITING (Effective-Interest Method) Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requires that this method be used instead of the
(L01,2,5) GROUPWORK (Comprehensive Problem: Issuance, Classification, Reporting) The following are four independent situations.(a) On March 1, 2018, Wilke Co. issued at 103 plus accrued interest $4,000,000, 9% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and
(L03) (Entries for Zero-Interest-Bearing Note; Payable in Installments) Sabonis Cosmetics Co. purchased machinery on December 31, 2016, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interest of 8% is implicit in the
(L03) (Entries for Zero-Interest-Bearing Note) On December 31, 2017, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2021. Faital Company’s credit rating permits it to borrow funds from its several lines
(L01,2) (Entries for Life Cycle of Bonds) On April 1, 2017, Seminole Company sold 15,000 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2018, Seminole took
(L01,2) GROUPWORK (Issuance of Bonds between Interest Dates, Straight-Line, Redemption) Presented below are selected transactions on the books of Simonson Corporation.May 1, 2017 Bonds payable with a par value of $900,000, which are dated January 1, 2017, are sold at 106 plus accrued interest.They
(L01,2) EXCEL (Comprehensive Bond Problem) In each of the following independent cases, the company closes its books on December 31.1. Sanford Co. sells $500,000 of 10% bonds on March 1, 2017. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2020. The
(L01,2,5) (Issuance and Redemption of Bonds; Income Statement Presentation) Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 2003, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a
(L01,3) (Negative Amortization) Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will
(L01,2) EXCEL (Issuance and Redemption of Bonds) Venezuela Co. is building a new hockey arena at a cost of$2,500,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow$2,000,000 to complete the project. It therefore decides to issue
(L01) GROUPWORK (Analysis of Amortization Schedule and Interest Entries) The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2011, and the subsequent interest payments and charges. The company’s year-end is December 31, and
(L03) (Warranty and Coupon Computation) Schmitt Company must make computations and adjusting entries for the following independent situations at December 31, 2018.1. Its line of amplifiers carries a 3-year warranty against defects. On the basis of past experience the estimated warranty costs
(L03) WRITING GROUPWORK (Liability Errors) You are the independent auditor engaged to audit Millay Corporation’s December 31, 2017, financial statements. Millay manufactures household appliances. During the course of your audit, you discovered the following contingent liabilities.1. Millay began
(L03) (Warranties and Premiums) Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques—warranties and premiums—to attract customers.Musical instruments and sound equipment
(L03) WRITING (Loss Contingencies: Entries and Essays) Polska Corporation, in preparation of its December 31, 2017, financial statements, is attempting to determine the proper accounting treatment for each of the following situations.1. As a result of uninsured accidents during the year, personal
(L03) WRITING (Loss Contingencies: Entries and Essay) On November 24, 2017, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totaling$9,000,000 were filed on January 11, 2018, against the airline by
(L03,4) (Premium Entries and Financial Statement Presentation) Sycamore Candy Company offers an MP3 download(seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The
(L03) (Premium Entries) To stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. Five coupons are redeemable for a premium consisting of a children’s hand puppet. In 2018, the company purchases 40,000 puppets at $1.50 each and sells 480,000 boxes of
(L03) (Warranties) Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 600 machines in
(L03) (Extended Warranties) Dos Passos Company sells televisions at an average price of $900 and also offers to each customer a separate 3-year warranty contract for $90 that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 300
(L03) GROUPWORK (Warranties) Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2017, the corporation sells for cash 400 computers at a unit price of $2,500. On the basis of
(L01) EXCEL (Payroll Tax Entries) The following is a payroll sheet for Otis Import Company for the month of September 2017. The company is allowed a 1% unemployment compensation rate by the state; the federal unemployment tax rate is 0.8% and the maximum for both is $7,000. Assume a 10% federal
(L01) (Payroll Tax Entries) Cedarville Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.Earnings to Weekly Vacation Pay to Be Employee July 31 Pay Received in
(L01,3) EXCEL (Liability Entries and Adjustments) Listed below are selected transactions of Schultz Department Store for the current year ending December 31.1. On December 5, the store received $500 from the Selig Players as a deposit to be returned after certain furniture to be used in stage
(L01) GROUPWORK (Current Liability Entries and Adjustments) Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system.1. On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10,
(L02,4,5) (Accounting for R&D Costs) During 2015, Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $60,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $320,000 and was
(L01,2,3,4) EXCEL (Comprehensive Intangible Assets) Montana Matt’s Golf Inc. was formed on July 1, 2016, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls.Magilke plans to integrate the instructional business into his
(L03,4,5) GROUPWORK (Goodwill, Impairment) On July 31, 2017, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita reported the following balance sheet at the time of the acquisition.Current assets $ 800,000 Current
(L01,2,5) (Accounting for Franchise, Patents, and Trademark) Information concerning Sandro Corporation’s intangible assets is as follows.1. On January 1, 2017, Sandro signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this
(L01,2,4,5) EXCEL (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops.Instead, it conducts research and develops products and
(L01,2,3,5) GROUPWORK (Correct Intangible Assets Account) Reichenbach Co., organized in 2016, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2017 and 2018.Intangible Assets 7/1/17 8-year franchise; expiration
*P 11-12 (L01,6) EXCEL (Depreciation—SL, DDB, SYD, Act., and MACRS) On January 1, 2016, Locke Company, a small machine-tool manufacturer, acquired for $1,260,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $60,000.
(L01,2) (Depreciation for Partial Periods—SL, Act., SYD, and DDB) On January 1, 2015, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours before it needs to be replaced. The
(L01) GROUPWORK (Comprehensive Depreciation Computations) Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on page 595. You have been asked to assist in
(L03) (Impairment) Roland Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $10,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced that would accelerate the
(L01) GROUPWORK (Comprehensive Fixed-Asset Problem) Darby Sporting Goods Inc. has been experiencing growth in the demand for its products over the last several years. The last two Olympic Games greatly increased the popularity of basketball around the world. As a result, a European sports retailing
(L01,4) (Natural Resources—Timber) Bronson Paper Products purchased 10,000 acres of forested timberland in March 2017. The company paid $1,700 per acre for this land, which was above the $800 per acre most farmers were paying for cleared land. During April, May, June, and July 2017, Bronson cut
(L04) (Depletion, Timber, and Unusual Loss) Conan O’Brien Logging and Lumber Company owns 3,000 acres of timberland on the north side of Mount Leno, which was purchased in 2005 at a cost of $550 per acre. In 2017, O’Brien began selectively logging this timber tract. In May 2017, Mount Leno
(L01,4) (Depletion and Depreciation—Mining) Khamsah Mining Company has purchased a tract of mineral land for$900,000. It is estimated that this tract will yield 120,000 tons of ore with sufficient mineral content to make mining and processing profitable. It is further estimated that 6,000 tons of
(L01,2) (Depreciation and Error Analysis) A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period
(L01,2) (Depreciation—SYD, Act., SL, and DDB) The following data relate to the Machinery account of Eshkol, Inc. at December 31, 2017.Machinery A B C D Original cost $46,000 $51,000 $80,000 $80,000 Year purchased 2012 2013 2014 2016 Useful life 10 years 15,000 hours 15 years 10 years Salvage
(L01,2) (Depreciation for Partial Periods—SL, Act., SYD, and Declining-Balance) The cost of equipment purchased by Charleston, Inc., on June 1, 2017, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7
(L02) EXCEL GROUPWORK (Depreciation for Partial Period—SL, SYD, and DDB) Alladin Company purchased Machine #201 on May 1, 2017. The following information relating to Machine #201 was gathered at the end of May.Price $85,000 Credit terms 2/10, n/30 Freight-in $ 800 Preparation and installation
(L01,4) (Purchases by Deferred Payment, Lump-Sum, and Nonmonetary Exchanges) Klamath Company, a manufacturer of ballet shoes, is experiencing a period of sustained growth. In an effort to expand its production capacity to meet the increased demand for its product, the company recently made several
(L04) (Nonmonetary Exchanges) During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000 less accumulated depreciation $50,000) for a new crane from Brigham Manufacturing Co. The new crane cost Brigham $165,000 to manufacture and is
(L04) (Nonmonetary Exchanges) On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde’s asset is referred to below as “Asset A,” and Wiggins’ is referred to as “Asset B.” The following facts pertain to these assets.Asset A Asset B Original cost $96,000 $110,000
(L04) (Nonmonetary Exchanges) Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry.1. Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for
(L03) GROUPWORK (Capitalization of Interest) Laserwords Inc. is a book distributor that had been operating in its original facility since 1987. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for
(L01,3) (Interest During Construction) Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on the
(L01,3) EXCEL (Classification of Costs and Interest Capitalization) On January 1, 2017, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker’s commission of $36,000, legal fees of$6,000, and title guarantee insurance of
(L01,4,6) GROUPWORK (Dispositions, Including Condemnation, Demolition, and Trade-In) Presented below is a schedule of property dispositions for Hollerith Co.Schedule of Property Dispositions Cost Accumulated Depreciation Cash Proceeds Fair Value Nature of Disposition Land $40,000 — $31,000
(L01,2,4) (Classification of Land and Building Costs) Spitfire Company was incorporated on January 2, 2018, but was unable to begin manufacturing activities until July 1, 2018, because new factory facilities were not completed until that date.The Land and Buildings account reported the following
(L01,6) (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2016, had the following balances.Land $ 300,000 Land improvements 140,000 Buildings 1,100,000 Equipment 960,000 During 2017,
(L01) EXCEL (Classification of Acquisition and Other Asset Costs) At December 31, 2016, certain accounts included in the property, plant, and equipment section of Reagan Company’s balance sheet had the following balances.Land $230,000 Buildings 890,000 Leasehold improvements 660,000 Equipment
(L07) (Change to LIFO Retail) Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2017.Amounts as shown below appear on the store’s books before adjustment.Cost Retail
(AICPA adapted)*P 9-13 (L07) GROUPWORK (Retail, LIFO Retail, and Inventory Shortage) Late in 2014, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group.
*P 9-12 (L07) (Conventional and Dollar-Value LIFO Retail) As of January 1, 2017, Aristotle Inc. adopted the retail method of accounting for its merchandise inventory.To prepare the store’s financial statements at June 30, 2017, you obtain the following data.Cost Selling Price Inventory, January 1
(L01,3,6) (Statement and Note Disclosure, LCNRV, and Purchase Commitment) Maddox Specialty Company, a division of Lost World Inc., manufactures three models of gear shift components for bicycles that are sold to bicycle manufacturers, retailers, and catalog outlets. Since beginning operations in
(L05) GROUPWORK (Retail Inventory Method) Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018.Inventory, October 1, 2018 At cost $ 52,000 At retail 78,000
(L05) (Retail Inventory Method) Presented below is information related to Waveland Inc.Cost Retail Inventory, 12/31/17 $250,000 $ 390,000 Purchases 914,500 1,460,000 Purchase returns 60,000 80,000 Purchase discounts 18,000 —Gross sales revenue (after employee discounts) — 1,410,000 Sales
(L05) EXCEL (Retail Inventory Method) The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.Inventory, January 1: at retail $25,000; at cost $17,000 Purchases in January: at retail $137,000; at cost $82,500 Freight-in: $7,000 Purchase
(L04) (Gross Profit Method) Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.Inventory (beginning) $ 80,000 Sales revenue $415,000 Purchases 290,000 Sales returns 21,000 Purchase returns
(L02) WRITING (Lower-of-Cost-or-Market) Fiedler Co. follows the practice of valuing its inventory at the lower-ofcost-or-market. The following information is available from the company’s inventory records as of December 31, 2017.Item Quantity Unit Cost Replacement Cost/Unit Estimated Selling
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