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intermediate accounting reporting
Intermediate Accounting 16th Edition Donald E. Kieso - Solutions
E7-17 (L06) (Transfer of Receivables with Recourse) Ames Quartet Inc. factors receivables with a carrying amount of $200,000 to Joffrey Company for $160,000 on a with recourse basis.Instructions The recourse provision has a fair value of $1,000. This transaction should be recorded as a sale.
E7-16 (L02,3,6) (Journalizing Various Receivable Transactions) The trial balance before adjustment for Phil Collins Company shows the following balances.Dr. Cr.Accounts Receivable $82,000 Allowance for Doubtful Accounts 2,120 Sales Revenue $430,000 Instructions Using the data above, give the
E7-15 (L06) (Assigning Accounts Receivable) On April 1, 2017, Rasheed Company assigns $400,000 of its accounts receivable to the Third National Bank as collateral for a $200,000 loan due July 1, 2017. The assignment agreement calls for Rasheed to continue to collect the receivables. Third National
E7-14 (L04,6) (Notes Receivable with Unrealistic Interest Rate) On December 31, 2015, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Abbey Co. agreed to accept a $200,000 zero-interest-bearing note due December 31, 2017, as payment in full.
E7-13 (L04) (Note Transactions at Unrealistic Interest Rates) On July 1, 2017, Agincourt Inc. made two sales.1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt’s books at
E7-12 (L02,3,6) (Journalizing Various Receivable Transactions) Presented below is information related to James Garfield Corp., which sells merchandise with terms 2/10, net 60. Garfield records its sales and receivables net.July 1 James Garfield Corp. sold to Warren Harding Co. merchandise having a
E7-11 (L03) (Bad Debts—Aging) Danica Patrick, Inc. includes the following account among its trade receivables.Hopkins Co.1/1 Balance forward 700 1/28 Cash (#1710) 1,100 1/20 Invoice #1710 1,100 4/2 Cash (#2116) 1,350 3/14 Invoice #2116 1,350 4/10 Cash (1/1 Balance) 155 4/12 Invoice #2412 1,710
E7-10 (L03) (Bad-Debt Reporting) The chief accountant for Dickinson Corporation provides you with the following list of accounts receivable written off in the current year.Date Customer Amount March 31 E. L. Masters Company $7,800 June 30 Stephen Crane Associates 6,700 September 30 Amy Lowell’s
E7-9 (L03) (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Taylor Swift Inc.shows the following balances.Dr. Cr.Accounts Receivable $90,000 Allowance for Doubtful Accounts 1,750 Sales Revenue (all on credit) $680,000 Instructions Give the entry for
E7-8 (L03) (Recording Bad Debts) At the end of 2017, Aramis Company has accounts receivable of $800,000 and an allowance for doubtful accounts of $40,000. On January 16, 2018, Aramis Company determined that its receivable from Ramirez Company of $6,000 will not be collected, and management
E7-7 (L03) (Recording Bad Debts) Duncan Company reports the following financial information before adjustments.Dr. Cr.Accounts Receivable $100,000 Allowance for Doubtful Accounts $ 2,000 Sales Revenue (all on credit) 900,000 Sales Returns and Allowances 50,000 Instructions Prepare the journal entry
E7-6 (L02) (Recording Sales Transactions) Presented below is information from Perez Computers Incorporated.July 1 Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Perez uses the gross method to record cash discounts. Perez estimates allowances of $1,300 will be honored on these
E7-5 (L02) EXCEL (Recording Sales Gross and Net) On June 3, Arnold Company sold to Chester Company merchandise having a sale price of $3,000 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $90, terms n/30, was received by Chester on June 8 from John Booth Transport Service for
E7-4 (L02) (Determining Ending Accounts Receivable) Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,500 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $82,000 as shown in the ledger.The following
E7-3 (L02) (Financial Statement Presentation of Receivables) Jim Carrie Company shows a balance of $181,140 in the Accounts Receivable account on December 31, 2017. The balance consists of the following.Installment accounts due in 2018 $23,000 Installment accounts due after 2018 34,000 Overpayments
E7-2 (L01) (Determining Cash Balance) Presented below are a number of independent situations.Instructions For each individual situation, determine the amount that should be reported as cash. If the item(s) is not reported as cash, explain the rationale.1. Checking account balance $925,000;
E7-1 (L01) EXCEL (Determining Cash Balance) The controller for Clint Eastwood Co. is attempting to determine the amount of cash to be reported on its December 31, 2017, balance sheet. The following information is provided.1. Commercial savings account of $600,000 and a commercial checking account
E6-22 (L05) (Fair Value Estimate) Killroy Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $3,500,000, but according to GAAP, it is assessed for impairment on an annual basis. To perform this impairment test, Killroy must
E6-21 (L05) (Expected Cash Flows and Present Value) Keith Bowie is trying to determine the amount to set aside so that he will have enough money on hand in 2 years to overhaul the engine on his vintage used car. While there is some uncertainty about the cost of engine overhauls in 2 years, by
E6-20 (L05) (Expected Cash Flows) For each of the following, determine the expected cash flows.Cash Flow Probability Estimate Assessment (a) $ 4,800 20%6,300 50%7,500 30%(b) $ 5,400 30%7,200 50%8,400 20%(c) $(1,000) 10%3,000 80%5,000 10%
E6-19 (L04) (Least Costly Payoff) Assuming the same facts as those in E6-18 except that the payments must begin now and be made on the first day of each of the 15 years, what payment method would you recommend?
E6-18 (L04) (Least Costly Payoff) Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,600,000, or it can make annual payments of $300,000 for 15 years, each payment due on the last day of
E6-17 (L04) (Computation of Amount of Rentals) Your client, Keith Moreland Leasing Company, is preparing a contract to lease a machine to Souvenirs Corporation for a period of 25 years. Moreland has an investment cost of $365,755 in the machine, which has a useful life of 25 years and no salvage
E6-16 (L03) (Retirement of Debt) Ricky Fowler borrowed $70,000 on March 1, 2015. This amount plus accrued interest at 6%compounded semiannually is to be repaid March 1, 2025. To retire this debt, Ricky plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2020, and
E6-15 (L02,3) (Investment Decision) Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually.Instructions (a) If Bogut plans to establish the AB Foundation once the fund grows to $1,999,000, how many years until he
E6-14 (L05) (Computation of Pension Liability) Nerwin, Inc. is a furniture manufacturing company with 50 employees.Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1,
E6-13 (L05) (Computation of Bond Liability) Hincapie Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes.After a careful evaluation of the request, the board
E6-12 (L04) (Analysis of Alternatives) The Black Knights Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Black Knights has decided to locate a new factory in the Panama City area. Black Knights
E6-11 (L04) (Evaluation of Purchase Options) Sosa Excavating Inc. is purchasing a bulldozer. The equipment has a price of $100,000. The manufacturer has offered a payment plan that would allow Sosa to make 10 equal annual payments of $16,274.53, with the first payment due one year after the
E6-10 (L02) (Unknown Periods and Unknown Interest Rate) Consider the following independent situations.(a) Mike Finley wishes to become a millionaire. His money market fund has a balance of $92,296 and has a guaranteed interest rate of 10%. How many years must Mike leave that balance in the fund in
E6-9 (L02) (Unknown Rate) LEW Company purchased a machine at a price of $100,000 by signing a note payable, which requires a single payment of $123,210 in 2 years. Assuming annual compounding of interest, what rate of interest is being paid on the loan?
E6-8 (L05) (Computations for a Retirement Fund) Clarence Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 8% basis that will enable him to withdraw $20,000 per year on June 30, beginning in 2021 and continuing through 2024. To
E6-7 (L05) (Computation of Bond Prices) What would you pay for a $100,000 debenture bond that matures in 15 years and pays $5,000 a year in interest if you wanted to earn a yield of:(a) 4%? (b) 5%? (c) 6%?
E6-6 (L02,3,4) (Future Value and Present Value Problems) Presented below are three unrelated situations.(a) Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be
E6-5 (L04) (Computation of Present Value) Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.(a) $30,000 receivable at the end of each period for 8 periods compounded at 12%.(b) $30,000 payments to be made at
E6-4 (L03,4) (Computation of Future Values and Present Values) Using the appropriate interest table, answer the following questions. (Each case is independent of the others).(a) What is the future value of 20 periodic payments of $4,000 each made at the beginning of each period and compounded at
E6-3 (L02,3,4) EXCEL (Computation of Future Values and Present Values) Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)(a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest?(b) What is the
E6-2 (L01,2) EXCEL (Simple and Compound Interest Computations) Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Alan withdraws the accumulated amount of money.Instructions (a) Compute the
E6-1 (L01) (Using Interest Tables) For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor.1. In a future value of 1 table Annual Number of Rate Years Invested Compoundeda. 9% 9 Annuallyb. 12% 5
E5-13 (L04) (Statement of Cash Flows—Classifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:1. Operating activity—add to net income.2. Operating activity—deduct
E5-10 (L02,3) (Current Liabilities) Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year.(a) On December 20, 2017, a former employee filed a legal action against Baylor
E5-8 (L02) (Current vs. Long-term Liabilities) Frederic Chopin Corporation is preparing its December 31, 2017, balance sheet. The following items may be reported as either a current or long-term liability.1. On December 15, 2017, Chopin declared a cash dividend of $2.50 per share to stockholders of
E5-4 (L02,3) (Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year.1. Common Stock.2. Discount on Bonds Payable.3. Treasury Stock (at cost).4. Notes Payable (short-term).5. Raw Materials.6. Preferred Stock Investments
E5-3 (L02,3) (Classification of Balance Sheet Accounts) Assume that Fielder Enterprises uses the following headings on its balance sheet.(a) Current assets. (g) Long-term liabilities.(b) Investments. (h) Capital stock.(c) Property, plant, and equipment. (i) Equity attributed to noncontrolling
E5-2 (L02,3) (Classification of Balance Sheet Accounts) Presented below are the captions of Faulk Company’s balance sheet.(a) Current assets. (f) Current liabilities.(b) Investments. (g) Noncurrent liabilities.(c) Property, plant, and equipment. (h) Capital stock.(d) Intangible assets. (i)
E5-1 (L02,3) (Balance Sheet Classifications) Presented below are a number of balance sheet accounts of Deep Blue Something, Inc.(a) Debt Investments. (h) Interest Payable.(b) Treasury Stock. (i) Deficit.(c) Common Stock. (j) Equity Investments (ownership stake of less than 20%).(d) Dividends
E4-17 (L03,4,6,7) (Various Reporting Formats) The following information was taken from the records of Roland Carlson Inc. for the year 2017: income tax applicable to income from continuing operations $187,000, income tax applicable to loss on discontinued operations $25,500, and unrealized holding
E4-16 (L06,7) (Comprehensive Income) C. Reither Co. reports the following information for 2017: sales revenue $700,000, cost of goods sold $500,000, operating expenses $80,000, and an unrealized holding loss on available-for-sale securities for 2017 of $60,000. It declared and paid a cash dividend
E4-15 (L03,7) (Comprehensive Income) Roxanne Carter Corporation reported the following for 2017: net sales $1,200,000, cost of goods sold $750,000, selling and administrative expenses $320,000, and an unrealized holding gain on available-for-sale securities $18,000.Instructions Prepare a statement
E4-14 (L05) (Change in Accounting Principle) Tim Mattke Company began operations in 2015 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2017, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is
E4-13 (L04) (Earnings per Share) At December 31, 2016, Shiga Naoya Corporation had the following stock outstanding.10% cumulative preferred stock, $100 par, 107,500 shares $10,750,000 Common stock, $5 par, 4,000,000 shares 20,000,000 During 2017, Shiga Naoya did not issue any additional common
E4-12 (L06) EXCEL (Retained Earnings Statement) Eddie Zambrano Corporation began operations on January 1, 2017.During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.Net Income Dividends Declared 2014 $ 40,000 $ –0–2015 125,000 50,000 2016 160,000
E4-11 (L03,4) (Condensed Income Statement—Periodic Inventory Method) The following are selected ledger accounts of Spock Corporation at December 31, 2017.Cash $ 185,000 Salaries and wages expense (sales) $284,000 Inventory 535,000 Salaries and wages expense (offi ce) 346,000 Sales revenue
E4-10 (L04) (Earnings per Share) The stockholders’ equity section of Hendly Corporation appears below as of December 31, 2017.8% preferred stock, $50 par value, authorized 100,000 shares, outstanding 90,000 shares $ 4,500,000 Common stock, $1.00 par, authorized and issued 10 million shares
E4-9 (L03,4,6) (Multiple-Step Statement with Retained Earnings Statement) Presented below is information related to Ivan Calderon Corp. for the year 2017.Net sales $1,300,000 Write-off of inventory due to obsolescence $ 80,000 Cost of goods sold 780,000 Depreciation expense omitted by accident in
E4-8 (L03,4) (Income Statement, EPS) Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2017.Cash $ 50,000 Administrative expenses 100,000 Selling expenses 80,000 Net sales 540,000 Cost of goods sold 210,000 Cash dividends declared (2017) 20,000 Cash dividends
E4-7 (L02,3,4) (Multiple-Step and Single-Step Statements) The accountant of Latifa Shoe Co. has piled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2017.Rent revenue $ 29,000 Interest expense 18,000 Market appreciation on
E4-6 (L02,3,4) (Multiple-Step Statement) The following balances were taken from the books of Alonzo Corp. on December 31, 2017.Interest revenue $ 86,000 Accumulated depreciation—equipment $ 40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable
E4-5 (L02,3) EXCEL (Multiple-Step and Single-Step Statements) Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride
E4-4 (L02,3) (Single-Step Income Statement) The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2017. Fortunately, the controller had kept certain statistical data related to the income statement as follows.1. The beginning merchandise inventory was $92,000 and decreased
E4-3 (L02,4) (Income Statement Items) Presented below are certain account balances of Paczki Products Co.Rent revenue $ 6,500 Sales discounts $ 7,800 Interest expense 12,700 Selling expenses 99,400 Beginning retained earnings 114,400 Sales revenue 390,000 Ending retained earnings 125,000 Income tax
E4-2 (L02,4) (Compute Income Measures) Presented below is information related to Viel Company at December 31, 2017, the end of its first year of operations.Sales revenue $310,000 Cost of goods sold 140,000 Selling and administrative expenses 50,000 Gain on sale of plant assets 30,000 Unrealized
E4-1 (L02) (Computation of Net Income) Presented below are changes in all the account balances of Fritz Mayhew Furniture Co. during the current year, except for retained earnings.Increase Increase (Decrease) (Decrease)Cash $ 79,000 Accounts Payable $ (51,000)Accounts Receivable (net) 45,000 Bonds
*E3-20 (L03,8) (Adjusting and Reversing Entries) When the accounts of Daniel Barenboim Inc. are examined, the adjusting data listed below are uncovered on December 31, the end of an annual fiscal period.1. The prepaid insurance account shows a debit of $5,280, representing the cost of a 2-year fire
*E3-18 (L07) (Cash to Accrual Basis) Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis.During 2017, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2017, and December 31, 2017, she had accounts receivable, unearned
E3-17 (L02) (Transactions of a Corporation, Including Investment and Dividend) Scratch Miniature Golf and Driving Range Inc. was opened on March 1 by Scott Verplank. The following selected events and transactions occurred during March.Mar. 1 Invested $50,000 cash in the business in exchange for
E3-13 (L05,6) (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue $800,000, Delivery Expense $12,000, Sales Returns and Allowances $24,000, and Sales Discounts $15,000.Instructions
E3-8 (L03) EXCEL (Adjusting Entries) Andy Roddick is the new owner of Ace Computer Services. At the end of August 2017, his first month of ownership, Roddick is trying to prepare monthly financial statements. Below is some information related to unrecorded expenses that the business incurred during
E3-6 (L03) (Adjusting Entries) Karen Weller, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred.1. Performed services for patients who had dental plan insurance. At January 31, $750 of such services was performed but not
E3-1 (L02) (Transaction Analysis—Service Company) Beverly Crusher is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred.April 2 Invested $32,000 cash and equipment valued at $14,000 in the business.2 Hired
(L06) What accounting assumption, principle, or constraint would Target Corporation use in each of the situations below?(a) Target was involved in litigation over the last year. This litigation is disclosed in the financial statements.(b) Target allocates the cost of its depreciable assets over the
(L06) Vande Velde Company made three investments during 2017. (1) It purchased 1,000 shares of Sastre Company, a start-up company. Vande Velde made the investment based on valuation estimates from an internally developed model. (2) It purchased 2,000 shares of GE stock, which trades on the NYSE.
(L06) Identify which basic principle of accounting is best described in each item below.(a) Norfolk Southern Corporation reports revenue in its income statement when the performance obligation is satisfied instead of when the cash is collected.(b) Yahoo! recognizes depreciation expense for a
(L05) If the going concern assumption is not made in accounting, discuss the differences in the amounts shown in the financial statements for the following items.(a) Land. (d) Inventory.(b) Unamortized bond premium. (e) Prepaid insurance.(c) Depreciation expense on equipment.
(L05) Identify which basic assumption of accounting is best described in each item below.(a) The economic activities of FedEx Corporation are divided into 12-month periods for the purpose of issuing annual reports.(b) Solectron Corporation, Inc. does not adjust amounts in its financial statements
(L04) Explain how you would decide whether to record each of the following expenditures as an asset or an expense.Assume all items are material.(a) Legal fees paid in connection with the purchase of land are $1,500.(b) Eduardo, Inc. paves the driveway leading to the office building at a cost of
(L04) For each item below, indicate to which category of elements of financial statements it belongs.(a) Retained earnings (e) Depreciation (h) Dividends(b) Sales (f) Loss on sale of equipment (i) Gain on sale of investment(c) Additional paid-in capital (g) Interest payable (j) Issuance of common
(L03) Presented below are three different transactions related to materiality. Explain whether you would classify these transactions as material.(a) Blair Co. has reported a positive trend in earnings over the last 3 years. In the current year, it reduces its bad debt allowance to ensure another
(L03) Identify which qualitative characteristic of accounting information is best described in each item below. (Do not use relevance and faithful representation.)(a) The annual reports of Best Buy Co. are audited by certified public accountants.(b) Black & Decker and Cannondale Corporation both
(L03) Discuss whether the changes described in each of the cases below require recognition in the CPA’s audit report as to consistency. (Assume that the amounts are material.)(a) The company changed its inventory method to FIFO from weighted-average, which had been used in prior years.(b) The
(L03) Match the qualitative characteristics below with the following statements.1. Timeliness 5. Faithful representation 2. Completeness 6. Relevance 3. Free from error 7. Neutrality 4. Understandability 8. Confirmatory value(a) Quality of information that assures users that information represents
(L03) Match the qualitative characteristics below with the following statements.1. Relevance 5. Comparability 2. Faithful representation 6. Completeness 3. Predictive value 7. Neutrality 4. Confirmatory value 8. Timeliness(a) Quality of information that permits users to identify similarities in and
The following are a number of values taken from compound interest tables involving the same number of periods and the same rate of interest. Indicate what each of these four values represents.(a) 6.71008. (c) .46319.(b) 2.15892. (d) 14.48656.
Regina Henry deposited $20,000 in a money market certificate that provides interest of 10% compounded quarterly if the amount is maintained for 3 years. How much will Regina have at the end of 3 years?
Will Smith will receive $80,000 5 years from now, from a trust fund established by his father. Assuming the appropriate interest rate for discounting is 12% (compounded semiannually), what is the present value of this amount today?
Property/casualty insurance companies have been criticized because they reserve for the total loss as much as 5 years before it may happen. The IRS has joined the debate because it says the full reserve is unfair from a taxation viewpoint. What do you believe is the IRS position?
In what accounts should the following items be classified?(a) Coins and currency.(b) U.S. Treasury (government) bonds.(c) Certificate of deposit (matures in 5 months).(d) Cash in a bank that is in receivership.(e) NSF check (returned with bank statement).(f) Deposit in foreign bank (exchangeability
What is a repurchase agreement (product financing)arrangement? How should a product repurchase agreement be reported in the financial statements?
On December 31, 2016, the inventory of Powhattan Company amounts to $800,000. During 2017, the company decides to use the dollar-value LIFO method of costing inventories. On December 31, 2017, the inventory is$1,053,000 at December 31, 2017, prices. Using the December 31, 2016, price level of 100
What approaches may be employed in applying the LCNRV procedure? Which approach is normally used and why?
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases using LCNRV.Cases 1 2 3 4 5 Cost $15.90 $16.10 $15.90 $15.90 $15.90 Sales value 14.80 19.20 15.20 10.40 17.80 Estimated cost to
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule.Cases 1 2 3 4 5 Cost $15.90 $16.10 $15.90 $15.90 $15.90 Net realizable value 14.50 19.20
A fire destroys all of the merchandise of Assante Company on February 10, 2017. Presented below is information compiled up to the date of the fire.Inventory, January 1, 2017 $ 400,000 Sales revenue to February 10, 2017 1,950,000 Purchases to February 10, 2017 1,140,000 Freight-in to February 10,
(a) Determine the ending inventory under the conventional retail method for the furniture department of Mayron Department Stores from the following data.Cost Retail Inventory, Jan. 1 $ 149,000 $ 283,500 Purchases 1,400,000 2,160,000 Freight-in 70,000 Markups, net 92,000 Markdowns, net 48,000 Sales
Discuss the basic accounting problem that arises in handling each of the following situations.(a) Assets purchased by issuance of common stock.(b) Acquisition of plant assets by gift or donation.(c) Purchase of a plant asset subject to a cash discount.(d) Assets purchased on a long-term credit
A building that was purchased on December 31, 2003, for$2,500,000 was originally estimated to have a life of 50 years with no salvage value at the end of that time. Depreciation has been recorded through 2017. During 2018, an examination of the building by an engineering firm discloses that its
Andrea Torbert purchased a computer for $8,000 on July 1, 2017. She intends to depreciate it over 4 years using the double-declining-balance method. Salvage value is $1,000. Compute depreciation for 2018.
Wal-Mart Stores, Inc. in 2014 reported net income of$16.4 billion, net sales of $482.2 billion, and average total assets of $204.2 billion. What is Wal-Mart’s asset turnover? What is Wal-Mart’s return on assets?*29. What is a modified accelerated cost recovery system(MACRS)? Speculate as to why
Indicate the proper accounting for the following items.(a) Organization costs. (c) Operating losses.(b) Advertising costs.
In 2016, Austin Powers Corporation developed a new product that will be marketed in 2017. In connection with the development of this product, the following costs were incurred in 2016: research and development costs$400,000, materials and supplies consumed $60,000, and compensation paid to research
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