New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
intermediate accounting reporting
Intermediate Accounting Reporting and Analysis 3rd edition James M. Wahlen, Jefferson P. Jones, Donald Pagach - Solutions
On July 1, 2019, Wolfpack Corporation purchased securities which it intends to buy and sell frequently. These securities consisted of Todd Corporation 10%, 5-year bonds with a face value of $20,000 which were purchased for $18,500. Prepare the July 1 journal entry to record the purchase of these
On January 1, 2019, Gatrong Corporation purchased 12%, 5-year Fleming Corporation bonds with a face value of $200,000. It expects to hold these bonds until maturity. The bonds pay interest semiannually on June 30 and December 31. Gatrong paid $215,443, a price that yields a 10% effective annual
On January 1, 2019, Park Company accepted a $36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park $200,000 and had a book value of $20,000 on the date of the sale. At the 12% imputed interest rate for this type of
On January 2, 2019, Portela Inc. bought 30% of the outstanding common stock of Bracero Corporation for $258,000 cash. Portela accounts for this investment by the equity method. At the date of acquisition of the stock, Bracero’s property, plant, and equipment had a fair value in excess of its
On its December 31, 2018, balance sheet, Fay Company reported equity investments at a market value of $183,000. There was no change during 2019 in the composition of Fay’s portfolio of marketable equity securities. Pertinent data are as follows:What amount of loss on these securities should be
In 2021, Cromwell Corporation purchased bonds of Oliver Company at par for $300,000 and classified the investment as available-for-sale. In 2022, the market value declined to $200,000. In 2023, the market value of the investment rose to $230,000, and the investment was sold. How much should
On July 1, 2019, Aldrich Company purchased as an available-for-sale security $200,000 face value, 9% U.S. Treasury notes for $194,000.The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for $199,000.Aldrich normally uses
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows:The net holding gain or loss included in Anthony’s income statement for the year should be:a. $0b. $3,000
On January 1, 2019, Weaver Company purchased as held-to-maturity debt securities $500,000 face value of Park Corporation’s 8% bonds for $456,200. The bonds were purchased to yield 10% interest and pay interest annually. The bonds mature on January 1, 2024. Weaver uses the effective interest
Briefly describe how to determine and record the gain or loss on the sale of a minority passive investment in equity securities.
Briefly describe how to determine and record any subsequent increases or decreases in the fair value of a minority passive investment in equity securities.
Briefly summarize the accounting for an investment in equity securities.
Describe how to recognize an impairment under the current expected credit loss model.
What accounting is required for minority passive equity investments?
a. On January 1, 2019, Tully signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $85,000. Of this amount, $25,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020.
Lee Manufacturing Corporation was incorporated on January 3, 2018. The corporation’s financial statements for its first year’s operations were not examined by a CPA. You have been engaged to examine the financial statements for the year ended December 31, 2019, and your examination is
Munn Inc. had the following intangible account balance at December 31, 2018:Patent .........................$168,000Information relating to Munn’s patent and transactions involving other intangible assets during 2019 includes the following:a. The patent was purchased from Grey Company for
Barb Company has provided information on intangible assets as follows:1. A patent was purchased from Lou Company for $1,500,000 on January 1, 2018. Barb estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou’s accounting records at a net book value of
On January 2, 2019, Brock Corporation purchased a tract of land (site number 101) with a building for $600,000. Additionally, Brock paid a real estate broker’s commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing statement indicated that the land’s
Borrell Company purchased four delivery trucks on January 2, 2019, for $22,000 each.Borrell expected two of the trucks to last 5 years and have a residual value of $3,500 each. The other two trucks had an expected life of 8 years and no residual value. Borrell uses straight-line depreciation on a
Yummy Cereal Company is offering one toy shovel set for 15 box tops of its cereal. Yearto-date sales have been off, and it is hoped that this offer will stimulate demand. Each shovel set costs the company $3. The following data are available for the last 3 months of 2019:It is estimated that only
Intella Inc. adopted the dollar-value retail LIFO method on January 1, 2018. The following data apply to the 4 subsequent years:In addition, the following price indexes are available:Required:Compute the inventory at the end of each of the 4 years. Round the cost-to-retail ratio to 3 decimal
Red Department Store uses the retail inventory method. Information relating to the computation of the inventory at December 31, 2019, is as follows:Estimated normal shrinkage is 2% of sales.Required:Prepare a schedule to calculate the estimated ending inventory at the lower of average cost or
EKC Company uses the retail inventory method. The following information for 2019 is available:Required:Compute the cost of the ending inventory under each of the following cost flow assumptions (round the cost-toretail ratio to 3 decimal places):1. FIFO2. average cost3. LIFO4. lower of cost or
Turner Corporation uses the retail inventory method. The following information relates to 2019:Required:Compute the cost of the ending inventory under each of the following cost flow assumptions (round the cost-toretail ratio to 3 decimal places):1. FIFO2. average cost3. LIFO4. lower of cost or
On June 30, 2019, a flash flood damaged the warehouse and factory of Padway Corporation, completely destroying the work-in-process inventory. There was no damage to either the raw materials or finished goods inventories. A physical inventory taken after the flood revealed the following
January 1, 2018, Sato Company adopted the dollar-value LIFO method of inventory costing. Sato’s ending inventory records appear as follows:Required:Compute the ending inventory for the years 2018, 2019, 2020, and 2021, using the dollar-value LIFO method.Round to the nearest dollar. Year Current
When the double-extension approach to the dollar-value LIFO inventory cost flow method is used, the inventory layer added in the current year is multiplied by an index number. How would the following be used in the calculation of this index number? Ending Inventory at Current-Year Cost Ending
Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold computed when inventory is valued using the FIFO method exceeds cost of goods sold when inventory is valued using the LIFO method?a. Prices decreased.b. Prices remained unchanged.c. Prices
During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of cocoa beans at $1.00 per pound, delivery to be made in the spring of 2020. Because a record harvest is predicted for 2020, the price per pound for cocoa beans had fallen to $0.80 by December 31,
Hogan Company uses the net method of accounting for sales discounts. Hogan also offers trade discounts to various groups of buyers. On August 1, 2019, Hogan factored some accounts receivable on a without-recourse basis. Hogan incurred a finance charge. Hogan also has some notes receivable bearing
SituationGilmatt Company developed a new product that it planned to sell directly to customers and to promote heavily because of “stiff” competition in the marketplace. Its marketing department did extensive market surveys and developed a marketing plan for this product. The plan called for a
SituationAfter securing lease commitments from several major stores, Bay Lake Shops Inc. was organized and built a shopping center in a growing suburb. The shopping center would have opened on schedule on January 2, 2020, if it had not been struck by a severe tornado in December. Instead, it opened
Obtain Nestlé’s 2017 annual report using the “Investor Relations” portion of its website (do a web search for Nestlé investor relations).Required:1. What was the total amount of intangible assets that Nestlé reported at the end of 2017, and what was the amount of each component?2. What is
Obtain Starbucks’s 2017 annual report either using the “Investor Relations” portion of its web-site (do a web search for Starbucks investor relations) or go to http://www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).”Required:1. What was the total
On June 30, 2019, your client, Sprauge Corporation, was granted two patents covering plastic cartons that it has been producing and marketing profitably for the past 3 years. One patent covers the manufacturing process, and the other covers the related products.Sprauge executives tell you that
Elson Corporation, a retail fuel oil distributor, has increased its annual sales volume to a level three times greater than the annual sales of a dealer it purchased in 2015 in order to begin operations.The board of directors recently received an offer to negotiate the sale of Elson to a large
In examining Samson Manufacturing Company’s books, you find on the December 31, 2019, balance sheet the item, “Costs of patents, $308,440.” Referring to the ledger accounts, you note the following items regarding one patent acquired in 2016:There are no credits in the account, and the
Bryant Corporation was incorporated on December 1, 2018, and began operations one week later. Before closing the books for the fiscal year ended November 30, 2019, Bryant’s controller prepared the following financial statements:Ended November 30, 2019Net sales
Hamilton Company’s balance sheet on January 1, 2019, was as follows:Korbel Company is considering purchasing Hamilton (a privately held company) and discovers the following about Hamilton:a. No allowance for doubtful accounts has been established. A $10,000 allowance is considered appropriate.b.
Wember Company acquired a subsidiary company on December 31, 2015, and recorded the cost of the intangible assets it acquired as follows:Patent...................... $100,000Trade name ................80,000Goodwill ...................150,000The patent is being amortized by the straight-line method
Bailey Company was formed in January 2017 and is preparing its financial statements under GAAP for the first time at the end of 2019. Its general ledger at December 31, 2019, includes the following assets:Patent ............................$120,000Copyright .........................140,000Trade
During the year-end audit of Cressman Corporation’s financial statements for 2019, you discover the following items:1. Cressman capitalized $57,000 to the Patent account at the beginning of 2018 for the cost of a patent. This amount included $50,000 of R&D costs. The patent was amortized
Byrd Corporation engaged in the following transactions at the beginning of 2019:a. Purchased a Hogburger franchise for a 5-year, $60,000, 10% interest-bearing note. The franchise has an indefinite life providing the terms of the franchise are not violated.b. Sold a trade name for $50,000. The trade
Jolis Company has provided information on the following items:1. A patent was purchased from Totley Company for $500,000 on January 1, 2018. At that time, Jolis estimated the remaining useful life to be 10 years. The patent was carried on Totley’s books at $20,000 when it sold the patent.2. On
Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $100,000 related to the purchase. Since that time, the company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for
Marino Company had the following balance sheet on January 1, 2019:On January 2, 2019, Paul Company purchased Marino by acquiring all its outstanding shares for $300,000 cash.On that date, the fair value of the inventory was $30,000, and the fair value of the equipment was $240,000. In addition,
In 2019, eGames spent $8,000,000 developing new software. Of this amount, $5,300,000 was spent before July 2019—when technological feasibility was established. The product was marketed to consumers beginning in September 2019. eGames estimates total revenue of $20,000,000 to be earned during the
Elm Company is considering purchasing EKC Company. EKC’s balance sheet at December 31, 2019, is as follows:At December 31, 2019, Elm discovered the following about EKC:a. No allowance for uncollectible accounts has been established. An allowance of $5,000 is considered appropriate.b. The LIFO
Probst Company acquired a trademark several years ago at a cost of $60,000. Probst has never considered the trademark to be impaired. However, at the end of 2019, Probst has determined that the trademark is impaired because of a change in market conditions. It estimates that the trademark has a
Davis Research Company engaged in the following 5 transactions during 2019:1. Purchased a patent for $35,000. Legal costs of $5,000 were also incurred.2. Costs paid to improve patent:Engineering costs ...............................................$20,000Assembling and testing prototypes
Brush Company engaged in the following transactions at the beginning of 2019:a. Purchased a patent (Patent A) for $70,000 that had originally been filed in January 2013. The purchase was made to protect another patent (Patent B) that the company had filed for in January 2015 and subsequently
Barnum Company acquired several small companies at the end of 2018, and based on the acquisitions, reported the following intangible assets on its December 31, 2018, balance sheet:Patent ............................................$20,000Trade name ....................................35,000Internet
Kling Company was organized in late 2019 and began operations on January 2, 2020. Prior to the start of operations, it incurred the following costs:Costs of hiring new employees .......................................................................$ 3,000Attorney’s fees in connection with the
In 2019, Lalli Corporation incurred R&D costs as follows:Materials used from inventory ............................................................................$100,000Personnel in R&D lab
Cressman Company incurred R&D costs for various projects in 2019 as follows:Materials used for research .....................................................$ 240,000Materials used for development ...............................................160,000Equipment acquired that will have
Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2019, and a payment of $20,000 was made to obtain a copyright. Gansac expectsto sell 200,000 books evenly between 2019 and 2023 at a price of $10 per book.Required:1. Prepare journal
On January 11, 2019, Hughes Company applied for a trade name. Legal costs associated with the application were $20,000. In January 2020, the company incurred $8,000 of legal fees in a successful defense of its trade name. The trade name was not impaired in 2019 and 2020.Required:1. Compute the
On January 4, 2019, Franc Company purchased for $27,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2020, the company paid its lawyers $10,000 for successfully defending the patent in a
Using the information from RE12-9, assume that America’s Sweethearts is a reporting unit of Grand Champion. At the end of 2020, America’s Sweethearts has a fair value of $720,000 and a book value of $850,000, which includes any goodwill recorded in RE12-9. Of this fair value, $350,000 is
Grand Champion Inc. purchased America’s Sweethearts Corporation on January 1, 2019. At the time, America’s Sweethearts had the following assets and liabilities (stated at fair value):Cash ................................................................$ 62,000Accounts receivable
Mystic Pizza Company purchases a franchise from NY Pizzeria Inc. for $96,000 on June 1, 2019. The franchise will last 8 years. Record Mystic Pizza’s purchase of the franchise on June 1 and adjusting entry at the end of 2019.
Mystic Pizza Company purchased a patent from Prime Pizza Plus on January 1, 2019, for $72,000. The patent has a remaining legal life of 9 years. Prepare the journal entries to record the acquisition and the amortization for 2019, assuming Mystic Pizza amortizes its patents using the straight-line
Notting Hill Company incurred the following costs for R&D activities:Material used from inventory ....................................................................$15,000Equipment purchased (with cash) for R&D with no other use ................85,000Depreciation on building housing
Steel Magnolia Incorporated purchased a trademark 7 years ago for $275,000. Steel Magnolia believed the trademark would have an indefinite life. At the end of 2020, the corporation believes the fair value of the trademark is $189,000. Record the impairment loss for Steel Magnolia.
Flint Corporation’s general ledger as of December 31, 2019, includes the following accounts:Corporation (start-up) costs ...........................................................................$ 5,000Deposits with advertising agency (will be used to promote goodwill) ........8,000Discounts on
Sherwood Corporation incurred $68,000 of R&D costs in its laboratory to develop a patent that was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $13,600. Sherwood estimates that the economic life of the patent will be 8 years. What
During 2015, Traco Machine Company spent $176,000 on R&D costs for an invention. This invention was patented on January 2, 2016, at a nominal cost that was expensed in 2016. The patent had a legal life of 20 years and an estimated useful life of 8 years. In January 2020, Traco paid $16,000 for
Frye Company incurred R&D costs in 2019 as follows:Equipment acquired for use in multiple R&D projects ..........$1,000,000Depreciation on the equipment ...................................................150,000Materials used
Plaza Company originated late in 2018 and began operations on January 2, 2019. Plaza is engaged in conducting market research studies on behalf of manufacturers. Prior to the start of operations, the following costs were incurred:Attorney’s fees in connection with organization of Plaza $
Explain how a company accounts for the cost of its intangible assets.
Obtain Starbucks’s 2017 annual report either using the “Investor Relations” portion of its web site (do a Web search for Starbucks investor relations) or go to http://www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).”Required:1. Which depreciation
Lurch Company’s December 31, 2018, balance sheet follows:During 2019, the following transactions occurred:1. To avoid paying monthly rent of $5,000 on existing plant facilities, the company decided to buy a tract of land and construct a building of its own on it. On January 2, 2019, Lurch
Pell Corporation’s Property, Plant, and Equipment and Accumulated Depreciation accounts had the following balances at December 31, 2018:Depreciation method and useful lives:• Land improvements: Straight-line; 15 years.• Building: 150%-declining-balance; 20 years.• Machinery and equipment:
Information for Blake Corporation’s property, plant, and equipment for 2019 is:Depreciation Method and Useful LifeBuilding: 150%-declining-balance; 25 years.Machinery and equipment: Straight-line; 10 years.Automotive equipment: Sum-of-the-years’-digits; 4 years.Leasehold improvements:
Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the
On December 31, 2019, Vail Company owned the following assets:Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions:Jan. 3 Extended the building at a cost of $30,000. The extension provided an addition to the service
Logan Corporation, a manufacturer of steel products, began operations on October 1, 2018.Logan’s accounting department has started the fixed asset and depreciation schedule shown as follows:You have been asked to complete this schedule. In addition to determining that the data already on the
Hunter Company purchased a light truck on January 2, 2019 for $18,000. The truck, which will be used for deliveries, has the following characteristics:Estimated life: 5 yearsEstimated residual value: $3,000Depreciation method for financial statements: straight-line methodDepreciation for income tax
On July 1, 2019, Amplex Company purchased a coal mine for $2 million. The estimated capacity of the mine was 800,000 tons. During 2019, Amplex mines 10,000 tons of coal per month and sells 9,000 tons per month. The selling price is $30 per ton and production costs (excluding depletion and
On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that 400,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $80,000, after which it could be sold for $30,000.During 2019, Whistler mined
On January 1, 2014, Borstad Company purchased equipment for $1,180,000. It is depreciating the equipment over 25 years using the straight-line method and a zero residual value. Late in 2019, because of technological changes in the industry and reduced selling prices for its products, Borstad
Pete’s Petroleum, Inc., an SEC registrant with a calendar year-end, is in the business of constructing and operating offshore oil platforms. Pete’s Petroleum is required legally to dismantle and remove the platforms at the end of their useful lives, which is estimated to be 10 years. On January
During 2019, Ryel Company’s controller asked you to prepare correcting journal entries for the following three situations:1. Machine A was purchased for $50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of
Kam Company purchased a machine on January 2, 2019, for $20,000. The machine had an expected life of 8 years and a residual value of $300. The double-declining-balance method of depreciation is used.Required:1. Compute the depreciation expense for each year of the asset’s life and book value at
Dinnell Company owns the following assets:In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for $7,000.Required:Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the
Cheadle Company purchased a fleet of 20 delivery trucks for $8,000 each on January 2, 2019. It decided to use composite depreciation on a straight-line basis and calculated the depreciation from the following schedule:Cheadle actually retired the trucks according to the following schedule (assume
Heist Company purchased a machine on January 2, 2019, and uses the 150%-declining-balance depreciation method. The machine has an expected life of 10 years and an expected residual value of $5,000. The following costs relate to the acquisition and use of the machine during the first year of its
Sayers Company purchased a building for $250,000 on January 2, 2019. The building has an expected residual value of $20,000 at the end of its expected life of 20 years.Required:1. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value on December 31, 2019, and December
Lord Company purchased a machine on January 2, 2019, for $70,000. The machine had an expected residual value of $10,000, an expected life of 8 years or 24,000 hours, and a capacity to produce 100,000 units. During 2019, Lord produced 12,000 units in 2,500 hours. In 2020, Lord produced 15,000 units
Winsey Company purchased equipment on January 2, 2019, for $700,000. The equipment has the following characteristics:Estimated service life 20 years, ..........100,000 hours, 950,000 units of outputEstimated residual value .....................$50,000During 2019 and 2020, the company used the
Dinkle Company purchased equipment for $50,000. The equipment has an estimated residual value of $5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements.Required:What is the difference between the company’s income before taxes reported
Feller Company purchased a site for a limestone quarry for $100,000 on January 2, 2019. It estimate that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of $20,000, after which the land could be sold for $10,000. In 2019, 80,000 tons
On July 1, 2019, Osceola Company retired a metal stamping machine that it had originally purchased for $1,500,000. At December 31, 2018, the machine had a book value of $125,000 and was being depreciated on a straight-line basis at $75,000 per year. Osceola sold the machine for $200,000.Required:1.
Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, for $42,000. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $5,000. At December 31, 2018, the truck had a book value of
On January 1, 2015, Vallahara Company purchased machinery for $650,000, which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a residual value of $50,000. Late in 2019, because of increasing competition in the industry, the company
On January 1, 2019, Barbosa Company purchased a coal mining site for $1,000,000.Under the terms of the purchase agreement, Barbosa must restore the site to specified conditions at an estimated cost of $125,000. Barbosa estimates that it will be able to operate the site for 20 years. Barbosa uses a
Reveille, Inc., purchased Machine #204 on April 1, 2019, and placed the machine into production on April 3, 2019. The following information is relevant to Machine #204:Price ......................................................................................$60,000Freight-in costs
On May 10, 2019, Horan Company purchased equipment for $25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used.Required:Compute the depreciation expense for 2019 for each of the following four alternatives:1.
Hathaway Company purchased a copying machine for $8,700 on October 1, 2019. The machine’s residual value was $500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month.Required:1. Compute depreciation expense (rounded to the nearest dollar)
Showing 3700 - 3800
of 3974
First
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Step by Step Answers
Get 50% OFF
Claim Now
