Intermediate Accounting 11th International Edition David Spiceland, Mark W. Nelson, Wayne M. Thomas - Solutions

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Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are provided in Connect. This material is also available under the Finance
Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations link at the company’s website
Insight concerning the performance and financial condition of a company often comes from evaluating its financial data in comparison with other firms in the same industry.Required:Obtain annual reports from three corporations in the same primary industry. Using techniques you learned in this
A first-year accounting student is confused by a statement made in a recent class. Her instructor stated that the assets listed in the balance sheet of the IBM Corporation include computers that are classified as current assets as well as computers that are classified as long-term (noncurrent)
Examine the segment disclosures of Abbott Laboratories reported in Appendix 3 and answer the following questions.1. Does Abbott Laboratories define its operating segments by business or geography?2. Determine which business segment has the greatest amount of (a) sales, (b) operating earnings, and
Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in the Connect library. This material also is available under the Investor Relations link at the company’s website
A common problem facing any business entity is the debt versus equity decision. When funds are required to obtain assets, should debt or equity financing be used? This decision also is faced when a company is initially formed.What will be the mix of debt versus equity in the initial capital
Obtain the quarterly financial report (10-Q) of Delta Airlines for the period ended June 30, 2020. You can access this report through the SEC’s EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system. You can also access this report at the company’s website
The fiscal year-end for the Northwest Distribution Corporation is December 31. The company’s 2024 financial statements were issued on March 15, 2025. The following events occurred between December 31, 2024, and March 15, 2025.1. On January 22, 2025, the company negotiated a major merger with
The usefulness of the balance sheet is enhanced when assets and liabilities are grouped according to common characteristics. The broad distinction made in the balance sheet is the current versus long-term classification of both assets and liabilities.Required:1. Identify the factors that determine
The current asset section of Guardian Consultant’s balance sheet consists of cash, accounts receivable, and prepaid expenses. The balance sheet reported the following: cash, $1,300,000; prepaid expenses, $360,000; longterm assets, $2,400,000; and shareholders’ equity, $2,500,000. The current
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. Determine the specific eight-digit Codification citation (XXX-XX-XX-X) for each of the following:1. The balance sheet classification for a note payable due in six months that
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine each of the following:1. The topic number (Topic XXX) that provides guidance on information contained in the notes to the financial statements.2. The specific seven-digit Codification citation
Parkman Sporting Goods is preparing its annual report for its fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items:1. A related-party transaction.2. Depreciation method.3. Allowance for uncollectible accounts.4.
The following are the typical classifications used in a balance sheet:a. Current assetsb. Investmentsc. Property, plant, and equipmentd. Intangible assetse. Current liabilitiesf. Long-term liabilities g. Paid-in capital h. Retained earnings Required:For each of the following balance sheet items,
The following are the typical classifications used in a balance sheet:a. Current assetsb. Investmentsc. Property, plant, and equipmentd. Intangible assetse. Current liabilitiesf. Long-term liabilities g. Paid-in capital h. Retained earnings Required:For each of the following balance sheet items,
The current asset section of Stibbe Pharmaceutical Company’s balance sheet included cash of $20,000 and accounts receivable of $40,000. The only other current asset is inventory. The company’s current ratio is 2.0 and its acid-test ratio is 1.5. Determine the ending balance in inventory and
At the end of 2024, Barker Corporation’s preliminary trial balance indicated a current ratio of 1.2. Management is contemplating paying some of its accounts payable balance before the end of the fiscal year. Determine whether the effect of this transaction would increase or decrease the current
Refer to the trial balance information in BE 3–5. Calculate the (a) current ratio, (b) acid-test ratio, and (c) debt to equity ratio.
For each of the following note disclosures, indicate whether the disclosure would likely appear in (A) environmental,(B) social, or (C) governance disclosures: (1) ratio of pay of chief executive offer to median full-time employee; (2) ratio of independent board members; (3) reduction in greenhouse
For each of the following note disclosures, indicate whether the disclosure would likely appear in (A) the summary of significant accounts policies or (B) a separate note: (1) depreciation method; (2) contingency information;(3) significant issuance of common stock after the fiscal year-end; (4)
You have been asked to review the December 31, 2024, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior:1. An investment of $30,000 is included in current assets. Management has indicated it has no intention of
Refer to the situation described in BE 3–2. Prepare a classified balance sheet for K and J Nursery, Inc.The equipment originally cost $140,000
Refer to the situation described in BE 3–2. Determine the year-end balance in retained earnings for K and J Nursery, Inc.
The trial balance for K and J Nursery, Inc., listed the following account balances at December 31, 2024, the end of its fiscal year: cash, $16,000; accounts receivable, $11,000; inventory, $25,000; equipment (net), $80,000;accounts payable, $14,000; salaries payable, $9,000; interest payable,
Indicate whether each of the following assets and liabilities typically should be classified as current or long-term:(a) accounts receivable within the next 60 days; (b) prepaid rent for the next six months; (c) notes receivable due in two years; (d) notes payable due in 90 days; (e) notes payable
Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are provided in Connect. This material also is available under the Finance
You have recently been hired by Davis & Company, a small public accounting firm. One of the firm’s partners, Alice Davis has asked you to deal with a disgruntled client, Mr. Sean Pitt, owner of the city’s largest hardware store. Mr. Pitt is applying to a local bank for a substantial loan to
A company has always kept its records on a cash basis. You are provided with the following transaction information for the fiscal year ending December 31, 2024:1. A new comprehensive insurance policy requires an annual payment of $12,000 for the upcoming year. Coverage began on September 1, 2024,
“I don’t understand,” complained Chris, who responded to your bulletin board posting for tutoring in introductory accounting. The complaint was in response to your statements that recording adjusting entries is a critical step in the accounting processing cycle, and the two major
Refer to E 2–9 and respond to the following requirements.Required:1. If Microchip’s accountant employed reversing entries for accruals, which adjusting entries would she likely reverse at the beginning of the following year?2. Prepare the adjusting entries at the end of 2024 for the adjustments
The employees of Xitrex, Inc., are paid each Friday. The company’s fiscal year-end is June 30, which falls on a Wednesday for the current year. Salaries are earned evenly throughout the five-day work week, and $10,000 will be paid on Friday, July 2.Required:1. Prepare an adjusting entry to record
During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2024, you discover net income in 2024 is $30,000 but no adjusting entries have been prepared. To prepare adjusting entries, you discover the following items:a. An insurance
The following transactions occurred during 2024 for the Beehive Honey Corporation:External transactions and adjusting entries Feb. 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2025.Apr. 1 Paid $3,600 to an insurance company for a
The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2024, trial balances contained the following account information:Cash versus accrual accounting;adjusting entries Nov. 30 Dec. 31 Dr. Cr. Dr. Cr.Supplies 1,500 3,000 Prepaid insurance
Presented below is income statement information of the Schefter Corporation for the year ended December 31, 2024.Closing entries Sales revenue $492,000 Cost of goods sold $284,000 Salaries expense 80,000 Insurance expense 12,000 Interest revenue 6,000 Interest expense 4,000 Advertising expense
American Chip Corporation’s reporting year-end is December 31. The following is a partial adjusted trial balance as of December 31, 2024.E 2–13 Closing entries● LO2–8 Account Title Debits Credits Retained earnings $ 80,000 Sales revenue 750,000 Interest revenue 3,000 Cost of goods sold $
The December 31, 2024, adjusted trial balance for the Blueboy Cheese Corporation is presented below.Account Title Debits Credits Cash $ 21,000 Accounts receivable 300,000 Prepaid rent 10,000 Inventory 50,000 Office equipment 600,000 Accumulated depreciation $ 250,000 Accounts payable 60,000 Notes
The Mazzanti Wholesale Food Company’s fiscal year-end is June 30. Prepare the necessary year-end adjusting entries at the end of June 30, 2024, for the following situations.1. On December 1, 2023, the company paid its annual fire insurance premium of $6,000 for the year beginning December 1 and
The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries were prepared on December 31, 2024:Debit Credit Interest expense 7,200 Interest payable 7,200 Rent expense 35,000 Prepaid rent 35,000 Interest receivable 500
Prepare the necessary adjusting entries on December 31, 2024, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded.1. On October 1, 2024, Microchip lent $90,000 to another company. A
Prepare the necessary adjusting entries on December 31, 2024, for the Fierro Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded.1. A three-year fire insurance policy was purchased on July 1, 2024,
Some of the ledger accounts for a company are numbered and listed below. For each of the October transactions numbered 1 through 10 below, indicate by account number which accounts should be debited and which should be credited when preparing journal entries. The company uses the perpetual
Indicate whether a debit will increase (I) or decrease (D) each of the following accounts listed in items 1 through 15.Debits and credits● LO2–1 Increase (I) or Decrease (D) Account 1. _____ Inventory 2. _____ Depreciation expense 3. _____ Accounts payable 4. _____ Prepaid rent 5. _____ Sales
Listed below are terms associated with the steps of the accounting processing cycle. Pair each item from List A(by letter) with the item from List B that is most appropriately associated with it.E 2–5 The accounting processing cycle● LO2–2 List A List B 1. Source documentsa. Record of the
The following transactions occurred during the month of June 2024 for the Stridewell Corporation. The company owns and operates a retail shoe store.1. Issued 100,000 shares of common stock in exchange for $500,000 cash.2. Purchased office equipment at a cost of $100,000. Cash of $40,000 was paid
Post the journal entries prepared in E 2–2 to T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances.
Prepare journal entries to record each of the transactions listed in E 2–1.
The following transactions occurred during March 2024 for the Right Corporation. The company operates a wholesale warehouse.1. Issued 30,000 shares of no-par common stock in exchange for $300,000 in cash.2. Purchased equipment at a cost of $40,000. Cash of $10,000 was paid and a note payable to the
New Consulting Company maintains its records on a cash basis. During the year, the following cash flows were recorded: cash received for services rendered to clients, $420,000; and cash paid for salaries, utilities, and advertising,$240,000, $35,000, and $12,000, respectively. You also determine
For each situation, determine the date for which the company recognizes the expense under (a) accrual-basis accounting and (b) cash-basis accounting.1. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots’ salaries associated with the flight are paid on
Issues are scheduled for delivery each week from July 1 through September 30.
For each situation, determine the date for which the company recognizes the revenue under (a) accrual-basis accounting and (b) cash-basis accounting.1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs on August 16.2. A customer purchases
The year-end adjusted trial balance of the Tool and Die Corporation included the following account balances:retained earnings, $220,000; dividends, $12,000; sales revenue, $850,000; cost of goods sold, $580,000; salaries expense, $180,000; rent expense, $40,000; and interest expense, $15,000.
The following account balances were taken from the 2024 post-closing trial balance of the Bowler Corporation:cash, $5,000; accounts receivable, $10,000; inventory, $16,000; equipment, $100,000; accumulated depreciation,$40,000; accounts payable, $20,000; salaries payable, $12,000; retained
The following account balances were taken from the 2024 adjusted trial balance of the Bowler Corporation: sales revenue, $325,000; cost of goods sold, $168,000; salaries expense, $45,000; rent expense, $20,000; depreciation expense, $30,000; and miscellaneous expense, $12,000. Prepare an income
Prepare the necessary adjusting entries for Digital Controls at the end of its December 31, 2024, fiscal year-end for each of the following situations. No adjusting entries were recorded during the year.1. On March 31, 2024, the company lent $50,000 to another company. A note was signed with
If the adjusting journal entries prepared in BE 2–13 were not recorded, would assets, liabilities, and shareholders’equity on the December 31, 2024, balance sheet be higher or lower and by how much?
Prepare the necessary adjusting entries on its year-end of December 31, 2024, for the Jingle Corporation for each of the following situations. No adjusting entries were recorded during the year.1. On December 10, 2024, Jingle received a $4,000 payment from a customer, and credited deferred service
If the adjusting entries prepared in BE 2–11 were not recorded, would net income be higher or lower and by how much?
Prepare the necessary adjusting entries on December 31 for each of the items listed in BE 2–10. Depreciation on the equipment is $12,000 per year.
Prepare journal entries for each of the following transactions for a company that has a fiscal year-end of December 31: (1) on October 1, $12,000 was paid for a one-year fire insurance policy; (2) on June 30 the company loaned its chief financial officer $10,000; principal and interest at 6% on the
Post the journal entries prepared in BE 2–8 to T-accounts. Assume that the opening balances in each of the accounts is zero except for cash, accounts receivable, and accounts payable that had opening balances of$65,000, $43,000, and $22,000, respectively.
Prepare journal entries for each of the transactions listed in BE 2–7.
The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system); (2) paid $40,000 in salaries to employees for work performed during the month; (3) sold inventory on
Post the following transactions to the Cash T-account and calculate the ending balance. The beginning balance in the Cash T-account is $5,000.1. Receive cash from customers, $15,000.2. Pay cash for employee salaries, $9,000.3. Pay cash for rent, $3,000.4. Receive cash from sale of equipment,
Prepare journal entries for each of the following transactions:1. Issue common stock for $21,000.2. Obtain $9,000 loan from the bank by signing a note.3. Purchase construction equipment for $25,000 cash.4. Purchase advertising for the current month for $1,100 cash.5. Provide construction services
Prepare journal entries for each of the following transactions:1. Pay $700 for radio advertising for the current month.2. Purchase supplies of $1,300 on account.3. Provide services of $2,900 to customers and receive cash.4. Pay employee salaries for the current month of $900.5. Provide services of
Prepare journal entries for each of the following transactions:1. Purchase equipment in exchange for cash of $23,400.2. Provide services to customers and receive cash of $6,800.3. Pay the current month’s rent of $1,300.4. Purchase office supplies on account for $1,000.5. Pay employee salaries of
Analyze each of the following transactions and show the effect on the accounting equation.1. Issue 10,000 shares of common stock in exchange for $32,000 in cash.2. Purchase land for $19,000. A note payable is signed for the full amount.3. Purchase equipment for $8,000 cash.4. Hire three employees
32. Analyze each of the following transactions and show the effect on the accounting equation.1. Provide services to customers on account for $50,000.2. Purchase equipment by signing a note with the bank for $35,000.3. Repay $10,000 of the note in 2 above.4. Pay utilities of $5,000 for the current
31. Refer to the August 31, 2024, adjusted trial balance of the Wyndham Wholesale Company presented in the previous Concept Review Exercise.Required:1. Prepare an income statement and a statement of shareholders’ equity for the month ended August 31, 2024, and a classified balance sheet as of
30. Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This material is also available under the
29. Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations link at the company’s website
28. Auditors often earn considerable fees from a company for examining (auditing) its financial statements. In addition, it’s not uncommon for auditors to earn additional fees from the company by providing consulting, tax, and other advisory services.Required:1. Which party has primary
27. Consider the question of whether the United States should converge accounting standards with IFRS.Required:1. Make a list of arguments that favor convergence.2. Make a list of arguments that favor nonconvergence.3. Indicate your own conclusion regarding whether the United States should converge
26. One of your friends is a financial analyst for a major stock brokerage firm. Recently she indicated to you that she had read an article in a weekly business magazine that alluded to the political process of establishing accounting standards. She had always assumed that accounting standards were
25. Some theorists contend that companies that create pollution should report the social cost of that pollution in income statements. They argue that such companies are indirectly subsidized as the cost of pollution is borne by society while only production costs (and perhaps minimal pollution
24. Assume that the FASB is considering revising an important accounting standard.Required:1. What constraint applies to the FASB’s consideration of whether to require companies to provide new information?2. In what Concepts Statement is that constraint discussed?3. What are some of the possible
23. A friend asks you about whether GAAP requires companies to disclose forecasts of financial variables to external users. She thinks that information could be very useful to investors.Required:1. What are the two primary qualitative characteristics of accounting information?2. Does GAAP routinely
22. Access the financial statements for the year ended February 1, 2020, for Gap Inc., by downloading them from www.gapinc.com, and use them to answer the following questions.Required:1. What amounts did Gap Inc. report for the following items for the fiscal year ended February 1, 2020?a. Total net
21. A new client, the Wolf Company, asks your advice concerning the point in time that the company should recognize revenue from the rental of its office buildings under generally accepted accounting principles. Renters usually pay rent on a quarterly basis at the beginning of the quarter. The
20. A key aspect of the Accounting Standards Codification is the structure used to organize content. Understanding that structure will help you utilize the codification efficiently and effectively.Required:Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and
19. The purpose of this case is to introduce you to the information available on the website of the International Accounting Standards Board (IASB).Required:Access the IASB home page on the Internet. The web address is www.iasb.org. Answer the following questions:1. The IASB has how many board
18. The purpose of this case is to introduce you to the information available on the website of the Financial Accounting Standards Board (FASB).Required:Access the FASB home page on the Internet. The web address is www.fasb.org. Answer the following questions:1. The FASB has how many board
17. The purpose of this case is to introduce you to the information available on the website of the Securities and Exchange Commission (SEC) and its EDGAR database.Required:Access the SEC home page on the Internet. The web address is www.sec.gov. Answer the following questions:1. Choose the
16. In 1934, Congress created the Securities and Exchange Commission (SEC).Required:1. Does the SEC have more authority or less authority than the FASB with respect to standard setting?2. Can you think of any reasons why the SEC relies on private sector bodies to set accounting standards, rather
15. Determine the response that best completes the following statements or questions.1. The primary objective of financial reporting is to provide informationa. About a firm’s management team.b. Useful to capital providers.c. Concerning the changes in financial position resulting from the
14. Listed below are accounting concepts discussed in this chapter.a. Economic entity assumptionb. Going concern assumptionc. Periodicity assumptiond. Monetary unit assumptione. Historical cost principlef. Conservatism g. Expense recognition h. Full-disclosure principle i. Cost effectiveness j.
13. For each of the following situations, state whether you agree or disagree with the financial reporting practice employed, and briefly explain the reason for your answer.1. The controller of the Dumars Corporation increased the carrying value of land from its original cost of$2 million to its
12. For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the accounting concept applied (if you agree) or violated (if you disagree).1. Wagner Corporation adjusted the valuation of all assets and liabilities to reflect
11. Identify the accounting concept that was violated in each of the following situations.1. Pastel Paint Company purchased land two years ago for a price of $250,000. Because the value of the land has appreciated to $400,000, the company has valued the land at $400,000 in its most recent balance
10. Listed below are several statements that relate to financial accounting and reporting. Identify the accounting concept that applies to each statement.1. Jenna Asare is the sole owner of Asare Appliances. Jenna borrowed $100,000 to buy a new home to be used as their personal residence. This
9. Listed below are several terms and phrases associated with the accounting concepts. Pair each item from List A(by letter) with the item from List B that is most appropriately associated with it.List A List B 1. Expense recognitiona. The enterprise is separate from its owners and other
8. The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information. Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints.1. Which
7. Listed below are several terms and phrases associated with the FASB’s conceptual framework. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.List A List B 1. Predictive value 2. Relevance 3. Timeliness 4. Distribution to owners 5.
6. For each of the items listed below, identify the appropriate financial statement element or elements.1. Obligation to transfer cash or other resources as a result of a past transaction 2. Dividends paid by a corporation to its shareholders 3. Inflow of an asset from providing a good or service
5. Three groups that participate in the process of establishing GAAP are users, preparers, and auditors. These groups are represented by various organizations. For each organization listed below, indicate which of these groups it primarily represents.1. Securities and Exchange Commission 2.
4. Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. Determine the specific citation for each of the following items:1. The topic number for business combinations 2. The topic number for related party disclosures 3. The
3. Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access.Required:1. Identify the Codification topic number that provides guidance on fair value measurements.2. What is the specific seven-digit Codification citation (XXX-XX-XX)

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Intermediate Accounting 11th International Edition David Spiceland, Mark W. Nelson, Wayne M. Thomas - Solutions

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