Questions and Answers of Intermediate Accounting 11th

The current asset section of the Moorcroft Outboard Motor Company’s balance sheet reported the following amounts:The average collection period for 2024 is 50 days.Required:Determine net sales for
Jansen Company’s general ledger showed a checking account balance of $23,820 at the end of May 2024. The May 31 cash receipts of $2,340, included in the general ledger balance, were placed in the
Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2024:Mar. 17 Accounts receivable of $1,700 were written off as
Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2024. The note, along with interest at 10%, is due on July 1, 2024. On February 28, 2024, Selkirk discounted the note
Shan Enterprises received a bank statement listing its May 31, 2024, bank balance as $47,582. Shan determined that as of May 31 it had cash receipts of $2,500 that were not yet deposited and checks
Marin Company’s general ledger indicates a cash balance of $22,340 as of September 30, 2024. Early in October Marin received a bank statement indicating that during September Marin had an NSF check
How did the CARES Act affect accounting for loan modifications as Troubled Debt Restructurings?
On June 30, 2024, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2024, the company borrowed $450,000 from the Equitable Finance Corporation and signed a
On January 1, 2024, the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January 1, 2025. The
How is a petty cash fund established? How is the fund replenished?
On January 1, 2024, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31,
On June 30, 2024, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $30,000 on March 31, 2025. The fair value of the
On June 30, 2024, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31,
On April 19, 2024, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%. What amount of
Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $17,280 at the beginning of 2024 and a $22,410 credit balance at the
On December 1, 2024, Davenport Company sold merchandise to a customer for $20,000. In payment for the merchandise, the customer signed a 6% note requiring the payment of interest and principal on
The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2024, balance of $14,632.12. Information that might be useful in preparing a bank reconciliation is
Caterpillar, Inc., is one of the world’s largest manufacturers of construction, mining, and forestry machinery. The following disclosure note is included in the company’s 2019 financial
The December 31, 2024, year-end inventory balance of the Almond Corporation is $210,000. You have been asked to review the following transactions to determine if they have been correctly recorded.1.
Refer to the situation described in BE 8–6. Record (1) the purchase of inventory on account (2) freight charges, assuming the company uses a periodic inventory system.Data from in BE 8-6A company
The table below contains selected financial information included in the financial statements of Kohl’s Corporation and Dillards, Inc., two companies in the department store
Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $30,000
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2024, accounts receivable totaled $625,000. The allowance method is used to account for uncollectible accounts. The
Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was
Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2024, year-end balance sheet:Additional Information:1. The notes receivable account consists of two notes, a
Ervin Company uses the allowance method to account for uncollectible accounts receivable. The allowance account is adjusted based on bad debt expense as a percentage of credit sales. For 2024, net
Zuo Software categorizes its accounts receivable into four age groups for purposes of estimating its allowance for uncollectible accounts.1. Accounts not yet due = $400,000; estimated uncollectible =
El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2024, reconciliation of the bank balance is as
Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance for uncollectible accounts.1. Accounts not yet due = $180,000; estimated
Refer to the situation described in BE 7–13. Answer the two questions assuming the company estimates that future bad debts will equal 10% of the year-end balance in accounts receivable.Data from in
EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by
Toughbuilt Industries, Inc., designs, manufactures, and distributes tools and accessories to the do-it-yourself and professional building industry.Required:1. Access EDGAR on the Internet. The web
Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2024 operations is as follows:a. January 1, 2024, beginning inventory had a cost of
On September 22, 2024, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records
Mayfair Department Stores, Inc., operates over 30 retail stores in the Pacific Northwest. Prior to 2024, the company used the FIFO method to value its inventory. In 2024, Mayfair decided to switch to
On November 21, 2024, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The
Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data:Required:Use the retail method to approximate cost of
What is the conventional retail method?
Robotics Corporation uses a periodic inventory system and the retail inventory method. Accounting records provided the following information for the 2024 fiscal year:The company records sales to
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2024. Accounting records on that date indicated the following:The gross profit ratio has averaged 20% of sales for the past four
Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data:Required:Assuming the price level increased from 1.00 at
On January 1, 2024, Select Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:Estimate ending inventory using the dollar-value
On January 1, 2024, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as
Salt and Mineral (SAM) began 2024 with 200 units of its one product. These units were purchased near the end of 2023 for $25 each. During the month of January, 100 units were purchased on January 8
On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $400,000. Inventory data for 2024 through 2026 are as
A company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to base year. The company began operations on January 1, 2024, with an
Altira Corporation provides the following information related to its inventory during the month of August 2024:Required:Using calculations based on a perpetual inventory system, determine the
On January 1, 2024, a company adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $260,000. An internally generated cost index is used to
Altira Corporation provides the following information related to its inventory during the month of August 2024:Required:Using calculations based on a perpetual inventory system, determine the
Listed below are several terms and phrases associated with cash and receivables. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. List
General Mills reported the following information in its 2020 financial statements ($ in millions):A note disclosed that the allowance for uncollectible accounts had a balance of $33.2 million and
Refer to the situation described in BE 4–8. Assume instead that the estimated fair value of the segment’s assets, less costs to sell, on December 31 was $7 million rather than $10 million.
Dinoland Manufacturing shipped consignment inventory of $200,000 to Storing Company on December 1, 2024. Storing agrees to sell the inventory for a 10% sales commission, while Dinoland maintains
The following information is available for a company:Required:Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these
Microsoft Corporation reported the following information in its financial statements for three successive quarters ($ in millions):Required:Compute the receivables turnover ratio and the average
Refer to the data provided in E 21–27 for Red, Inc.Data from in E 21-27Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting
Refer to the data provided in E 21–27 for Red, Inc.Data from in E 21-27Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting
Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Inc., are provided below.Additional information from the
Refer to the data provided in the P 21–11 for Arduous Company.Data from in P 21-11The comparative balance sheets for 2024 and 2023 and the income statement for 2024 are given below for Arduous
Refer to the data provided in the P 21–5 for Metagrobolize Industries.Data from in P 21-5Comparative balance sheets for 2024 and 2023 and a statement of income for 2024 are given below for
Refer to the data provided in the P 21–4 for Dux Company.Data from in P 21-4The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company.
Refer to the data provided in the P 21–11 for Arduous Company.Data from in P 21-11The comparative balance sheets for 2024 and 2023 and the income statement for 2024 are given below for Arduous
Refer to the data provided in the P 21–5 for Metagrobolize Industries.Data from in P 21-5Comparative balance sheets for 2024 and 2023 and a statement of income for 2024 are given below for
Refer to the data provided in the P 21–4 for Dux Company.Data from in P 21-4The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company.
The comparative balance sheets for 2024 and 2023 are given below for Surmise Company. Net income for 2024 was $50 million.Required:Prepare the statement of cash flows of Surmise Company for the year
The comparative balance sheets for 2024 and 2023 and the income statement for 2024 are given below for Arduous Company. Additional information from Arduous’s accounting records is provided
Comparative balance sheets for 2024 and 2023 and a statement of income for 2024 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also
The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company. Additional information from Dux’s accounting records is provided
The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for National Intercable Company. Additional information from NIC’s accounting records is
The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Wright Company. Additional information from Wright’s accounting records is provided
For each of the following inventory errors occurring in 2024, determine the effect of the error on 2024’s cost of goods sold, net income, and retained earnings. Assume that the error is not
Indicate with the appropriate letter the nature of each situation described below: Type of Change PR PP E EP R N Change in principle reported retrospectively Change in principle reported
At the beginning of 2024, Wagner Implements undertook a variety of changes in accounting methods, corrected several errors, and instituted new accounting policies.Required:Indicate for each item 1 to
Late in 2024, you and two other officers of Curbo Fabrications Corporation just returned from a meeting with officials of the City of Jackson. The meeting was unexpectedly favorable even though it
On December 31, 2023, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding.∙ On March 1, 2024, Berclair
Hardaway Fixtures’ balance sheet at December 31, 2023, included the following:On July 21, 2024, Hardaway issued a 25% stock dividend on its common stock. On December 12, it paid $50,000 cash
For the year ended December 31, 2024, Norstar Industries reported net income of $655,000. At January 1, 2024, the company had 900,000 common shares outstanding. The following changes in the number of
On December 31, 2023, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding.∙ Dow issued a 4%
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2022, 2023, and 2024.Required:Infer from the
You are assistant controller of Stamos & Company, a medium-sized manufacturer of machine parts. On October 22, 2023, the board of directors approved a stock option plan for key executives. On
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
Wong Corporation reports $50 million accumulated other comprehensive income in its balance sheet as a component of shareholders’ equity. In a related statement reporting comprehensive income for
The following is from the 2024 annual report of Kaufman Chemicals, Inc.Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders’ equity as
Part ADuring its first year of operations, the A. Clem Corporation entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 100 million
The shareholders’ equity portion of the balance sheet of Sessel’s Department Stores, Inc., a large regional specialty retailer, is as follows:Disclosures elsewhere in Sessel’s annual report
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
The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2023:Required:1. During 2024, TNL Systems reacquired shares of its common
Titan Networking became a public company through an IPO (initial public offering) two weeks ago. You are looking forward to the challenges of being assistant controller for a publicly owned
Brown Company issued 100,000 shares of its $1 par common stock to the Mary Keim law firm as compensation for 4,000 hours of legal services performed. Keim’s usual rate is $240 per hour. By what
Indicate by letter whether each of the items listed below most likely is reported in the income statement as Net Income (NI) or in the statement of comprehensive income as Other Comprehensive Income
National Supply’s shareholders’ equity included the following accounts at December 31, 2023:Required:1. National Supply reacquired shares of its common stock in two separate transactions and
Distinguish between not-for-profit and for-profit corporations.
Comparative statements of retained earnings for Renn Dever Corporation were reported in its 2024 annual report as follows.At December 31, 2023, common shares consisted of the following:Required:Infer
During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8
Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2024–2026. At December 31, 2023, the corporation’s accounts included:a.
AGF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy’s
Agee Storage issued 35 million shares of its $1 par common stock at $16 per share several years ago. Last year, for the first time, Agee retired 1 million shares at $14 per share. If Agee now retires
Comparative statements of shareholders’ equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2024, 2025, and 2026.Required:1. Infer from
The Basu Group reacquired 2 million of its shares at $70 per share as treasury stock. Last year, for the first time, Basu sold 1 million treasury shares at $71 per share. If Basu now sells the
Liu Industries issued 15 million of its $1 par common shares for $424 million on April 11. Legal, promotional, and accounting services necessary to effect the sale cost $2 million.Required:1. Prepare

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