Questions and Answers of Managerial Accounting Tools For Business Decision Making 9th

Emeric and Ellie’s Painting Service estimates that it will paint 10 small homes, 5 medium homes, and 2 large homes during the month of June 2025. The company estimates its direct labor needs as 40
Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2025, the following data are available.1. Sales: 20,000
Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2025 sales forecast is as follows.The January 1, 2025, inventory of HD-240 is 2,000 units. Management desires an
Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials,
Deitz Corporation is projecting a cash balance of $30,000 in its December 31, 2024, balance sheet. Deitz’s schedule of expected collections from customers for the first quarter of 2025 showstotal
Atlanta Company is preparing its manufacturing overhead budget for 2025. Relevant data consist of the following.Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.Direct labor: time
Edington Electronics Inc. produces and sells two models of calculators, XQ-103 and XQ-104. The calculators sell for $15 and $25, respectively. Because of the intense competition Edington faces,
Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2025). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for
On January 1, 2025, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2025. Sales units: First quarter 5,000, second quarter 6,000,
North Company has completed all of its operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,250,000. The total cost of producing one unit is $25. Sellingand
Elbert Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $24,000 in the first quarter, and $4,000 increments
For Roche Inc., variable manufacturing overhead costs are expected to be $20,000 in the first quarter of 2025, with $5,000 increments in each of the remaining three quarters. Fixed overhead costs are
For Gundy Company, units to be produced are 5,000 in quarter 1 and 7,000 in quarter 2. It takes 1.6 hours to make a finished unit, and the expected hourly wage rate is $15 per hour. Prepare a direct
Perine Company has 2,000 pounds of raw materials in its December 31, 2024, ending inventory. Required production for January and February of 2025 are 4,000 and 5,000 units, respectively. Two pounds
Paige Company estimates that unit sales will be 10,000 in quarter 1, 14,000 in quarter 2, 15,000 in quarter 3, and 18,000 in quarter 4. The unit selling price is $70. Management desires to have an
On January 2, 2024, Twilight Hospital purchased a $100,000 special radiology scanner from Bella Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of
Paige Company estimates that unit sales will be 10,000 in quarter 1, 14,000 in quarter 2, 15,000 in quarter 3, and 18,000 in quarter 4. Using a unit selling price of $70, prepare the sales budget by
Sanchez, Inc. reports the following liabilities (in thousands) on its December 31, 2025, balance sheet and notes to the financial statements.Instructionsa. Identify which of the above liabilities are
Suppose the following information was taken from the 2025 financial statements of pharmaceutical giant Merck & Co. (All dollar amounts are in millions.)Instructionsa. After analyzing the data,
The following items and amounts were taken from Lonyear Inc.’s 2025 income statement and balance sheet.Instructionsa. In each, case, identify on the blank line whether the item is an asset (A),
Suppose 3M Company reported the following financial data for 2025 and 2024 (in millions).Instructionsa. Calculate the current ratio for 3M for 2025 and 2024.b. Suppose that at the end of 2025, 3M
This information is for Williams Corporation for the year ended December 31, 2025.Instructionsa. Prepare the 2025 statement of cash flows for Williams Corporation.b. Suppose you are one of
Alpine Company issues $2 million, 10-year, 7% bonds at 99, with interest payable on December 31. The straight-line method is used to amortize bond discount. a. Prepare the journal entry to
Yancey Co. receives $300,000 when it issues a $300,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2025. The terms provide for annual installment payments of
Jenseng Inc. issues an $800,000, 10%, 10-year mortgage note on December 31, 2025, to obtain financing for a new building. The terms provide for annual installment payments of $130,196. Prepare the
Robbins Corporation issues $200,000 of 6%, 5-year bonds on January 1, 2025, at 103. Assuming that the straight-line method is used to amortize the premium, what is the total amount of interest
Dotsin Corporation issues $400,000 of 9%, 5-year bonds on January 1, 2025, at 104. If Dotsin uses the effective-interest method in amortizing the premium, will the annual interest expense increase or
Kelly Jones and Tami Crawford borrowed $15,000 on a 7-month, 8% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2025, and the note matures
The balance sheet for Gelher Company reports the following information on July 1, 2025.Gelher decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record
Presented here are liability items for O’Brian Inc. at December 31, 2025. Prepare the liabilities section of O’Brian’s balance sheet. Accounts payable Notes payable (due May 1, 2026) Bonds
C.S. Lewis Company had the following transactions involving notes payable. July 1, 2025 Borrows $50,000 from First National Bank by signing a 9-month, 8% note.Nov. 1, 2025 Borrows $60,000 from
Presented here are long-term liability items for Stevens Inc. at December 31, 2025. Prepare the long-term liabilities section of the balance sheet for Stevens Inc. Bonds payable (due 2029) Notes
Bridle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2025.
Ravine Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2025.
Clooney Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2025, at face value. Interest is paid each January 1.a. Prepare the journal entry to record the sale of these bonds on
Suppose the 2025 adidas financial statements contain the following selected data (in millions).Compute the following values and provide a brief interpretation of each.a. Working capital.b. Current
Cassini Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2025, Cassini sells 6,300 subscriptions for cash, beginning
On August 1, 2025, Gonzaga Corporation issued $600,000, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Gonzaga’s year-end is December 31.InstructionsPrepare journal
Harvard Inc. issues $4 million, 5-year, 8% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium.a. Prepare the journal entry to record the sale
Al Medina, D.D.S., opened an incorporated dental practice on January 1, 2025. During the first month of operations, the following transactions occurred.1. Performed services for patients who had
These items are taken from the financial statements of Martin Corporation for 2025.InstructionsPrepare an income statement, a retained earnings statement, and a classified balance sheet as of
You are provided with the following information for Lazuris Enterprises, effective as of its April 30, 2025, year-end.Instructionsa. Prepare an income statement and a retained earnings statement for
The accounts in the ledger of Rapid Delivery Service contain the following balances on July 31, 2025.Instructionsa. Prepare a trial balance with the accounts arranged as illustrated in the chapter,
This information relates to Benser Co. for the year 2025.InstructionsPrepare an income statement and a retained earnings statement for the year ending December 31, 2025. Retained earnings, January 1,
The following items and amounts were taken from Familia Inc.’s 2025 income statement and balance sheet, the end of its first year of operations.Instructionsa. In each case, identify on the blank
The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Walco Corporation and Gunther Enterprises, are presented as follows for
The following financial statement items are for Batra Corporation at year-end, July 31, 2025.InstructionsPrepare an income statement, retained earnings statement, and balance sheet for the year.
The following list presents different types of evaluations made by various users of accounting information.1. Determining if the company can pay for purchases made on account.2. Determining if the
The following items are taken from the financial statements of Carmen Co. at December 31, 2025.InstructionsPrepare a classified balance sheet. Assume that $9,100 of the mortgage payable will be paid
Suppose the following information (in thousands of dollars) is available for H. J. Heinz Company—famous for ketchup and other fine food products—at April 30, 2025.InstructionsPrepare the assets
Suppose the following items were taken from the December 31, 2025, assets section of the Boeing Company balance sheet. (All dollars are in millions.)InstructionsPrepare the assets section of a
The financial statements of Summit Ltd. includes the following items at December 31, 2025.Instructionsa. Calculate net income and the ending balance of retained earnings at December 31, 2025. It is
Presented here is information for Zheng Inc. for 2025.InstructionsPrepare the 2025 retained earnings statement for Zheng Inc. Retained earnings, January 1 Service revenue Total
Suppose the following items were taken from the 2025 financial statements of Texas Instruments, Inc. (All dollars are in millions.)InstructionsPrepare a classified balance sheet in good form as of
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2025.1. Purchased a 1-year insurance policy on June 1 for $1,800 cash.2.
A tabular analysis of the transactions made during August 2025 by Wolfe Company during its first month of operations is shown as follows. Each increase and decrease in stockholders’ equity is
These items are taken from the financial statements of Longhorn Co. at December 31, 2025.InstructionsPrepare a classified balance sheet. Assume that $13,600 of the note payable will be paid in 2026.
Suppose the following data were taken from the 2025 and 2024 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.)InstructionsPerform each of the
Franken Company, a ski tuning and repair shop, opened on November 1, 2024. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the
Is it possible to create a company using an organizational form that has the advantages of both a partnership and a corporation? Explain.
Your examination of the records of a company that follows the cash basis of accounting tells you that the company’s reported cash-basis earnings in 2025 are $33,640. If this firm had followed
Consider the following business activities that occur at a Colorado ski area.1. ______ Cash receipts from customers paying for daily ski passes.2. ______ Payments made to purchase additional
During 2025, its first year of operations as a delivery service, Persimmon Corp. entered into the following transactions.1. Issued shares of common stock to investors in exchange for $100,000 in
The CCBC Corporation had the following unadjusted trial balance at the end of its fiscal year, July 31, 2025.Additional information for adjusting entries:1. On July 31, the company had performed $800
What are the characteristics of a “critical audit matter”?
Selected year-end account balances from the adjusted trial balance as of December 31, 2025, for Tippy Corporation is provided below.Instructionsa. Prepare closing entries.b. Determine the
The ledger of Armour Lake Lumber Supply on July 31, 2025, includes the selected accounts below before adjusting entries have been prepared.An analysis of the company’s accounts shows the
On December 31, 2025, Waters Company prepared an income statement and balance sheet, but failed to take into account three adjusting entries. The balance sheet showed total assets $150,000, total
The adjusted trial balance for Laurel Developments as of March 31, 2025, is as follows.Instructionsa. Prepare the closing entries.b. Determine Laurel Developments’ ending retained earnings balance
Merle Hawkins, the president of Pathway Company, is pleased. Pathway substantially increased its net income in 2025 while keeping its unit inventory relatively the same. Jon Dietz, chief accountant,
Lopez Co. had three major business transactions during 2025.a. Reported at its fair value of $260,000 merchandise inventory with a cost of $208,000.b. The president of Lopez Co., Victor Lopez,
The following selected accounts from Orlando Corporation’s general ledger are for the year ended December 31, 2025.InstructionsPrepare a multiple-step income statement. Accounts
On July 1, 2025, Ling Co. pays $12,400 to Marsh Insurance Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. For Ling Co., journalize and post the entry on July
The following information is available for Rancid Corp. for the year ended December 31, 2025.Prepare a multiple-step income statement for Rancid Corp. The company has a tax rate of 25%. Other
The adjusted trial balance of Levin Corporation at December 31, 2025, includes the following accounts: Retained Earnings $17,200, Dividends $6,000, Service Revenue $32,000, Salaries and Wages Expense
Greenock Limited has the following information available for accruals for the year ended December 31, 2025. The company adjusts its accounts annually.1. The December utility bill for $425 was
Suppose in its income statement for the year ended June 30, 2025, The Clorox Company reported the following condensed data (dollars in millions).Instructionsa. Prepare a multiple-step income
The following comparative information is available for Rose Company for 2025.Instructionsa. Determine net income under each approach. Assume a 20% tax rate.b. Determine net cash provided by operating
The income statement of Norski Co. for the month of July shows net income of $2,000 based on Service Revenue $5,500, Salaries and Wages Expense $2,100, Supplies Expense $900, and Utilities Expense
Presented below is information for Lieu Co. for the month of January 2025.Instructionsa. Prepare a multiple-step income statement.b. Calculate the profit margin and the gross profit rate. Cost of
Barto Company provides this information for the month ended October 31, 2025: sales on credit $300,000, cash sales $150,000, sales discounts $5,000, and sales returns and allowances $19,000. Prepare
The adjusted trial balance of Doqe Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2025: Sales Revenue $900,000, Freight-Out $14,000, Sales Returns and
In its income statement for the year ended December 31, 2025, Darren Company reported the following condensed data.Instructionsa. Prepare a multiple-step income statement.b. Calculate the profit
The following selected accounts from the Blue Door Corporation’s general ledger are presented below for the year ended December 31, 2025:InstructionsPrepare a multiple-step income statement.
Perth Inc.’s bank statement from Main Street Bank at August 31, 2025, gives the following information.A summary of the Cash account in the ledger for August shows the following: balance, August 1,
following information is available for Zoe’s Activewear Inc. for three recent fiscal years.Instructionsa. Calculate the inventory turnover, days in inventory, and gross profit rate for 2025 and
Starbucks sells coffee beans, which are sensitive to price fluctuations. Suppose the following inventory information is available for this product at December 31, 2025.InstructionsCalculate
Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. The company reports inventory and cost of goods sold using the LIFO method. Suppose
Suppose this information is available for PepsiCo, Inc. for 2025, 2024, and 2023.Instructionsa. Calculate the inventory turnover for 2023, 2024, and 2025. (Round to one decimal place.)b. Calculate
The trial balance of Mendez Company at the end of its fiscal year, August 31, 2025, includes these accounts: Beginning Inventory $18,700, Purchases $154,000, Sales Revenue $190,000, Freight-In
At December 31, 2025, Familla Corporation estimates that goods with a selling price of $1,400 and a cost of $650 that were sold on account during the current period will be returned during the next
Godfreid Company has accounts receivable of $95,400 at March 31, 2025. Credit terms are 2/10, n/30. At March 31, 2025, there is a $2,100 credit balance in Allowance for Doubtful Accounts prior to
At December 31, 2025, Highland Corporation estimates that goods with a selling price of $4,700 and a cost of $1,870 that were sold on account during the current period will be returned during the
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2025, of $46,850,000 under the LIFO inventory method. In the notes to
The following information pertains to Ranchero Company.1. Cash balance per books, August 31, $7,364.2. Cash balance per bank, August 31, $7,328.3. Outstanding checks, August 31, $686.4. August bank
What title does Apple use for gross profit? By how much did its total gross profit change, and in what direction, for the year ended September 26, 2020?
A new accountant at Wyne Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April
Suppose the following information was taken from the 2025 financial statements of FedEx Corporation, a major global transportation/delivery company.InstructionsAnswer each of the following
At the end of 2024, Safer Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2025, it is learned that the company’s receivable from Madonna
On January 1, 2025, Budd Corporation started the year with a balance in Accounts Receivable of $145,000 and a credit balance in Allowance for Doubtful Accounts of $7,950. During 2025, the company had

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