Financial Accounting 8th Edition Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, J. Mather - Solutions

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What are the three main types of business activity?Give examples of each activity.(LO 3)
Why would a bank want to monitor the dividend payment practices of the corporations to which it lends money?(LO 3)
What is the primary purpose of the statement of cash fl ows?(LO 3)
What are the three main categories of the statement of cash fl ows? Why do you think these categories were chosen?(LO 3)
What is retained earnings? What items increase the balance in retained earnings? What items decrease the balance in retained earnings?(LO 3)
What is the basic accounting equation?(LO 3)
(a) Defi ne the terms assets, liabilities, and stockholders’equity.(b) What items affect stockholders’ equity?(LO 3)
Which of these items are liabilities of White Glove Cleaning Service?(LO 3)(a) Cash. (f) Equipment.(b) Accounts payable. (g) Salaries and wages(c) Dividends. payable.(d) Accounts receivable. (h) Service revenue.(e) Supplies. (i) Rent expense.
What is the purpose of the management discussion and analysis section (MD&A)? (LO 3)
Why is it important for fi nancial statements to receive an unqualifi ed auditor’s opinion? (LO 3)
What types of information are presented in the notes to the fi nancial statements? (LO 3)
Match each of the following forms of business organization with a set of characteristics:sole proprietorship (SP), partnership (P), corporation (C). (LO 3)(a) _____ Shared control, tax advantages, increased skills and resources.(b) _____ Simple to set up and maintains control with owner.(c) _____
Match each of the following types of evaluation with one of the listed users of accounting information. (LO 3)1. Trying to determine whether the company complied with tax laws.2. Trying to determine whether the company can pay its obligations.3. Trying to determine whether an advertising proposal
In alphabetical order below are balance sheet items for Karol Company at December 31, 2017. Prepare a balance sheet following the format of Illustration 1-7. (LO 3)Accounts payable $65,000 Accounts receivable 71,000 Cash 22,000 Common stock 18,000 Retained earnings 10,000
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet. In each case, identify whether the item would appear on the balance sheet (BS) or income statement (IS).
Which is not a required part of an annual report of a publicly traded company? (LO 3)(a) Statement of cash fl ows. (c) Management discussion and analysis.(b) Notes to the fi nancial statements. (d) All of these are required.
Here is a list of words or phrases discussed in this chapter: (LO 3)1. Corporation 4. Partnership 7. Accounts payable 2. Creditor 5. Stockholder 8. Auditor’s opinion 3. Accounts receivable 6. Common stock Instructions Match each word or phrase with the best description of it.______ (a) An
The following items and amounts were taken from Lonyear Inc.’s 2017 income statement and balance sheet. (LO 3)______ Cash $ 84,700 ______ Accounts receivable $ 88,419 ______ Retained earnings 123,192 ______ Sales revenue 584,951 ______ Cost of goods sold 438,458 ______ Notes payable 6,499 ______
Here are incomplete fi nancial statements for Donavan, Inc. (LO 3)Assets Cash $ 7,000 Inventory 10,000 Buildings 45,000 Total assets $62,000 DONAVAN, INC.Balance Sheet Liabilities and Stockholders’ Equity Liabilities Accounts payable $ 5,000 Stockholders’ equity Common stock (a)Retained
Otay Lakes Park is a private camping ground near the Mount Miguel Recreation Area. It has compiled the following fi nancial information as of December 31, 2017. (LO 3)Service revenue (from camping fees) $132,000 Dividends $ 9,000 Sales revenue (from general store) 25,000 Notes payable 50,000
Kellogg Company is the world’s leading producer of ready-to-eat cereal and a leading producer of grain-based convenience foods such as frozen waffl es and cereal bars.Suppose the following items were taken from its 2017 income statement and balance sheet. (All dollars are in millions.) (LO 3)____
Wayne Holtz is the bookkeeper for Beeson Company. Wayne has been trying to get the balance sheet of Beeson Company to balance. It fi nally balanced, but now he’s not sure it is correct. (LO 3)BEESON COMPANY Balance Sheet December 31, 2017 Assets Cash $18,000 Supplies 9,500 Equipment 40,000
Suppose the following items were taken from the balance sheet of Nike, Inc. (All dollars are in millions.) (LO 3)1. Cash $2,291.1 7. Inventory $2,357.0 2. Accounts receivable 2,883.9 8. Income taxes payable 86.3 3. Common stock 2,874.2 9. Equipment 1,957.7 4. Notes payable 342.9 10. Retained
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 2017. (LO 3)Walco Corporation Gunther Enterprises Beginning of year Total assets $110,000 $150,000 Total
Identify each of the following organizational characteristics with the business organizational form or forms with which it is associated. (LO 3)(a) Easier to transfer ownership. (d) Tax advantages.(b) Easier to raise funds. (e) No personal legal liability.(c) More owner control.
Gray Corporation began operations on January 1, 2017. The following information is available for Gray Corporation on December 31, 2017. (LO 3)Accounts payable $ 5,000 Notes payable $ 7,000 Accounts receivable 2,000 Rent expense 10,000 Advertising expense 4,000 Retained earnings ?Cash 3,100 Service
Financial decisions often place heavier emphasis on one type of fi nancial statement over the others. Consider each of the following hypothetical situations independently. (LO 3)(a) The North Face is considering extending credit to a new customer. The terms of the credit would require the customer
On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2017, and the revenues and expenses for the month of June, its fi rst month of operations: (LO 3)Cash $ 4,600 Notes
Presented below is selected fi nancial information for Rojo Corporation for December 31, 2017. (LO 3)Inventory $ 25,000 Cash paid to purchase equipment $ 12,000 Cash paid to suppliers 104,000 Equipment 40,000 Buildings 200,000 Service revenue 100,000 Common stock 50,000 Cash received from customers
Micado Corporation was formed on January 1, 2017. At December 31, 2017, Miko Liu, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows. (LO 3)MICADO CORPORATION Balance Sheet December 31, 2017 Assets Liabilities and Stockholders’ Equity Cash $20,000
Xerox was not having a particularly pleasant year. The company’s stock price had already fallen in the previous year from $60 per share to $30. Just when it seemed things couldn’t get worse, Xerox’s stock fell to $4 per share. The data below were taken from the statement of cash fl ows of
Purpose: Identify summary information about companies. This information includes basic descriptions of the company’s location, activities, industry, fi nancial health, and fi nancial performance. (LO 3)Address: http://biz.yahoo.com/iSteps 1. Type in a company name, or use the index to find
Sylvia Ayala recently accepted a job in the production department at Apple. Before she starts work, she decides to review the company’s annual report to better understand its operations.The content and organization of corporate annual reports have become fairly standardized.Excluding the public
Marci Ling is the bookkeeper for Samco Company, Inc. Marci has been trying to get the company’s balance sheet to balance. She fi nally got it to balance, but she still isn’t sure that it is correct. (LO 3)SAMCO COMPANY, INC.Balance Sheet For the Month Ended December 31, 2017 Assets Liabilities
IFRS is considered to be more: (LO 3)(a) principles-based and less rules-based than GAAP.(b) rules-based and less principles-based than GAAP.(c) detailed than GAAP.(d) None of the above.
Who are the two key international players in the development of international accounting standards? Explain their role. (LO 3)
What is the benefit of a single set of high-quality accounting standards? (LO 3)
Comparisons of data within a company are an example of the following comparative basis:(a) Industry averages.(b) Intracompany.(c) Intercompany.(d) Both (b) and (c).In horizontal analysis, each item is expressed as a percentage of the:(a) net income amount.(b) stockholders’ equity amount.(c) total
Sammy Corporation reported net sales of $300,000,$330,000, and $360,000 in the years, 2012, 2013, and 2014, respectively. If 2012 is the base year, what is the trend percentage for 2014?(Gao (c) 120%.(b) 108%. (d) 130%.
Which of the following measures is an evaluation of a firm’s ability to pay current liabilities?(a) Acid-test ratio. (c) Both (a) and (b).(b) Current ratio. (d) None of the above.
Compute the days in inventory for 2014.(a) 64.4 days. (c) 6 days.(b) 60.8 days. (d) 24 days.
Compute the current ratio for 2014.(a) e2oalls (co) 80 ir(ib) pSocOale (a) eS woos
Compute the profit margin ratio for 2014.(a), 1719: (c) 37.9%.(b) 18.1%. Xd) sas 9 es
Compute the return on common stockholders’ equity for 2014.(a) 47.9%. (c) 61.2%.(Bea 1e7 2a (d) 59.4%.
Compute the times interest earned for 2014.(a) 11.2 times. (c) 14.0 times.(b) 65.3 times. (d) 13.0 times.
(a) Kurt Gibson believes that the analysis of financial statements is directed at two characteristics of a company: liquidity and profitability. Is Kurt correct?Explain.(b) Are short-term creditors, long-term creditors, and stockholders interested primarily in the same characteristics of a company?
(a) If Nimoy Company had net income of $350,000 in 2013 and it experienced a 22.4% increase in net income for 2014, what is its net income for 2014?
If five cents of every dollar of Nimoy revenue is net income in 2013, what is the dollar amount of 2013 revenue?
Maria Fierro Corporation reported the following amounts in 2012, 2013, and 2014.2012 2013 2014 Current assets $220,000 $230,000 $240,000 Current liabilities $160,000 $170,000 $184,000 Total assets $500,000 $600,000 $630,000 Instructions(a) Identify and describe the three tools of financial
Using the following data from the comparative balance sheet of Dotte Company, illustrate horizontal analysis.December 31, 2014 December 31, 2013 Accounts receivable $ 520,000 $ 350,000 Inventory $ 840,000 $ 500,000 Total assets $2,500,000 $3,000,000
Using the same data presented above in
for Dotte Company, illustrate vertical analysis.
Horizontal analysis (trend analysis) percentages for Kemplar Company’s sales, cost of goods sold, and expenses are shown below.Horizontal Analysis 2014 2013 2012 Sales 97.8 105.3 100.0 Cost of goods sold 103.0 96.0 100.0 Expenses 108.2 O93 100.0 Did Kemplar’s net income increase, decrease, or
Vertical analysis (common size) percentages for Dagman Company's sales, cost of goods sold, and expenses are shown below.Vertical Analysis 2014 2013 2012 Sales 100.0 100.0 100.0 Cost of goods sold BOR 62.4 64.5 Expenses 25.0) 25.6 PIGS Did Dagman’s net income as a percentage of sales increase,
The following data are taken from the financial statements of Gladow Company.2014 2013 Accounts receivable (net), end of year $ 550,000 $ 520,000 Net sales on account 3,745,000 3,000,000 Terms for all sales are 1/10, n/60.(a) Compute for each year (1) the accounts receivable turnover and (2) the
The following data are from the income statements of Charles Company.2014 2013 Sales $6,420,000 $6,240,000 Beginning inventory 980,000 860,000 Purchases 4,440,000 4,720,000 Ending inventory 1,020,000 980,000(a) Compute for each year (1) the inventory turnover and (2) the average days to sell the
Financial information for Gallup Inc. is presented below. Prepare horizontal analysis.December 31, 2014 December 31, 2013 (LO 3)Current assets $128,000 $100,000 PxLS |Plant assets (net) 396,000 330,000 Current liabilities 91,000 70,000 F i Long-term liabilities 138,700 95,000| Common stock, $1 par
Operating data for Conard Corporation are presented below. Prepare vertical analysis.2014 2013 rom Net sales $750,000 $600,000 XLS Cost of goods sold 480,000 408,000 Selling expenses 105,000 84,000 F ’Administrative expenses 75,000 54,000 Income tax expense 36,000 18,000 Net income 54,000 36,000
The comparative condensed balance sheets of Garcia Corporation are presented|below.Garcia Corporation Comparative Condensed Balance Sheets December 31 2014 2013 Assets Current assets $ 76,000 $ 80,000 Property, plant, and equipment (net) 100,000 90,000 Intangibles 24,000 40,000 Total assets
The comparative condensed income statements of Hendi Corporation are shown below.Hendi Corporation Comparative Condensed Income Statements For the Years Ended December 31 2014 2013 Net sales $600,000 $500,000 Cost of goods sold 468,000 400,000 Gross profit 132,000 100,000 Operating expenses 60,000
Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 30, 2010, are shown below.Nordstrom, Inc.Balance Sheet (partial)(in millions) End-of-Year Beginning-of-Year Cash and cash equivalents $ 795 A of Accounts receivable (net)
Willingham Company has the following comparative balance sheet data.Willingham Company Balance Sheets December 31 2014 2013 Cash $ 10,000 $ 30,000 Accounts receivable (net) 70,000 50,000 Inventory 60,000 50,000 Plant assets (net) 205,000 190,000$345,000 $320,000 Accounts payable $ 50,000 $ 60,000
Selected comparative statement data for Molini Products Company are presented below. All balance sheet data are as of December 31.2014 2013 Net sales $700,000 $680,000 Cost of goods sold 480,000 400,000 Interest expense 7,000 5,000 Net income 42,000 34,000 Accounts receivable 120,000 100,000
Rees Corporation experienced a fire on December 31, 2014, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.December 31, 2014 December 31, 2013 Cash $ 30,000 $ 10,000 Accounts receivable (net) 73,000
Yadier Corporation’s comparative balance sheets are presented below. Compute ratios.Yadier Corporation (LO 5)Balance Sheets December 31 2014 2013 Cash $ 4,300 $ 3,700 Accounts receivable 22,000 24,000 Inventory 10,000 7,000 Land 20,000 26,000 Buildings 70,000 70,000 Accumulated
For its fiscal year ending October 31, 2014, Douglas Corporation reports the fol- Prepare a correct income lowing partial data shown below. statement.Income before income taxes $550,000 (LO 6)Income tax expense (30% X $410,000) 123,000 Income before extraordinary items 427,000 Extraordinary loss
Maulder Corporation has income from continuing operations of $290,000 for the year Prepare income statement.ended December 31, 2014. It also has the following items (before considering income taxes). (LO 6)1. An extraordinary loss of $70,000.2. A gain of $35,000 on the discontinuance of a
Comparative statement data for Lionel Company and Barrymore Company, two comment on profitability. competitors, appear below. All balance sheet data are as of December 31, 2014, and(LO 4, 5) December 31, 2013.Lionel Company Barrymore Company _ 2014 _ 2013.10) pp 2014) |) tO Net sales $1,549,035
The ledger of Gower Corporation at December 31, 2014, contains the following summary data.Net sales $1,600,000 Cost of goods sold $1,100,000 Selling expenses 70,000 Administrative expenses 90,000 Other revenues and gains 22,000 Other expenses and losses 28,000 Your analysis reveals the following
Your parents are considering investing in PepsiCo, Inc. common stock. They ask you, asan accounting expert, to make an analysis of the company for them. Fortunately, excerpts from a current annual report of PepsiCo are presented in Appendix A. Note that all dollar amounts are in millions.PEPSICO
PepsiCo’s financial statements are presented in Appendix A. Financial statements of sg The Coca-Cola Company are presented in Appendix B. PEPSICO Instructions(a) Based on the information contained in these financial statements, determine each of the following for each company.(1) The percentage
As the CPA for Bonita Inc., you have been asked to develop some key ratios from the comparative financial statements. This information is to be used to convince creditors that the company is solvent and will continue as a going concern. The data requested and the computations developed from the
The Management Discussion and Analysis section of an annual report addresses corporate performance for the year, and sometimes uses financial ratios to support its claims.Address: www.ibm.com/investor/tools/index.phtml or go to www.wiley.com/college/weygandt Steps 1. Choose How to read annual
Kyle Benson is the CEO of McCarty’s Electronics. Benson is an expert engineer but a novice in accounting. He asks you to explain (1) the bases for comparison in analyzing McCarty’s financial statements, and (2) the factors affecting quality of earnings.Instructions Write a letter to Kyle Benson
Assuming the same information as in Question 4, Parmalane should report the following using a one-statement approach under IFRS:(a) net income of $260,000 and comprehensive income of $270,000.(b) net income of $270,000 and comprehensive income of $260,000.(c) other comprehensive income of $10,000
M-Bot Corporation has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2014. No dividends were declared in 2012 or 2013. If M-Bot wants to pay $375,000 of dividends in 2014, common stockholders will receive:(a) $0. (c) $215,000.(b) $295,000. (d) $135,000.
Katie Inc. reported net income of $186,000 during 2014 and paid dividends of $26,000 on common stock.It also has 10,000 shares of 6%, $100 par value, noncumulative preferred stock outstanding. Common stockholders’ equity was $1,200,000 on January 1, 2014, and $1,600,000 on December 31, 2014. The
The treasury stock purchased in Question 13 is resold by Luz, Inc. for $13,000. What effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders’ equity?
On June 1, Federia Inc. issues 4,000 shares of no-par common stock at a cash price of $6 per share. Journalize the issuance of the shares assuming the stock has a stated
On January 1, 2014, Leonard Corporation purchased 1,000 shares of treasury stock. Other information regarding Leonard Corporation is provided below.2013 2014 Net income $200,000 $210,000 Dividends on preferred stock $30,000 $30,000 Dividends on common stock $20,000 $25,000 Weighted-average number
Victoria has prepared the following list of statements about corporations.of a corporation. 1(LO 1) . A corporation is an entity separate and distinct from its owners.2. As a legal entity, a corporation has most of the rights and privileges of a person.3. Most of the largest U.S. corporations are
During its first year of operations, Branden Corporation had the following transactions pertaining to its common stock.Jan. 10 ey alae Instructions(a) Journalize the transactions, assuming that the common stock has a par value of $4 per share.(b) Journalize the transactions, assuming that the
Anya Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review his textbooks on the topic of corporation accounting. During the first month, the accountant made the following
The ledger of Summit Corporation contains the following accounts: Common Stock, Preferred Stock, Treasury Stock, Paid-in Capital in Excess of Par—Preferred Stock, Paid-in Capital in Excess of Stated Value—Common Stock, Paid-in Capital from Treasury Stock, and Retained Earnings.Instructions
Ina recent year, the stockholders’ equity section of Aluminum Company of America(Alcoa) showed the following (in alphabetical order): additional paid-in capital $6,101, common stock $925, preferred stock $56, retained earnings $7,428, and treasury stock 2,828. All dollar data are in millions.The
The stockholders’ equity accounts of Terrell Corporation on January 1, 2014, were as follows.Preferred Stock (9%, $50 par, cumulative, 10,000 shares authorized) $ 400,000 Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par—Preferred Stock
On January 1, 2014, Prasad Corporation had the following stockholders’ equity accounts.Common Stock ($25 par value, 48,000 shares issued and outstanding) $1,200,000 Paid-in Capital in Excess of Par—Common Stock 200,000 Retained Earnings 600,000 During the year, the following transactions
On January 1, 2014, Primo Corporation had the following stockholders’ equity accounts.Common Stock ($10 par value, 75,000 shares issued and outstanding) $750,000 Paid-in Capital in Excess of Par—Common Stock 200,000 Retained Earnings 540,000 During the year, the following transactions
Welles Corporation was organized on January 1, 2014. It is authorized to issue 20,000 shares of 6%, $40 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.Jan. 10 Mar. 1 Apr.
On January 1, 2014, Dixon Corporation had the following stockholders’ equity accounts.Common Stock ($4 par value, 250,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of Par—Common Stock 200,000 Retained Earnings 840,000 During the year, the following transactions
The ledger of Paisley Corporation at December 31, 2014, after the books have been closed, contains the following stockholders’ equity accounts.Preferred Stock (8,000 shares issued) $ 800,000 Common Stock (400,000 shares issued) 2,000,000 Paid-in Capital in Excess of Par—Preferred Stock 100,000
The following stockholders’ equity accounts arranged alphabetically are in the section; compute book value _ ledger of Crivello Corporation at December 31, 2014.per share. Common Stock ($3 stated value) $2,400,000(LO 7, 9) Paid-in Capital from Treasury Stock 10,000 Paid-in Capital in Excess of
PepsiCo’s financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in Appendix B. 3 PEPSICO Instructions(a) Based on the information contained in these financial statements, compute the 2010 book value per share for each company. (Hint: Use the
The stockholders’ meeting for Kissinger Corporation has been in progress for some time.The chief financial officer for Kissinger is presently reviewing the company’s financial statements and is explaining the items that comprise the stockholders’ equity section of the balance sheet for the
Jerrod Platt, your uncle, is an inventor who has decided to incorporate. Uncle Jerrod knows that you are an accounting major at U.N.O. In a recent letter to you, he ends with the question,“Tm filling out a state incorporation application. Can you tell me the difference in the following terms: (1)
A high percentage of Americans own stock in corporations. As a shareholder in a corporation, you will receive an annual report. One of the goals of this course is for you to learn how to navigate your way around an annual report.Instructions Use PepsiCo Inc.’s annual report provided in Appendix A
Earnings per share computations related to IFRS and GAAP:(a) are essentially similar.(b) result in an amount referred to as earnings per share.(c) must deduct preferred (preference) dividends when computing earnings per share.(d) All of the above.IFRS Exercises
Ingram Corporation has the following accounts (in euros) at December 31: Share Capital—Ordinary, €10 par, 5,000 shares issued, €50,000; Share Premium—Ordinary €10,000;Retained Earnings €45,000; and Treasury Shares—Ordinary, 500 shares, €11,000. Prepare the equity section of the
Sorocaba Co. had the following transactions during the current period.Mar. 2 Issued 5,000 shares of $1 par value ordinary shares to attorneys in payment of a bill for$30,000 for services provided in helping the company to incorporate.June 12 Issued 60,000 shares of $1 par value ordinary shares for
Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1, 2014, for$300,000. During 2014 Sheboygan Corp. reported net income of $160,000 and paid total dividends of $60,000.If Horicon uses the equity method to account for its investment, the balance in the

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Financial Accounting 8th Edition Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, J. Mather - Solutions

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