Questions and Answers of Survey of Accounting

What is U.S. GAAP?What is IFRS?
Following is a list of various costs incurred in producing and selling college textbooks. With respect to the production and sale of textbooks, classify each cost as either variable, fixed, or
List the errors you find in the following partial balance sheet: CHICO COMPANY Balance Sheet December 31, 20Y7 Assets Total current assets $350,000 Replacement Cost Accumulated Book Value
Quavo Mining Co. acquired mineral rights for $36,000,000. The mineral deposit is estimated at 80,000,000 tons. During the current year, 15,000,000 tons were mined and sold.a. Determine the amount of
The total assets and total liabilities for a recent year of Apple (AAPL) and Microsoft (MSFT) are shown here.Determine the stockholders’ equity of each company Apple (in millions) Microsoft (in
Determine the missing amount for each of the following: Assets Liabilities Stockholders' Equity a. $262,500 $450,000 b. $1,320,000 C. $3,150,000 %3D X $787,500 %3D $900,000
Determine the missing amounts (in millions) for the condensed balance sheets shown below. Target (TGT) Costco Walmart (COST) (WMT) Assets $36,347 $ (c) $38,999 (b) Liabilities 25,268 123,700
For a recent year ending January 31, Target Corporation (TGT) had revenues of $72,618 million and total expenses of $74,254 million. Did Target Net loss of $(1,636) million ($72,618 million –
Determine the missing amount for each of the following: Assets Liabilities Stockholders'Equity $357,500 $592,500 $255,000 a. + b. $300,000 C $ 56,200 $11,875
Using transactions listed in P2-2 for Restart Technology Services indicate the effects of each transaction on the liquidity metric Cash and profitability metric Net Income – Cash Basis.Data from
A vacant lot acquired for $500,000, on which there is a balance owed of $300,000, is sold for $660,000 in cash. The seller pays the $300,000 owed. What is the effect of these transactions on the
JIT Delivery Service had the following selected transactions during November:1. Received cash from issuance of common stock, $37,500.2. Paid rent expense for November, $2,500.3. Paid advertising
Use the following data (in millions) for Oracle Corporation (ORCL), for a recent year to answer the questions below:Retained earnings, beginning of year ................................
Based upon the financial transactions for McDonald’s Corp. (MCD), shown in Exercise 2-21, indicate whether the transaction would be reported in the cash flows from operating, investing, or
Data for SLO Health Care for January are provided in Problems 3-1 and 3-2.Data from problem 3-1SLO Health Care Inc. is owned and operated by Morgan Denby, the sole stockholder. During January 20Y6,
Data for SLO Health Care for January are provided in Problems 3-1, 3-2, and 3-3.Data from problem 3-1SLO Health Care Inc. is owned and operated by Morgan Denby, the sole stockholder. During January
Illustrate the effects on the accounts and financial statements of the following related transactions of Bigsur Inc.a. Purchased $200,000 of merchandise from Central Coast Co. on account, terms 1/10,
Determine the due date and the amount of interest due at maturity on the following notes: Date of Note Face Amount Interest Rate Term of Note January 15 April 1 30 days 90 days 45 days 120 days 50
Referring to the entry for uncollectible accounts in E6-8, indicate the effects of the adjustment on the liquidity metric days’ sales in receivables and profitability metric return on sales.
Using data in E6-16, indicate the effects of valuing inventory using lower of cost or market on the liquidity metric days’ sales in inventory and profitability metric return on sales.
The following data (in millions) were adapted from recent financial statements of Apple Inc. (AAPL).1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal place.2.
The following data (in millions) were adapted from recent financial statements of HP Inc (HPQ) formerly Hewlett-Packard Company.1. Compute the accounts receivable turnover for Years 1 and 2. Round to
Compare and comment on Apple and HP using the results of MBA 6-6 and MBA 6-7.Data from Sun Valley Rides is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on
The following data (in millions) were adapted from recent financial statements of CVS Health Corporation (CVS):1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal
The following data (in millions) were adapted from recent financial statements of International Paper Company (IP) and Walmart Inc. (WMT):1. Compute the accounts receivable turnover for International
The units of an item available for sale during the year were as follows:There are 25 units of the item in the physical inventory at December 31. Determine the cost of ending inventory and the cost of
Boots Young owns and operates Kinetic Printing. During August, Kinetic Printing incurred the following costs in acquiring two printing presses. One printing press was new, and the other was used by a
The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk.a. Architect’s
Using the data from E7-4, indicate the effects on the liquidity metric free cash flow and profitability metric asset turnover for each of the following:1. The equipment was sold in the first week of
Village Delivery Company purchased a lot to construct a new warehouse for $287,500, paying $100,000 in cash and giving a short-term note for the remainder. Legal fees paid in connection with the
Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage, assuming that the residual value of the fixed asset is to be ignored:(a) 4
A refrigerator used by a restaurant has a cost of $45,000, an estimated residual value of $7,500, and an estimated useful life of 15 years. What is the amount of the annual depreciation computed by
A piece of heavy equipment acquired on January 1 at a cost of $360,000 has an estimated useful life of 20 years. Assuming that it will have no residual value, determine the depreciation for each of
Equipment acquired at the beginning of the fiscal year at a cost of $160,000 has an estimated residual value of $4,500 and an estimated useful life of 20 years. Determine the following:(a) The amount
Immediately after a used truck is acquired, a new motor is installed and the tires are replaced at a total cost of $4,300. Is this a capital expenditure or a revenue expenditure?
Retrograde Delivery Co. incurred the following costs related to trucks and vans used in operating its delivery service:1. Changed the oil and greased the joints of all the trucks and vans.2. Changed
Debra Bundy owns and operates DB Transport Co. During the past year, Debra incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a television in the sleeping
Equipment acquired on January 3, 20Y1, at a cost of $140,000, has an estimated useful life of 5 years and an estimated residual value of $15,000.a. What was the annual amount of depreciation for the
The following cost graphs illustrate various types of cost behavior:For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced
How would each of the following costs be classified if units produced is the activity base?a. Salary of factory supervisor ($120,000 per year)b. Straight-line depreciation of plant and equipmentc.
FirstClass Gaming Inc. manufactures components for computer games within a relevant range of 250,000 to 500,000 components per year. Within this range, the following partially completed manufacturing
Partially completed budget performance reports for EZ Breezy Company, a manufacturer of air conditioners, are provided next.a. Complete the budget performance reports by determining the correct
The total assets and total liabilities for a recent year of Best Buy (BBY) and Gamestop (GME) are shown below.Determine the stockholders’ equity of each company. Best Buy (in millions) Gamestop (in
Identify the primary business emphasis of each of the following companies as (a) a lowcost emphasis or (b) a premium-price emphasis. If you are unfamiliar with the company, you may use the Internet
What particular item of financial or operating data appears on both the income statement and the statement of stockholders’ equity? What items appear on both the balance sheet and the statement of
Briefly describe the nature of the information provided by each of the following financial statements: the income statement, the statement of stockholders’ equity, the balance sheet, and the
The three business activities are financing, investing, and operating. Using Southwest Airlines (LUV), give an example of each type of activity.
Assume that a friend of yours operates a familyowned pharmacy. A Walmart Supercenter, scheduled to open in the next several months, will also offer pharmacy services. What business emphasis would
Both Kia Motors (KRX) and BMW (BMW) produce and sell automobiles. Describe and contrast the business emphasis of KIA and BMW.
Why are most large companies like Apple (AAPL), Pepsico (PEP), General Electric (GE), and Intel (INTC) organized as corporations?
What are the basic elements of a financial accounting system? Do these elements apply to all businesses, from a local restaurant to Alphabet (Google) Inc. (GOOGL)? Explain.
Based on the Amazon.com, Inc. (AMZN), financial statement data shown in Exercise 1-22, prepare an income statement for the year ending December 31.Exercise 1-22Amazon.com, Inc. (AMZN) operates as an
Amazon.com, Inc. (AMZN) operates as an online retailer in North America and internationally. Both Amazon and third parties, via the Amazon.com Web site, sell products across various product
JLM Services was organized on August 1, 20Y5. A summary of the revenue and expense transactions for August follows: Fees earnedWages expense $2,550,000 1,612,500Miscellaneous
Financial information related to All Seasons Company for the month ended June 30, 20Y7, is as follows:Common stock, June 1, 20Y7Stock issued in June $ 30,000 20,000Net income for
From the following list of selected items taken from the records of Mermaid Stories, Inc. as of a specific date, identify those that would appear on the balance sheet.1. Accounts Receivable2. Common
Staples, Inc. (SPLS) is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adapted
Four different companies—Chang, Henry, Nagel, and Wilcox—show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders’ equity, are
Alternative Flour Company manufactures flour by a series of three processes, beginning in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging
Prepare a cost of production report for the Dyeing Department of Alladin Carpet Company for May. Use the weighted average cost method with the following data: Work in process, May 1, 4,000 units, 75%
The following information concerns production in the Finishing Department for July. The Finishing Department uses the weighted average cost method.a. Determine the number of units in work-in-process
Units of production data for the two processing departments of the Tennessee Cable and Wire Company for May of the current fiscal year are as follows:Each department uses the weighted average cost
The Assembly Department of A-Okay Company uses the weighted average cost method and had 700 units in work in process that were 60% complete at the beginning of the period. During the period, 4,980
Orange Realty acts as an agent in buying, selling, renting, and managing real estate. The trial balance on October 31, 20Y4, is shown next.The following business transactions were completed by Orange
On March 1, 20Y1, Sadie May established Pampered Pet, which completed the following transactions during the month:a. Sadie May transferred cash from a personal bank account to an account to be used
The accounts in the ledger of Angel Co. as of December 31, 20Y7, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally
The following selected transactions were completed during January of the current year:1. Billed customers for fees earned, $8,346.2. Purchased supplies on account, $360.3. Received cash from
Winter Solstice Co. has the following accounts in its ledger: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, Retained Earnings, Dividends, Fees Earned, Rent
Identify each of the following accounts of Shakti Yoga Co. as an asset, liability, stockholders’ equity, revenue, or expense, and state in each case whether the normal balance is a debit or a
During the month, Be You Co. has a substantial number of transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit
Costco Wholesale Corporation (COST) and Walmart Stores Inc. (WMT) reported the following data (in millions) for a recent year:1. Compute the return on total assets. Round to one decimal place.2.
Delta Air Lines, Inc. (DAL) reported the following data (in millions) for a recent year:Sales ...........................................$41,244Operating income ........................ 6,114Average
Southwest Airlines Co. (LUV) reported the following data (in millions) for a recent year:Sales ..........................................$21,171Operating income ........................4,116Average
Microsoft Corporation (MSFT) reported the following data (in millions) for a recent year:Sales ..............................................$110,360Operating income
West Coast Industries Inc. wishes to evaluate three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows:Instructions1.
Mulkey Development Company has two competing projects: an office building and a condominium complex. Both projects have an initial investment of $1,000,000. The net cash flows estimated for the two
Kentucky Grill has computed the net present value for capital expenditures for the Somerset and Whitley City locations using the net present value method. Relevant data related to the computation are
Take a Load Off Hotels is considering the construction of a new hotel for $40 million. The expected life of the hotel is 20 years with no residual value. The hotel is expected to earn revenues of
RiverBend Wood is evaluating two capital investment proposals for a retail outlet store, each requiring an investment of $500,000 and each with a five-year life and expected total net cash flows of
The following data are accumulated by GreenApple Motors Inc. evaluating two competing capital investment proposals:Determine the expected average rate of return for each proposal. Testing Equipment
A condensed income statement for the Motorboat Division of Ride of Your Life Inc. for the year ended December 31, 20Y2, is as follows:Sales ..............................$ 6,000,000Cost of goods sold
Horizon Foods Inc. is a diversified food products company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year
Raptor Company sells vehicle parts to manufacturers of heavy construction equipment. The Bulldozer Division is organized as a cost center. The budget for the Bulldozer Division for the month ended
Based on Childs Manufacturing’s data in Exercise 14-17, assume that a transfer price of $11 has been established and that 75,000 units of materials are transferred, with no reduction in the
Wiring used by the Appliance Division of Childs Manufacturing is currently purchased from outside suppliers at a cost of $12.50 per unit. However, the same materials are available from the Electronic
The condensed income statement for the International Division of Shakti Inc. is as follows (assuming no service department charges):Sales .........................................$12,000,000Cost of
Power Sports Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December 31, 20Y7,
Children’s Hospital of the King’s Daughters Health System in Norfolk, Virginia, introduced a new budgeting method that allowed the hospital’s annual plan to be updated for changes in actual
Southwest Airlines Co. (LUV) reported the following data (in millions) for three recent years.Southwest refers to its utilization rates as “passenger load factor.”1. Compute the passenger load
Delta Air Lines (DAL) reported the following data (in millions) for three recent years.Delta refers to its utilization rates as “passenger load factor.”1. Compute the passenger load factor
Hilton Worldwide Holdings Inc. (HLT) and Marriott International, Inc. (MAR) reported the following occupancy data for two recent years:1. Comment on Hilton’s occupancy rate for Years 1 and 2.2.
Hendrick Motorsports sponsors cars and drivers in the National Association for Stock Car Auto Racing (NASCAR)’s Sprint Cup Series. Performance data for three years are as follows:Performance data
Kraft Heinz Company (KHC) uses standards to control its materials costs. Assume that a batch of ketchup (6,000 pounds) has the following standards:The actual materials in a batch may vary from the
The following data relate to the direct materials cost for the production of 20,000 automobile tires:a. Determine the price variance, quantity variance, and total direct materials cost variance.b. To
Shakti Power Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:March ........$60,000April
Fur Family Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:May ..........$600,000June ............900,000July
Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers® and 501 Jeans®. Slacks and jeans are assembled by a variety of different sewing operations.
Sea Pines Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for March for the two rackets is as follows:Both rackets are produced in two
Your Pie Inc. has determined from its production budget the following estimated production volumes for 12" and 16" frozen pizzas for September:There are three direct materials used in producing the
Sadie & Chipper, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been

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