Questions from Financial Accounting

Q: Franklin Sports Authority purchased inventory costing $5,000 by signing

Franklin Sports Authority purchased inventory costing $5,000 by signing an 8% short-term note payable. The purchase occurred on September 30, 2010. Franklin pays annual interest each year on September...

Q: This short exercise works with Short Exercise 8-1.

This short exercise works with Short Exercise 8-1. 1. Refer to the data in Short Exercise 8-1. Show what the company would report on its balance sheet at June 30, 2011, and on its income statement fo...

Q: Trekster USA guarantees automobiles against defects for five years or 55,

Trekster USA guarantees automobiles against defects for five years or 55,000 miles, whichever comes first. Suppose Trekster USA can expect warranty costs during the five-year period to add up to 6% of...

Q: Sunset Drive-Ins Ltd. issued a $500,000

Sunset Drive-Ins Ltd. issued a $500,000, 8%, 10-year bond payable on July 1, 2010, at a price of 94. Also assume that Sunsets accounting year ends on December 31. Journalize the following transactions...

Q: Refer to the data given in Short Exercise 8-3.

Refer to the data given in Short Exercise 8-3. What amount of warranty expense will Trekster USA report during 2010? Which accounting principle addresses this situation? Does the warranty expense for...

Q: MarleyDavid, Inc., the motorcycle manufacturer, included the following note

MarleyDavid, Inc., the motorcycle manufacturer, included the following note in its annual report: 1. Why are these contingent (versus real) liabilities? 2. In the United States, how can the contingen...

Q: Consider the authority structure in a corporation, as diagrammed in Exhibit

Consider the authority structure in a corporation, as diagrammed in Exhibit 9-2. 1. What group holds the ultimate power in a corporation? 2. Who is the most powerful person in the corporation? Whats...

Q: Give the formula for computing (a) rate of return

Give the formula for computing (a) rate of return on total assets (ROA) and (b) rate of return on common stockholders’ equity (ROE). Then answer these questions about the rate-of-return computations...

Q: McGahan Corporation is conducting a special meeting of its board of directors

McGahan Corporation is conducting a special meeting of its board of directors to address some concerns raised by the stockholders. Stockholders have submitted the following questions. Answer each ques...

Q: Greentea Corporation earned net income of $95,000 during the

Greentea Corporation earned net income of $95,000 during the year ended December 31, 2010. On December 15, Greentea declared the annual cash dividend on its 6% preferred stock (11,000 shares with tota...