Questions from Financial Accounting

Q: Willow Creek Nursery, with an authorization of 75,000 shares

Willow Creek Nursery, with an authorization of 75,000 shares of preferred stock and 200,000 shares of common stock, completed several transactions involving its stock on October 1, the first day of op...

Q: According to a summary of the payroll of Guthrie Co., $

According to a summary of the payroll of Guthrie Co., $560,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $60,000 was subject to state and federal unemployment taxes....

Q: Yuri Co. operates a chain of gift shops. The company

Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Fu...

Q: Lightfoot Inc., a software development firm, has stock outstanding as

Lightfoot Inc., a software development firm, has stock outstanding as follows: 40,000 shares of cumulative preferred 1% stock, $125 par, and 100,000 shares of $150 par common. During its first four ye...

Q: On October 31, Legacy Rocks Inc., a marble contractor,

On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 400,000 shares of $10 par common stock at $18, and on November 19, it issued for cash 50,000 shares of preferred stock, $75 par a...

Q: In a recent year’s financial statements, Procter & Gamble showed an

In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $5,599 million and a periodic pension cost of $434 million. Explain the meaning of the $5,599 million...

Q: Parker Manufacturing Co. warrants its products for one year. The

Parker Manufacturing Co. warrants its products for one year. The estimated product warranty is 2.5% of sales. Assume that sales were $600,000 for January. In February, a customer received warranty rep...

Q: General Motors Corporation (GM) disclosed estimated product warranty payable for

General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: Presume that GM’s sales were $135,592 million in Year 2 and that the...

Q: McMahon Inc. reported the following on the company’s statement of cash

McMahon Inc. reported the following on the company’s statement of cash flows in Year 2 and Year 1: Seventy percent of the net cash flow used for investing activities was used to re...

Q: Several months ago, Ayers Industries Inc. experienced a hazardous materials

Several months ago, Ayers Industries Inc. experienced a hazardous materials spill at one of its plants. As a result, the Environmental Protection Agency (EPA) fined the company $240,000. The company i...