Questions from Financial Accounting

Q: Suppose on February 1, 2012, Western Motors paid $380

Suppose on February 1, 2012, Western Motors paid $380 million for a 35% investment in Phase Motors. Assume Phase earned net income of $40 million and paid cash dividends of $20 million during 2012. 1....

Q: Five Flags over New York paid $90,000 for a

Five Flags over New York paid $90,000 for a concession stand. Five Flags started out depreciating the building straight-line over 10 years with zero residual value. After using the concession stand fo...

Q: Kohl’s Corporation operates family oriented department stores that sell moderately priced apparel

Kohl’s Corporation operates family oriented department stores that sell moderately priced apparel and housewares. The company reported the following information (adapted) for the thr...

Q: On January 1, 2012, Smith Air purchased an airplane for

On January 1, 2012, Smith Air purchased an airplane for $67,850,000. Smith Air expects the plane to remain useful for 11 years and to have a residual value of $2,950,000. Smith Air uses the straight-l...

Q: On January 7, 2012, J.B. Griffin Co

On January 7, 2012, J.B. Griffin Co. paid $240,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $1,400, $6,500 sales tax, and $29,100 for a special p...

Q: TexAm Petroleum, the giant oil company, holds reserves of oil

TexAm Petroleum, the giant oil company, holds reserves of oil and gas assets. At the end of 2012, assume the cost of TexAM Petroleum’s mineral assets totaled $234 billion, representing 13 billion barr...

Q: PTL, Inc., dominates the snack-food industry with its

PTL, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that, PTL, Inc., purchased Seacoast Snacks, Inc., for $8.2 million cash. The market value of Seacoast Snacks’ assets is $...

Q: The following questions are unrelated except that they all apply to plant

The following questions are unrelated except that they all apply to plant assets and intangible assets: 1. The manager of Carpet World regularly debits the cost of repairs and maintenance of plant ass...

Q: Ochoa Optical, Inc., provides a full line of designer eyewear

Ochoa Optical, Inc., provides a full line of designer eyewear to optical dispensaries. Ochoa reported the following information for 2012 and 2013: Compute return on assets for 2012 and 2013.

Q: During 2012, Southeast Satellite Systems, Inc., purchased two other

During 2012, Southeast Satellite Systems, Inc., purchased two other companies for $15 million. Also during 2012, Southeast made capital expenditures of $8 million to expand its market share. During th...