Questions from General Accounting

Q: On October 31, the stockholders’ equity section of Pele Company’s balance

On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock $648,000 and retained earnings $400,000. Pele is considering the following two courses of actio...

Q: Sandberg Company has $1,000,000 in assets and

Sandberg Company has $1,000,000 in assets and $1,000,000 in stockholders’ equity, with 40,000 shares outstanding the entire year. It has a return on assets of 10%. In the past year, it had net income...

Q: Cole Corporation issued $400,000, 7%, 20-

Cole Corporation issued $400,000, 7%, 20-year bonds on January 1, 2014, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. C...

Q: Chambers Company produces blankets. From its accounting records, it prepares

Chambers Company produces blankets. From its accounting records, it prepares the following schedule and financial statements on a yearly basis. (a) Cost of goods manufactured schedule. (b) Income stat...

Q: Ikerd Company is a manufacturer of personal computers. Various costs and

Ikerd Company is a manufacturer of personal computers. Various costs and expenses associated with its operations are as follows. 1. Property taxes on the factory building. 2. Production superintendent...

Q: The administrators of Crawford County’s Memorial Hospital are interested in identifying the

The administrators of Crawford County’s Memorial Hospital are interested in identifying the various costs and expenses that are incurred in producing a patient’s X-ray. A list of such costs and expens...

Q: Dailey Company issued $300,000, 8%, 15-

Dailey Company issued $300,000, 8%, 15-year bonds on December 31, 2013, for $288,000. Interest is payable annually on December 31. Dailey uses the straight-line method to amortize bond premium or disc...

Q: Dailey Company issued $300,000, 8%, 15-

Dailey Company issued $300,000, 8%, 15-year bonds on December 31, 2013, for $288,000. Interest is payable annually on December 31. Dailey uses the straight-line method to amortize bond premium or disc...

Q: Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview

Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2014, Valenti sells 6,300 subscriptions for cash, beginning...

Q: In providing accounting services to small businesses, you encounter the following

In providing accounting services to small businesses, you encounter the following situations pertaining to cash sales. 1. Furcal Company enters sales and sales taxes separately on its cash register. O...