Questions from Intermediate Accounting

Q: The following are Sullivan Corp.’s comparative balance sheet accounts at

The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. Additional i...

Q: Assume that on January 1, 2017, Elmer’s Restaurants sells a

Assume that on January 1, 2017, Elmer’s Restaurants sells a computer system to Liquidity Finance Co. for $680,000 and immediately leases the computer system back. The relevant information is as follow...

Q: The following are four independent situations. a. On December

The following are four independent situations. a. On December 31, 2017, Zarle Inc. sold computer equipment to Daniell Co. and immediately leased it back for 10 years. The sales price of the equipment...

Q: The reported net incomes for the first 2 years of Sandra Gustafson

The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2017, $147,000; 2018, $185,000. Early in 2019, the following errors were discovered. 1. Depreciatio...

Q: Peter Henning Tool Company’s December 31 year-end financial statements contained

Peter Henning Tool Company’s December 31 year-end financial statements contained the following errors. An insurance premium of $66,000 was prepaid in 2017 covering the years 2017,...

Q: A partial trial balance of Julie Hartsack Corporation is as follows on

A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2018. Additional adjusting data: 1. A physical count of supplies on hand on December 31, 2018, totaled $1,100. 2...

Q: The before-tax income for Lonnie Holdiman Co. for 2017

The before-tax income for Lonnie Holdiman Co. for 2017 was $101,000 and $77,400 for 2018. However, the accountant noted that the following errors had been made: 1. Sales for 2017 included amounts of...

Q: Gerald Englehart Industries changed from the double-declining-balance to

Gerald Englehart Industries changed from the double-declining-balance to the straight-line method in 2018 on all its equipment. There was no change in the assets’ salvage values or useful lives. Plant...

Q: On January 1, 2017, Beyonce Co. purchased 25,

On January 1, 2017, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for $1,400,000. At the time, the book value and the fair value of John’s net assets were...

Q: Dan Aykroyd Corp. was a 30% owner of Steve Martin

Dan Aykroyd Corp. was a 30% owner of Steve Martin Company, holding 210,000 shares of Martin’s common stock on December 31, 2016. The investment account had the following entries. O...