A building was acquired on January I, 2011, at a cost of $4.000.000, and its depreciation is calculated using the straight-line method. At the end of 2015. the accumulated depreciation contra asset for the building is $800.000. What will be the balance in the building's accumulated depreciation contra asset at the end of 2022? What is the building's book value al that date?
> Redo Mini-Exercise M 10-16 but now assume the payments are made on January I of each year (including the first year January I , 2020).
> On January 1, 2020, Samuels, Inc., purchased a building for $2 million to be leased. The building is expected to have a 45-year life with no salvage value. The building was leased immediately by Verdi Corp. (a calendar year-end company) for $130,000 a ye
> On January 1, 2020, Weber, Inc., entered into two lease contracts. The first lease contract was a six-year lease for computer equipment with $15,000 annual lease payments due at the end of each year. Weber took possession of the equipment on January 1, 2
> On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of$4,500. The first lease payment is due on September 30, 2020. The lease was reported as a finance lease using an 8%
> On January 3, 2020, Hanna Corporation signed a lease on a machine for its manufacturing operation and the lease commences on the same date. The lease requires Hanna to make six annual lease payments of $12,000 with the first payment due December 31, 2020
> What are three examples of source documents that underlie business transactions’?'
> Lunar, Inc., plans to issue $900,000 of I 0% bonds that will pay interest semiannually and mature in 5 years. Assume that the effective interest rate is 12% per year compounded semiannually. Compute the selling price of the bonds. Use Tables A.2 and A.3
> On December 3 1, 2018, Thomas, Inc., borrowed $700,000 on a 12%, 15-year mortgage note pay-able. The note is to be repaid in equal semiannual installments of $50,854 (payable on June 30 and December 31 ). a. Prepare journal entries to record (1) the iss
> Indicate the proper financial statement classification for each of the following accounts:
> On December 31, 2018, Kaplan, Inc., issues $500,000 of 9% bonds that pay interest semiannually and mature in IO years (December 31, 2028). a. Using the Excel PV worksheet function, compute the issue price assuming that the bonds' market rate is 8% per ye
> Petroni Company engages in the following sequence of transactions every month: 1. Purchases $300 of inventory on credit. 2. Sells $300 of inventory for $420 on credit. 3. Pays other operating expenses of $ 110 in cash. 4. Collects $420 in cash from custo
> Bruman, Inc., issues $500,000 of zero-coupon bonds that mature in 10 years. Compute the bond issue price assuming that the bonds' market rate is: a. 8% per year compounded semiannually. b. 10% per year compounded semiannually. c. If prior to the debt iss
> Bushman, Inc., issues $500,000 of 9% bonds that pay interest semiannually and mature in IO years. Compute the bond issue price assuming that the bonds' market rate is: a. 8% per year compounded semiannually. b. 10% per year compounded semiannually.
> General Mills, Inc., reports the following information in cash flow statement for the year ended May 27, 2018: a. General Mills reported net income of $2,163.0 million in the year ended May 2018. What effect did these financing cash flows have on General
> Compute any interest accrued for each of the following notes payable owed by Penman, Inc., as of December 31, 2018 (use a 365-day year):
> Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 96 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2019, Dechow amortized $3,186 of the bond discount. On July I, 2019, Dechow retired the bonds at IOI.
> Colgate-Palmolive Company reports the following balances in its retained earnings. During 2017. Colgate-Palmolive reported net income of $2,024 million. a. Assume that the only changes affecting retained earnings were net income and dividends. What amoun
> Holthausen Corporation issued $400,000 of 11 %, 20-year bonds at 108 on January 1, 2013. Interest is payable semiannually on June 30 and December 31. Through January I, 2019, Holthausen amortized $4,191 of the bond premium. On January I , 2019, Holthause
> Cencosud SA is a leading Latin American retailer, with approximately US$4. I 2 billion in short and long-term debt outstanding as of December 31, 2017. ln its 20-F filing with the Securities and Exchange Commission, Cencosud reports the following: Our lo
> Indicate the proper financial statement classification (balance sheet or income statement) for each of the following accounts: a. Gain on Bond Retirement b. Discount on Bonds Payable c. Mortgage Notes Payable d. Bonds Payable e. Bond Interest Expense f.
> In its 2017 balance sheet, Pfizer, Inc., reports a value of $3,546 million as current portion of long term debt. In addition, Pfizer reports the following maturity schedule for its remaining $32,783 million in long-term debt outstanding: a. Why does the
> On January 1, 2019, two years before maturity, Easton Company retires $400,000 of its 8.5% bonds payable at the current market price of 102 (102% of the bond face amount, or $400,000 x 1.02 = $408,000). The bond book value on January I, 2019, is $397,000
> In January 2017, Microsoft Corporation issued $17 billion of bonds in seven parts, with maturities ranging from 2020 to 2057. The bond issue was rated Aaa by Moody's. Two of the bond offerings are described below. Amount: $4 billion; Maturity: February 6
> For each of the following situations, indicate the liability amount. if any, which is reported on the balance sheet of Hirst. Inc., at December 31. 2018. a. Hirs t owes $110,000 at year-end 2018 for its inventory purchases. b. Hirst agreed to purchase a
> Huddart Company gave a creditor a 90-day. 8% note payable for $7.200 on December 16. a. Prepare the journal entry to record the year-end December 31st accounting adjustment Huddart must make. (Round to the nearest dollar.) b. Post the journal entries fro
> Schrand Corporation purchases materials from a supplier that offers credit terms of 2/ I 5, n/60. It purchased $12,500 of merchandise inventory from that supplier on January 20, 2019. a. Assume that Schrand Corporation paid the invoice on February 15, 20
> On November 15, 2018. Shields Company purchased inventory costing $6,200 on credit. The credit terms were 2/10, n/30. a. Assume that Shields Company paid the invoice on November 23. 2018. Prepare journal entries to record the purchase of this inventory a
> What does the term fiscal year mean?
> Abbott Laboratories reports the following income statement (in partial form): a. Compute the percent of net sales that Abbott Laboratories spends on research and development (R&D). How would you assess the appropriateness of its R&D expense level
> Texas Instruments Incorporated and Intel Corporation report the following information: a. Compute the 2018 PPE turnover for both companies. Comment on any difference you observe. b. Discuss ways in which high-tech manufacturing companies like these can i
> The Nelson Oil Company estimated that the oil reserve that it acquired in 2019 would produce 4 million barrels of oil. The company extracted 300,000 barrels the first year, 500,000 barrels in 2020, and 600,000 barrels in 2021. Nelson paid $32,000,000 for
> DeFond Company purchased equipment for $50,000. For each of the following sets of assumptions, prepare a depreciation schedule (all years) for this equipment assuming that DeFond uses the double-declining-balance depreciation method.
> The following information on Siemens AG's treatment of research and development is extracted from its 2018 financial statements. Siemens AG is an integrated technology company with activities in the fields of industry, energy and healthcare. The company
> A machine costing $145,800 is purchased on May 1, 2019. The machine is expected to be obsolete after three years (36 months) and, thereafter, no longer useful to the company. The estimated salvage value is $5,400. Compute depreciation expense for both 20
> Gaver Company sold machinery that had originally cost $75,000 for $25,000 in cash. The machinery was three years old and had been depreciated using the double-declining-balance method assuming a five-year useful life and a residual value of $5,000. a. Pr
> As part of a renovation of its showroom, O' Keefe Auto Dealership sold furniture and fixtures that were eight years old for $3,500 in cash. The assets had been purchased for $40,000 and had been depreciated using the straight-line method with no residual
> Equipment costing $ 130,000 is expected to have a residual value of $10,000 at the end of its six year useful life. The equipment is metered so that the number of units processed is counted. The equipment is designed to process 1,000,000 units in its lif
> The following data refer to Froning Company's ending inventory. Determine the ending inventory amount by applying the lower of cost or net realizable value rule to (a) each item of inventory and (b) the total inventory.
> Answer the following questions. (Hint: Apply the accounting equation.) a. Intel Corporation had assets equal to $123,249 million and liabilities equal to $54,230 million for a recent year-end. What was the total equity for Inters business at year-end? b.
> Penno Company reported ending inventories of $23,560,000 in 2020 and $25,790,000 in 2019. Cost of goods sold totaled $142,790,000 in 2020. a. Prepare the journal entry to record cost of goods sold. b. Set up a T-account for inventory and post the cost of
> Wal-Mart Stores, Inc., and Target Corporation reported the following in their financial reports: a. Compute the 2017 and 2016 inventory turnovers for each of these two retailers. b. Discuss any changes that are evident in inventory turnover across years
> Bartov Corporation reports the following beginning inventory and purchases for 2020: Bartov sells 600 of these units in 2020. Compute its cost of goods sold for 2020 and the ending inventory reported on its 2020 balance sheet under each of the following
> Geiger Corporation, a retail company, reported inventories of $ 1,320,000 in 2019 and $ 1,460,000 in 2020. The 2020 income statement reported cost of goods sold of $6,980,000. a. Compute the amount of inventory purchased during 2020. b. Prepare journal e
> Assume that Gode Company reports the following initial balance and subsequent purchase of inventory: Assume that 1,700 units are sold during 2020. Compute the cost of goods sold for 2020 and the balance reported as ending inventory on its 2020 balance sh
> An acquaintance has proposed the following business plan to you. A local company requires a consistent quantity of a commodity and is looking for a reliable supplier. You could become that reliable supplier. The cost of the commodity is expected to rise
> For each of the following scenarios, determine the effect of the error on income in the current period and in the subsequent period. To answer these questions, rely on the inventory equation: Beginning inventory + Purchases - Cost of goods sold = Ending
> Johnson & Johnson reported the following revenue and cost of goods sold information in its 10-K report for 2017, 2016, and 20 IS. Compute Johnson & Johnson's gross profit margin for each year.
> Ybarra Products began operations in 2020. During its first year, the company purchased raw materials costing $84,000 and used $63,000 of those materials in the production of its products. The company's manufacturing operations also incurred labor costs o
> Schrand Inc., a merchandiser, is requesting help in determining what costs ought to be considered as costs when incurred or treated as inventory costs, which are expensed as COGS. The costs include: sales persons wages, utilities such as heat and light i
> Shields Company has purchased inventories incurring the following costs: (a) the invoice amount of $500, (b) shipping charges of $30, (c) interest of $ 10 on the $500 borrowed to finance the purchase, and (d) $5 for the cost of moving the inventory t
> Verdi Co. builds and sells PC computers to customers. The company sells most of its products for immediate payment but also extends credit to some customers. The industry is competitive and in the most recent year many competitors showed declines in reve
> Commtech, Inc., designs and sells cellular phones. The company creates the technical specifications and the software for its products, though it outsources the production of the phones to an overseas contract manufacturer. Commtech has arrangements to se
> Finn Publishing Corp. produces a monthly publication aimed at competitive swimmers, with articles profiling current stars of the sport, advice from coaches, and advertising by swimwear companies, training organizations, and others. The magazine is distri
> In 2019, Grant Corporation recorded credit sales of $3,200,000 and bad debts expense of $42,000. Write-offs of uncollectible accounts totaled $39,000 and one account, worth$ I 2,000, that had been written off in an earlier year was collected in 2019. a.
> The Procter & Gamble Company and Colgate-Palmolive Company report the following sales and accounts receivable balances ($ millions): a. Compute' accounts receivable turnover and average collection period for both companies. b. Identify and discuss a
> The comparative balance sheets of Sloan Company reveal that accounts receivable (before deducting allowances) increased by $15,000 in 2019. During the same to me period, the allowance for uncollectible accounts increased by $2.100. If sales revenue was $
> Following is the current asset section from the Ralph Lauren Corporation balance sheet: a. Compute the gross amount of accounts receivable for both 2018 and 2017. Compute the percentage of the allowance for uncollectible accounts relative to the gross am
> At a recent board of directors meeting of Ascot. Inc., one of the directors expressed concern over the allowance for uncollectible accounts appearing in the company's balance sheet. "I don't understand this account.'' he said. "Why don't we just show acc
> Mohan Company estimate its uncollectible accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. Mohan computes a total of $2.100 in estimated losses as of December 31. 2019. Its Accounts Receivable has
> Financial statements have a wide audience of interested stakeholders. Identify two or more financial statement users that are external to the company. Specify two questions for each user identified that could be addressed or aided by use of financial sta
> A.J. Smith Electronics is a retail consumer electronics company that also sells extended warranty contracts for many of the products that it carries. The extended warranty provides coverage for three years beyond expiration of the manufacturer's warranty
> Halsey Building Company signed a contract to build an office building for $40,000,000. The scheduled construction costs follow. The building should be completed in 2021. For each year, compute the revenue, expense, and gross profit reported for this cons
> The Unlimited Company offers an unconditional return policy for its retail clothing business. It normally expects 2% of sales at retail selling prices to be returned at some point prior to the expiration of the return period, and returned items cannot be
> Identify and explain when each of the following companies should recognize revenue. a. The GAP Inc.: The GAP is a retailer of clothing items for all ages. b. Merck & Company Inc.: Merck engages in the development. manufacturing. and marketing of pharmace
> Selected data from recent financial statements of The Procter & Gamble Company, CVS Health Corporation, and Valero Energy Corporation are presented below: a. Compute the asset turnover (AT) ratio for each company. b. Compute the accounts receivable t
> Selected balance sheet and income statement information from Verizon Communications, Inc follows. a. Compute the current ratio for each year and discuss any change in liquidity. How does Verizon 's current ratio compare to the median for the telecommunic
> Selected balance sheet and income statement information from Urban Outfitters, Inc. and TJX Companies, clothing retailers in the high-end and value-priced segments, respectively, follows. a. Compute the 2017 return on assets (ROA) for both companies. b.
> Refer to the balance sheet and income statement information for 3M Company, presented in M5-19 and M5-20. a. Compute 3M's 2017 return on assets (ROA). Use 35% as the effective tax rate. b. Disaggregate ROA into profit margin (PM) and asset turnover (AT).
> Following is the income statement for 3M Company. Prepare common-size income statements for 2017 and 2016.
> Following is the balance sheet for 3M Company. Prepare common-size balance sheets for 2017 and 2016.
> What is a contra account? What contra account is used in reporting the book value of a depreciable asset'?
> Refer to the financial information of Target Corporation in MS-15 and MS-I6 to answer the following. a. Compute Target's current ratio and quick ratio for February 20 18 and January 2017. Comment on any observed trends. b. Compute Target's times interest
> Refer to the financial information for Target Corporation, presented in MS-I5 and MS-16. a. Compute its return on assets (ROA) for the fiscal year ending February 3, 2018. Compute two ROA measures, one using net earnings from continuing operations and on
> Following is the income statement for Target Corporation. Prepare Target's common-size income statement for the fiscal year ended February 3, 2018.
> Following is the balance sheet for Target Corporation. Prepare Target's common-size balance sheets as of February 3, 2018 and January 28, 2017.
> The following table presents selected 2019 financial information for Sunder Company. a. Compute Sunder's ROE, ROA and ROFL for 2019. b. Use the DuPont analysis described in the Business Insight on page 230 to disaggregate ROE. c. How did the use of finan
> Chakravarthy Company's current year income statement reports the following: Chakravarthy's comparative balance sheets show the following (accounts payable relate to merchandise purchases): Compute Chakravarthy's current-year cash received from customers
> Calculate the cash flow for each of the following cases. a. Cash paid for rent: b. Cash received as interest: c. Cash paid for merchandise purchased:
> The following table presents selected items from a recent cash flow statement of Nordstrom, Inc. a. For each item, determine whether the amount would be disclosed in the cash flow statement under operating activities, investing activities, or financing a
> Weber Company had a $21,000 net loss from operations for 2018. Depreciation expense for 2018 was $8,600 and a 2018 cash dividend of $6,000 was declared and paid. Balances of the current as- set and current liability accounts at the beginning and end of 2
> For liscal year 2018. Riffe Enterprises had the following summary information available concerning its, operating activities. The company had no investing or financing activities this year. REQUIRED a. Enter the items above into the Financial Statement
> Determine the missing amount from each of the separate situations (a). (b). and (c) below. Which of these companies is more owner-financed? Which of these companies is more creditor-financed?
> The following information was obtained from Galena Company's comparative balance sheets. Assume that Galena Company's 2018 income statement showed depreciation expense of $8,000. Again on sale of investments of $9.000, and net income of $45,000. Calculat
> For fiscal year 2018. Beyer GmbH had the following summary information available concerning its operating activities. The company had no investing or financing activities this year. REQUIRED a. Enter the i1ems above into the Financial Statement Effects T
> For each of the items below. indicate whether it is (1) a cash flow from an operating activity. (2) a cash flow from an investing activity. (3) a cash flow from a financing activity, (4) a noncash investing and financing activity or (5) none of the
> The following table presents selected items from a recent cash flow statement of General Mills, Inc . For each item, determine whether the amount would be disclosed in the cash flow statement under operating activities, investing activities, or financing
> For each of the items below, indicate whether the cash flow relates to an operating activity, an investing activity, or a financing activity. a. Cash receipts from customers for services rendered. b. Sale of long-term investments for cash. c. Acquisition
> The following account information was presented as adjustments to net income in a recent statement of cash flows for Target Corporation. Determine whether each item would be a positive adjustment or a negative adjustment to net income in determining cash
> Hatcher Company closes its accounts on December 31 each year. On December 31. 20 I 8. Hatcher accrued $600 of interest income that was earned on an investment but not yet received or recorded (the investment will pay interest of $900 cash on January 31.2
> Amazon.com Inc. is one of the world’s leading e-commerce companies. with almost $120 billion in revenues for the fiscal year ended December 31. 2017. For the year ended December 31. 20 I 7. Amazon's cost of goods sold was $111,934 milli
> The adjusted trial balance at December 31, 2018, for Smith Company includes the following selected accounts. a. Prepare entries to close these accounts in journal entry form. b. Set up T-accounts for each of these ledger accounts. enter the balances abov
> Assume you are in the process of closing procedures for Echo Corporation. You have already closed all revenue and expense accounts to the Retained Earnings account. The total debits to Retained Earnings equal $308,800 and total credits to Retained Earnin
> On January 1. Prepaid Insurance was debited with the cost of a two-year premium, $1,872. What adjusting entry should be made on January 31 before financial statements are prepared for the month?
> Matt Wilson has an investment opportunity that promises to pay him $24,000 in four years. He could earn 6% if he invested his money elsewhere. What is the maximum amount that he should be willing to invest in this opportunity?
> On December 31, 2017, the credit balances of the Common Stock and Retained Earnings accounts were $30,000 and $18,000, respectively, for Architect Services Company. Its stock issuances for 2018 totaled $6,000, and it paid $9,700 cash toward dividends in
> El Puerto de Liverpool (Liverpool) is a large retailer in Mexico. The following accounts are selected from its annual report for the fiscal year ended December 31, 2017. For the fiscal year ended December 31, 2017, Liverpool purchased merchandise invento
> Selected accounts of Ideal Properties, a real estate management firm, are shown below as of January 3 I, 2019, before any adjusting entries have been made. Monthly financial statements are prepared. Using the following information, record the adjusting e
> Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2019, Deluxe collected $20,100 in advance on a six-month contract for work to be performed evenly during the next six months. Assume that Delux
> Minute Maid, a firm providing housecleaning services, began business on April I, 2019. The following transactions occurred during the month of April. April I A. Falcon invested $9,000 cash to begin the business in exchange for common stock. 2 Paid $2,850
> Creative Designs, a firm providing art services for advertisers, began business on June I, 2019. The following transactions occurred during the month of June. June 1. Anne Clem invested $12.000 cash to begin the business in exchange for common stock. 2.