A company uses a perpetual inventory system. The company began its fiscal year with inventory of $267,000. Purchases of inventory on account during the year totaled $845,000. Inventory costing $902,000 was sold on account for $1,420,000. Prepare the journal entries to record these transactions.
> I’m so confused,” your study partner snarls, throwing up his hands in exasperation. “As part of our team’s group project, I need to find out how much cash Microsoft spent on leases l
> I doubt my eating these Cheerios will boost their ability to pay me dividends,” you quip, referring to General Mills, the maker of the best-selling breakfast cereal. It’s General Mills’ dividend-paying ability, in fact, that you plan to investigate right
> Be careful with that coffee!” Your roommate is staring in disbelief at the papers in front of her. “This was my contribution to our team project,” she moaned. “When you spilled your
> Locate the financial statements and related disclosure notes of FedEx Corporation for the fiscal year ended May 31, 2020. You can locate the report online at www.fedex.com. Use the information provided in the statement of cash flows to respond to the que
> You are a loan officer for First Benevolent Bank. You have an uneasy feeling as you examine a loan application from Daring Corporation. The application included the following financial statements. It is not Daring’s profitability that w
> A company purchased inventory on account for $100,000. Freight charges to have the inventory shipped to the company’s location were $5,000 (paid in cash). Record (1) the purchase of inventory on account and (2) freight charges, assuming the company uses
> Why can’t we pay our shareholders a dividend?” shouted your new boss. “This income statement you prepared for me says we earned $5 million in our first half-year!” You were hired las
> Danville Bottlers is a wholesale beverage company. Danville uses the FIFO inventory method to determine the cost of its ending inventory. Ending inventory quantities are determined by a physical count. For the fiscal yearend June 30, 2024, ending invento
> Late in 2024, you and two other officers of Carob Fabrications Corporation just returned from a meeting with officials of the City of Jackson. The meeting was unexpectedly favorable even though it culminated in a settlement with city authorities that you
> Ray Solutions decided to make the following changes in its accounting policies on January 1, 2024: a. Changed from the cash to the accrual basis of accounting for recognizing revenue on its service contracts. b. Adopted straight-line depreciation for all
> Some inventory errors are said to be “self-correcting” in that the error has the opposite financial statement effect in the period following the error, thereby “correcting,” the original account balance errors. Despite this self-correcting feature, these
> Sometimes a business entity will change its method of accounting for certain items. The change may be classified as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. Listed below are three independent, un
> DRS Corporation changed the way it depreciates its computers from the sum-of-the-year’s-digits method to the straight-line method beginning January 1, 2024. DRS also changed its estimated residual value used in computing depreciation for its office build
> Early one Wednesday afternoon, Ken and Larry studied in the dormitory room they shared at Fogelman College. Ken, an accounting major, was advising Larry, a management major, regarding a project for Larry’s Business Policy class. One asp
> Mayfair Department Stores operates over 30 retail stores in the Pacific Northwest. Prior to 2024, the company used the FIFO method to value its inventory. In 2024, Mayfair decided to switch to the dollar-value LIFO retail inventory method. One of your re
> Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for financial and income tax reporting on January 1, 2024. Webster continues to use the FIFO method for internal decision making purposes. Websterâ€
> Dinoland Manufacturing shipped consignment inventory of $200,000 to Storing Company on December 1, 2024. Storing agrees to sell the inventory for a 10% sales commission, while Dinoland maintains title and control over pricing. By the end of the year, $60
> You are assistant controller of Stamps & Company, a medium-sized manufacturer of machine parts. On October 22, 2023, the board of directors approved a stock option plan for key executives. On January 1, 2024, a specific number of stock options were grant
> While eating his Kellogg’s Frosted Flakes one February morning, Tony noticed the following notification on his iPhone: A quick click revealed reported earnings per share of $0.59 and $3.63 for the quarter and year ended January 2, 2021
> IGF Foods Company is a large, primarily domestic, consumer Foods Company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy’s The Almanac of Business and Industrial
> Del Conte Construction Company has experienced generally steady growth since its inception in 1976. Management is proud of its record of having maintained or increased its earnings per share in each year of its existence. The economic downturn has led to
> “I guess I’ll win that bet!” you announced to no one in particular. “What bet?” Renee asked. Renee Patsy was close enough to overhear you. “When I
> The shareholders’ equity of Proactive Solutions, Inc., included the following at December 31, 2024: Additional Information: • Proactive had 7 million shares of preferred stock authorized, of which 2 million were outst
> The 2021 annual report of Best Buy Co., Inc. reported profitable operations. However, the company has not always been profitable. The company suffered a net loss for the 12 months ended March 3, 2012: Note: The calculation of diluted (loss) per share for
> Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stock award grants. The following is an excerpt from a disclosure note from Microsoft’s 2020 annual report: Re
> You are in your third year as internal auditor with VXI International, manufacturer of parts and supplies for jet aircraft. VXI began a defined contribution pension plan three years ago. The plan is a so-called 401(k) plan (named after the Tax Code secti
> Stacy Per off is the newly hired assistant controller of Kemp Industries, a regional supplier of hardwood derivative products. The company sponsors a defined benefit pension plan that covers its 420 employees. On reviewing last year’s f
> Kryoton Corporation shipped goods to a customer f.o.b. destination on December 29, 2024. The goods arrived at the customer’s location in January. In addition, one of Kryoton’s major suppliers shipped goods to Kryoton f.o.b. shipping point on December 30.
> LGD Consulting is a medium-sized provider of environmental engineering services. The corporation sponsors a noncontributory, defined benefit pension plan. Alan Barlow, a new employee and participant in the pension plan, obtained a copy of the 2024 financ
> Refer to the financial statements of Macy’s, Inc. for the year ended February 1, 2020, and related disclosure notes of the company. The financial statements can be found at the company’s website (www.macys.com). Required: 1. From the information provide
> While doing some online research concerning a possible investment you come across an article that mentions in passing that a representative of Morgan Stanley had indicated that a company’s pension plan had benefited its reported earnings. Curiosity pique
> Charles Rubin is a 30-year employee of Amalgamated Motors. Charles was pleased with recent negotiations between his employer and the United Auto Workers. Among other favorable provisions of the new agreement, the pact also includes a 14% increase in pens
> Refer to the 2020 financial statements and related disclosure notes of FedEx Corporation. The financial statements can be found at the company’s website (www.fedex.com). Required: 1. Does FedEx sponsor defined benefit pension plans for its employees? De
> Refer to the 2020 financial statements and related disclosure notes of Microsoft Corporation (www.microsoft.com). Required: 1. What type of pension plan does Microsoft sponsor for its employees? 2. Who bears the “risk” of factors that might reduce retir
> I only get one shot at this?” you wonder aloud. Martina, human resources manager at Covington State University, has just explained that newly hired assistant professors must choose between two retirement plan options. “
> The following is a portion of the balance sheets of Macy’s, Inc., for the years ended February 1, 2020, and February 2, 2019: Required: 1. What is Macy’s debt to equity ratio for the year ended February 1, 2020? 2. Wh
> The Internal Revenue Service (IRS) maintains an information site on the Internet that provides tax information and services. Among those services is a server for publications and forms which allows a visitor to download a variety of IRS forms and publica
> Williams-Santana Inc. is a manufacturer of high-tech industrial parts that was started in 2010 by two talented engineers with little business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the fol
> Refer to the situation described in BE 8–2. Prepare the journal entries to record these transactions using a periodic inventory system.
> CVS Health Corporation showed 2019 net income from continuing operations of $6,631 million. The following is an excerpt from a disclosure note to CVS Health’s 2019 financial statements: Required: 1. Did CVS’s valuatio
> Access the 2019 financial statements and related disclosure notes of Ford Motor Company from its website at corporate.ford.com. Required: 1. In Note 7, find Ford’s net deferred tax asset or liability. What is that number? 2. Does Ford show a valuation a
> Kroger Co. is one of the largest retail food companies in the United States as measured by total annual sales. The Kroger Co. operates supermarkets, convenience stores, and manufactures and processes food that its supermarkets sell. Using EDGAR (sec.gov)
> The income tax disclosure note accompanying the January 31, 2020, financial statements of Walmart is reproduced below: // Required: 1. Focusing on only the first part of Note 9, relating current, deferred, and total provision for income taxes, prepare a
> Francesca’s Holdings Corporation is a specialty retailer that operates boutiques throughout the United States under Francesca’s trademark. Access the financial statements and related disclosure notes of Francesca for the fiscal year ended February 1, 202
> The date is January 10, 2023, and Mary ton Hotels’ CFO George Smith is looking with dismay at his company’s financial performance during 2022. Already facing stiff competition from other hotel chains as well as Earbob, Mary ton had run an operating loss
> The date is November 15, 2020. You are the new controller for Engineered Solutions. The company treasurer, Randy Pate, believes that as a result of pending legislation, the currently enacted 40% income tax rate may be decreased for 2021 to 25% and is unc
> The following True blood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with Professor’s Discussion Material, can be obtained from t
> The following True blood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with Professor’s Discussion material, can be obtained from t
> An August 11, 2020 article from World Oil Magazine had the following headline: “Marathon Sets Up for $1.1 Billion Tax Refund via Coronavirus Aid Law.” * The article goes on to indicate, “That measure included a tax provision that allows companies to imme
> Russell-James Corporation is a diversified consumer products company. During 2024, Russell-James discontinued its line of cosmetics, which constituted discontinued operations for financial reporting purposes. As vice president of the food products divisi
> As a senior auditor with Klein and Co, you are interacting with David Perkins, CFO of a prominent public company and an important client. Perkins has a reputation for pushing for favorable accounting treatments, and frequently asks auditors to “prove to
> Access the financial statements and related disclosure notes of Buckle for the fiscal year ended February 1, 2020, from its website at corporate.buckle.com. Buckle is a fashion retailer operating over 400 stores in more than 40 states under the names Buc
> General Tools is seeking ways to maintain and improve cash balances. As company controller, you have proposed the sale and leaseback of much of the company’s equipment. As seller-lessee, General Tools would retain the right to essentially all of the rema
> Why does FedEx show operating cash flows for both types of leases, but only financing cash flows for finance leases,” your colleague wonders aloud. “We need to draft our lease disclosure by tomorrow morning.â
> Anthony’s Restaurant has been has served award-winning, traditional Italian dishes, including pasta, steak, veal, ossobuco, saltimbocca, and seafood, using recipes that were handed down by Anthony’s grandmother and tha
> You know, we heard in our accounting class today that a few years ago, there were advantages to structuring lease arrangements as operating leases,” your study partner said unexpectedly. “Now I’m wond
> Walmart Inc. is the world’s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information: Required: 1. The net asset “Finance leas
> Security Devices Inc. (SDI) needs additional office space to accommodate expansion. SDI wants to avoid income statement effects that would disrupt its attempts to “smooth” income over time. Required: 1. Which lease classification would management prefer
> Interstate Automobiles Corporation leased 40 vans to VIP Transport under a four-year no cancelable lease on January 1, 2024. Information concerning the lease and the vans follows: a. Equal annual lease payments of $300,000 are due on January 1, 2024, and
> It’s common in the electronics industry for unit costs of raw materials inventories to decline over time. In this environment, explain the difference between LIFO and FIFO in terms of the effect on cost of goods sold and ending inventory. Assume that inv
> Kevin Brantley is a new hire in the controller’s office of Fleming Home Products. Two events occurred in late 2024 that the company had not previously encountered. The events appear to affect two of the company’s liabi
> Late in 2024, you and two other officers of Curb Fabrications Corporation just returned from a meeting with officials of the City of Jackson. The meeting was unexpectedly favorable even though it culminated in a settlement with city authorities that requ
> I see an all-nighter coming on,” Gayle grumbled. “Why did Mitch just now give us this assignment?” Your client, Western Manufacturing, is involved with several situations that possibly involve contingencies. The assignment Gayle refers to is to draft app
> Domestic Transfer and Storage is a large trucking company headquartered in the Midwest. Rapid expansion in recent years has been financed in large part by debt in a variety of forms. In preparing the financial statements for 2023, questions have arisen r
> The following True blood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with Professor’s Discussion Material, can be obtained from t
> The following True blood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with Professor’s Discussion Material, can be obtained from t
> The following True blood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with Professor’s Discussion Material, can be obtained from t
> Reporting requirements for contingent liabilities under IFRS differ somewhat from those under U.S. GAAP. Required: For each of the following, access the online version of the indicated financial report and answer the question. Also compare reporting und
> In the March 2025 meeting of Halleck Corporation’s board of directors, a question arose as to the way a possible obligation should be disclosed in the forthcoming financial statements for the year ended December 31. A veteran board memb
> Honda Motor Company, Ltd., is a Japanese manufacturer of automobiles, motorcycles, and power equipment. The company’s fiscal year ends Mach 31, 2020, and it filed its financial statements with the SEC on June 22, 2020. On August 26, 202
> The Boxcar Company shipped inventory to Depot Corporation on December 28, 2024. Depot received the shipment on January 3, 2025. December 31 is the fiscal year-end for both companies. The inventory was shipped f.o.b. shipping point. Explain the difference
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are provided in Connect. This ma
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF‘s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This m
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2020, are available in Connect. This m
> A Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This material is also avail
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> The birth of the Internet in the 1990s led to the creation of a new industry of online retailers such as Amazon, Overstock.com, and Insight Enterprises, Inc. Many of these companies often act as intermediaries between the manufacturer and the customer wi
> EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by law to file forms with the U.S. Securities and Exchange C
> Mars Marine produces outboard motors for a variety of recreational and commercial boating configurations. Martin Quint, the owner of Mars Marine, is planning to provide to any person purchasing a Mars motor a coupon entitling them to a 40% discount on a
> Consider the following excerpts from revenue recognition disclosure notes: 1. Verizon: “We offer wireless services through a variety of plans on a postpaid or prepaid basis. For wireless service, we recognize revenue . . . either as the service allowance
> Refer to the situation described in BE 8–12. SAM uses a periodic inventory system. Calculate ending inventory and cost of goods sold for January using (1) FIFO and (2) average cost.
> Thomas Plastics is in the process of developing a revolutionary new plastic valve. A new division of the company was formed to develop, manufacture, and market this new product. As of year end (December 31, 2024), the new product has not been manufacture
> The focus of this case is the situation described in Case 10–7. What is the appropriate accounting for R&D costs? Do you believe that (1) capitalization is the correct treatment of R&D costs, (2) expensing is the correct treatment of R&D costs, or (3) th
> The Elegant Software Company recently completed the development and testing of a new software program for sale to customers that provides the ability to transfer data from among a variety of operating systems. The company believes this product will gener
> Mayer Biotechnical, Inc., develops, manufactures, and sells pharmaceuticals. Significant research and development (R&D) expenditures are made for the development of new drugs and the improvement of existing drugs. During 2024, $220 million was spent on R
> EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by law to file forms with the U.S. Securities and Exchange C
> Chilton Peripherals manufactures printers, scanners, and other computer peripheral equipment. In the past, the company purchased equipment used in manufacturing from an outside vendor. In March 2024, Chilton decided to design and build equipment to repla
> Darden Restaurants, Inc., is a full-service restaurant company, including brands such as Olive Garden, Long- Horn Steakhouse, and Bahama Breeze. The company’s fixed-asset turnover ratio, using the average book value of property, plant,
> Norfolk Southern Corporation, one of the nation’s premier transportation companies, reported the following amounts in the asset section of its balance sheets: In addition, information from the 2019 statement of cash flows and related no
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This m
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Salt and Mineral (SAM) began 2024 with 200 units of its one product. These units were purchased near the end of 2023 for $25 each. During the month of January, 100 units were purchased on January 8 for $28 each and another 200 units were purchased on Jan
> Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a copper mine in West Virginia for $15 million. Hazelton incurred development costs of $6 million in preparing the mine for extraction, which began on July 1
> Mayfair Department Stores, Inc., operates over 30 retail stores in the Pacific Northwest. Prior to 2024, the company used the FIFO method to value its inventory. In 2024, Mayfair decided to switch to the dollar-value LIFO retail inventory method. One of
> The Brenly Paint Company, your client, manufactures paint. The company’s president, Mr. Brenly, decided to open a retail store to sell paint as well as wallpaper and other items that would be purchased from other suppliers. He has asked you for informati
> The lower of cost or net realizable value (LCNRV) approach to valuing inventory is a departure from the accounting principle of reporting assets at their historical costs. There are those who believe that inventory, as well as other assets, should be val
> Eddie’s Galleria sells billiard tables. The company has the following purchases and sales for 2024. Eddie is worried about the company’s financial performance. He has noticed an increase in the purchase cost of billiar
> Danville Bottlers is a wholesale beverage company. Danville uses the FIFO inventory method to determine the cost of its ending inventory. Ending inventory quantities are determined by a physical count. For the accounting yearend December 31, 2024, ending
