Question: Arrow Products typically earns a contribution

> Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings. On the basis of past experience, the company estimated

> The Home Depot, Inc., financial statements appear in Appendix A at the end of this textbook. Using figures from the income statement and balance sheet, answer the following questions. a. What was the company’s inventory turnover for the most recent year

> The balance sheet items of The Sweet Shop (arranged in alphabetical order) were as follows at the close of the business on September 30, 2021 The transactions occurring during the first week of October were as follows. Instructions: a. Prepare a balanc

> A French furniture maker agrees to purchase wood stain from a U.S. paint manufacturer. If all payments are to be made in U.S. dollars, which company bears the risk of exchange rate gains and losses?

> Jell Stores is considering expanding its operations to include the greater Portsmouth area. Rather than build new stores in Portsmouth, management plans to acquire existing stores and convert them into Jell outlets. Jell is evaluating two similar acquisi

> Boston Bait Shop uses a periodic inventory system. At December 31, year 2, the accounting records include the following information. A complete physical inventory taken at December 31, year 2, indicates merchandise costing $3,000 remains in stock. a. H

> Rodeo Drive Jewelers makes custom jewelry for celebrities. Would you expect the company to use job order or process costing? Explain

> Osage Farm Supply had poor internal control over its cash transactions. Facts about the company’s cash position at November 30 are described as follows. The accounting records showed a cash balance of $35,400, which included a deposit i

> Ivy Blooms sells wreaths and leis. The following is selected per-unit information for these two products. Fixed costs and expenses amount to $97,500 per month. The company generates total sales of $300,000 per month, of which 80 percent result from the

> The cash transactions and cash balances of Banner, Inc., for July were as follows. 1. Banner, Inc.’s account for Cash showed a balance at July 31 of $125,568. 2. The July bank statement showed a closing balance of $114,828. 3. The cash received on July

> CPI sells computer peripherals. At December 31, year 1, CPI’s inventory amounted to $500,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows. CPI has a full

> A summary of the transactions affecting the stockholders’ equity of Riverton Corporation duringthe current year follows. Instructions:a. Prepare a statement of stockholders’ equity for the year. Use these column headi

> For each of the following scenarios, use the current exchange rates from an internet site or other source of your choice to compute the required amount. Round exchange rates to three decimal points. a. A Citroën automobile is advertised in France for 17,

> The following are data regarding last year’s production of Old Joe, one of the major products of Columbus Toy Company. During the year, 50,000 units of this product were manufactured and 51,500 units were sold. Selected information con

> How do the costs of operating service departments (organized as cost centers) appear in a responsibility income statement?

> To maintain a high level of control over production operations and final product quality, what types of globalization activities could a company engage in?

> Distinguish between traceable and common fixed costs. Give an example of each type of fixed cost for an auto dealership with a sales department and a service department.

> Important information concerning a company’s operating performance can be found in its income statement and statement of financial position (balance sheet). Using the search mechanism of your choice, locate the most recent annual report of Martin Mariett

> In a responsibility accounting system, should the recording of revenue and costs begin at the largest areas of responsibility or the smallest? Explain.

> Identify four ratios or other analytical tools used to evaluate profitability. Explain briefly how each is computed.

> Glassware Company is organized into two divisions—etched glass and clear glass. During August, sales for the etched division totaled $7,500,000, and its contribution margin ratio averaged 38 percent. Sales generated by the clear division totaled $6,000,0

> What is meant by the term mutual agency?

> Name three types of transfer prices and explain when each type of transfer price would be used.

> Distinguish among a cost center, a profit center, and an investment center, and give an example of each for a multihospital corporation.

> Assume that you have recently obtained your scuba instructor’s certification and have decided to start a scuba diving school. a. Describe the advantages and disadvantages of organizing your scuba diving school as a 1. Sole proprietorship 2. Corporatio

> Shown as follows is information from the financial reports of Klaus Supermarkets for the past few years. Instructions: a. Calculate the following statistics for Knauss Supermarkets (round your answers to one decimal place). 1. The percentage change in

> Even though transfer prices have no direct effect on a company’s overall net income, these transfer prices still matter to managers of responsibility centers. Explain why.

> You are a loan officer with Third Nebraska Bank. Joe West owns two successful restaurants, each of which has applied to your bank for a $250,000 one-year loan for the purpose of opening a second location. Condensed balance sheets for the two business ent

> Mickey Gillespie is the controller of Print Technologies, a publicly owned company. The company is experiencing financial difficulties and is aggressively looking for ways to cut costs. Suzanne Befell, the CEO, instructs Gillespie to lengthen from 5 to 1

> What amounts are debited to the Finished Goods Inventory account during the year? What amounts are credited to this account? What type of balance (debit or credit) is this account likely to have at year-end?

> Why is the combination of direct labor and manufacturing overhead referred to as a conversion cost?

> What is the purpose of arranging an income statement to show separate amounts for unusual and/or infrequent items and discontinued operations?

> Explain why using cost as a transfer price is inappropriate when the center producing the product is evaluated as a profit center.

> Many companies hold a significant portion of their financial assets in the form of marketable securities. For example, Microsoft Corporation recently reported short-term investments totaling almost $122 billion, an amount equal to 76 percent of its total

> The controller of Fifties, a chain of drive-in restaurants, is considering modifying the monthly income statements by charging all costs relating to operations of the corporate headquarters to the individual restaurants in proportion to each restaurant’s

> In financial statement analysis, what is the basic objective of observing trends in information and ratios? Suggest some standards of comparison.

> Early in 2019, Teak Corporation was formed with authorization to issue 50,000 shares of $3 par value common stock. All shares were issued at a price of $10 per share. The corporation reported net income of $160,000 in 2019, $89,200 in 2020, and $97,000 i

> Sarah Miller is the proprietor of a small manufacturing business. She is considering the possibility of joining in partnership with Will Bracken, whom she believes will be a highly competent and congenial partner. Prepare a brief statement outlining the

> Old Victrola, Inc., produces top-quality stereos and uses process costing. The manufacture of stereos is such that direct materials, labor, and overhead are all added evenly throughout the production process. Due to the smooth production process, only on

> At the beginning of the current year, Wexler Corporation had dividends payable of $1,600,000. During the current year, the company declared cash dividends of $4,500,000, of which $970,000 appeared as a liability in the statement of financial position (ba

> Briefly explain the distinction between controllable fixed costs and committed fixed costs. Also explain the nature and purpose of performance margin in a responsibility income statement.

> Sanlucas, Inc., provides home inspection services to its clients. The following is the company’s trial balance dated June 1, current year. Sanlucas engaged in the following transactions in June Instructions: a. Record the company&acir

> Glen Pool Club, Inc., has an installment loan outstanding with a current balance of $150.000. The company makes monthly installments of $1,543, which include interest computed at an annual rate of 6 percent. a. Prepare a partial amortization table showi

> What amounts are debited to the Work in Process Inventory account during the year? What amounts are credited to this account? What does the year-end balance in this account represent?

> Describe the usual nature of the following features as they apply to a share of preferred stock: (a) cumulative, and (b) convertible.

> In a recent annual report the chief executive officer of Kimberly-Clark outlined his plans as follows. We have four reportable global business segments: Personal Care, Consumer Tissue, K-C Professional (KCP) and Health Care . . . Key strategies for our s

> Assume that on May 1, Zavior Corporation (a U.S. company) sells goods to a Portuguese corporation at a price of 100,000 euros, with payment due within three months. At the date of the sale, the exchange rate is $1.20 per euro. The Portuguese customer wai

> Fifteen transactions or events affecting Phil mar, Inc., are as follows. a. Made a year-end adjusting entry to accrue interest on a note payable that has the interest rate stated separately from the principal amount. b. A liability classified for severa

> Distinguish between paid-in capital and retained earnings of a corporation. Why is such a distinction useful?

> The balances in the perpetual inventory accounts of Anditon Manufacturing Corporation at the beginning and end of the current year are as follows. The total dollar amounts debited and credited during the year to the accounts used in recording manufactur

> Lind Manufacturing had the following account balances as of January 1. During the month of January, all of the following occurred. 1. Direct labor costs were $460,000 for 18,400 hours worked. 2. Direct materials costing $340,000 and indirect materials c

> Darby Press publishes two lines of books—fiction and nonfiction. Cost and revenue data for each product line for the current month are as follows In addition to the costs shown, the company incurs monthly fixed costs of $260,000 common

> Distinguish between corporations and sole proprietorships in terms of the following characteristics. a. Owners’ liability for debts of the business. b. Transferability of ownership interest. c. Continuity of existence. d. Federal taxation on income.

> The following information was reported in a recent balance sheet issued by Microsoft Corporation. 1. The book value of property and equipment is listed at $23.8 billion (net of depreciation). Related notes to the financial statements reveal that accumul

> An analysis of the income statement and the balance sheet accounts of RPZ Imports at December 31 of the current year, provides the following information. Additional Information: 1. Except as noted in 4, payments and proceeds relating to investing transa

> Identify whether each of the following costs of Granite Construction, Inc., would be classified as direct labor, direct materials, manufacturing overhead, or as selling, general, and administrative costs. a. Hourly wages paid to backhoe operators. b. C

> MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit information relating to the manufacture and sale of this product. Determine the following, showing as part of your answer the for

> If you were going to start a corporation and expected to need to raise capital from several investors, would you include preferred stock in your capital structure? Why or why not? If your answer is that you would include preferred stock, what features wo

> Tom Klee is the controller of Watson Manufacturing, Inc. He estimates that the company’s breakeven point in sales dollars is $2 million. However, he recently told all of the regional sales managers that sales of $3 million were needed to break even. He a

> Of the three types of business activities summarized in a statement of cash flows, which type is least likely to show positive net cash flows in a successful, growing business? Explain your reasoning.

> The basic accounting equation for a corporation is Assets = Liabilities + Stockholders ‘Equity. Stockholders’ equity is further divided into two categories: paid-in capital and retained earnings. What are the major transactions and other financial activi

> Wharton, Inc., pays income taxes on capital gains (including gains on marketable securities) at a rate of 30 percent. At December 31, year 1, the company owns marketable securities that cost $180,000 but have a current market value of $220,000. a. How w

> Donegal’s Lawn Care Service began operations in July, current year. The company uses the following general ledger accounts The company engaged in the following transactions during its first month of operations Instructions: a. Record

> Leases most of its commercial aircraft and is currently committed to pay almost $15  billion in future lease obligations. However, notes to the company’s financial statements reported only $297 million of these commitments as long-term capital lease obli

> Nicholls Produce has two product lines—fresh and frozen. Cost and revenue data for each product line for the current month are as follows In addition to the costs shown, the company incurs monthly fixed costs of $30,000 common to both

> The pharmaceutical industry spends billions of dollars each year on research and development. Rather than capitalize these R&D expenditures as intangible assets, companies are required to charge them to expense in the year incurred. Perform a keyword sea

> For each of the six independent situations that follow, compute the missing amounts. a. Using contribution margin per unit: b. Using the contribution margin ratio:

> Moor-n-More operates a boat mooring service in the downtown harbor with 80 docking spaces. The business is open 3,000 hours per year. The mooring charge per boat is $5 per hour; the average boater docks for two hours. Moor-n-More rents the harbor space f

> In many states, corporation law requires that retained earnings be restricted for dividend purposes to the extent of the cost of treasury shares. What is the reason for this legal rule?

> Determine the following: a. The unit contribution margin. b. The number of units that must be sold each month to break even. c. The number of units that must be sold to earn an operating income of $7,600,000 per month. a. What total monthly sales revenu

> What is treasury stock? Why do corporations purchase their own shares? Is treasury stock an asset? How should it be reported in the balance sheet?

> Safe-Haul manufactures custom trailer equipment. In June, the company built 400 utility trailers for Cole’s Trailer Sales. Assembly of these units required 1,200 hours of direct labor at a cost of $30,000, direct materials costing $333,000, and 600 hours

> Hernandez Enterprises has two divisions—Retail and Wholesale. Cost and revenue data for each division for the current month are as follows. In addition, fixed costs that are common to both divisions amount to $96,000. Instructions: a.

> The following is information concerning a product manufactured by Ames Brothers. Determine the following: a. The unit contribution margin. b. The number of units that must be sold each month to break even. c. The number of units that must be sold to ear

> What is the purpose of a stock split?

> Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial statements of Freedom Airlines. If the situation is not a loss contingency, explain how (if at

> One of your responsibilities as division manager of an important component of Paramount Industries is to oversee accounting for the division. One of the issues you are responsible for on a continuous basis is whether particular costs should be expensed i

> Several years ago Benet Security purchased a well-known trademark for padlocks and other security products for$150,000. After using the trademark for three years, Benet Security discontinued it altogether when the company withdrew from the lock business

> Beverley Products, has two divisions—Residential Products and Commercial Products. Cost and revenue data for each division for the current month are as follows. In addition, fixed costs that are common to both divisions amount to $60,0

> The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period. a. Use the high-low method to determine: 1. The variable element of manufacturing overhead costs per machine-hour. 2. The

> An analysis of the income statement and the balance sheet accounts of Holmes Export Co. at December 31 of the current year, provides the following information. Additional Information: 1. Except as noted in 4, payments and proceeds relating to investin

> In the stock market crash of October 19, 1987, the market price of IBM’s capital stock fell by over $31 per share. Explain the effects, if any, of this decline on the recorded stockholders’ equity in IBM’s balance sheet.

> Water World sells three products: ski vests, slalom skis, and ski ropes. Information related to each product line is provided as follows. The company’s annual fixed costs are approximately $741,000. a. Compute total annual sales that t

> In an effort to make the company more competitive, Fast Guard, Inc., incurred significant expenses related to a reduction in the number of employees, consolidation of offices and facilities, and disposition of assets that are no longer productive. Explai

> When Mary Potts arrived at her store on the morning of January 29, she found empty shelves and display racks; thieves had broken in during the night and stolen the entire inventory. Accounting records showed that Potts had inventory costing $50,000 on Ja

> Why are large corporations often described as publicly owned?

> Nicholls Provisions has been asked to submit a bid on supplying tents to the Boy Scouts of America. The company’s current cost structure per cent is as follows. a. Assume that there would be no variable sales commission on this special

> The following T accounts summarize the flow of manufacturing costs during the current year through the ledger accounts of Double Bar Corporation. Instructions: From the data supplied, indicate the following amounts. Some amounts are shown in the T accou

> In the past, Abbott Labs had two bond issues outstanding with the following characteristics. Instructions Answer the following questions regarding these bond issues. a. Which issue, A or B, has the higher effective rate of interest? How can you tell?

> Tops manufacture TVs. The company’s high-definition TVs are very popular, but it has an Inventory of 400 large-screens, standard-definition TVs for which there is little demand. Tops is considering the following options for disposing of these TVs. 1. Sel

> Some bonds now being bought and sold by investors on organized securities exchanges were issued when interest rates were much higher than they are today. Would you expect these bonds to be trading at prices above or below their face values? Explain

> Shown is the information needed to prepare a bank reconciliation for Warren Electric at December 31. 1. At December 31, cash per the bank statement was $15,200; cash per the company’s records was $17,500. 2. Two debit memoranda accompanied the bank sta

> The following T accounts summarize the flow of manufacturing costs during the current year through the ledger accounts of Payback Corporation. Instructions: From the data supplied, indicate the following amounts. Some amounts are shown in the T accounts

> J.C. Penney Company, Inc., uses LIFO in applying the lower-of-cost-or-market. Recent financial statements were used to compile the following information (dollar figures in millions). Instructions: a. Using the information provided, compute the followin

> Schreiner Instruments currently produces and sells 80,000 financial calculators monthly. At this level, its variable cost per calculator is $9 and its fixed cost per calculator is $6. The company’s monthly break-even point is 24,000 calculators. Determin

> Wilson Dynamics makes flanges in a continuous process through two departments: Forging and Assembly. All direct materials are added at the beginning of the process in the Forging Department, whereas all direct materials are added at the end of the proces

> An analysis of the income statement and the balance sheet accounts of Hampton, Inc., at December 31 of the current year, provides the following information. Additional Information: 1. Except as noted in 4, payments and proceeds relating to investing tr

> Why do bond prices vary inversely with interest rates?

> One of Spa Magic’s products is a whirlpool spa. Two processing departments are involved in the whirlpool spa’s manufacture. The tub is assembled in one department, and a second department assembles and installs the mot

> Guthrie Industries manufactures and sells dog collars. The collars sell for $12 each. Information about the company’s costs is as follows. a. Determine the company’s monthly break-even point in units. b. Determine the