Assume the same facts as in Exercise 10-27, except that the book value of the press traded in is $108,500. (a) What is the amount of cash given? (b) What is the gain or loss on the exchange? Data from Exercise 10-27: A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. Assuming that the trade-in allowance is $90,000, what is the amount of cash given?
> On February 22, Triangle Corporation acquired 34,000 shares of the 500,000 outstanding common stock of Jupiter Co. at $25 plus commission charges of $680. On June 1, a cash dividend of $1.70 per share was received. On November 12, 7,000 shares were sold
> Rushton Corp., a wholesaler of music equipment, issued $11,000,000 of 20-year, 9% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the
> Financial data for McMasters Company follow: For Year Ended December 31 Cash on December 31 …………………… $ 138,780 Cash flow from operations …………… (308,400) a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).
> Favreau Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Favreau Corporation issued $35,000,000 of five-year, 7% bonds at a market (effective) interest rate of 6%, receiving cash of $36,492,785. Interest is payable s
> On the first day of its fiscal year, Jacinto Company issued $6,500,000 of six-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) int
> Abioye Co. produces and distributes semiconductors for use by computer manufacturers. Abioye Co. issued $700,000 of 10-year, 9% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the compan
> Stone Energy Corporation’s 7.5% bonds due in 2022 were reported as selling for 77.00. Were the bonds selling at a premium or at a discount? Why is Stone Energy Corporation able to sell its bonds at this price?
> The financial statements for Nike, Inc., are presented in Appendix C at the end of the text. What is the major source of financing for Nike? Financial Statements of Nike, Inc. in Appendix C:
> Based on the data in Exercise 14-1, what factors other than earnings per share should be considered in evaluating these alternative financing plans? Data in Exercise 14-1: Bonds payable, 5% (issued at face amount) ………… $6,000,000 Preferred $2.00 stock,
> The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to more than 50 cities in the United States: a. Determine the times interest earned ratio for the current and preceding years. Roun
> On January 1, Year 1, Wedekind Company issued a $170,000, five-year, 8% installment note to Shannon Bank. The note requires annual payments of $42,578, beginning on December 31, Year 1. Journalize the entries to record the following: Year 1 Jan. 1. Issue
> Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 5% (issued at face amount) ………… $6,000,000 Preferred $2.00 stock, $100 par …………………………. 3,000,000 Common stock, $25 par ……………………………………… 5,000,000 Income tax i
> Ergonomics Supply Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 80,000 shares of preferred 2% stock, $70 par, and 900,000 shares of $11 par common stock. The following selected transactions w
> The dividend yield of Suburban Propane was 10.2% in a recent year, and the dividend yield of Alphabet was 0% in the same year. What might explain the difference between these ratios?
> On October 31, Pidgeon Stones Inc., a marble contractor, issued for cash 320,000 shares of $5 par common stock at $12, and on November 19, it issued for cash 45,000 shares of preferred stock, $60 par at $72. a. Journalize the entries for October 31 and N
> Caterpillar Inc. and Deere & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years: a
> Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as follows: a. Determine the earnings per share for fiscal Y
> PickApart Arts, Inc., had earnings of $565,300 for the year. The company had 55,000 shares of common stock outstanding during the year and issued 23,000 shares of $50 par value preferred stock. The preferred stock has a dividend of $2.10 per share. There
> The following Stockholders’ Equity section of the balance sheet prepared as of the end of the current year: a. List the errors in the preceding statement of stockholders’ equity. b. Prepare a corrected statement of st
> Pressure Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended January 31, 20Y2: Retained earnings, February 1, 20Y1 ……………….. $29,842,000 Net income ……………………………………………………….. 4,082,000 Cash dividends declar
> The following accounts and their balances were selected from the adjusted trial balance of Block Ayala Group Inc., a freight forwarder, at October 31, the end of the current fiscal year: Common Stock, no par, $22 stated value ……………………….. $ 5,500,000 Paid
> Yard Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Yard Spray Inc. reacquired 42,000 shares of its common stock at $36 per share. On June 14, 19,000 of the reacquired shar
> Yeoman Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Yeoman Grill Restaurant Corporation, which had 35,000 shares of common stock outstanding, declared a 3-for-1 stock split. a. What will be the number
> Advanced Life Co. is an HMO for businesses in the Albuquerque area. The following account balances appear on the balance sheet of Advanced Life Co.: Common stock (600,000 shares authorized; 400,000 shares issued), $8 par, $3,200,000; Paid-in capital in e
> Kroger, a grocery store chain, recently had a price-earnings ratio of 7.6, while the average price-earnings ratio in the grocery store industry was 18.6. What might explain this difference?
> Internal Insights Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000 shares of cumulative preferred 2% stock, $60 par, and 100,000 shares of $10 par common. During its first four years of operations, the following amounts
> Exploit Media, LLC, has three members: WACS Partners, Elyse O’Reilly, and Encounter Newspaper, LLC. On January 1, 20Y2, the three members had equity of $275,000, $55,000, and $220,000, respectively. WACS Partners contributed an additional $69,000 to Expl
> Lynn Carpenter and Matthew Fredrick formed a partnership in which the partnership agreement provided for salary allowances of $58,000 and $41,000, respectively. Determine the division of a $33,000 net loss for the current year, assuming that remaining in
> Using each of the five assumptions as to income division listed in Exercise 12-3, determine the income participation of Dawson and McDonald if the year’s net income is $136,000. Assumptions listed in Exercise 12-3: (a) No agreement concerning division o
> Beau Dawson and Willow McDonald formed a partnership, investing $276,000 and $92,000, respectively. Determine their participation in the year’s net income of $380,000 under each of the following independent assumptions: (a) No agreement concerning divisi
> Squeeky Cleaning Services, LLC, provides cleaning services for office buildings. The firm has 10 members in the LLC, which did not change between 20Y8 and 20Y9. During 20Y9, the business terminated two commercial contracts. The following revenue and empl
> The accounting firm of Deloitte & Touche is the largest international accounting firm in the world as ranked by total revenues. For two recent years, Deloitte & Touche reported the following for its U.S. operations: a. For the current and previo
> The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $64,000 and $99,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $11,000. During the year, Grecco and Rosenfe
> After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Silver, Carillo, and Tingley are $77,700, $51,800, and $25,900, respectively. Cash, noncash assets, and liabilities total $72,500, $124,200, and $
> After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $64,900 and $86,500, respectively. Lewan Gorman is to be admitted to the partnership, contributing $43,300 cas
> If Valuation Allowance for Trading Investments has a credit balance, how is it reported on the balance sheet?
> Vanessa Kaiser and Mariah Newman decide to form a partnership by combining the assets of their separate businesses. Kaiser contributes the following assets to the partnership: cash, $25,800; accounts receivable with a face amount of $187,600 and an allow
> An employee earns $22 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and fe
> PepsiCo, Inc., reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt is comprised of the following: a. How much of the long-term debt was disclosed as a current liability o
> The current assets and current liabilities for Apple Inc. and HP, Inc., are as follows at the end of a recent fiscal period: * These represent prepaid expense and other non-quick current assets. a. Determine the quick ratio for both companies. Round to
> General Motors Corporation (GM) disclosed estimated product warranty payable for comparative years as follows: Presume that GM’s sales were $147,049 million in Year 2 and that the total paid on warranty claims during Year 2 was $3,000
> Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 2.5% of sales. Assume that sales were $398,000 for January. In February, a customer received warranty repairs requiring $410 of parts and $250 of labor. a. Jour
> Laughlin Enterprises issues a $130,000, 45-day, 6% note to Morrison Industries for merchandise inventory. a. Journalize Laughlin Enterprises’ entries to record: 1. The issuance of the note. 2. The payment of the note at maturity. b. Journalize Morrison I
> In a recent year’s financial statements, Procter & Gamble showed an unfunded pension liability of $4,391 million and a periodic pension cost of $208 million. Explain the meaning of the $4,391 million unfunded pension liability and the $208 million period
> A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year’s vacation pay is $138,000. a. Journalize the adjusting entry required on January 31, the end of
> The payroll register for Schmidt Company for the week ended April 29 indicated the following: Salaries ……………………………….. $1,380,000 Social security tax withheld …………. 82,800 Medicare tax withheld …………………. 20,700 Federal income tax withheld ……… 276,000 In ad
> The following data were gathered to use in reconciling the bank account of Crystal Company: Balance per bank ……………………………………..… $28,240 Balance per company records ………………..……… 10,280 Bank service charges ………………………………………….. 60 Deposit in transit …………………………
> Deere & Company manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division loans money to customers to finance the purchase of th
> Floatin Away Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: *For hourly employees, overtime is paid for hours worked in excess of
> The following table shows the sales and average book value of fixed assets for three different companies from three different industries for a recent year: a. For each company, determine the fixed asset turnover ratio. Round to one decimal place. b. Exp
> FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The major fixed assets for each business include aircraft, sorting and handling facilities, delivery vehicles, and information technology. The sales and average b
> Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets: Verizon’s revenue for the year was $130,863 milli
> Backwoods Mining Co. acquired mineral rights for $53,200,000. The mineral deposit is estimated at 19,000,000 tons. During the current year, 2,500,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. b. Journali
> American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years: Assume that accounts receivable were $87
> The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years: Assume that the accounts receivable were $638 million at th
> Use the data in Exercises 9-27 and 9-28 to analyze the accounts receivable turnover ratios of the Campbell Soup Company and American Eagle Outfitters, Inc. a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle for
> Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson’s disease. Amicus Therapeutics reported the following financial data (in thousands) for three recen
> The following data were gathered to use in reconciling the bank account of Donovan Company: Balance per bank …………………………. $14,385 Balance per company records …………. 11,200 Bank service charges ………………………….… 60 Deposit in transit …………………………….. 2,125 NSF chec
> Capstone Turbine Corporation produces and sells turbine generators for such applications as charging electric, hybrid vehicles. Capstone Turbine reported the following financial data for a recent year (in thousands): Net cash flows from operating activit
> Ralph Lauren Corporation designs, markets, and distributes a variety of apparel, home decor, accessory, and fragrance products. The company’s products include such brands as Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren,
> Hasbro, Inc., designs, manufactures, and markets toy products worldwide. Hasbro’s toys include Monopoly®, My Little Pony®, and Nerf brands. For a recent year, Hasbro reported the following net cash flows from operating activities (in thousands): First qu
> Journalize the entries to record the following: a. Check is issued to establish a petty cash fund of $1,290. b. The amount of cash in the petty cash fund is now $303. Check is issued to replenish the fund, based on the following summary of petty cash rec
> Amazon.com, Inc. is the world’s leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the world’s leading Internet television network
> Equipment acquired on January 6 at a cost of $401,300 has an estimated useful life of 18 years and an estimated residual value of $25,100. a. What was the annual amount of depreciation for Years 1–3 using the straight-line method of depreciation? b. What
> Apple Inc. designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (iPod) and mobile phones (iPhone) along with related accessories and services, including online distribution of t
> Autumn Designs & Decorators issued a 120-day, 5% note for $93,000, dated April 13 to Zebra Furniture Company on account. a. Determine the due date of the note. b. Determine the maturity value of the note. c. Journalize the entries to record the following
> Using the data presented in Exercise 8-18, journalize the entry or entries that should be made by the company. Data from Exercise 8-18: 1. Cash balance according to the company’s records at July 31, $49,910. 2. Cash balance according to the bank stateme
> The following data were accumulated for use in reconciling the bank account of Nakajima Co. for July: 1. Cash balance according to the company’s records at July 31, $49,910. 2. Cash balance according to the bank statement at July 31, $48,250. 3. Checks o
> Balance sheet data for Kwan Company on December 31, the end of two recent fiscal years, follow: Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders’ eq
> Which of the reconciling items listed in Exercise 8-16 require an entry in the company’s accounts? Data from Exercise 8-16: 1. Bank service charges, $90. 2. Check of a customer returned by bank to company because of insufficient funds, $520. 3. Check fo
> Identify each of the following reconciling items as: (a) An addition to the cash balance according to the bank statement, (b) A deduction from the cash balance according to the bank statement, (c) An addition to the cash balance according to the company’
> A building with a cost of $1,200,000 has an estimated residual value of $250,000, has an estimated useful life of 40 years, and is depreciated by the straight-line method. (a) What is the amount of the annual depreciation? (b) What is the book value at t
> Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck: 1. Changed engine oil. 2. Installed a television in the sleeping compartment of the truck. 3. Installed a wind def
> The actual cash received from cash sales was $66,670, and the amount indicated by the cash register total was $66,341. Journalize the entry to record the cash receipts and cash sales.
> The actual cash received from cash sales was $25,538, and the amount indicated by the cash register total was $25,670. Journalize the entry to record the cash receipts and cash sales.
> Assume that the social security tax rate is 6% and the Medicare tax rate is 1.5%. In the following summary of data for a payroll period, some amounts have been intentionally omitted: Earnings: 1. At regular rate ………………………………… ? 2. At overtime rate ………………
> A storage tank acquired at the beginning of the fiscal year at a cost of $61,000 has an estimated residual value of $9,000 and an estimated useful life of 20 years. Determine the following: (a) The amount of annual depreciation by the straight-line metho
> A computer system acquired on January 1 at a cost of $35,000 has an estimated useful life of five years. Assuming that it will have no residual value, determine the depreciation for each of the first two years (a) By the straight-line method and (b) By t
> A refrigerator used by a wholesale warehouse has a cost of $66,700, an estimated residual value of $5,100, and an estimated useful life of 14 years. What is the amount of the annual depreciation computed by the straight-line method?
> The following items may appear on a bank statement: 1. Bank correction of an error from recording a $7,400 deposit as $4,700 2. EFT payment 3. Note collected for company 4. Service charge Using the following format, indicate whether each item would appea
> A diesel-powered tractor with a cost of $136,700 and estimated residual value of $14,500 is expected to have a useful operating life of 18,800 hours. During November, the tractor was operated 160 hours. Determine the depreciation for the month.
> At the end of the current year, the accounts receivable account has a debit balance of $2,700,000 and sales for the year total $32,400,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptio
> Capstone Solutions Company, a computer consulting firm, has decided to write off the $45,800 balance of an account owed by a customer, Philadelphia Inc. Journalize the entry to record the write-off, assuming that (a) The direct write-off method is used a
> Journalize the following transactions in the accounts of Arizona Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 1. Sold merchandise on account to Taiwan Palace Co., $25,800.
> Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Apr. 15. Received $1,800 from Joe Brown and wrote off the remainder owed of $2,700 as uncollectible. Aug. 7. Reinstated the account of Joe Brow
> Financial data for Abrams Company follow: For Year Ended December 31 Cash on December 31 ……………… $ 54,270 Cash flow from operations ………. (97,200) a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).
> Journalize the necessary entries for each of the following: a. Issued a check to establish a petty cash fund of $1,270. b. The amount of cash in the petty cash fund is $160. Issued a check to replenish the fund, based on the following summary of petty ca
> Journalize the necessary entries for each of the following: a. Issued a check to establish a petty cash fund of $1,410. b. The amount of cash in the petty cash fund is $440. Issued a check to replenish the fund, based on the following summary of petty ca
> A company reports the following: Cost of merchandise sold ………………. $558,000 Average merchandise inventory ………… 45,000 Determine (a) the inventory turnover and (b) the number of days’ sales in inventory. Round to one decimal place.
> A company reports the following: Sales ………………………………………………….. $6,862,000 Average accounts receivable (net) ………………. 365,000 Determine (a) the accounts receivable turnover and (b) the number of days’ sales in receivables. Round to one decimal place.
> How does the accounting for a dividend received differ for equity investments of less than 20% ownership and equity investments of between 20%–50% ownership?
> A company reports the following: Sales …………………………………………………….. $1,460,000 Average accounts receivable (net) ………………… 100,000 Determine (a) the accounts receivable turnover and (b) the number of days’ sales in receivables. Round to one decimal place.
> The following items are reported on a company’s balance sheet: Cash ………………………………… $320,000 Marketable securities …………… 170,000 Accounts receivable (net) …….. 140,000 Inventory ………………………….. 450,000 Accounts payable ……………….. 300,000 Determine (a) the curre
> The following items are reported on a company’s balance sheet: Cash ………………………………. $120,000 Marketable securities …………. 40,000 Accounts receivable (net) ….… 50,000 Inventory ………………………….. 90,000 Accounts payable ………………. 150,000 Determine (a) the current ra
> Income statement information for Ivanoff Corporation follows: Sales …………………………………… $1,400,000 Cost of merchandise sold …………… 812,000 Gross profit ……………………………… 588,000 Prepare a vertical analysis of the income statement for Ivanoff Corporation.
> Income statement information for Turay Corporation follows: Sales …………………..………….. $200,000 Cost of merchandise sold …….. 140,000 Gross profit …………………………. 60,000 Prepare a vertical analysis of the income statement for Turay Corporation.
> A company reports the following: Net income …………………………………………….. $640,000 Preferred dividends …………………………………... $82,000 Shares of common stock outstanding ……………. 60,000 Market price per share of common stock ……… $120.90 a. Determine the company’s earnings
> A company reports the following: Net income …………………………………………….. $460,000 Preferred dividends ………………………………….. $40,000 Shares of common stock outstanding ………….. 150,000 Market price per share of common stock ………. $40.60 a. Determine the company’s earnings
> A company reports the following: Net income …………………………………………….. $ 500,000 Preferred dividends ……………………………………… 25,000 Average stockholders’ equity …………………….. 3,125,000 Average common stockholders’ equity ………. 1,900,000 Determine (a) the return on stockhol
> The comparative accounts payable and long-term debt balances for a company follow: Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis?
