Question: At the end of 2009, Great Financial

> Best Guy purchases inventory in crates of merchandise; each crate of inventory is a unit. The fiscal year of Best Guy ends each February 28. Assume you are dealing with a single Best Guy store in Denver, Colorado. The Denver store began 2010 with an inve

> The accounting records of R.B. Video Sales show the data on the following page (in millions). The shareholders are very happy with R.B.s steady increase in net income. Auditors discovered that the ending inventory for 2008 was understated by $3 million a

> Maroneys Convenience Stores income statement and balance sheet reported the following. The business is organized as a proprietorship, so it pays no corporate income tax. The owner is budgeting for 2010. He expects sales and cost of goods sold to increa

> ELV Trade Mart has recently had lackluster sales. The rate of inventory turnover has dropped, and the merchandise is gathering dust. At the same time, competition has forced ELVs suppliers to lower the prices that ELV will pay when it replaces its invent

> Identify the internal control weakness in the following situations. State how the person can hurt the company. a. James Mason works as a security guard at SAFETY parking in Detroit. Mason has a master key to the cash box where customers pay for parking.

> The records of Bell Aviation include the following accounts for inventory of aviation fuel at December 31 of the current year: Requirements 1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round ave

> Fatigues Surplus began October with 72 tents that cost $17 each. During the month, Fatigues Surplus made the following purchases at cost: Fatigues Surplus sold 324 tents and at October 31 the ending inventory consists of 52 tents. The sale price of eac

> Assume a Tiger Sports outlet store began October 2010 with 48 pairs of running shoes that cost the store $34 each. The sale price of these shoes was $69. During October, the store completed these inventory transactions: Requirements 1. The preceding d

> Nice Buy purchases inventory in crates of merchandise; each crate of inventory is a unit. The fiscal year of Nice Buy ends each February 28. Assume you are dealing with a single Nice Buy store in Dallas, Texas. The Dallas store began 2010 with an invento

> Quick Meals completed the following selected transactions: Requirements 1. Record the transactions in Quick Meals journal. Round all amounts to the nearest dollar. Explanations are not required. 2. Show what Quick Meals will report on its comparative

> Assume Smith & Jones, the accounting firm, advises Catch of the Day Seafood that its financial statement must be changed to conform to GAAP. At December 31, 2010, Catch of the Days accounts include the following: The accounting firm advised Catch of

> The September 30, 2011, records of Image Communications include these accounts: During the year, Image Communications estimates doubtful-account expense at 1% of credit sales. At year-end, the company ages its receivables and adjusts the balance in Allo

> This problem demonstrates the effects of transactions on the current ratio and the debt ratio of Hillsboro Company. Hillsboros condensed and adapted balance sheet at December 31, 2009, follows. Assume that during the first quarter of the following year

> Refer back to Problem 3-84B. From problem 84: The accounts of Sunny Stream Service, Inc., at March 31, 2010, are listed in alphabetical order. Requirements 1. Prepare the company’s classified balance sheet in report form at March 31,

> The accounts of Sunny Stream Service, Inc., at March 31, 2010, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Sunny Streams closing entries

> Accounting records for Richmond Corporation yield the following data for the year ended December 31, 2010: Requirements 1. Journalize Richmonds inventory transactions for the year under the perpetual system. 2. Report ending inventory, sales, cost of

> This problem takes you through the accounting for sales, receivables, and uncollectibles for Dependable Delivery Corp, the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At May 31, 2010, and

> Fairview Apartments, Inc.s unadjusted and adjusted trial balances at April 30, 2010, follow: Requirements 1. Make the adjusting entries that account for the differences between the two trial balances. 2. Compute Fairviews total assets, total liabiliti

> Consider the unadjusted trial balance of Kings, Inc., at August 31, 2010, and the related month-end adjustment data. Adjustment data at August 31, 2010 include the following: a. Accrued advertising revenue at August 31, $2,000 b. Prepaid rent expired

> Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Irons Corp. Include an explanation for each entry. a. Details of Prepaid Insurance are shown in the acc

> Kings Consulting had the following selected transactions in May: Requirements 1. Show how each transaction would be handled using the cash basis and the accrual basis. 2. Compute May income (loss) before tax under each accounting method. 3. Indicate

> Gauge Corporation earned revenues of $33 million during 2010 and ended the year with net income of $6 million. During 2010 Gauge collected cash of $24 million from customers and paid cash for all of its expenses plus an additional $1 million on account f

> This problem demonstrates the effects of transactions on the current ratio and the debt ratio of Hartford Company. Hartfords condensed and adapted balance sheet at December 31, 2010, follows. Assume that during the first quarter of the following year, 2

> Refer back to Problem 3-75A. From problem 75: The accounts of Spa View Service, Inc., at March 31, 2010, are listed in alphabetical order. Requirements 1. Use the Spa View data in Problem 3-75A to prepare the companys classified balance sheet at March

> The accounts of Spa View Service, Inc., at March 31, 2010, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Spa Views closing entries at March

> The September 30, 2011, records of Perfecto Communications include these accounts: During the year, Perfecto Communications estimates doubtful-account expense at 1% of credit sales. At year-end (December 31), the company ages its receivables and adjusts

> This case is based on the Foot Locker, Inc. s consolidated balance sheets, consolidated statements of cash flows, and Footnote 6 of its financial statements in Appendix B at the end of this book. 1. What securities are included in Foot Lockers Short-ter

> Peachtree Apartments, Inc.s unadjusted and adjusted trial balances at April 30, 2010, follow. Requirements 1. Make the adjusting entries that account for the differences between the two trial balances. 2. Compute Peachtrees total assets, total liabili

> Consider the unadjusted trial balance of London, Inc., at December 31, 2010, and the related month-end adjustment data. Adjustment data December 31, 2010: a. Accrued service revenue at December 31, $2,100. b. Prepaid rent expired during the month. The

> Journalize the adjusting entry needed on December 31, end of the current accounting period, for each of the following independent cases affecting Rowling Corp. Include an explanation for each entry a. Details of Prepaid Insurance are shown in the account

> Elders Consulting had the following selected transactions in August: Requirements 1. Show how each transaction would be handled using the cash basis and the accrual basis. 2. Compute August income (loss) before tax under each accounting method. 3. In

> Labear Corporation earned revenues of $41 million during 2011 and ended the year with net income of $5 million. During 2011, Labear collected $23 million from customers and paid cash for all of its expenses plus an additional $5 million for amounts payab

> Lakeview Software Solutions makes all sales on account, so virtually all cash receipts arrive in the mail. Larry Higgins, the company president, has just returned from a trade association meeting with new ideas for the business. Among other things, Higgi

> During the fourth quarter of 2010, Main St., Inc., generated excess cash, which the company invested in trading securities, as follows: Requirements 1. Open T-accounts for Cash (including its beginning balance of $22,000), Short-Term Investment, Divide

> This problem takes you through the accounting for sales, receivables, and uncollectibles for Mail Time Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At May 31, 2010, and 2011, re

> Healthy Meal completed the following selected transactions. Requirements 1. Record the transactions in Healthy Meals journal. Round interest amounts to the nearest dollar. Explanations are not required. 2. Show what Healthy Meal will report on its com

> Assume Smith & Jones, the accounting firm, advises Ocean Mist Seafood that its financial statements must be changed to conform to GAAP. At December 31, 2010, Ocean Mists accounts include the following: The accounting firm advised Ocean Mist that Ca

> Refer to the Foot Locker, Inc., Consolidated Financial Statements in Appendix B at the end of this book. 1. Focus on cash and cash equivalents. Why did cash change during 2007? The statement of cash flows holds the answer to this question. Analyze the s

> Don Beecher, chief financial officer of Carvel Wireless, is responsible for the companys budgeting process. Beechers staff is preparing the Carvel cash budget for 2011. A key input to the budgeting process is last year’s statement of ca

> Flawless Skin Care makes all sales on credit. Cash receipts arrive by mail, usually within 30 days of the sale. Elizabeth Nelson opens envelopes and separates the checks from the accompanying remittance advices. Nelson forwards the checks to another empl

> Laptop Delivery, Inc., makes all sales on account. Sarah Carter, accountant for the company, receives and opens incoming mail. Company procedure requires Carter to separate customer checks from the remittance slips, which list the amounts that Carter pos

> During the fourth quarter of 2010, Cable, Inc., generated excess cash, which the company invested in trading securities as follows: Requirements 1. Open T-accounts for Cash (including its beginning balance of $15,000), Short-Term Investments, Dividend

> Each of the following situations reveals an internal control weakness: Situation a. In evaluating the internal control over cash payments of York Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use i

> International Imports is an importer of silver, brass, and furniture items from France. Elaine Spencer is the general manager of International Imports. Spencer employs two other people in the business. Marie Walsh serves as the buyer for International Im

> John Watson, chief financial officer of Jasper Wireless, is responsible for the companys budgeting process. Watsons staff is preparing the Jasper cash budget for 2011. A key input to the budgeting process is last year’s statement of cas

> Fresh Skin Care makes all sales on credit. Cash receipts arrive by mail, usually within 30 days of the sale. Kate Martin opens envelopes and separates the checks from the accompanying remittance advices. Martin forwards the checks to another employee, wh

> Each of the following situations reveals an internal control weakness: a. In evaluating the internal control over cash payments of Framingham Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use in the

> Celtic Imports is an importer of silver, brass, and furniture items from Ireland. Eileen Sullivan is the general manager of Celtic Imports. Sullivan employs two other people in the business. Mary McNicholas serves as the buyer for Celtic Imports. In her

> During 2007, Foot Locker, Inc., had numerous accruals and deferrals. As a new member of Foot Locker, Inc.s accounting staff, it is your job to explain the effects of accruals and deferrals on net income for 2007. The accrual and deferral data follow, alo

> South Pacific Energy Companys balance sheet includes the asset Iron Ore. South Pacific Energy paid $2.2 million cash for a lease giving the firm the right to work a mine that contained an estimated 190,000 tons of ore. The company paid $61,000 to remove

> Parem, Inc., sells electronics and appliances. The excerpts that follow are adapted from Parems financial statements for 2010 and 2009. Requirements 1. How much was Parems cost of plant assets at February 28, 2010? How much was the book value of plant

> The board of directors of Cooper Structures, Inc., is reviewing the 2010 annual report. A new board member a wealthy woman with little business experience questions the company accountant about the depreciation amounts. The new board member wonders why d

> Tarrier, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except land. Tarrier completed the following transactions: Requirement 1. Record the transactions

> Rossi Lakes Resort reported the following on its balance sheet at December 31, 2010: In early July 2011, the resort expanded operations and purchased additional equipment at a cost of $105,000. The company depreciates buildings by the straight-line meth

> Assume Lance Pharmacy, Inc., opened an office in Vero Beach, Florida. Further assume that Lance Pharmacy incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: Assume Lance Pharm

> At the end of 2009, Solving Engineering Associates (SEA) had total assets of $17.1 billion and total liabilities of $9.7 billion. Included among the assets were property, plant, and equipment with a cost of $4.4 billion and accumulated depreciation of $3

> Northeastern Energy Company’s balance sheet includes the asset Iron Ore. Northeastern Energy paid $2.5 million cash for a lease giving the firm the right to work a mine that contained an estimated 197,000 tons of ore. The company paid $65,000 to remove u

> Floral, Inc., sells electronics and appliances. The excerpts that follow are adapted from Florals financial statements for 2010 and 2009. Requirements 1. How much was Florals cost of plant assets at February 28, 2010? How much was the book value of pla

> For each of the following situations, answer the following questions: 1. What is the ethical issue in this situation? 2. What are the alternatives? 3. Who are the stakeholders? What are the possible consequences to each? Analyze from the following sta

> The board of directors of Gold Structures, Inc., is reviewing the 2010 annual report. A new board member a wealthy woman with little business experience questions the company accountant about the depreciation amounts. The new board member wonders why dep

> Carr, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except land. Carr completed the following transactions: Requirement 1. Record the transactions in Car

> Romano Lakes Resort reported the following on its balance sheet at December 31, 2010: In early July 2011, the resort expanded operations and purchased additional equipment at a cost of $102,000. The company depreciates buildings by the straight-line met

> Assume Online, Inc., opened an office in Clearwater, Florida. Further assume that Online incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: Assume Online depreciates building

> The accounting records of Waterville Video Sales show these data (in millions). The shareholders are very happy with Watervilles steady increase in net income. Auditors discovered that the ending inventory for 2008 was understated by $2 million and that

> Daves Convenience Stores income statement and balance sheet reported the following. The business is organized as a proprietorship, so it pays no corporate income tax. The owner is budgeting for 2010. He expects sales and cost of goods sold to increase by

> Pastry People and Coffee Grind are both specialty food chains. The two companies reported these figures, in millions: Requirements 1. Compute the gross profit percentage and the rate of inventory turnover for Pastry People and Coffee Grind for 2010.

> Refer to Amazon.com, Inc.s consolidated financial statements in Appendix A at the end of this book. 1. Did accounts payable for Amazon.com, Inc., increase or decrease in 2008? What was the amount? What might have caused this change? 2. Examine Note 12 I

> Refer to Amazon.com, Inc.s Consolidated Financial Statements in Appendix A at the end of the book, and answer the following questions: 1. Refer to Note 1 and Note 3 of the Notes to Consolidated Financial Statements. What kinds of assets are included in

> The notes are part of the financial statements. They give details that would clutter the statements. This case will help you learn to use a company’s inventory notes. Refer to Amazon.com, Inc.s consolidated financial statements and related notes in Appen

> For each of the following situations, answer the following questions: 1. What is the ethical issue in this situation? 2. What are the alternatives? 3. Who are the stakeholders? What are the possible consequences to each? Analyze from the following sta

> Mark Davis formed a lawn service company as a summer job. To start the business on May 1, he deposited $2,000 in a new bank account in the name of the corporation. The $2,000 consisted of a $1,600 loan from his father and $400 of his own money . The corp

> If unit 1 requires 200 hours to produce and the labor records for an Air Force project of 50 units indicates an average labor content of 63.1 hours per unit, what was the learning rate?

> A marketing analyst has investigated each of the four threats in Exercise 3.5 in terms of NOT being able to ameliorate them and has come up with the following values (again, on a 7 point scale) for each of the threats: #1: 1, #2: 6, #3: 3, #4: 4. Recalcu

> A marketing firm is trying to win a major contract from a large retail company and is concerned with four major threats. (1) Competition: the probability of very competitive bids is high at 0.6, and the potential impact would be substantial at a value of

> You are offered the chance to play a dice game at $10 per toss of 2 die. If the sum of the two dice tossed is 4, you will receive $100. Should you play or not?

> Laptops-R-Me keeps detailed data on their laptop sales. In the last 300 days the number of laptops sold was as shown in the table …

> In Exericse 1, base your decision instead on the worst possible outcome for each alternative. Now consider a decision based on the best possible outcome. When might both of these give you the same decision?

> Your firm designs PowerPoint slides for computer training classes, and you have just received a request to bid on a contract to produce the slides for an 8-session class. From previous experience, you know that your firm follows an 85 percent learning ra

> Explain the reasons for the growth and decay of each source of conflict in Figure 2.6, and for the Total as well.

> Give an example of a case in which project management could be important in your personal life. Explain why, as well as how and why you might organize such a project.

> There is a danger in letting the client “visit” the project operation too frequently, not the least of which is “scope creep” or informal changes to the project’s performance specifications. What other dangers might arise? How might the danger of scop

> 1. What has a larger impact on Palmstar’s profits, delaying the 2000HD’s introduction by 3 months or increasing the project’s budget by 30 percent? 2. Are there other factors you would consider in addition to profit? 3. What should Palmstar do? Why? 4. H

> The Chapter mentions that regular functional managers are moving from their classic authoritarian style to a facilitative, participative style because it is more effective. Do you think it took managers 200 years to learn this, or is something else drivi

> Construct a list of factors, conditions, and circumstances you think might be important for a manufacturing firm to evaluate during the project selection process. Do the same for a computer repair shop.

> For each of the projects identified in the answer to Question 5, is the life cycle for the project S-shaped or J-shaped?

> Give several examples of projects found in your city, region, or country – avoiding those used as examples in the chapter.

> In Figure 1- 5, what distribution of large and small circles and squares across the four boxes would characterize a strong, well-positioned product development business? A weak business?

> You are the project manager of a team of software specialists working on a project to produce a piece of application software in the field of project management. Give some examples of things that might go wrong on such a project and the sorts of trade-o

> What errors in a firm’s project portfolio might the Wheelwright and Clark aggregate project plan graphically identify?

> Contrast the three types of nonnumeric project selection methods. Could any specific case combine two of them, such as the sacred cow and the operating necessity, or the comparative benefits and the competitive necessity?

> In Section 8.2, subsection The Audit Report, six elements are listed that should be included in every audit report. For each element, explain why its inclusion is important.

> How might an audit team deal with an attempt to co-opt the team?

> 1. Draw a network diagram for this project. Identify all the paths through the network diagram. 2. 3. Develop a histogram to summarize the results of your simulation. 4. Calculate the probability that the project can be completed within 30 months. Wha

> Can you think of any acceptable ways of assigning credit for profits (or responsibility for costs) resulting from a project on which several departments worked?

> It is frequently suggested that items that will become potential problems later in the project life be decided up front, such as how to allocate revenues or dispose of project assets. How can this wisdom be used for project problems that cannot be fores

> What are the dangers of evaluating a project based on the reason(s) it was selected (such as being a competitive necessity), rather than the goals and objectives in the project proposal or contract?

> What steps might be taken to reduce the anxiety of project team members facing an audit?

> How should a committee determine which closure method to use?

> What might be some characteristics of a good closure manager?

> Under what circumstances is a detailed audit apt to be useful?