Question: B. P. Palmer is the chief executive

> What is the distinction between comparability and consistency?

> On July 31, 2017, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank se

> Blue Bayou Middle School wants to raise money for a new sound system for its auditorium. The primary fund-raising event is a dance at which the famous disc jockey Kray Zee will play classic and not-so-classic dance tunes. Grant Hill, the music and theate

> Gary Theater is in the Hoosier Mall. A cashier’s booth is located near the entrance to the theater. Two cashiers are employed. One works from 1:00 to 5:00 P.M., the other from 5:00 to 9:00 P.M. Each cashier is bonded. The cashiers receive cash from custo

> Soho Equipment Repair began operating in September 2017. It prepares financial statements at the end of each month. On November 1, 2017, a tabular summary includes the following information. Note that Soho began the month with $3,000 in Retained Earnings

> Roadside Travel Court was organized on July 1, 2016, by Betty Johnson. Betty is a good manager but a poor accountant. From the unadjusted tabular summary, Betty prepared the following income statement for her fourth quarter, which ended June 30, 2017.

> A review of the unadjusted balances for Lewis Company at December 31, 2017, produces these data pertaining to the preparation of annual adjustments. 1. Prepaid Insurance $15,200. The company has separate insurance policies on its buildings and its motor

> Salt Creek Golf Inc. was organized on July 1, 2017. Quarterly financial statements are prepared. Information from the unadjusted and adjusted tabular summary on September 30 is shown as follows. The $14,800 in the revenue column includes Service Revenue:

> As a new auditor for the CPA firm of Blacke and Whyte, you have been assigned to review the internal controls over mail cash receipts of Simon Company. Your review reveals that checks are promptly endorsed “For Deposit Only,” but no list of the checks is

> The Moto Hotel opened for business on May 1, 2017. The May transactions resulted in a tabular summary, with May 31 unadjusted balances shown below in the first row. The $9,000 in the revenue column resulted from Rent Revenue. The $4,300 in the expense co

> Len Kumar started his own consulting firm, Kumar Consulting, on June 1, 2017. The June transactions resulted in a tabular summary, with June 30 unadjusted balances shown here. Instructions (a) Record adjustments for the month of June that reflect the f

> The following selected data are taken from the comparative financial statements of Yankee Curling Club. The club prepares its financial statements using the accrual basis of accounting. Dues are billed to members based upon their use of the clubâ

> Merle Hawkins, the president of Pathway Company, is pleased. Pathway substantially increased its net income in 2017 while keeping its unit inventory relatively the same. Jon Dietz, chief accountant, cautions Merle, however. Dietz says that since Pathway

> Nancy Tercek started a delivery service, Tercek Deliveries, on June 1, 2017. The following transactions occurred during the month of June. June 1 Stockholders invested $10,000 cash in the business in exchange for common stock. 2 Purchased a used van for

> On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September, the following tran

> Fredonia Repair Inc. was started on May 1. A summary of May transactions is presented below. 1. Stockholders invested $10,000 cash in the business in exchange for common stock. 2. Purchased equipment for $5,000 cash. 3. Paid $400 cash for May office rent

> Bindy Crawford created a corporation providing legal services, Bindy Crawford Inc., on July 1, 2017. On July 31 the balance sheet showed Cash $4,000, Accounts Receivable $2,500, Supplies $500, Equipment $5,000, Accounts Payable $4,200, Common Stock $6,20

> Nona Curry started her own consulting firm, Curry Consulting Inc., on May 1, 2017. The following transactions occurred during the month of May. May 1 Stockholders invested $15,000 cash in the business in exchange for common stock. 2 Paid $600 for offic

> On April 1, Wonder Travel Agency Inc. was established. These transactions were completed during the month. 1. Stockholders invested $30,000 cash in the company in exchange for common stock. 2. Paid $900 cash for April office rent. 3. Purchased office equ

> Alternative Distributor Corp., a distributor of groceries and related products, is headquartered in Medford, Massachusetts. During a recent audit, Alternative Distributor Corp. was advised that existing internal controls necessary for the company to deve

> A friend of yours, Saira Ortiz, recently completed an undergraduate degree in science and has just started working with a biotechnology company. Saira tells you that the owners of the business are trying to secure new sources of financing which are neede

> Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data were taken from the 2017 financial statements of each company. Instructions For each company, compute these values and

> Condensed balance sheet and income statement data for Danke Corporation are presented as follows. Instructions Compute these values and ratios for 2016 and 2017. (a) Earnings per share. (b) Working capital. (c) Current ratio. (d) Debt to assets ratio.

> The following are financial statements of Ohara Company. Additional information: The net cash provided by operating activities for 2017 was $190,800. The cash used for capital expenditures was $92,000. The cash used for dividends was $31,000. The weigh

> (a) What is the primary objective of financial reporting? (b) Identify the characteristics of useful accounting information.

> Distinguish between long-term investments and property, plant, and equipment.

> Comparative financial statement data for Loeb Corporation and Bowsh Corporation, two competitors, appear below. All balance sheet data are as of December 31, 2017. Instructions (a) Comment on the relative profitability of the companies by computing the

> You are provided with the following information for Lazuris Enterprises, effective as of its April 30, 2017, year-end. Accounts payable………………………. $ 834 Accounts receivable………………………810 Accumulated depreciation—equipment.670 Cash…………………………………………. 1,270 Co

> These items are taken from the financial statements of Martin Corporation for 2017. Retained earnings (beginning of year) ……$31,000 Utilities expense……………………………………. 2,000 Equipment…………………………………………. 66,000 Accounts payable…………………………………. 18,300 Cash………………

> Suppose the following items are taken from the 2017 balance sheet of Yahoo! Inc. (All dollars are in millions.) Goodwill……………………………………………. $3,927 Common stock………………………………………6,283 Equipment……………………………………………. 1,737 Accounts payable…………………………………….152 Paten

> The website www.cpa2biz.com has an article dated February 4, 2010, by Mary Schaeffer entitled “Emerging Issues: Demise of Paper Checks.” Instructions Go to the website and do a search on the article title. Read the article and answer the following quest

> On numerous occasions, proposals have surfaced to put the federal government on the accrual basis of accounting. This is no small issue because if this basis were used, it would mean that billions in unrecorded liabilities would have to be booked and the

> Abbey Park was organized on April 1, 2016, by Trudy Crawford. Trudy is a good manager but a poor accountant. Trudy used information from the unadjusted tabular summary to prepare the following income statement for the quarter that ended March 31, 2017.

> Purpose: To learn about the functions of the Securities and Exchange Commission (SEC). Address: www.sec.gov/about/whatwedo.shtml Instructions Use the information in this site to answer the following questions. (a) What event spurred the creation of the

> Laser Recording Systems, founded in 1981, produces disks for use in the home market. The following is an excerpt from Laser Recording Systems’ financial statements (all dollars in thousands). Instructions (a) Can you tell from the dis

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Identify two accounts on Columbia’s balance sheet that provide evidence that Columb

> The financial statements of Apple Inc. are presented in Appendix A at the end of this textbook. Instructions (a) Using the consolidated income statement and balance sheet, identify items that may result in adjustments for deferrals. (b) Using the consol

> In their annual reports to stockholders, companies must report or disclose information about all liabilities, including potential liabilities related to environmental clean-up. There are many situations in which you will be asked to provide personal fina

> How do documentation procedures contribute to good internal control?

> Identify and state two generally accepted accounting principles that relate to adjusting the accounts.

> At one time, Boeing closed a giant deal to acquire another manufacturer, McDonnell Douglas. Boeing paid for the acquisition by issuing shares of its own stock to the stockholders of McDonnell Douglas. In order for the deal not to be revoked, the value of

> The July 28, 2007, issue of the Wall Street Journal includes an article by Kathryn Kranhold entitled “GE’s Accounting Draws Fresh Focus on News of Improper Sales Bookings.” Instructions Read the article and answer the following questions. (a) What impro

> The January 27, 2011, edition of the New York Times contains an article by Richard Sandomir entitled “N.F.L. Finances, as Seen Through Packers’ Records.” The article discusses the fact that the Green Bay Packers are the only NFL team that publicly publis

> Purpose: This activity provides information about career opportunities for CPAs. Address: www.startheregoplaces.com/why-accounting Instructions Go to the address shown above and then answer the following questions. (a) Where do CPAs work? (b) What skill

> Chieftain International, Inc., is an oil and natural gas exploration and production company. A recent balance sheet reported $208 million in assets with only $4.6 million in liabilities, all of which were short-term accounts payable. During the year, Chi

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions Based on the information contained in these financial statements, identify the other ac

> The financial statements of Apple Inc. in Appendix A at the back of this textbook contain the following selected accounts, all in thousands of dollars. Common Stock………………………………………………. $23,313 Accounts Payable……………………………………………..30,196 Accounts Receivable

> Auditors provide a type of certification of corporate financial statements. Certification is used in many other aspects of business as well. For example, it plays a critical role in the sustainability movement. The February 7, 2012, issue of the New York

> At one time, Boeing closed a giant deal to acquire another manufacturer, Mc-Donnell Douglas. Boeing paid for the acquisition by issuing shares of its own stock to the stockholders of McDonnell Douglas. In order for the deal not to be revoked, the value o

> Assume that Kohl’s Department Stores installed new cash registers in its stores. How do cash registers improve internal control over cash receipts?

> As a financial analyst in the planning department for Erin Industries, Inc., you must develop ratios from the comparative financial statements. This information is to be used to convince creditors that, despite a slight decline in sales, Erin Industries,

> The July 6, 2011, edition of the Wall Street Journal Online includes an article by Michael Rapoport entitled “U.S. Firms Clash Over Accounting Rules.” The article discusses why some U.S. companies favored adoption of International Financial Reporting Sta

> Suppose the following information was reported by Gap, Inc. (a) Determine the overall percentage decrease in Gap’s total assets from 2013 to 2017. What was the average decrease per year? (b) Comment on the change in Gapâ€&#

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) For each company, calculate the following values for 2014. (1) Working capital. (3

> The financial statements of Apple Inc. are presented in Appendix A at the end of this textbook. Instructions Answer the following questions using the financial statements and the notes to the financial statements. (a) What were Apple’s total current ass

> Although Clif Bar & Company is not a public company, it does share its financial information with its employees as part of its open-book management approach. Further, although it does not publicly share its financial information, it does provide a differ

> Some people are tempted to make their finances look worse to get financial aid. Companies sometimes also manage their financial numbers in order to accomplish certain goals. Earnings management is the planned timing of revenues, expenses, gains, and loss

> Rules governing the investment practices of individual certified public accountants prohibit them from investing in the stock of a company that their firm audits. The Securities and Exchange Commission (SEC) became concerned that some accountants were vi

> Marci Ling is the bookkeeper for Samco Company, Inc. Marci has been trying to get the company’s balance sheet to balance. She finally got it to balance, but she still isn’t sure that it is correct. Instructions Expl

> Sylvia Ayala recently accepted a job in the production department at Apple. Before she starts work, she decides to review the company’s annual report to better understand its operations. The content and organization of corporate annual reports have becom

> As the company accountant, explain the following ideas to the management of Ortiz Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in internal control.

> The June 22, 2011, issue of the Wall Street Journal Online includes an article by Michael Rapoport entitled “Auditors Urged to Tell More.” It provides an interesting discussion of the possible expanding role of CPAs. Instructions Read the article and an

> Purpose: Identify summary information about companies. This information includes basic descriptions of the company’s location, activities, industry, financial health, and financial performance. Address: http://biz.yahoo.com/i Steps 1. Type in a company n

> Xerox was not having a particularly pleasant year. The company’s stock price had already fallen in the previous year from $60 per share to $30. Just when it seemed things couldn’t get worse, Xerox’s s

> Columbia Sportswear Company’s financial statements are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information in these financial statements, determine the following for each

> The financial statements of Apple Inc. for 2014 are presented in Appendix A. Instructions Refer to Apple’s financial statements and answer the following questions. (a) What were Apple’s total assets at September 27, 2014? At September 28, 2013? (b) How

> At the end of 2016, Safer Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2017, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes

> Presented below are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a balance sheet. (a) Advanced $10,000 to an employee. (b) Received a promissory note of

> For each of the following cases, state whether the statement is true for LIFO or for FIFO. Assume that prices are rising. (a) Results in a higher quality of earnings ratio. (b) Results in higher phantom profits. (c) Results in higher net income. (d) Resu

> In its first month of operation, Hoffman Company purchased 100 units of inventory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result if the comp

> The management of Milque Corp. is considering the effects of various inventory costing methods on its financial statements and its income tax expense. Assuming that the price the company pays for inventory is increasing, which method will: (a) provide th

> How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

> Data for McLanie Company are presented in BE6-4. Compute the cost of the ending inventory under the average-cost method. (Round the cost per unit to three decimal places.) Reference Data BE6-4: In its first month of operations, McLanie Company made thre

> In its fi rst month of operations, McLanie Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $8, and (3) 500 units at $9. Assuming there are 200 units on hand at the end of the period, compute th

> Use a tabular summary to record the following transactions for Borst Company using a perpetual inventory system. (a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company on account. The cost of the merchandise sold was $540,000. (b)

> Rita Company buys merchandise on account from Linus Company for $590. Rita sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Rita Company using a perpetual inventory system.

> Presented here are the components in Salas Company’s income statement. Determine the missing amounts. Gross Profit Sales Cost of Оperating Net Revenue Goods Sold Expenses Income $ 71,200 $108,000 (a) (b) $70,000 $71,900 $ 30,000 (c

> Spahn Company has these cash balances: cash in bank $12,742, payroll bank account $6,000, and plant expansion fund cash $25,000. Explain how each balance should be reported on the balance sheet.

> Using the data in BE5-8, indicate (a) the items that will result in an adjustment to the depositor’s records and (b) why the other items do not require adjustment. Data from BE5-8: The following reconciling items are applicable to the bank reconciliat

> The following reconciling items are applicable to the bank reconciliation for Forde Co. Indicate how each item should be shown on a bank reconciliation. (a) Outstanding checks. (b) Bank debit memorandum for service charge. (c) Bank credit memorandum for

> Luke Roye is uncertain about the control features of a bank account. Explain the control benefits of (a) a checking account and (b) a bank statement.

> Tott Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure. (a) Company checks are prenumbered. (b) The bank statement is reconciled monthly by an inter

> Bene Mart, a large national retail chain, is nearing its fiscal year-end. It appears that the company is not going to hit its revenue and net income targets. The company’s marketing manager, Ed Mellon, suggests running a promotion selling $50 gift cards

> While examining cash receipts information, the accounting department determined the following information: opening cash balance $150, cash on hand $1,125.74, and cash sales per register tape $988.62. Prepare a tabular analysis of the required adjustment

> Jolson Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure. (a) All over-the-counter receipts are entered in cash registers. (b) All cashiers are bonded. (

> The internal control procedures in Dayton Company result in the following provisions. Identify the principles of internal control that are being followed in each case. (a) Employees who have physical custody of assets do not have access to the accounting

> Pat Buhn is the new owner of Young Co. She has heard about internal control but is not clear about its importance for her business. Explain to Pat the four purposes of internal control, and give her one application of each purpose for Young Co.

> Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it. (a) An employee’s monthly credit card payments are nearly 75% of her monthly earnings. (b) An employee earns minimum wage at

> The following selected accounts appear in the adjusted balances for Deane Company. Indicate the financial statement on which each account would be reported. (a) Accumulated Depreciation. (b) Depreciation Expense. (c) Retained Earnings (beginning). (d)

> Partial adjusted account balance data for Levin Corporation are presented in BE4-10. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $10,400. Reference Data BE4-1

> The adjusted account balances of Levin Corporation at December 31, 2017, include the following accounts: Retained Earnings $17,200, Dividends $6,000, Service Revenue $32,000, Salaries and Wages Expense $14,000, Insurance Expense $1,800, Rent Expense $3,9

> Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment, indicate (1) the type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accr

> The bookkeeper for Tran Company asks you to record the following accrual adjustments at December 31 in the tabular summary that follows. Use these account titles: Service Revenue, Accounts Receivable, Interest Expense, Interest Payable, Salaries and Wa

> Abe Technologies provides maintenance service for computers and office equipment for companies throughout the Northeast. The sales manager is elated because she closed a $300,000, 3-year maintenance contract on December 29, 2016, two days before the comp

> On July 1, 2017, Ling Co. pays $12,400 to Marsh Insurance Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. For Marsh Insurance Co., enter the July 1 transaction and the December 31 adjustment in the tabular summar

> On July 1, 2017, Ling Co. pays $12,400 to Marsh Insurance Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. For Ling Co., enter the July 1 transaction and the December 31 adjustment in the tabular summary that foll

> At the end of its first year, a tabular summary of transactions for Rayburn Company before adjustments include the following selected account information. Depreciation for the year is estimated to be $2,750. Record the adjustment for depreciation in th

> A tabular summary of transactions for Lahey Advertising Company before adjustments includes the following selected account information. On December 31, there is $1,100 of supplies on hand. Record the adjustment for supplies in the tabular summary and i

> Cortina Company accumulates the following adjustment data at December 31. Indicate (1) the type of adjustment (prepaid expense, accrued revenue, and so on) and (2) the status of the accounts before adjustment (for example, “assets understated and reven

> The records of Melmann Company include the following accounts. Explain why each account may require adjustment. (a) Prepaid Insurance. (c) Unearned Service Revenue. (b) Depreciation Expense. (d) Interest Payable.