Question: Below are several transactions entered into by

> Excerpts from the 2020 financial statements of Finley Ltd., a service company, follow: Auditors from Price and Company reviewed the financial records of Finley and found that a credit sale of $10,000 (for services rendered), which was included in the ser

> The following financial information represents Hadley Company's first year of operations, 2020: After reading Hadley's financial statements, you conclude that the company had a very successful first year of operations. However, after further examination,

> The information below was taken from the footnotes of JPMorgan Chase's 2019 annual report. The December 31, 2019, balance in the allowance account was $13,123 (dollars in millions). INSTRUCTIONS: Compute the actual write-offs recognized by JPMorgan Chase

> Albertson's Locksmith Corporation started operations on January 1, 2019. Albertson's estimates Un collectibles using the percentage-of-credit-sales method. The following information pertains to the company's sales, receivables, and collections for the fi

> Glacier Ice Company uses a percentage-of-net-sales method to account for estimated bad debts. Historically, 3 percent of net sales has proven to be uncollectible. During 2020 and 2021 , the company reported the following: INSTRUCTIONS: a. Prepare the nec

> Financial information for CNG Inc. follows: The company estimates bad debts for financial reporting purposes at 3 percent of credit sales. The balance in allowance for bad debts as of January 1, 2019, was $10,000. INSTRUCTIONS: a. Provide the journal ent

> International Services entered into a debt covenant requiring it to maintain a current ratio of at least 1.5: l. The company's condensed balance sheet as of December 31 follows: International's primary customer is Buckingham Ltd., a company located in Br

> Hughes International is a U.S. company that conducts business throughout the world. Assume that during 2019 the company entered into the following transactions at the following exchange rates. 1. Sold merchandise to Royal Equipment Company (a United King

> Excerpts from the financial statements of Ticheley Enterprises are as follows: On December 27, 2020, Ticheley sent merchandise with a sales price of $8,500 to a major customer. The merchandise was in transit as of December 31 . The cost of the inventory

> On September 30, 2020, Print-O-Matic Inc. entered into an arrangement with its bank to borrow $250,000. The principal is due on October 1, 2025, and the note has a stated annual interest rate of 10 percent. Under the borrowing agreement, Print-O-Matic ag

> Access the Data Analytic worksheet at www.wiley.coin/go/pratt/financialaccountinglle and create a statement that explains the change in Dillard’s retained earnings balance during 2017 and 2018.

> Bob Cleary, the controller of Mountain-Pacific Railroad, has prepared the financial statements for 2019 and 2020, which follow. The market prices of the company's stock as of January 1, 2019, December 31, 2019, and December 31, 2020, were $50, $45, and $

> Tumwater Canyon Campsites began operations on January 1, 2020. The following information is available at year-end. Assume that all sales were on credit. INSTRUCTIONS: Prepare an income statement and the current asset and current liability portions of the

> The following selected financial information was obtained from the 2020 financial reports of Robotronics Inc. and Technology, Limited: Assume that total assets, total liabilities, and total shareholders' equity were constant throughout 2020. INSTRUCTIONS

> Excerpts from the 2019 financial statements for Goodyear are as follows (dollars in millions): INSTRUCTIONS: Assume that you have some capital to invest and that you are considering an equity investment in Goodyear. Review the financial statements and co

> The following information was obtained from the 2020 financial reports of Hathaway Toy Company and Yakima Manufacturing: Assume that the only change to shareholders' equity during 2020 is due to net income earned in 2020. The number of outstanding shares

> You have just been hired as a stock analyst for a large stock brokerage company. Your first assignment is to analyze the performance of Gidley Electronics. The company's balance sheet for 2019 and 2020 follows. The company's income statement and reconcil

> You are considering investing in Eli Lilly, a major pharmaceutical company. As part of your investigation of Lilly, you obtained the following balance sheets for the years ended December 31, 2019 and 2018 (dollars in millions): INSTRUCTIONS: a. Compute t

> Edgemont Repairs began operations on January 1, 2018. The 2018, 2019, and 2020 financial statements follow: On January 1, 2020, the company expanded operations by taking out a $40,000 long-term loan at a 10 percent annual interest rate. INSTRUCTIONS: a.

> Obtain and review the 2019 consolidated income statement and balance sheet published by Unilever, which is located online at the Unilever website. INSTRUCTIONS: a. Compute the profitability, solvency, leverage, and turnover ratios listed in Figure 5- 3.

> Information about PepsiCo's six primary segments follows (dollars in millions). The information was taken from the company's 2019 SEC Form I 0-K. INSTRUCTIONS: a. Compute the percent each segment contributes to the total revenues reported for 2019. b. Ra

> Access the Data Analytic worksheet at www.witey.comfgu/prattffinanciaIaccounting11e and create a statement that explains the change in Bed, Bath and Beyond’s retained earnings balance during 2017.

> The following relationships were obtained for Boulder Mineral Company for 2020: ADDITIONAL INFORMATION: I. Boulder Mineral Company generated $450,000 in net income during 2020. 2. Credit sales comprise 80 percent of sales. 3. Cost of goods sold is 55 per

> Watson Metal Products is planning to expand its operations to France in response to increased demand from the French for quality metal products to use in production processes. Ben Watson, president of Watson Metal Products, and his consultants have estim

> You have just been hired as a loan officer for Washington Mutual Savings. Selig Equipment and Mountain Bike Inc. have both applied for $125,000 nine-month loans to acquire additional plant equipment. Neither company offered any security for the loans. It

> Mountain-Pacific Railroad, whose financial statements are presented in P5.9, is interested in comparing itself to the rest of the industry. Bob Cleary, the controller, has obtained the following industry averages from a trade journal. (The industry avera

> Advanced Micro Devices, a global technology company, reported the following selected items as part of its 2019 annual report (dollars in millions): INSTRUCTIONS: Compute the following ratios: 1. Current ratio 2. Quick ratio 3. Receivable turnover (time a

> The following information is available for Derrick Company immediately before and immediately after the adjusting journal entries: INSTRUCTIONS: Prepare the adjusting journal entries that gave rise to the changes indicated.

> The following information is available for M&M Johnson Inc.: a. The December 31, 2(120, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand. b. As of December 31, 2020, Johnson Inc.

> Beta Alloys made the following adjusting journal entries on December 31, 2020. INSTRUCTIONS: Classify each adjusting entry as either an accrual adju6tmeni (A) or a cost expiration adjustment (C), and indicate whether each entry increases (+ ), decreases

> Ten transactions are listed below. INSTRUCTIONS: For each one, indicate what specific accounts are affected as well as the direction (increase or decrease) of the effect. Also indicate whether the transaction would increase or decrease both net income

> The December 31, 2020, balance sheet of Tybee Corporation is provided below (in millions). Transactions during 2021: • Paid $5 for employee payroll that was incurred during the year. • Collected $10 cash from customers

> Access the Data Analytic worksheet at www.wiley.corn/gofpratt/financialaccountinglle and compare and discuss the size of two large Internet information providers: U.S.-based Alphabet. which reports U.S. GAAP financial statements expressed in U.S. dollars

> The December 31. 2020, balance sheet for Morrison Home Services is summarized below. During January 2021, the following transactions were entered into: 1. Services were performed for $7,000 cash. 2. $3,000 cash was received from customers on outstanding

> Ryan Hope, controller of Hope Inc., provides you with the following information concerning Hope during 2020. (Hope Inc. began operations on January 1, 2020.) 1. Issued 1,000 shares of common stock at $95 per share. 2. Paid $2,600 per month to rent office

> You are a credit analyst for First American Bank, and Badger Business has applied for a loan. The company claims to have more than tripled profits from 2019 to 2020 and believes that it should be given prime credit terms. In addition, you note that Badge

> The following T-accounts reflect seven different transactions that Rodman Container Company entered into during 2020: INSTRUCTIONS: For each transaction, describe what occurred and how it affected the accounting equation.

> Mayberry Enterprises has two sources of revenue. It sells advertising displays to retail firms and provides a consulting service on how to mount and use these displays. You represent a large manufacturing company that is considering purchasing Mayberry.

> You are a credit analyst for First American Bank, and Badger Business has applied for a loan. The company claims to have more than tripled profits from 2019 to 2020 and believes that it should be given prime credit terms. In addition, you note that Badge

> The following balance cheer is presented for J.D.F. Company as of December 31, 2020. During 2021, J.D.F. entered into the following transactions. 1. Made credit sales of $1,350,000 and cash sales of $350,000. The cost of the inventory sold was $700,000.

> The following balances were taken from the December 31, 2(1l9, balance sheet of AT&T (dollars in millions): Early in 2020, AT&T considered the financial effects of several events. INSTRUCTIONS: For each of the five events listed here, indicate ho

> The following balances were taken from the December 31, 2019, balance sheet of Manpower In a world-leading workforce provider (dollars in millions): Early in 2020, Manpower considered the financial effects of seven events. INSTRUCTIONS: For each of the

> The following balances were taken from the October 31, 2019, balance sheet of HP, Inc. (dollars in millions). Early in fiscal 2020, HP considered the financial effects of several events. INSTRUCTIONS: For each of the five events listed here, indicate how

> Access the Data Analytic worksheet at www.wiley.com/go/pratt/financialacconntinglle and compare and discuss the size of two large media companies: U.S.-based News Corp, which reports U.S. GAAP financial statements expressed in U.S. dollars, and Norwegian

> It is early January 2021. You have just been hired by Zenith Creations and assigned to the accounting department.

> The following condensed balance sheet for December 3 J. 2020, comes from the records of Buzz and Associates: Buzz and Associates is considering the purchase of a new piece of equipment for $30,000. The company does not have enough cash tn purchase it out

> The balance sheet of Walgreens, a leading chain drugstore, as of August 31, 2019, appears as follows (dollars in millions) INSTRUCTIONS: Assume that the following eight transactions occurred the next year (dollars in millions). Indicate the effect of eac

> Prostate Insurance Company collected $240,000 from Jncobs Priming Corporation for a two-year fire insurance policy on May 31, 3020. The policy is in effect from June 1, 2020, to May 31. 2021. INSTRUCTIONS: a. Assume that Prostate Insurance Company record

> Burkholder Corporation borrowed $28,000 from its bank on January 1, 2020, at an annual interest rate of 10 percent. The $28,000 principal is to be paid as a lump sum at the end of the period of the loan, which is after December 31, 2021. This is the only

> Suppose that Myers and Myers in P3.8 paid no dividends during 2021 and that the December 31, 2021, balance sheet looks like the one below. (This problem requires knowledge of present value calculations. Refer to Appendix A.) Assume that the investor in P

> The December 31, 2020, balance sheet of Myers and Myers, prepared under generally accepted accounting principles, follows. (This problem requires knowledge of present value calculations. Refer to Appendix A.) An investor believes that Myers and Myers can

> On January 1, 2020, Barry Smith established a company by contributing $90,000 and using all of the cash to purchase an apartment house. At the time, he estimated that cash inflows due to rentals would be $65,000 per year, while annual cash outflows to ma

> The December S1, 2019, balance sheet and the income statement for the period ending December 31 for the entire Manpower entity Inc., a world leader in staffing and workforce management solutions, follow (dollars in millions). This problem requires knowle

> Selected financial information is provided below for three major pharmaceuticals: GlaxoSmith- Kline (Britain), Sanofi (France), and Pfizer (U.S.). GlaxoSmithKline’s numbers were taken from the 2018 SEC Form 20-F, it uses fFRS, and the n

> Access the Data Analytic worksheet at www.wiley.coin/go/pratt/financialaccountinglle and extract the data necessary to compare Pfizer and Merck on the five fundamental measures of financial performance (net income; total assets; total liabilities; inves

> Sales data for the fiscal years 2017, 2018, arid 2019 for Advanced Micro Devices (AMD) follows (dollars in billions): According to the financial statements, sales increased by 26 percent from 2017 to 2019. Assume that the general rate of inflation as we

> Three years ago. Yeagley and Sons purchased the three assets listed in the following table. The chief financial officer, Kathy Dillon, is presently trying to decide what to do with each asset. She has to choose whether to sell it or keep it. The followin

> Assume that on January 1, Bush Enterprises borrowed $5,0O0 thorn Banking Corporation, promising to pay $'i,OO0 plus interest at the end of one year. The contractual rate of interest on the Joan is 5 percent, and the general rate of inflation for that yea

> Joe McGuire is a CPA who has recently completed the audit of Nelson Repairs Inc. The audited balance sheet and income statement follow: During his examination. Joe learned that a lawsuit is soon to be filed against Nelson. The lawsuit accuses Nelson of n

> Hydra Aire Inc. sells appliances to Seasons Depamnent Store. A recent order requires Hydra Aire to manufacture and deliver 500 toasters at a price of $100 per unit. Hydra Aire’s manufacturing costs are approximately $40 per unit. The fo

> During 2020, Brenda’s Bookstore (BB) opened ten new locations in the greater metro area. During 2020, the following took place for these new locations: Revenue recognition: BB sold $90,000 of books for which i1 received cash at the time of the sale;

> The net income and working capital accounts for two companies in the same industry, ABC Company and XYZ Company, follow: After reviewing the complete financial statements of the two companies, you note that ABC and XYZ use different inventory valuatio

> On January 1, 2020, you purchased a piece of property for $10,000. On December 31 of that year, you sold the property for $20,000. Assume that the general rare of inflation for 2020 was 10 percent. INSTRUCTIONS: a. According to generally accepted account

> Because of consistent losses in the past several years, Eat and Run, a fast-food franchise, is in danger of bankruptcy. lts most current balance sheet follows. Additional information: • The fair market value of the marketable securities

> Excerpts from the financial statements for Kroger, a major supermarket retailer, are as fol- lows (dollars in millions). INSTRUCTUION: Organize these numbers into income statements rind balance sheets.

> Access the Data Analytic worksheet at www.wiley.com/gofpratt/financialaccounbnglle and extract the data necessary to compare Nordstrom and Macys on the five fundamental measures of financial performance (net income; total assets; total liabilities; inves

> Compute the missing values for the following chari. The first year of operations is 2017.

> The following information Is available relating to the activities of Johnson Co. as of December 31, 2020. • Cash balance on 12/31/20 is $8,000. • Short-term investments have a value of $40,000 on 12/31f2D. • Accounts receivable balance of $125,000 on I 2

> Review Figure 2-12 and complete the blanks below to show the relationships among the four financial statements for Nimmo Brothers Corporation:

> The main section headings of the income statement are a. Sales b. Service revenue c. Other revenue d. Cost of goods sold e. Operating expenses f. Other expenses INSTRUCTIONS Classify the following descriptions under the appropriate headings and prepar

> Presented below are the main section headings of the balance sheet: a. Current assets b. Long-term investments c. Property, plant, and equipment d. Intangible assets e. Current liabilities f. Long-term liabilities g. Contributed capital h. Retained ea

> A summary of the December 31, 2020, balance sheet of Ellington Industries follows: On January 1, 2021, the company borrowed $40,000 (long-term debt) to purchase additional land. The debt covenant stares that Ellington must maintain a current asset balanc

> Ted Tooney has operated a smaller vice company for several years. The t’o1lowing information is from the financial statements prepared by Ted‘s accountant. INSTRUCTIONS: Assume that you have some capital to invest and

> The chief executive officer of Romney Heights has included the following information from the financial statements in a loan application submitted to Acme Bank. The company intends to acquire additional equipment and wishes to finance the purchase with a

> Joy Don Corp. sells a building to Trifle and Life in exchange for a note. The note specifies a lump-sum payment of $300,000 ten years in the future and annual payments (beginning today) of $2,000 at the beginning of each year for ten years. Assume an ann

> Assume an annual interest rate of 8 percent for each of the following independent cases. Compute the value at time O and the value at the end of the investment period for all the cash flows described: a. $10,000 is invested and held for four years. b. $2

> Access the Data Analytic worksheet at www.wiley.coin/go/pratt/financialaccountinglle and compute the rate of growth from 2017 to 2018 and from 2018 to 2019 in “Sales” (from the income statement data) and â€&

> Boulder Wilderness Adventures purchased rafting and kayaking equipment by issuing a note to Recreational Co-op, the seller of the equipment. The note required a down payment of $5,000, annual payments of $10,000 at the end of each year for five years (th

> In its 2019 annual report, Home Depot reported that sales increased from $100.9 billion in 2018 to $108.2 billion in 2019, while profits increased to $11.1 from $8.6 billion. However, total assets decreased from $44.5 to $44.0 billion, with the company’s

> One of the factors contributing to the 2008-2009 recession was the unwillingness of commercial banks to extend loans to customers, some of whom were quite creditworthy. This unwillingness led to what was called a “credit crunch.” Discuss reasons why bank

> Explain the function of the audit committee, and describe why it is important that it consist of outside fnonmanagement) directors.

> The AICPA’s list of red flags alerting auditors to the possibility of management fraud includes a “domineering management with a weak board of directors.” Briefly explain the role of the board of directors and how such a situation could indicate the pote

> Financial accounting statements are used by many parties. Describe how each of the following parties might use them: equity analysts and shareholders, bank loan officers, a company’s customers and suppliers, public utilities, labor unions, and a company’

> Airbus, a global French aircraft manufacturer, prepares its financial statements in accordance with IFRS. On its 2019 income statement, it reported a net loss of approximately 1.3 billion euros, driven primarily by a charge (expense) recorded during the

> Starbucks is a relatively young, fast-growing company that is a pioneer and leader in its industry. Excerpts from its 2019 statement of cash flows are as follows (dollars in millions): INSTRUCTIONS: a. Discuss the cash management profile of Starbucks acr

> The following information was taken from the 2019 annual report and statement of cash flows of Eli Lilly, a major pharmaceutical (dollars in millions):* INSTRUCTIONS: a. Discuss the cash management profile of Lilly across the three-year period. Where did

> In May, 2019, Uber Technologies, Inc., went public. Selected information from its 2020 statement of cash flows is provided below (dollars in billions). INSTRUCTIONS: a. What has happened to Uber's cash balance over the three-year period? b. Where is the

> A 2018 balance sheet of Royal Dutch Shell, a huge oil and gas company that prepares financier statements using IFRS, reported the following dollar amounts (in millions). First, format these balance sheer sections in a manner that is used by many non-U.S.

> The financial press often uses the term cash flow to refer to a company's "net income + depreciation." In a well-known article in Barron's titled "No Substitutions, Please," Intel was criticized for relying heavily on a number the company called "cash ea

> Loan officer Han Blackford once commented that cash flow analysis has risen in importance due to a "trend over the past twenty years toward capitalizing and deferring more and more expenses. Although the practice may match revenues and expenses more clos

> The 2019 balance sheet of The Walt Disney Company includes a long-term asset account called "Investments" in the amount of $3.2 billion. Most of this account is comprised of investments where Disney owns enough of the investees' common shares to exert a

> You can review the Disney SEC Form 10-K by searching for "Disney Annual Report" online. INSTRUCTIONS: Review the 2019 10-K, and answer the following questions: a. What are the major sources of cash for the company, and what is it doing with that cash? b.

> An article in Business Week described how Bob Olstein, a successful stock analyst, predicts that the prices of stocks issued by firms that "engage in aggressive accounting practices" will go down, stating that other "investors have unrealistic expectatio

> When luxury automaker BMW recently released earnings, the Wall Street Journal reported that it compared poorly to the prior year for a number of reasons, including the following: • rising raw material costs • strength of the euro • a large gain booked du

> Indicate how the income effects of the following items would be disclosed on the income statement and whether they represent a wealth change and/or can be expected to persist in the future: a. Federal Express reported $17 million on operating gains from

> General Electric's 2019 annual report, which included a statement of comprehensive income, contained the following items (dollars in millions): INSTRUCTIONS: a. From top to bottom, list each item as it would be disclosed on the income statement and state

> Eastman Kodak once recorded a third-quarter net loss of $206 million, but at the same time, posted a 22 percent rise in operating earnings to $835 million. Much of the loss was due to a $909.5 million charge taken to cover the costs associated with a wel

> Excerpts from the annual report of AT&T, Inc., are as follows. Compute the missing values and briefly discuss AT&€™s sources and uses of cash during the three-year period.

> Many e-tailers (retailers via the Internet) were not profitable in their early years. Analysts who believed in the futures of these firms, therefore, were forced to focus on other positive metrics of performance, such as revenues and gross profit margins

> In a particular year, PepsiCo's earnings either rose or fell, depending on the source of the information. Standard & Poor's reported that PepsiCo experienced a 25 percent earnings gain, while Value Line, another investor service, reported that PepsiCo ex