Below are the transactions for Salukis Car Cleaning for June, the first month of operations. June 1 Obtain a loan of $70,000 from the bank by signing a note. June 2 Issue common stock in exchange for cash of $40,000. June 7 Purchase car wash equipment for $75,000 cash. June 10 Purchase cleaning supplies of $8,000 on account. June 12 Wash 500 cars for $10 each. All customers pay cash. June 16 Pay employees $900 for work performed. June 19 Pay for advertising in a local newspaper, costing $500. June 23 Wash 600 cars for $10 each on account. June 29 Pay employees $950 for work performed. June 30 A utility bill of $1,400 for the current month is paid. June 30 Pay dividends of $600 to stockholders. Required: 1. Record each transaction. 2. Post each transaction to the appropriate T-accounts. 3. Calculate the balance of each account. 4. Prepare a trial balance for June. Salukis uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Notes Payable, Common Stock, Dividends, Service Revenue, Salaries Expense, Advertising Expense, and Utilities Expense.
> Togo’s Sandwich Shop had the following long-term asset balances as of January 1, 2021: Togo’s purchased all the assets at the beginning of 2019 (3 years ago). The building is depreciated over a 10-year service life usi
> “Why can’t we pay our shareholders a dividend?” shouts your new boss at Polar Opposites. “This income statement you prepared for me says we earned $5 million in our first year!â
> The following information relates to the intangible assets of Lettuce Express: a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Inc., for $1,600,000 in cash. The fair value of the identifiable net assets of Farmers Produc
> Cheetah Copy purchased a new copy machine. The new machine cost $140,000 including installation. The company estimates the equipment will have a residual value of $35,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000
> Stillwater Youth Programs (SYP) purchased a used school bus to transport children for its after-school program. SYP incurred the following expenses related to the bus for the current year: 1. Replaced a blown tire on the bus for $175. 2. Installed new se
> Northern Equipment Corporation purchased all the outstanding common stock of Pioneer Equipment Rental for $5,600,000 in cash. The book values and fair values of Pioneer’s assets and liabilities were. Required: 1. Calculate the amount No
> Sicily Pizza purchased baking ovens from New World Deli. New World Deli was closing its bakery business and sold its three-year-old ovens for $341,000. In addition to the purchase price, Sicily Pizza paid shipping costs of $16,000. Employees of Sicily Pi
> Barry Sanders, likely the best running back to ever play football, has opened a successful used-car dealership. He has noted a higher than normal percentage of sales for trucks and SUVs with hauling capacity at his dealership. He is also aware that sever
> The Italian Pizza Company purchased land as a factory site for $90,000. Prior to construction of the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below: Required: Determine the
> Refer to the transactions of Circuit Country in P6–3B. Required: 1. Assuming that Circuit Country uses a periodic inventory system, record the transactions. 2. Record the month-end adjustment to inventory, assuming that a final count reveals ending inven
> Payless ShoeSource and Dillard’s both offer men’s formal footwear. Payless offers lower- to middle-priced footwear, whereas Dillard’s offers more specialized, higher-end footwear. The average price fo
> Toys “R” Us sells a variety of children’s toys, games, books, and accessories. Assume that a local store has the following amounts for the month of March 2021. Required: 1. Prepare a multiple-step inc
> EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, is a giant database of documents required to be submitted to the U.S. Securities and Exchange Commission (SEC). All publicly traded domestic companies use EDGAR to make the majority of
> At the beginning of November, Yoshi Inc.’s inventory consists of 60 units with a cost per unit of $94. The following transactions occur during the month of November. November 2 Purchase 90 units of inventory on account from Toad Inc. for $100 per unit,
> Trends by Tiffany sells high-end leather purses. The company has the following inventory transactions for the year. Required: 1. Using FIFO, calculate ending inventory and cost of goods sold. 2. Using LIFO, calculate ending inventory and cost of goods so
> A home improvement store, like Lowe’s, carries the following items: Required: 1. Compute the total cost of inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value. Multiply the quantity of e
> At the beginning of June, Circuit Country has a balance in inventory of $3,000. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $2,700, terms 1/15, n/45. June 4 Pay cash for freight ch
> Pete’s Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August: Required: 1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification me
> Sylvester has a bird shop that sells canaries. Sylvester maintains accurate records on the number of birds purchased from its suppliers and the number sold to customers. The records show the following purchases and sales during 2021. Sylvester uses a per
> Jimmie’s Fishing Hole has the following transactions related to its top-selling Shimano fishing reel for the month of June: Required: 1. Calculate ending inventory and cost of goods sold at June 30, using the specific identification met
> Assume selected financial data for Sun Health Group and Select Medical Corporation, two companies in the health-care industry, are as follows: Required: 1. Calculate the receivables turnover ratio and average collection period for Sun Health and Select M
> On April 15, 2021, Sampson Consulting provides services to a customer for $110,000. To pay for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each April 15. (Hint
> By the end of its first year of operations, Previts Corporation has credit sales of $750,000 and accounts receivable of $350,000. Given it’s the first year of operations, Previts’ management is unsure how much allowance for uncollectible accounts it shou
> Aggressive Corporation approaches Matt Taylor, a loan officer for Oklahoma State Bank, seeking to increase the company’s borrowings with the bank from $100,000 to $200,000. Matt has an uneasy feeling as he examines the loan application
> Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment. Wanda
> Letni Corporation engages in the manufacture and sale of semiconductor chips for the computing and communications industries. During the past year, operating revenues remained relatively flat compared to the prior year but management notices a big increa
> Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2021, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An ag
> The following events occur for Morris Engineering during 2021 and 2022, its first two years of operations. February 2, 2021 Provide services to customers on account for $38,000. July 23, 2021 Receive $27,000 from customers on account. December 31, 2021 E
> Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 10% discount to students and faculty at educational institutio
> Scenario 1: During 2021, The Hubbard Group provides services of $900,000 for repair of a state highway. The company receives an initial payment of $300,000 with the balance to be received the following year. Scenario 2: Rolling Stone magazine typically c
> Peter loves dogs and cats. For the past several years, he has owned and operated Homeward Bound, which temporarily houses pets while their owners go on vacation. For the month of June, the company has the following transactions: 1. June 2 Obtain cash by
> Below is a summary of all transactions of Dreamworks Bedding Supplies for the month of August 2021. Required: Prepare a statement of cash flows for the month of August, properly classifying each of the transactions into operating, investing, and financin
> The cash records and bank statement for the month of July for Glover Incorporated are shown below. Additional information: a. The difference in the beginning balances in the company’s records and the bank statement relates to check #53
> On October 31, 2021, the bank statement for the checking account of Blockwood Video shows a balance of $12,751, while the company’s records show a balance of $12,381. Information that might be useful in preparing a bank reconciliation is as follows: a. O
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Calculate American Eagle’s cash return on assets, cash flow t
> At the end of February, Howard Productions’ accounting records reveal a balance for cash equal to $19,225. However, the balance of cash in the bank at the end of February is only $735. Howard is concerned and asks the companyâ
> The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances: The following is a summary of the transactions for the year: 1. January 12 Provide services to customers on account, $62,400. 2. February 25 Provide se
> The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances: The following is a summary of the transactions for the year: 1. January 24 Provide plumbing services for cash, $20,000, and on account, $65,000. 2. March 1
> Jaguar Auto Company provides general car maintenance to customers. The company’s fiscal year-end is December 31. The December 31, 2021, trial balance (before any adjusting entries) appears below. In addition, the company had the followi
> The year-end financial statements of Fighting Illini Financial Services are provided below. Required: 1. Record year-end closing entries. 2. Prepare a post-closing trial balance. (Hint: The balance of retained earnings will be the amount shown in the bal
> Orange Designs provides consulting services related to home decoration. Orange Designs provides customers with recommendations for a full range of home décor, including window treatments, carpet and wood flooring, paint colors, furniture, an
> Grasshopper Lawn Service provides general lawn maintenance to customers. The company’s fiscal year-end is December 31. Information necessary to prepare the year-end adjusting entries appears below. 1. On October 1, 2021, Grasshopper lent $60,000 to anoth
> The information necessary for preparing the 2021 year-end adjusting entries for Bearcat Personal Training Academy appears below. Bearcat’s fiscal year-end is December 31. 1. Depreciation on the equipment for the year is $7,000. 2. Salaries earned (but no
> Horned Frogs Fine Cooking maintains its books using cash-basis accounting. However, the company recently borrowed $50,000 from a local bank, and the bank requires the company to provide annual financial statements prepared using accrual-basis accounting
> Consider the following transactions. Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting.
> Financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. What was the amount of increase or decrease in cash and cash equivalents for the most recent year? 2. What was net cash from operating activities for the mos
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. For the most recent year, what amount does American Eagle report for current assets? What is the ratio of current assets to total assets? 2. For the
> Thunder Cat Services specializes in training and veterinary services to household pets, such as dogs, birds, lizards, fish, horses, and of course, cats. After the first 11 months of operations in 2021, Thunder Cat has the following account balances: The
> Buckeye Incorporated had the following balances at the beginning of November. The following transactions occur in November. November 1 Issue common stock in exchange for $13,000 cash. November 2 Purchase equipment with a long-term note for $3,500 from Sp
> Below are account balances of Ducks Company at the end of September. Required: Prepare a trial balance by placing amounts in the appropriate debit or credit column and determining the balance of the Service Revenue account.
> Refer to the transactions described in P2–4B. Required: 1. Record transactions for Olivia’s Maintenance Services. Keep in mind that Olivia may not need to record each transaction. 2. Using the format shown, indicate th
> Eli owns an insurance office, while Olivia operates a maintenance service that provides basic custodial duties. For the month of May, the following transactions occurred. May 2 Olivia decides that she will need insurance for a one-day special event at
> Below is a list of typical accounts. Required: For each account, indicate (1) the type of account and (2) whether the normal account balance is a debit or credit. For type of account, choose from asset, liability, stockholders’ equity,
> Below is a list of activities for Vikings Incorporated. Required: For each activity, indicate the impact on the accounting equation. After doing all the transactions, ensure that the accounting equation remains in balance.
> Below is a list of activities for Tigers Corporation. Required: For each activity, indicate whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders’ equity.
> Listed below are several terms and definitions associated with the FASB’s conceptual framework. Required: Pair each term with its related definition.
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. What was the amount of increase or decrease in cash and cash equivalents for the most recent year? 2. What was net cash from operating activities for
> The four underlying assumptions of generally accepted accounting principles are economic entity, monetary unit, periodicity, and going concern. Consider the following four independent situations. 1. Mound Builders Groceries has over 1,000 grocery stores
> Tar Heel Corporation provides the following information at the end of 2021. Required: Prepare the income statement, statement of stockholders’ equity, and balance sheet for Tar Heel Corporation on December 31, 2021.
> Below are incomplete financial statements for Cyclone, Inc. Required: Calculate the missing amounts.
> Gator Investments provides financial services related to investment selections, retirement planning, and general insurance needs. At the end of the year on December 31, 2021, the company reports the following amounts: In addition, the company had common
> Account classifications include assets, liabilities, stockholders’ equity, dividends, revenues, and expenses. Required: For each transaction, indicate whether the related account would be classified in the balance sheet as (a) an asset,
> Below are typical transactions for Caterpillar Inc. Required: Indicate whether each transaction is classified as a financing, investing, or operating activity.
> Viking Voyager specializes in the design and production of replica Viking boats. On January 1, the company issues $3,000,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate o
> As a long-term investment at the beginning of the year, Acquisitions, Inc., purchased 3 million shares (30%) of Takeover Target’s 10 million shares outstanding for $52 million. During the year, Takeover Target earned net income of $9 million and distribu
> Emmitt, Walter, and Barry form a company named Long Run Investments, with the intention of investing in stocks with great long-run potential. A clothing company named National League Gear looks like a great investment prospect. National League Gear has t
> Barry, Hank, and Babe form a company named Long Ball Investments, hoping to find that elusive home run stock. A new clothing company by the name of Major League Apparel has caught their eye. Major League Apparel has two classes of stock authorized: 5%, $
> The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below. Required: Prepare the statement of cash flows for the year ended December 31, 2022, using the indirect method.
> Justin Investor, Inc., purchases $180,000 of 8% bonds from M.R. Bonds Company on January 1. Management intends to hold the debt securities to maturity. For bonds of similar risk and maturity, the market yield is 10%. Justin paid $152,000 for the bonds. I
> Hollywood Tabloid needs a new state-of-the-art camera to produce its monthly magazine. The company is looking at two cameras that are both capable of doing the job and has determined the following: Camera 1 costs $6,000. It should last for eight years an
> Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,000,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be t
> Alec, Daniel, William, and Stephen decide today to save for retirement. Each person wants to retire by age 65 and puts $11,000 into an account earning 10% compounded annually. Required: Calculate how much each person will have accumulated by the age of 6
> Income statement and balance sheet data for Virtual Gaming Systems are provided below. Required: 1. Calculate the following risk ratios for 2021 and 2022: a. Receivables turnover ratio. b. Inventory turnover ratio. c. Current ratio. d. Debt to equity r
> Data for Virtual Gaming Systems are provided in P12–4A. Earnings per share for the year ended December 31, 2021, are $1.40. The closing stock price on December 31, 2021, is $28.30. Required: Calculate the following profitability ratios for 2021. 1. Gross
> The following income statement and balance sheets for Virtual Gaming Systems are provided. Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. 1. Receivables turnover ratio. 2. Average collection period. 3. In
> The balance sheets for Sports Unlimited for 2021 and 2020 are provided below. Required: 1. Prepare a vertical analysis of Sports Unlimited’s 2021 and 2020 balance sheets. Express each amount as a percentage of total assets for that year
> The income statements for Anything Tennis for the years ending December 31, 2021 and 2020, are provided below. Required: 1. Complete the “Amount” and “%” columns to be used in a hori
> Sports Emporium has two operating segments: sporting goods and sports apparel. The income statement for each operating segment is presented below. Required: 1. Complete the “%” columns to be used in a vertical analysis
> Renegade Clothing is struggling to meet analysts’ forecasts. It’s early December 2021, and the year-end projections are in. Listed below are the projections for the year ended 2021 and the comparable actual amounts for
> Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s). Required: Complete the following income statement for Reverse Logic. Assume all accounts payable are to su
> Data for Video Phones, Inc., are provided in P11–4A. Required: Prepare the statement of cash flows for Video Phones, Inc., using the direct method. Disclose any noncash transactions in an accompanying note.
> Refer to the information provided in P11–3A for Alliance Technologies. Required: Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the direct method.
> Cyberdyne Systems and Virtucon are competitors focusing on the latest technologies. Selected financial data is provided below. Required: 1. Calculate the return on assets for both companies. 2. Calculate the cash return on assets for both companies. 3. C
> The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. Required: Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note.
> Portions of the financial statements for Alliance Technologies are provided below. Required: Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the indirect method.
> Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). Listed below in random order are line i
> Listed below are several transactions. For each transaction, indicate by letter whether the cash effect of each transaction is reported in a statement of cash flows as an operating (O), investing (I), financing (F), or noncash (NC) activity. Also, indica
> Khaki Republic sells clothing and accessories through premium outlet locations and online. Selected financial data for Khaki Republic is provided as follows: Required: 1. Calculate the return on equity for Khaki Republic. How does it compare with the ret
> Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2021, its first year of operations: January 2 Issue 110,000 shares of common stock for
> Preferred stock has characteristics of both liabilities and stockholders’ equity. Convertible bonds are another example of a financing arrangement that blurs the line between liabilities and stockholders’ equity. Items like these have led some to conclud
> Refer to the information provided in P10–2A. Required: Taking into consideration the beginning balances on January 1, 2021 and all the transactions during 2021, respond to the following for Donnie Hilfiger: 1. Prepare the stockholders’ equity section of
> The stockholders’ equity section of Velcro World is presented here. Required: Based on the stockholders’ equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousa
> Sammy’s Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Require
> Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders
> Match (by letter) the following terms with their definitions. Each letter is used only once. Definitions a. The amount invested by stockholders. b. Shares available to sell. c. Shares can be returned to the corporation at a predetermined price. d. The ea
> Selected financial data for Bahama Bay and Caribbean Key are as follows: Required: 1. Calculate the debt to equity ratio for Bahama Bay and Caribbean Key for the most recent year. Which company has the higher ratio? 2. Calculate the return on assets for
> Coney Island Entertainment issues $1,300,000 of 7% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: Calculate the issue price of a bond and complete the first three rows of an amortization schedul
> On January 1, 2021, Universe of Fun issues $900,000, 8% bonds that mature in 10 years. The market interest rate for bonds of similar risk and maturity is 9%, and the bonds issue for $841,464. Interest is paid semiannually on June 30 and December 31. Requ
> On January 1, 2021, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Required: 1. Were the bonds issued at face amount, a discount, or a
> On January 1, 2021, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $600,000 of 8% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1. If the market interest r
