Below are the transactions for Ute Sewing Shop for March, the first month of operations. March 1 Issue common stock in exchange for cash of $3,000. March 3 Purchase sewing equipment by signing a note with the local bank, $2,700. March 5 Pay rent of $600 for March. March 7 Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $800. Martha is not required to pay for the alterations until the work is complete. March 12 Purchase sewing supplies for $130 on account. This material will be used to provide services to customers. March 15 Ute delivers altered dresses to Martha and receives $800. March 19 Ute agrees to alter 10 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $700 from Bob and promises the suits to be completed by March 25. March 25 Ute delivers 10 altered business suits to Bob. March 30 Pay utilities of $95 for the current period. March 31 Pay dividends of $150 to stockholders. Required: 1. Record each transaction. 2. Post each transaction to the appropriate T-accounts. 3. Calculate the balance of each account at March 31. 4. Prepare a trial balance as of March 31. Ute uses the following accounts: Cash, Supplies, Equipment, Accounts Payable, Deferred Revenue, Notes Payable, Common Stock, Dividends, Service Revenue, Rent Expense, and Utilities Expense.
> New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery ovens to Great Harvest Bakery for $700,000. The ovens originally cost $910,000, had an estimated service life of 10 years, had an estimated residual value of
> Solich Sandwich Shop had the following long-term asset balances as of December 31, 2021: Solich purchased all the assets at the beginning of 2019 (3 years ago). The building is depreciated over a 10-year service life using the double-declining-balance me
> The following information relates to the intangible assets of University Testing Services (UTS): a. On January 1, 2021, UTS completed the purchase of Heinrich Corporation for $3,510,000 in cash. The fair value of the net identifiable assets of Heinrich w
> University Car Wash built a deluxe car wash across the street from campus. The new machines cost $270,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will u
> Several years ago, Health Services acquired a helicopter for use in emergency situations. Health Services incurred the following expenditures related to the helicopter delivery operations in the current year: 1. Overhauled the engine at a cost of $7,500.
> Fresh Cut Corporation purchased all the outstanding common stock of Premium Meats for $12,000,000 in cash. The book values and fair values of Premium Meats’ assets and liabilities were. Required: 1. Calculate the amount Fresh Cut should
> Great Harvest Bakery purchased bread ovens from New Morning Bakery. New Morning Bakery was closing its bakery business and sold its two-year-old ovens at a discount for $700,000. Great Harvest incurred and paid freight costs of $35,000, and its employees
> 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. The stock prices as of February 3, 2018, for American Eagle and Buckle wer
> University Hero is considering expanding operations beyond its healthy sandwiches. Jim Axelrod, vice president of marketing, would like to add a line of smoothies with a similar health emphasis. Each smoothie would include two free health supplements suc
> The Italian Bread Company purchased land as a factory site for $70,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Required: Determine the amounts
> Refer to the transactions of CD City in P6–3A. Required: 1. Assuming that CD City uses a periodic inventory system, record the transactions. 2. Record the month-end adjustment to inventory, assuming that a final count reveals ending inventory with a cost
> Wawa Food Markets is a convenience store chain located primarily in the Northeast. The company sells gas, candy bars, drinks, and other grocery-related items. St. Jude Medical Incorporated sells medical devices related to cardiovascular needs. Suppose a
> Baskin-Robbins is one of the world’s largest specialty ice cream shops. The company offers dozens of different flavors, from Very Berry Strawberry to lowfat Espresso ’n Cream. Assume that a local Baskin-Robbins in Rale
> At the beginning of October, Bowser Co.’s inventory consists of 50 units with a cost per unit of $50. The following transactions occur during the month of October. October 4 Purchase 130 units of inventory on account from Waluigi Co. for $50 per unit, te
> For the current year, Parker Games has the following inventory transactions related to its traditional board games. Required: 1. Using FIFO, calculate ending inventory and cost of goods sold. 2. Using LIFO, calculate ending inventory and cost of goods so
> A local Chevrolet dealership carries the following types of vehicles: Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire invent
> At the beginning of July, CD City has a balance in inventory of $3,400. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $2,300, terms 1/10, n/30. July 4 Pay cash for freight charges
> Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Required: 1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification m
> Financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. What is the par value per share for the common stock? 2. How many common shares were issued at the end of the most recent year? 3. Did the company have any t
> Over a four-year period, Jackie Corporation reported the following series of gross profits. In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory w
> Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Required: 1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification meth
> Assume selected financial data for Walmart and Target, two close competitors in the retail industry, are as follows: Required: 1. Calculate the receivables turnover ratio and average collection period for Walmart and Target. Round your answers to one de
> On December 1, 2021, Liang Chemical provides services to a customer for $90,000. In payment for the services, the customer signs a three-year, 10% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Re
> Humanity International sells medical and food supplies to those in need in underdeveloped countries. Customers in these countries are often very poor and must purchase items on account. At the end of 2021, total accounts receivable equal $1,300,000. The
> Willie Cheetum is the CEO of Happy Foods, a distributor of produce to grocery store chains throughout the Midwest. At the end of the year, the company’s accounting manager provides Willie with the following information, before any adjus
> In an effort to boost sales in the current year, Roy’s Gym has implemented a new program where members do not have to pay for their annual membership until the end of the year. The program seems to have substantially increased membershi
> Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $590,000. Of this amount, $80,000 remains receivable at the end of the year. An aging schedule as of December 31, 2021, is provided
> The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $41,000. September 17, 2021 Receive $25,000 from customers on account. December
> Outdoor Expo provides guided fishing tours. The company charges $300 per person but offers a 20% discount to parties of four or more. Consider the following transactions during the month of May. May 2 Charlene books a fishing tour with Outdoor Expo for h
> Financial information for American Eagle is presented in Appendix A at the end of the book. Using the financial information presented in Appendix A, answer the following. Required: 1. What is the par value per share for the common stock? 2. How many comm
> Scenario 1: During 2021, IBM provides consulting services on its mainframe computer for $11,000 on account. The customer does not pay for those services until 2022. Scenario 2: On January 1, 2021, Gold’s Gym sells a one-year membership for $1,200 cash. N
> Rocky owns and operates Balboa’s Gym located in Philadelphia. The following transactions occur for the month of October: 1. October 2 Receive membership dues for the month of October totaling $8,500. 2. October 5 Issue common stock in exchange for cash,
> Below is a summary of all transactions of Pixar Toy Manufacturing for the month of August 2021. Required: Prepare a statement of cash flows for the month of August 2021, properly classifying each of the transactions into operating, investing, and financi
> The cash records and bank statement for the month of May for Diaz Entertainment are shown below. Additional information: a. The difference in the beginning balances in the company’s records and the bank statement relates to checks #469
> Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day but makes bank deposits only once per week. The following provides information from the company’s
> The Carmike 8 Cinema is a modern theatre located close to a college campus. The cashier, located in a box office at the entrance to the theatre, receives cash from customers and operates a machine that ejects serially numbered tickets for each film. Cust
> The general ledger of Zips Storage at January 1, 2021, includes the following account balances: The following is a summary of the transactions for the year: 1. January 9 Provide storage services for cash, $134,100, and on account, $52,200. 2. February
> The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances: The following is a summary of the transactions for the year: 1. March 12 Provide services to customers, $60,000, of which $21,000 is on account. 2. May
> Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2021, appears below. December 31 is the company’s fiscal year-end. In addition, the company had th
> The year-end financial statements of Rattlers Tax 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 balance sheet.)
> Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million,
> You may refer to the opening story of Tony and Suzie and their decision to start Great Adventures in AP 1–1. More of their story and the first set of transactions for the company in July are presented in AP 2–1 and repeated here. July 1 Sell $10,000 of c
> Boilermaker Unlimited specializes in building new homes and remodeling existing homes. Remodeling projects include adding game rooms, changing kitchen cabinets and countertops, and updating bathrooms. Below is the year-end adjusted trial balance of Boile
> Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company’s fiscal year-end. Information necessary to prepare the year-end adjusting entries appears below. 1. A three-year fire insurance policy was purchased on Jul
> The information necessary for preparing the 2021 year-end adjusting entries for Gamecock Advertising Agency appears below. Gamecock’s fiscal year-end is December 31. 1. On July 1, 2021, Gamecock receives $6,000 from a customer for advertising services to
> Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual-basis accounting as p
> 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 in the current period.
> RiverHawk Expeditions provides guided tours in scenic mountainous areas. After the first 11 months of operations in 2021, RiverHawk has the following account balances. The following transactions occur during December 2021: December 1 Pay rent for mountai
> Pirates Incorporated had the following balances at the beginning of September. The following transactions occur in September. September 1 Provide services to customers for cash, $4,700. September 2 Purchase land with a long-term note for $6,400 from Crim
> Below are the account balances of Bruins Company at the end of November. Required: Prepare a trial balance by placing amounts in the appropriate debit or credit column and determining the balance of the Equipment account.
> Refer to the transactions described in P2–4A. Keep in mind that Jake may not need to record all transactions. Required: 1. Record each transaction for Luke’s Repair Shop. Keep in mind that Luke may not need to record a
> Adrenaline Entertainment is struggling financially and its CFO, David Plesko, is starting to feel the heat. Back on January 1, 2017, Adrenaline Entertainment issued $100 million of 6% bonds, due in 15 years, with interest payable semiannually on June 30
> Jake owns a lawn maintenance company, and Luke owns a machine repair shop. For the month of July, the following transactions occurred. July 3 Jake provides lawn services to Luke’s repair shop on account, $500. July 6 One of Jake’s mowers malfunctions. Lu
> 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 the type of account, choose from asset, liability, stockholders’ equi
> Below is a list of activities for Purple Cow Incorporated. Required: For each activity, indicate the impact on the accounting equation. After doing so for all transactions, ensure that the accounting equation remains in balance.
> Below is a list of activities for Jayhawk Corporation. Required: For each activity, indicate whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders’ equity.
> Listed below are nine terms and definitions associated with the FASB’s conceptual framework. Required: Pair each term with its related definition.
> The four underlying assumptions of generally accepted accounting principles are economic entity, monetary unit, periodicity, and going concern. Consider the four independent situations below. 1. Jumbo’s is a local restaurant. Due to a bad shipment of pot
> Cornhusker Company provides the following information at the end of 2021. Required: Prepare the income statement, statement of stockholders’ equity, and balance sheet for Corn- husker Company on December 31, 2021. No common stock is iss
> Below are incomplete financial statements for Bulldog, Inc. Required: Calculate the missing amounts.
> Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2021, the company reports the following amounts: In addition, the company had common stock of $40,000 at the beginning of the year an
> 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,
> Western Entertainment is considering issuing bonds to finance its business expansion. The company contacts you, a business consultant charging $200 an hour, to answer the following questions. 1. What are the advantages of issuing bonds over borrowing fun
> Below are typical transactions for Hewlett-Packard. Required: Indicate whether each transaction is classified as a financing, investing, or operating activity.
> On January 1, Twister Enterprises issues $600,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 7%. National Hydraulics, a supplier of mechanical parts
> As a long-term investment at the beginning of the year, Willie Winn Track Shoes purchased 25% of Betty Will Company’s 34 million shares outstanding for $178 million. During the year, Betty Will earned net income of $130 million and distributed cash divid
> Ray and Rachel are considering the purchase of two deluxe kitchen ovens. The first store offers the two ovens for $3,500 with payment due today. The second store offers the two ovens for $3,700 due in one year. Required: Assuming an annual discount rate
> The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Required: Assuming an annual discount rate of 9%, which of the fou
> You want to save for retirement. Assuming you are now 25 years old and you want to retire at age 55, you have 30 years to watch your investment grow. You decide to invest in the stock market, which has earned about 13% per year over the past 80 years and
> The four people below have the following investments. Required: Determine which of the four people will have the greatest investment accumulation in six years.
> The following condensed information is reported by Sporting Collectibles. Required: 1. Calculate the following profitability ratios for 2021: a. Gross profit ratio. b. Return on assets. c. Profit margin. d. Asset turnover. e. Return on equity. 2.Determin
> Refer to the information provided for Plasma Screens Corporation in E12–7. Required: 1. Calculate the following profitability ratios for 2021: a. Gross profit ratio. b. Return on assets. c. Profit margin. d. Asset turnover. e. Return on equity. 2. When w
> The balance sheets for Plasma Screens Corporation and additional information are provided below. Required: 1. Calculate the following risk ratios for 2021: a. Receivables turnover ratio. b. Inventory turnover ratio. c. Current ratio. d. Acid-test ratio.
> Standard & Poor’s is a global leader in credit ratings and credit risk analysis. Go to its website at standardandpoors.com. Required: 1. Click on “ABOUT US” then “Key Statistics” under “S&P Rating Services.” About how much debt is covered by Standard & P
> Refer to the information for Adrian Express in E12–5. Industry averages for the following profitability ratios are as follows: Required: 1. Calculate the five profitability ratios listed above for Adrian Express. 2. Do you think the com
> The 2021 income statement of Adrian Express reports sales of $19,310,000, cost of goods sold of $12,250,000, and net income of $1,700,000. Balance sheet information is provided in the following table. Industry averages for the following four risk ratios
> The balance sheets for Federer Sports Apparel for 2022 and 2021 are presented below. Required: 1. Prepare a vertical analysis of the balance sheet data for 2022 and 2021. Express each amount as a percentage of total assets. 2. Prepare a horizontal analys
> Refer to the information provided in E12–2. Required: Prepare a horizontal analysis for 2022 using 2021 as the base year.
> The income statements for Federer Sports Apparel for 2022 and 2021 are presented below. Required: Prepare a vertical analysis of the data for 2022 and 2021.
> Attached is a schedule of five proposed changes at the end of the year. Required: 1. Indicate whether each of the proposed changes is conservative, aggressive, or neutral. 2. Indicate whether the total effect of all the changes is conservative, aggressiv
> Dwight’s Trophy Shop is considering the following accounting changes: a. Increase the allowance for uncollectible accounts. b. When costs are going up, change from LIFO to FIFO. c. Change from the straight-line method of depreciation to declining-balance
> Shaquille Corporation has operating income of $1.7 million, a loss on write-down of inventory of $200,000, and income tax expense of $425,000 for the year ended December 31, 2021, before considering the following item: a $275,000 gain, after tax, from th
> LeBron’s Bookstores has two divisions: books and electronics. The electronics division had another great year in 2021 with net sales of $11 million, cost of goods sold of $6.5 million, operating expenses of $3 million, and income tax expense of $375,000.
> As an auditor for Bernard and Thomas, you are responsible for determining the proper classification of income statement items in the audit of California Sports Grill. a. One of the company’s restaurants was destroyed in a forest fire that raged through S
> The Tony Hawk Skate Park was built in early 2021. The construction was financed by a $3,000,000, 7% note due in 6 years, with payments of $51,147 required each month. The first year has not been as profitable as hoped. The discussion at the executive boa
> The income statement for Stretch-Tape Corporation reports net sales of $540,000 and net income of $65,700. Average total assets for the year are $900,000. Stockholders’ equity at the beginning of the year was $600,000, and $30,000 was paid to stockholder
> Match (by letter) the following items with the description or example that best fits. Each letter is used only once. Descriptions a. A company’s ability to pay its current liabilities. b. Accounting choices that result in reporting lowe
> Software Distributors reports net income of $65,000. Included in that number is depreciation expense of $15,000 and a loss on the sale of land of $6,000. A comparison of this year’s and last year’s balance sheets reveals a decrease in accounts receivable
> Hardware Suppliers reports net income of $165,000. Included in net income is a gain on the sale of land of $20,000. A comparison of this year’s and last year’s balance sheets reveals an increase in accounts receivable of $35,000, an increase in inventory
> Technology Solutions’ format for the statement of cash flows was corrupted by a computer virus, as follows: Required: Prepare a correct format for Technology Solutions to use in preparing the statement of cash flows.
> Refer to the transactions between Ernie’s Electronics and Bert’s Bargain House recorded in E11–5. Required: Analyze each of the four transactions from the perspective of Bert’s Bargain House. Indicate in which section of the statement of cash flows each
> Ernie’s Electronics had the following transactions with Bert’s Bargain House: 1. Ernie sold Bert land, originally purchased for $180,000, at a sales price of $195,000, resulting in a gain on sale of land of $15,000. 2. Ernie borrowed $100,000 from Bert,
> Wi-Fi, Inc., has the following selected transactions during the year. 1. Issues $20 million in bonds. 2. Purchases equipment for $80,000. 3. Pays a $20,000 account payable. 4. Collects a $15,000 account receivable. 5. Exchanges land for a new patent. Bot
> Analysis of an income statement, balance sheet, and additional information from the accounting records of Gadgets, Inc., reveals the following items. 1. Purchase of a patent. 2. Depreciation expense. 3. Decrease in accounts receivable. 4. Issuance of a n
> Consider the four independent situations below. Required: 1. Calculate cash paid for operating expenses. 2. Prepare the summary journal entry for each situation.
> 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 the debt to equity ratio for American Eagle and Buc
> Discount Computers is in its second year of business providing computer repair services in the local community and reselling used computers on the Internet. The company is owned by 10 investors, each investing $100,000. Justin Lake was hired as president
> Consider the four independent situations below. Required: 1. Calculate cash paid to suppliers. 2. Prepare the summary journal entry for each situation.
> Consider the three independent situations below (amounts are $ in millions): Required: 1. Calculate cash received from customers. 2. Prepare the summary journal entry for each situation.
> The income statement for Electronic Wonders reports net sales of $91,758 million and cost of goods sold of $69,278 million. An examination of balance sheet amounts indicates accounts receivable increased $1,733 million, inventory increased $883 million,
