Question: Brent Mussellman, owner of Brent’s Barbells,

> Valdez Company had the following stock transactions during the first 5 years of operations: (a) Issued 24,000 shares of $1 par common stock for $26,000 cash. (b) Issued 18,000 shares of $1 par common stock for $18,000 cash. (c) Issued 3,000 shares of $10

> After closing its books on December 31, Mel Brothers’ stockholders’ equity accounts have the following balances: Common stock subscriptions receivable ………...………...………...……….... $ 6,000 Common stock, $6 par, 15,000 shares ………...………...………...………...... 90,00

> Brant & Evans had the following stock transactions during the year: (a) Issued 6,000 shares of common stock with a $5 par value in exchange for real estate (land) with a fair market value of $33,500. (b) Issued 5,500 shares of common stock with a $5 par

> The following independent stock transactions occurred during January 20-- for various corporations: (a) Issued 4,000 shares of $10 par common stock for $40,000 cash. (b) Issued 5,000 shares of $10 par common stock for $53,500 cash. (c) Issued 6,000 share

> Situation 1: Espino Company has the following stock outstanding: The amount available for dividends this year is $50,000. Prepare the dividend allocation between the preferred and common shares. Situation 2: Chiola Corporation has the following stock

> Mayer Delivery Co. had the following plant asset transactions during the year: 1. Assets discarded or sold: Jan. 1 Van #11, which had a cost of $8,800 and accumulated depreciation of $8,800, was discarded. 8 Van #7, which had a cost of $9,400 and accumul

> After closing its books on December 31, 20--, Merrill Corporation’s stockholders’ equity accounts have the following balances: REQUIRED Prepare the stockholders’ equity section of the balance sheet

> T&R Track Town has decided to incorporate and has incurred the following costs of organizing: Incorporation fees ………... $ 500 Attorneys’ fees ………... 6,800 Promotion fees ………... 4,700 Prepare the entry for the payment of these organization costs for cash

> After several years of operations, the partnership of Leonard, Mitchell, and Swanson is to be liquidated. After making closing entries on June 30, 20--, the following accounts remain open: The noncash assets are sold for $211,000. Profits and losses are

> What steps are followed in posting from the cash receipts journal to the accounts receivable ledger?

> Cummings and Stickel Construction Company, a partnership, is operating a general contracting business. Ownership of the company is divided among the partners, Katie Cummings, Julie Stickel, Roy Hewson, and Patricia Weber. Profits and losses are shared eq

> The partnership of Rummel and Kang, Stonecutters, reported revenues of $133,000 and expenses of $41,000 on the year-end work sheet. The capital balances as of January 1, 20--, were $41,000 for C. Rummel and $25,000 for V. Kang. No additional investments

> On July 1, 20--, Lisa Bush and Wally Dodge combined their two businesses to form a partnership under the firm name of Bush and Dodge. The balance sheets of the two sole proprietorships are shown below. The balance sheets reflect fair market values except

> On liquidation of the partnership of L. Straw and M. Maury, as of February 9, 20--, assets with a book value of $156,000 are sold for $140,000. Given that the profit-and-loss ratio is 60% for Straw and 40% for Maury, prepare the entries for the sale and

> Maria Rhodes and Craig Blair, who have ending capital balances of $90,000 and $40,000, respectively, agree to admit two new partners to their business on September 1, 20--. Lori Kinder will buy one-third of Rhodes’s capital interest for $40,000 and one-f

> Randy Nolan and Jill Brenton formed a partnership on May 1, 20-1. Nolan contributed $50,000 and Brenton contributed $25,000. During the year, Nolan contributed an additional $10,000. The partnership agreement states that Nolan is to receive $15,000 and B

> John Clark and David Haase decided to form a partnership on July 1, 20-6. Clark invested $60,000 and Haase invested $40,000. For the fiscal year ended June 30, 20-7, a net income of $80,000 was earned. Determine the amount of net income that Clark and Ha

> After several years of operations, the partnership of Delco, Smith, and Walker is to be liquidated. After making closing entries on March 31, 20--, the following accounts remain open. The noncash assets are sold for $165,000. Profits and losses are share

> Sharon Usher and Leann Gomez agreed on September 1 to go into business as partners. According to the agreement, Usher is to contribute $30,000 cash and Gomez is to contribute $50,000 cash. Provide a separate journal entry for the investment of each partn

> Equipment records for Byerly Construction Co. for the year follow. Byerly Construction uses the straight-line method of depreciation. In the case of assets acquired by the fifteenth day of the month, depreciation should be computed for the entire month.

> What steps are followed in posting from the cash receipts journal to the general ledger?

> A machine is purchased January 1 at a cost of $58,000. It is expected to produce 110,000 units and have a salvage value of $3,000 at the end of its useful life. Units produced are as follows: Year 1 ………... 18,000 Year 2 ………... 16,000 Year 3 ………... 20,000

> A machine is purchased January 1 at a cost of $77,000. It is expected to serve for eight years and have a salvage value of $5,000. REQUIRED 1. Prepare a schedule showing depreciation for each year and the book value at the end of each year using the fol

> Prepare the following entries using a general journal: 1. A coal mine was acquired at a cost of $1,750,000 and estimated to contain 2,500,000 tons of ore. During the year, 110,000 tons were mined and sold. Prepare the journal entry for the year’s depleti

> Prepare the entries for the following transactions using a general journal: 1. Discarding an asset. (a) On January 4, shelving units, which had a cost of $7,200 and accumulated depreciation of $6,900, were discarded. (b) On June 15, a hand cart, which ha

> Enter the following transactions for Larry’s Lawn Service in a general journal: 1. Added a second mower deck to Tractor A for $550 cash to decrease mowing time. 2. Replaced the engine in Mower D for $200 cash. The replacement is expected to extend the li

> The truck purchased in Exercise 18-2B is expected to be used for 100,000 miles over its five-year useful life. Exercise 18-2: A light truck is purchased on January 1 at a cost of $19,000. It is expected to serve for five years and have a salvage value

> A light truck is purchased on January 1 at a cost of $19,000. It is expected to serve for five years and have a salvage value of $1,000. Calculate the depreciation expense for the first and third years of the truck’s life using the following methods: 1.

> On January 1, 20-1, Dan’s Demolition purchased two jackhammers for $2,500 each with a salvage value of $100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for $800

> Lam Company purchased the following long-term assets. Determine the purchase cost of each asset.

> At the end of the year, the following interest is payable, but not yet paid. Record the adjusting entry in the general journal. Interest on $8,000, 90-day, 8% note (for 18 days) $32.00 Interest on $4,500, 60-day, 7% note (for 7 days) 6.13 $38.

> List three items of information about each cash receipt entered in the cash receipts journal.

> What are the distinctive features of ToyJoy’s income statement? Its statement of retained earnings? Its balance sheet?

> Prepare general journal entries for the following transactions: Sept. 15 Borrowed $7,000 cash from the bank, giving a 60-day non-interest-bearing note. The note is discounted 8% by the bank. Nov. 14 Paid the $7,000 note, recognizing the discount as inter

> Prepare general journal entries for the following transactions: June 15 Purchased $6,000 worth of equipment from a supplier on account. July 15 Issued a $6,000, 30-day, 7% note in payment of the account payable. Aug. 14 Paid $600 cash plus interest to th

> At the end of the year, the following interest is earned, but not yet received. Record the adjusting entry in a general journal. Interest on $6,000, 60-day, 5.5% note (for 24 days) $22.00 Interest on $9,000, 90-day, 6% note (for 12 days) 18.00 $40.0

> Prepare general journal entries for the following transactions: Aug. 4 Received a 120-day, 7% note in payment for accounts receivable balance of $4,000. 14 Discounted the note at a rate of 8%. Sept. 5 Received a 30-day, 6% note in payment for accounts re

> Prepare general journal entries for the following transactions: May 22 Received a 30-day, 6% note in payment for merchandise sale of $22,000. June 21 Received $110.00 cash (interest) on the old (May 22) note; the old note is renewed for 30 days at 7%. Ju

> Determine the due date for the following notes. (Assume there are 28 days in February.) Date of Note Term of Note Due Date 45 days July 11 December 23 90 April 18 120 October 3 77 January 1 August 13 180 65

> Using 360 days as the denominator, calculate interest for the following notes using the formula I = P × R × T. Principal Rate Time e Interest $4,000 7.00% 60 days 3,000 6.50 30 7,500 8.00 150 850 7.90 99 2,250 7.55 122 1,900

> Mary’s Travel Agency had the following notes payable transactions: Apr. 1 Borrowed $4,000 from Finance Bank, signing a 90-day, 8% note. 5 Gave a $3,000, 60-day, 7% note to Krenshaw Airline for purchase of merchandise. 10 Paid $400 cash and issued a $1,60

> The following is a list of outstanding notes receivable as of December 31, 20--: REQUIRED 1. Compute the accrued interest at the end of the year. 2. Prepare the adjusting entry in the general journal. Maker Date of Note Term No. of Days Principal $

> Madison Graphics had the following notes receivable transactions: May 1 Sold merchandise on account to L. Carney, $5,600. 20 L. Carney gave a $5,600, 90-day, and 6% note to extend time for payment. 30 L. Carney’s note is discounted at Commercial Bank at

> What steps are followed in posting from the sales journal to the accounts receivable ledger?

> M. L. DiMaurizio had the following notes receivable transactions: 20-3 June 20 Received a $2,400, 30-day, 6% note from K. Lorenzo in payment for sale of merchandise. July 20 K. Lorenzo paid the note plus interest. 25 Sold merchandise on account to R. Boo

> Calculate total time in days for the following notes. (Assume there are 28 days in February.) Date of Note Due Date Time in Days August 17 January 12 July 15 October 10 March 10 September 13 February 1 July 6 December 18 December 3 April 11 October 6

> At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Anderson’s Greeting Cards was $180,000. Credit sales for the year were $1,950,000. REQUIRED Make the necessary adjusting entry in general journal for

> Lewis Warehouse used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--: Feb. 7 Received 70% of the $8,000 balance owed by Luxury Sofas, a bankrupt business, and wrote

> Madonna’s Music Store uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form: 20-1 May 5 Wrote off $2,360 owed by Neal Dammond, who has no assets. July 18 Wrote off $1,255 owed

> At the end of the current year, the accounts receivable account of Parker’s Nursery Supplies has a debit balance of $350,000. Credit sales are $2,300,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated

> Raynette Ramos, owner of Ramos Rentals, uses the allowance method in accounting for uncollectible accounts. Record the following transactions in general journal form: July 9 Wrote off $6,040 owed by Sue Sanchez, who has no assets. Aug. 15 Wrote off $4,79

> Charlie’s Chevy Sales and Service estimates the amount of uncollectible accounts using the percentage of receivables method. Based on aging the accounts, it is estimated that $3,935 will not be collected. Record the end-of-period adjusting entry on Decem

> Nicole’s Neckties has total credit sales for the year of $380,000 and estimates that 2% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assum

> What steps are followed in posting from the sales journal to the general ledger?

> Louie Long started a business called Louie’s Lawn Service. The trial balance as of March 31, after the first month of operation, is as follows: REQUIRED 1. Analyze the following adjustments and enter them on a work sheet. (a) Ending su

> For each journal entry shown below, indicate the accounting method(s) for which the entry would be appropriate. If the journal entry is not appropriate for a particular accounting method, explain the proper accounting treatment for that method. 1. O

> The partial work sheet shown on page 561 is taken from the books of Diamond Music Store, a business owned by Ned Diamond, for the year ended December 31, 20- . REQUIRED 1. Analyze the work sheet and determine the adjusted trial balance and the adjusting

> Lee and Chen Distributors uses the direct write-off method in accounting for uncollectible accounts. 20-1 Feb. 16 Sold merchandise on account to Biggs and Daughters, $16,000. Mar. 23 Sold merchandise on account to Lloyd Place, $12,800. June 8 Received $1

> An analysis of the accounts receivable of Matsushita Company as of December 31, 20--, reveals the following: REQUIRED 1. Prepare an aging schedule as of December 31, 20--, by adding the following column to the three columns shown above: Estimated Amount

> Mary Martin owns a department store that has a $65,200 balance in Accounts Receivable and a $5,175 credit balance in Allowance for Doubtful Accounts. 1. Determine the net realizable value of the accounts receivable. 2. Assume that an account receivable i

> Use the work sheet and financial statements prepared in Problem 15-8B. All sales are credit sales. The Accounts Receivable balance on January 1 was $38,200. REQUIRED Prepare the following financial ratios: (a) Working capital (b) Current ratio (c) Quick

> Backlund Farm Supply completed the work sheet on page 609 for the year ended December 31, 20--. Owner’s equity as of January 1, 20--, was $50,000. The current portion of Mortgage Payable is $1,000. REQUIRED 1. Prepare a multiple-step income statement. 2

> Prepare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry. Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis. (a) Wages paid durin

> From the work sheet in Exercise 15-5B, identify the adjusting entry(ies) that should be reversed and prepare the reversing entry(ies).

> List four items of information about each sale entered in the sales journal.

> From the work sheet on page 607 prepare the following: 1. Closing entries for Balloons and Baubbles in a general journal. 2. A post-closing trial balance.

> Based on the financial statements, shown on pages 605–606, for McDonald Carpeting Co. (income statement, statement of owner’s equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Acc

> Use the following information to prepare a multiple-step income statement, including the revenue section and the cost of goods old section, for Aeito’s Plumbing Supplies for the year ended December 31, 20--. Sales ……………………………………………………… $166,000 Sales Re

> Based on the information that follows, prepare the cost of goods sold section of a multiple-step income statement. Merchandise Inventory, January 1, 20-- ………………………………………………... $13,800 Purchases ……………………………………………………………………………………………. 71,300 Purchases Retur

> The partial work sheet shown below is taken from the books of Burnside Auto Parts, a business owned by Barbara Davis, for the year ended December 31, 20--. REQUIRED 1. Determine the adjusting entries by analyzing the difference between the adjusted tri

> The trial balance for Darby Kite Store as of December 31, 20-1, is shown on page 610. At the end of the year, the following adjustments need to be made: (a and b) Merchandise inventory as of December 31, $23,600. (c) Unused supplies on hand, $1,050. (d)

> Based on the information that follows, prepare the revenue section of a multiple-step income statement. Sales …………………………………………………… $86,200 Sales Returns and Allowances …………………… 2,280 Sales Discounts ………………………………………… 1,724

> A trial balance for the Basket Corner, a business owned by Linda Palermo, is shown on page 557. Year-end adjustment information is provided below. (a and b) Merchandise inventory costing $24,000 is on hand as of December 31, 20--. (The periodic inventory

> On December 31, Anup Enterprises completed a physical count of its inventory. Although the merchandise inventory account shows a balance of $200,000, the physical count comes to $210,000. Prepare the appropriate adjusting entry under the perpetual invent

> Sunita Computer Supplies entered into the following transactions. Prepare journal entries under the perpetual inventory system. May 1 Purchased merchandise on account from Anju Enterprises, $200,000. 8 Purchased merchandise for cash, $100,000. 15 Sold me

> What steps are followed in posting from the purchases journal to the accounts payable ledger?

> The following partial work sheet is taken from the books of Carmen’s Collies, a local pet kennel, for the year ended December 31, 20--. Journalize the adjustments in a general journal. Carmen's Collies Work Sheet (Partial) For Year

> From the following partial work sheet, indicate the dollar amount of beginning and ending merchandise inventory. ALUSTMENTS ALISTED TRAL BALAWE OME STATEMENT LALANCESHEET ACCOUNT MLE DERT CREDIT DERT CEDIT CREDIT DENT CEIT 1 Merchandise Inventory (b

> The following partial work sheet is taken from Nicole’s Gift Shop for the year ended December 31, 20--. The ending merchandise inventory is $37,000. 1. Complete the Adjustments columns for the merchandise inventory. 2. Extend the mercha

> Set up T accounts for Cash, Unearned Ticket Revenue, and Ticket Revenue. Post the following two transactions to the appropriate accounts, indicating each transaction by letter: (a) Sold 1,200 season tickets at $20 each, receiving cash of $24,000. (b) An

> Prepare the cost of goods sold section for Havens Gift Shop. The following amounts are known: Beginning merchandise inventory ………………………………... $29,000 Ending merchandise inventory ………………………………………. 27,000 Purchases …………………………………………………………………… 62,000 Purcha

> The trial balance for Oregon Bike Company, a business owned by Craig Moody, is shown below. Year-end adjustment information is provided below. (a and b) Merchandise inventory costing $26,000 is on hand as of December 31, 20--. (The periodic inventory sys

> Sandra Owens owns a business called Sandra’s Sporting Goods. Her beginning inventory as of January 1, 20--, was $33,000, and her ending inventory as of December 31, 20--, was $36,000. Set up T accounts for Merchandise Inventory and Income Summary and per

> The following information is provided by Beverly’s Basket Corner for the last quarter of its fiscal year ending on March 31, 20--: REQUIRED 1. Estimate the ending inventory as of March 31 using the retail inventory method. 2. Estimate

> A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. The following information is provided by Bayside Waterworks for the time period January 1 t

> Company’s beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows: REQUIRED 1. Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each

> What is the primary purpose of using special journals?

> Boyce Company’s beginning inventory and purchases during the fiscal year ended September 30, 20-2, were as follows: REQUIRED Calculate the total amount to be assigned to the cost of goods sold for the fiscal year ended September 30, 20-

> Bouie Company’s beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows: 1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory met

> Danny Steele owns a small specialty store, named Steele’s Storeroom, whose year-end is June 30. Determine the total amount that should be included in Steele’s Storeroom’s year-end inventory. A physica

> Doreen Woods owns a small variety store. The following transactions took place during March of the current year. Journalize the transactions in a general journal using the perpetual inventory method. Mar. 3 Purchased merchandise on account from Corner Ga

> Amy Douglas owns a business called Douglas Distributors. The following transactions took place during January of the current year. Journalize the transactions in a general journal using the periodic inventory method. Jan. 5 Purchased merchandise on accou

> Mueller owns a small retail business called Debbie’s Doll House. The cash account has a balance of $20,000 on July 1. The following transactions occurred during July: July 1 Issued Check No. 314 for July rent, $1,400. 1 Purchased merchandise on account f

> Kay Zembrowski operates a retail variety store. The books include a cash payments journal and an accounts payable ledger. All cash payments (except petty cash) are entered in the cash payments journal. Selected account balances on May 1 are as follows:

> The purchases journal of Ryan’s Rats Nest, a small retail business, is as follows: REQUIRED 1. Post the total of the purchases journal to the appropriate general ledger accounts. Use account numbers as shown in the chapter. 2. Post th

> Assume that in year 1, the ending merchandise inventory is understated by $40,000. If this is the only error in years 1 and 2, indicate which items will be understated, overstated, or correctly stated for years 1 and 2. Year 1 Year 2 Ending merchandi

> Ann Benton, owner of Benton’s Galleria, made the following purchases of merchandise on account during the month of October: Oct. 2 Purchase Invoice No. 321, $1,950, from Boggs Distributors. 7 Purchase Invoice No. 152, $2,915, from Wolfs Wholesaler. 10 Pu

> What steps are followed in posting cash payments from the general journal to the accounts payable ledger?

> Paul Jackson owns a retail business. The following sales, returns, and cash receipts are for April 20--. There is a 7% sales tax. Apr. 1 sold merchandise to O. L. Meyers, $2,100, plus sales tax. Sale No. 111. 3 Sold merchandise to Andrew Plaa, $1,000, pl

> Color Florists, a retail business, had the following cash receipts during January 20--. The sales tax is 5%. Jan. 1 received payment on account from Ray Boyd, $880. 3 Received payment on account from Clint Hassell, $271. 5 Made cash sales for the week, $