Caden Healey is a realtor. He organized the business as a corporation on December 16, 2017. The business received $60,000 cash from Healey and issued common stock. Consider the following facts as of December 31, 2017: a. Healey has $12,000 in his personal bank account and $48,000 in the business bank account. b. Healey owes $6,800 on a personal charge account at a local department store. c. Healey acquired business furniture for $23,400 on December 24. Of this amount, the business owes $2,000 on accounts payable at December 31. d. Office supplies on hand at the real estate office total $2,000. e. Healey’s business owes $132,000 on a note payable for some land acquired for a total price of $168,000. f. Healey’s business spent $15,000 for a Realty First franchise, which entitles him to represent himself as an agent. Realty First is a national affiliation of independent real estate agents. This franchise is a business asset. g. Healey owes $190,000 on a personal mortgage on his personal residence, which he acquired in 2012 for a total price of $405,000. Requirements 1. Prepare the balance sheet of the real estate business of Caden Healey Realtor, Inc., at December 31, 2017. 2. Does it appear that the realty business can pay its debts? How can you tell? 3. Identify the personal items given in the preceding facts that should not be reported on the balance sheet of the business.
> The records of Aldrin Aviation include the following accounts for inventory of aviation parts at July 31 of the current year: Requirements 1. Prepare a partial income statement through gross profit under the average, FIFO, and LIFO methods. Round aver
> Armed Forces Surplus began March 2016 with 80 tents that cost $15 each. During the month, Armed Forces Surplus made the following purchases at cost: Armed Forces Surplus sold 296 tents, and at March 31, the ending inventory consists of 54 tents. The sa
> Assume a Watercrest Sports outlet store began October 2016 with 47 pairs of running shoes that cost the store $38 each. The sale price of these shoes was $67. During October, the store completed these inventory transactions: Requirements 1. The preced
> Big Box purchases inventory in crates of merchandise; each crate of inventory is a unit. The fiscal year of Big Box ends each January 31. Assume you are dealing with a single Big Box store in Rosedale, Minnesota. The Rosedale store began t
> The comparative financial statements of Gold Pools, Inc., for 2017, 2016, and 2015 included the following select data: Requirements 1. Compute these ratios for 2017 and 2016: a. Current ratio b. Quick (acid-test) ratio c. Daysâ
> Quick Meals completed the following selected transactions: Requirements 1. Record the transactions in Quick Meals’ journal. Assume that no sales returns are expected. Round all amounts to the nearest dollar. Explanations are not requ
> Assume Spahr and Kennedy, the accounting firm, advises Arctic Seafood that its financial statement must be changed to conform to GAAP. At December 31, 2016, Arctic’s accounts include the following: The ac
> The September 30, 2017, records of Media Communications include these accounts: During the year, Media Communications estimates doubtful-account expense at 1% of credit sales. At year-end (December 31), the company ages its receivables and adjusts the
> This problem takes you through the accounting for sales, receivables, uncollectibles, and notes receivable for Henderson Shipping Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At
> Carson Computer Solutions makes all sales on account, so virtually all cash receipts arrive in the mail. Jeannette Carson, the company president, has just returned from a trade association meeting with new ideas for the business. Among other things, Cars
> During the fourth quarter of 2016, Zinner, Inc., generated excess cash, which the company invested in trading securities as follows: Requirements 1. Open T-accounts for Cash (including its beginning balance of $15,000), Investment in Trading Securitie
> The comparative financial statements of Kenmore Pools, Inc., for 2017, 2016, and 2015 included the following select data: Requirements 1. Compute these ratios for 2017 and 2016: a. Current ratio b. Quick (acid-test) ratio c. Days&aci
> Hughes Foods completed the following selected transactions. Requirements 1. Record the transactions in Hughes Foods’ journal. Assume that no sales returns are expected. Round all amounts to the nearest dollar. Explanations are not re
> During the fourth quarter of 2016, Abbott, Inc., generated excess cash, which the company invested in trading securities as follows: Requirements 1. Open T-accounts for Cash (including its beginning balance of $19,000), Investment in Trading Securitie
> This problem demonstrates the effects of transactions on the current ratio and the debt ratio of Digger Company. Digger’s condensed and adapted balance sheet at December 31, 2015, follows: Assume that during the first quarter of the f
> Refer back to Problem 3-72B. Requirements 1. Use the Spa View Services data in Problem 3-72B to prepare the company’s classified balance sheet at January 31, 2016. Show captions for total assets, total liabilities, and stockholders’ equ
> The accounts of Spa View Service, Inc., at January 31, 2016, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Spa View’s clo
> The adjusted trial balance for the year of Schneider Corporation at December 31, 2016, follows: Requirements 1. Prepare Schneider Corporation’s 2016 single-step income statement, statement of retained earnings, and balance sheet. Lis
> Peppertree Rentals, Inc.’s, unadjusted and adjusted trial balances at June 30, 2016, follow: Requirements 1. Make the adjusting entries that account for the differences between the two trial balances. 2. Compute Peppertree Rentals&a
> Consider the unadjusted trial balance of Edison, Inc., at December 31, 2016, and the related month-end adjustment data. Adjustment data at December 31, 2016, include the following: a. Accrued service revenue at December 31, $2,780. b. Prepaid rent ex
> Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Tiger Corp. Include an explanation for each entry. a. Details of Prepaid Insurance are shown in the acc
> Whittaker Consulting had the following selected transactions in July: Requirements 1. Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis. 2. Compute July income (loss)
> This problem demonstrates the effects of transactions on the current ratio and the debt ratio of Hartford Company. Hartford’s condensed and adapted balance sheet at December 31, 2016, follows: Assume that during the first quarter of t
> Refer back to Problem 3-64A. Requirements 1. Use the Granger Services data in Problem 3-64A to prepare the company’s classified balance sheet at January 31, 2016. Show captions for total assets, total liabilities, and total liabilities and st
> The accounts of Granger Services, Inc., at January 31, 2016, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Granger’s clo
> The adjusted trial balance for the year of Nicholl Corporation at October 31, 2016, follows. Requirements 1. Prepare Nicholl Corporation’s 2016 single-step income statement, statement of retained earnings, and balance sheet. List exp
> Lemontree Rentals, Inc.’s, unadjusted and adjusted trial balances at June 30, 2016, follow. Requirements 1. Make the adjusting entries that account for the differences between the two trial balances. 2. Compute Lemontree Rentals&aci
> Consider the unadjusted trial balance of Spateness, Inc., at December 31, 2016, and the related month-end adjustment data. Adjustment data at December 31, 2016: a. Accrued service revenue at December 31, $3,960. b. Prepaid rent expired during the mon
> Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Woolton Corporation. Include an explanation for each entry. a. Details of Prepaid Insurance are shown i
> Masters Consulting had the following selected transactions in October: Requirements 1. Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis. 2. Compute October income (l
> accounts; construct and use a trial balance) During the first month of operations (May 2016), Spahr Music Corporation completed the following selected transactions: a. The business received cash of $50,000 and a building with a fair value of $106,000.
> During the first month of operations, Gagne Services, Inc., completed the following transactions: Requirements 1. Record each transaction in the journal. Be sure to record the date in each entry. Explanations are not required. 2. Post
> This problem can be used in conjunction with Problem 2-66B. Refer to Problem 2-66B. Requirements 1. Journalize the transactions of Willis Computing, Inc. Explanations are not required. 2. Prepare T-accounts for each account. Insert in each T-account
> The following amounts summarize the financial position of Willis Computing, Inc., on October 31, 2016: During November 2016, the business completed these transactions: a. The business received cash of $3,900 and issued common stock. b
> The trial balance of Larrabee Design, Inc., follows: Amy Swoboda, your best friend, is considering making an investment in Larrabee Design, Inc. Amy seeks your advice in interpreting the company’s information. Specifica
> During the first month of operations (April 2016), Stein Music Services Corporation completed the following selected transactions: a. The business received cash of $44,000 and a building with a fair value of $106,000. The corporation issued common stock
> During the first month of operations, Martinson Services, Inc., completed the following transactions: Requirements 1. Record each transaction in the journal. Be sure to record the date in each entry. Explanations are not required. 2. P
> This problem can be used in conjunction with Problem 2-61A. Refer to Problem 2-61A. Requirements 1. Journalize the October transactions of Rodriguez Computing, Inc. Explanations are not required. 2. Prepare T-Accounts for each account. Insert in each
> The following amounts summarize the financial position of Rodriguez Computing, Inc., on September 30, 2016: During October 2016, Rodriguez Computing completed these transactions: a. The business received cash of $3,800 and issued common
> The trial balance of Amusement Specialties, Inc., follows: Vicki Gutierrez, your best friend, is considering investing in Amusement Specialties, Inc. Vicki seeks your advice in interpreting the company’s information. Speciï¬&
> Summarized versions of Nettleton Corporation’s financial statements are given for two recent years: Requirement 1. Complete Nettleton Corporation’s financial statements by determining the missing amou
> The following data come from the financial statements of Salem Water Company for the year ended March 31, 2017 (in millions): Requirements 1. Prepare a cash flow statement for the year ended March 31, 2017. Not all the items given appea
> The assets and liabilities of Blue Moon Products, Inc., as of December 31, 2016, and revenues and expenses for the year ended on that date follow: Beginning retained earnings was $364,500, and dividends declared totaled $108,000 for the year. Requirem
> Billy Higgins is a realtor. He organized his business as a corporation on June 16, 2017. The business received $65,000 from Higgins and issued common stock. Consider these facts as of June 30, 2017. a. Higgins has $14,000 in his personal bank account an
> The manager of Candace Design, Inc., prepared the company’s balance sheet as of June 30, 2016, while the accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balan
> Compute the missing amount (?) for each company—amounts in millions. Which company has the ■highest net income? ■highest percent of net income to revenues? Pearl Co. Loomis Co. Bryant Corp.
> Summarized versions of Santos Corporation’s financial statements are given for two recent years. Requirement 1. Complete Santos Corporation’s financial statements by determining the missing amounts de
> The following data come from the financial statements of Riley Company for the year ended March 31, 2017 (in millions): Requirements 1. Prepare a cash flow statement for the year ended March 31, 2017. Not all items given appear on the c
> The assets and liabilities of Beckwith Garden Supply, Inc., as of December 31, 2016, and revenues and expenses for the year ended on that date follow: Beginning retained earnings was $364,200, and dividends declared totaled $106,000 for the year. Req
> The manager of Salem News, Inc., prepared the company’s balance sheet as of October 31, 2016, while the accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balanc
> Compute the missing amount (?) for each company—amounts in millions. At the end of the year, which company has the ■highest net income? ■highest percent of net income to revenues? Crystal Co
> Assume Williams & Sellers, the accounting firm, advises Ocean Mist Seafood that its financial statements must be changed to conform to GAAP. At December 31, 2016, Ocean Mist’s accounts include the follo
> The September 30, 2017, records of First Data Communications include these accounts: During the year, First Data Communications estimates doubtful-account expense at 1% of credit sales. At year-end (December 31), the company ages its receivables and ad
> This problem takes you through the accounting for sales, receivables, uncollectibles, and notes receivable for Bates Delivery Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At Oct
> Bogoda Industries makes all sales on account. Ian Holt, accountant for the company, receives and opens incoming mail. Company procedure requires Holt to separate customer checks from the remittance slips, which list the amounts that Holt posts as credits
> Mark Farmer, chief financial officer of Carvel Wireless, is responsible for the company’s budgeting process. Farmer’s staff is preparing the Carvel cash budget for 2017. A key input to the budgeting proc
> The cash data of Duffy Automotive for July 2016 follow: Duffy Automotive received the following bank statement on July 31, 2016: Additional data for the bank reconciliation include the following: a. The EFT deposit was a receipt of monthly rent. Th
> Each of the following situations reveals an internal control weakness: Situation a. In evaluating the internal control over cash payments of Arlington Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for
> Swedish Imports is an importer of silver, brass, and furniture items from Sweden. Sandra Gustafson is the general manager of Swedish Imports. Gustafson employs two other people in the business. Mandy Martin serves as the buyer for Swedish Imports. In her
> Julia Beecher, chief financial officer of Keller Wireless, is responsible for the company’s budgeting process. Beecher’s staff is preparing the Keller Wireless cash budget for 2017. A key input to the bu
> The cash data of Dunlap Automotive for June 2016 follow: Dunlap Automotive received the following bank statement on June 30, 2016: Additional data for the bank reconciliation include the following: a. The EFT deposit was a receipt of monthly rent.
> Each of the following situations reveals an internal control weakness: a. In evaluating the internal control over cash payments of Judd Manufacturing, an auditor learns that the purchasing agent is responsible for purchasing diamonds for use in the comp
> Irish Imports is an importer of silver, brass, and furniture items from Ireland. Patricia O’Malley is the general manager of Irish Imports. O’Malley employs two other people in the business. Maureen Kennedy serves as the buyer for Irish Imports. In her w
> The notes are part of the financial statements. They give details that would clutter the statements. This case will help you learn to use a company’s inventory notes. Refer to Apple Inc.’s consolidated financial statements and related notes in Appendix A a
> Refer to Apple Inc.’s consolidated financial statements in Appendix A and online in the filings section of http://www.sec.gov. Requirements 1. Examine the account “Short-term marketable securities” in the consolidated balance sheets, as well as related
> Refer to Under Armour, Inc.’s, consolidated financial statements in Appendix B and online in the filings section of http://www.sec.gov. These financial statements report a number of liabilities. Requirements 1. The current liability section of Under Armo
> This case is based on the consolidated financial statements of Under Armour, Inc., given in Appendix B and online in the filings section of http://www.sec.gov. Requirements 1. Read Note 16—Segment Data and Related Information. What are Under Armour, Inc
> Refer to the Under Armour, Inc., Consolidated Financial Statements in Appendix B and online in the filings section of http://www.sec.gov. This case leads you through an analysis of the activity for some of Under Armour, Inc.’s, long-term assets, as well
> inventory; compute and evaluate gross profit and inventory turnover) Refer to Under Armour, Inc.’s, consolidated financial statements in Appendix B and online in the filings section of http://www.sec.gov. Show amounts in millions and round to the nearest
> This case is based on Under Armour, Inc.’s, consolidated balance sheets, consolidated statements of income, and Note 2 of its financial statements (Significant Accounting Policies) in Appendix B and online in the filings section of http://www.sec.gov. Req
> Refer to the Under Armour, Inc., Financial Statements in Appendix B and online in the filings section of http://www.sec.gov. Requirements 1. Focus on cash and cash equivalents. Why did cash and cash equivalents change during 2014? The s
> Refer to the consolidated financial statements of Under Armour, Inc., in Appendix B and online in the filings section of http:// www.sec.gov. During 2014, the company reported net revenues of $3,084 million in its consolidated statement of income. In add
> Refer to Under Armour, Inc.’s, financial statements in Appendix B and online in the filings section of http://www.sec.gov. Suppose you are an investor considering buying Under Armour, Inc.’s, common stock. The following questions are important. Show amount
> This and similar cases in each chapter are based on the consolidated financial statements of Under Armour, Inc., given in Appendix B and online in the filings section of http://www.sec .gov. As you work with Under Armour, Inc., you will develop the ability
> Refer to Apple Inc.’s consolidated financial statements in Appendix A and online in the filings section of http://www.sec.gov. Requirements 1. Did accounts payable for Apple Inc., increase or decrease in 2014? Calculate accounts payable turnover for 201
> The consolidated financial statements of Apple Inc. are given in Appendix A and online in the filings section of http://www.sec.gov. Requirements 1. Refer to Note 1—Summary of Significant Accounting Policies, under Cash Equivalents and Marketable Securi
> Refer to Apple Inc.’s Consolidated Financial Statements in Appendix A and online in the filings section of http://www.sec.gov., and answer the following questions: Requirements 1. Refer to Note 1 and Note 3 of the Notes to Consolidated Financial State
> Accounting records for Just Desserts, Inc., yield the following data for the year ended December 31, 2016 (amounts in thousands): Requirements 1. Journalize Just Desserts’s inventory transactions for the year under the periodic syste
> Assume a Championship outlet store began July 2016 with 52 units of inventory that cost $18 each. The sale price of these units was $75. During July, the store completed these inventory transactions: Requirements 1. Determine the storeâ€
> Refer to the Apple Inc. consolidated financial statements in Appendix A and online in the filings section of http://www.sec .gov. The cash and cash equivalents section of the Consolidated Balance Sheet shows a balance of $13,844 million as of September 27,
> Apple Inc.—like all other businesses—adjusts accounts prior to year-end to get correct amounts for the financial statements. Examine Apple Inc.’s Consolidated Balance Sheets in Appendix A and online in the filings section of http://www.sec.gov., and pay
> Refer to Apple Inc.’s financial statements in Appendix A and online in the filings section of http://www.sec.gov. Assume that Apple completed the following selected transactions during 2014: a. Made company sales (revenue) of $182,795 million, all on acco
> This and similar cases in succeeding chapters are based on the consolidated financial statements of Apple Inc., given in Appendix A and online in the filings section of http://www.sec.gov. As you work with Apple Inc. throughout this course, you will develo
> Stockwell Financial Services is considering two plans for raising $600,000 to expand operations. Plan A is to borrow at 6%, and plan B is to issue 125,000 shares of common stock at $4.80 per share. Before any new financing, Stockwell Financial Services ha
> Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare three leading companies (Company E, Com
> Footnote 7 of Ann Taylor Stores Corp.’s financial statements for fiscal year 2014 contains the following information: Requirements 1. Interpret the information in the footnote. What rights does the compa
> On June 30, 2016, the market interest rate is 6%. Grommet Candies Ltd. issues $2,000,000 of 8%, 10-year bonds payable. The bonds pay interest on June 30 and December 31. Grommet Candies Ltd. amortizes bond premium by the effective-interest method. Requ
> ActiveGo Sports Ltd. is authorized to issue $5,000,000 of 4%, 10-year bonds payable. On December 31, 2016, when the market interest rate is 4.5%, the company issues $4,000,000 of the bonds. ActiveGo Sports amortizes bond discount by the effective-interes
> City Bank has $100,000 of 7% debenture bonds outstanding. The bonds were issued at 103 in 2016 and mature in 2036. The bonds have annual interest payments. Requirements 1. How much cash did City Bank receive when it issued these bonds? 2. How much cas
> On January 31, 2016, Stonewall Logistics, Inc., issued 10-year, 5% bonds payable with a face value of $6,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Stonewall Logistics, Inc., amortizes bond discount by the straight-l
> Assume Costello Electronics completed these selected transactions during September 2016: a. Sales of $2,500,000 are subject to estimated warranty cost of 3%. The estimated warranty payable at the beginning of the year was $36,000, and warranty payments
> Crockett Security Systems’ revenues for 2016 totaled $21.9 million. As with most companies, Crockett is a defendant in lawsuits related to its products. Note 14 of the Crockett annual report for 2016 reported the following: Requiremen
> Great Earth Homes, Inc., builds environmentally sensitive structures. The company’s 2016 revenues totaled $2,770 million. At December 31, 2016 and 2015, the company had, respectively, $653 million and $583 million in current assets. The
> At December 31, 2016, Saglio Real Estate reported a current liability for income tax payable of $73,000. During 2017, Saglio earned income of $650,000 before income tax. The company’s income tax rate during 2017 was 33%. Also during 2017, Saglio paid inc
> Assume that Boston Sales Company completed the following note payable transactions: Requirements 1. How much interest expense must be accrued at December 31, 2016? (Round your answer to the nearest whole dollar.) 2. Determine the amount of Boston Sal
> Penske has an annual payroll of $215,000. In addition, the company incurs payroll tax expense of 12%. At December 31, Penske owes salaries of $7,800 and FICA and other payroll tax of $550. The company will pay these amounts early next year. Show what Pe
> Great White Publishing completed the following transactions for one subscriber during 2016: Requirement 1. Journalize these transactions (explanations not required). Then report any liability on the company’s balance sheet at Decembe
> The accounting records of Carmine Appliances included the following balances at the end of the period: In the past, Carmine’s warranty expense has been 8% of sales. During the current period, the business paid $7,000 to satisfy the wa
> Kimball Sports Authority purchased inventory costing $22,500 by signing a 6% short-term, one-year note payable. The purchase occurred on July 31, 2016. Kimball pays annual interest each year on July 31. Journalize the company’s a. purchase of inventory;
> Green Nation Financial Services is considering two plans for raising $600,000 to expand operations. Plan A is to borrow at 5%, and plan B is to issue 100,000 shares of common stock at $6.00 per share. Before any new financing, Green Nation Financial Servi
