Contemporary Furniture, a wholesale distributor of modern casual furniture, frequently accepts promissory notes from its customers at the time of sale. Because Contemporary Furniture regularly needs cash to meet its own obligations, it frequently discounts these notes at the bank. Contemporary Furniture’s accountant tells you that she does not bother to credit discounted notes to a Notes Receivable—Discounted account. Instead, she makes an entry debiting Cash and Interest Expense and crediting Notes Receivable (and Interest Income when appropriate). She says that using a Notes Receivable—Discounted account “just makes extra work, and, anyway, once the note is discounted, it becomes the bank’s problem.” What is your reaction to the bookkeeper’s comments?
> The transactions that follow took place at the Cedar Hill Recreation and Sports Arena during September 20X1. This firm has indoor courts where customers can play tennis for a fee. It also rents equipment and offers tennis lessons. INSTRUCTIONS Record eac
> The following accounts and transactions are for Vincent Sutton, Landscape Consultant. INSTRUCTIONS Analyze the transactions. Record each in the appropriate T accounts. Identify each entry in the T accounts by writing the letter of the transaction next to
> The following occurred during June at Brown Financial Planning. INSTRUCTIONS Analyze each transaction. Use T accounts to record these transactions and be sure to put the name of the account on the top of each account. Record the effects of the transactio
> Since graduating from college five years ago, you have worked for a national chain of men’s clothing stores. You have held several positions within the company and are currently manager of a local branch store. Over the past three years
> Home Suppliers, Inc. sells a variety of consumer products. Its comparative income statement and balance sheet for the years 2022 and 2021 are presented on the following pages. The Retained Earnings balance on January 1, 2021, was $188,442. Also, Preferre
> At the beginning of the summer, Humphrey Nelson was looking for a way to earn money to pay for his college tuition in the fall. He decided to start a lawn service business in his neighborhood. To get the business started, Humphrey used $6,000 from his sa
> The chart of accounts and account balances of The Purple Company on January 1, 2022, are shown below. The company does not use reversing entries. Round all computations to the nearest whole dollar. 1. Open the general ledger accounts and enter the balanc
> The Fashion Rack is a retail merchandising business that sells brand-name clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1, 20X1. This project will give you an opportunity to put your knowled
> This project will give you an opportunity to apply your knowledge of accounting principles and procedures by handling all the accounting work of Eli’s Consulting Services for the month of January 2020. Assume that you are the chief acco
> On December 1, Karl Zant opened a speech and hearing clinic. During December, his firm had the following transactions involving revenue and expenses. Did the firm earn a net income or incur a net loss for the period? What was the amount? Paid $6,200 for
> At the beginning of September, Helen Rojas started Rojas Wealth Management Consulting, a firm that offers financial planning and advice about investing and managing money. On September 30, the accounting records of the business showed the following infor
> The following equation shows the effects of a number of transactions that took place at Cantu Auto Repair Company during the month of July. Describe each transaction.
> Technology World had the following revenue and expenses during the month ended July 31. Did the firm earn a net income or incur a net loss for the period? What was the amount? Fees for computer repairs $93,600 Advertising expense 16,200 Salaries expense
> The Business Center had the transactions listed below during the month of June. Show how each transaction would be recorded in the accounting equation. Compute the totals at the end of the month. The headings to be used in the equation follow. TRANSACTIO
> The following financial data are for the dental practice of Dr. Jose Ortiz when he began operations in July. Determine the amounts that would appear in Dr. Ortiz’s balance sheet. 1. Owes $42,000 to the Sanderson Equipment Company. 2. Has cash balance of
> Indicate the impact of each of the transactions below on the fundamental accounting equation (Assets = Liabilities + Owner’s Equity) by placing an “I” to indicate an increase and a “
> Santiago Madrid opened a gym and fitness studio called Perfect Body Fitness and Spa Center at the beginning of November of the current year. It is now the end of December, and Madrid is trying to determine whether he made a profit during his first two mo
> The fundamental accounting equations for several businesses follow. Supply the missing amounts.
> Just before Henderson Laboratories opened for business, Eugene Henderson, the owner, had the following assets and liabilities. Determine the totals that would appear in the firm’s fundamental accounting equation (Assets = Liabilities + Owner’s Equity). C
> Harbor Corporation is manufacturing a part that is used in its finished product. The costs for each unit of the part follow: Direct materials $ 34 Direct labor 35 Manufacturing overhead: Variable costs $25 Fixed costs 8 33 Total cost $102 The fixed overh
> Harbor Corporation is manufacturing a part that is used in its finished product. The costs for each unit of the part follow: Direct materials $ 34 Direct labor 35 Manufacturing overhead: Variable costs $25 Fixed costs 8 33 Total cost $102 The fixed overh
> Santa Clara Microelectronics is considering the purchase of a new factory machine at a cost of $195,000. The machine would perform a function that is now being performed by hand. The new machine would have a life of 10 years, would produce 16,500 units a
> The standard cost sheet for the leading product made by Queen Corporation shows the following data: Direct materials $ 52 Direct labor (3 hours at $23/hour) 69 Manufacturing overhead: Variable costs (3 hours at $23/hour) 69 Fixed costs (3 hours at $20/ho
> Wisconsin Manufacturing has an opportunity to export 2,500 units of its product to a foreign country. The current selling price is $176, but the special order will be sold at a unit price of $110. This special order will not affect its current sales, all
> Memphis Company is considering replacing its existing wrapping system with new equipment. The existing system has a book value of $125,000 and a remaining useful life of two years. The new wrapping system would cost $300,000 and have a useful life of fiv
> Starmont Manufacturing Co. divided all of its costs and expenses into fixed and variable components. Data for the company’s first year of operations follows. Ignore income taxes. Beginning inventory of finished goods –0– Units produced (no work in proces
> Starmont Manufacturing Co. divided all of its costs and expenses into fixed and variable components. Data for the company’s first year of operations follows. Ignore income taxes. Beginning inventory of finished goods –0– Units produced (no work in proces
> The following account balances are for Ping Chung, Certified Public Accountant, as of April 30, 20X1. Cash $120,000 Accounts Receivable 48,000 Maintenance Expense 18,400 Advertising Expense 15,560 Fees Earned 107,200 Ping Chung, Capital, April 1 ? Salari
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> In preparing the standard cost for each unit of QS500, the company’s only product, the accountant for Total Earth Solvents Corporation has developed the following data for the year 20X1: Total budgeted production, 23,000 units Raw material: Two units of
> In Woodinville Power Corporation’s factory, fixed indirect labor costs are $6,300 per month. Variable indirect labor costs are $1.40 per direct labor hour. The budget for the month of May 20X1 calls for employment of 16,500 direct labor hours. Compute th
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: Materials: 2 gallons at $12 per gallon $ 24 Labor: 5 hours at $20 per hour 100 Overhead: 80% of direct labor 80 Total $204 Duri
> James Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactio
> Alpha Company’s records show the following data for the four quarters of 20X1: Compute the fixed and variable elements of utilities cost, using the high-low point method.
> At SanAn Corporation, production is started in the fab department. The work is then transferred to the finishing department, where goods are completed and then transferred to the finished goods storeroom. Data about the company’s costs during September 2
> At SanAn Corporation, production is started in the fab department. The work is then transferred to the finishing department, where goods are completed and then transferred to the finished goods storeroom. Data about the company’s costs during September 2
> At SanAn Corporation, production is started in the fab department. The work is then transferred to the finishing department, where goods are completed and then transferred to the finished goods storeroom. Data about the company’s costs during September 2
> The cutting department is the first department of BrakeParts Co. On April 1, 20X1, the beginning inventory in this department consisted of 700 units. Costs for the beginning work in process were as follows: Materials (100% complete) $7,000 Labor (60% com
> The cutting department is the first department of BrakeParts Co. On April 1, 20X1, the beginning inventory in this department consisted of 700 units. Costs for the beginning work in process were as follows: Materials (100% complete) $7,000 Labor (60% com
> On April 1, 20X1, the assembly department of Ros Inc. had no beginning work in process. During the month, production was started on 10,000 units. The total cost of materials was $60,000. All materials were placed in production at the start of the manufac
> Information about production in the fabricating department of the AGAM Company for March 20X1 follows: Beginning inventory –0– Transferred in from prior department 20,000 units Transferred out to next department 16,000 units Ending inventory, work in pro
> Information about production in the fabricating department of the AGAM Company for March 20X1 follows: Beginning inventory –0– Transferred in from prior department 20,000 units Transferred out to next department 16,000 units Ending inventory, work in pro
> Information about production in the fabricating department of the AGAM Company for March 20X1 follows: Beginning inventory –0– Transferred in from prior department 20,000 units Transferred out to next department 16,000 units Ending inventory, work in pro
> 1. Why should management be concerned about paying its invoices on a timely basis? 2. Why is it important for a firm to maintain a satisfactory credit rating? 3. Suppose you are the new controller of a small but growing company and you find that the firm
> For the year 20X1, WolfT Inc. had actual overhead costs of $90,000, and its applied overhead was $85,000: 1. Did the firm have overapplied or underapplied overhead for the year? 2. What was the amount of overapplied or underapplied overhead?
> During 20X1, Truck Manufacturing Company began and completed Job 1203. Costs entered on the job cost sheet for this job were $50,000 for materials and $10,000 for direct labor: 1. Assuming that overhead is applied at 65 percent of direct labor costs, com
> CHAR Co.’s direct labor costs were $100,000 for May 20X1. Assuming that the company applies overhead at the rate of 65 percent of direct labor costs, give the general journal entry for May summarizing the overhead applied for the month.
> IAM Co. estimates the following manufacturing overhead costs for 20X1: Estimated direct labor hours 60,000 hours Estimated direct labor costs $900,000 Estimated overhead costs $270,000 What is the overhead application rate based on direct labor costs?
> A payroll summary prepared at ELI Manufacturing Company showed the following figures for January 20X1: Direct labor costs incurred $50,000.00 Indirect labor costs incurred 14,000.00 Social security tax withheld 3,968.00 Medicare tax withheld 928.00 Incom
> During July 20X1, White Co. purchased and issued the following materials and supplies. Use July 31 as the date for all entries: Purchases Materials $100,000 Manufacturing supplies 6,000 Issues from Storeroom Direct materials $60,000 Manufacturing supplie
> During July 20X1, White Co. purchased and issued the following materials and supplies. Use July 31 as the date for all entries: Purchases Materials $100,000 Manufacturing supplies 6,000 Issues from Storeroom Direct materials $60,000 Manufacturing supplie
> During July 20X1, White Co. purchased and issued the following materials and supplies. Use July 31 as the date for all entries: Purchases Materials $100,000 Manufacturing supplies 6,000 Issues from Storeroom Direct materials $60,000 Manufacturing supplie
> The records of HHI Inc. for 20X1 show that it completed goods costing $160,000 and that it sold goods costing $209,000 for the year. Give the entries in general journal form on December 31, 20X1, to record the cost of goods completed and the cost of good
> During July 20X1, White Co. purchased and issued the following materials and supplies. Use July 31 as the date for all entries: Purchases Materials $100,000 Manufacturing supplies 6,000 Issues from Storeroom Direct materials $60,000 Manufacturing supplie
> Brecha Hogan is president of Hogan Company, a manufacturer of toys for children. For the past 10 years, the company has sold its product to both wholesale and retail dealers of toys in the northeastern United States. Over the years, the company has come
> Which of the following account balances would not be extended to the Cost of Goods Manufactured section of the worksheet? 1. Insurance on finished goods 2. Payroll taxes on outside sales salaries 3. Salary of factory shift supervisor 4. Insurance on raw
> Which of the following items would be included in the Manufacturing Overhead section of the statement of cost of goods manufactured? 1. Direct labor 2. Raw materials used 3. Indirect materials and supplies 4. Repairs to factory building 5. Depreciation o
> Which of the following items would not be included in the Manufacturing Overhead section of the statement of cost of goods manufactured? 1. Payroll taxes on wages of plant security guards 2. Insurance costs for factory 3. Freight-in charges on purchases
> Which of the following items would appear on the statement of cost of goods manufactured? 1. Work in process inventory 2. Finished goods inventory 3. Raw materials inventory
> Which of the following items would not appear on the statement of cost of goods manufactured? 1. Advertising expense 2. Depreciation of factory equipment 3. Direct labor
> Cat Company’s total manufacturing cost for the year was $1,500,000. Its manufacturing overhead was $300,000, and its cost of raw materials used was $900,000. What was its direct labor cost for the year?
> WFC Company’s beginning raw materials inventory was $85,000. Its net purchases for the period were $795,000, and its ending raw materials inventory was $75,000. What was its cost of raw materials used?
> Using the data given in Exercise 26.1, prepare the general journal entry to record adjustments for inventory accounts. Data from Exercise 26.1: The following selected items appeared in the Adjustments columns of the worksheet for Red Inc. on December 31
> Information about certain account balances in the trial balance of Vol Corp. on December 31, 20X1, follows: a. Balance in Raw Materials Inventory account that reflects the beginning balance, December 31, 20X0, $52,000; physical count on December 31, 20X1
> The following selected items appeared in the Adjustments columns of the worksheet for Red Inc. on December 31, 20X1. From this information, prepare the section of the statement of cost of goods manufactured relating to the cost of raw materials used:
> The Family Place Kitchen is a small chain of kitchen remodeling stores. The company’s year-end trial balance on December 31, 20X1, included the information shown below: Accounts Receivable $495,220 Allowance for Doubtful Accounts (credi
> Quik Gift Company sells a product for $59. It costs $19 to obtain the product. The company has a total of $80,000 of fixed expenses. What is the break-even point?
> Using the data given in Exercise 25.5, would you recommend closing Department 1? Why or why not? Data from Exercise 25.5: Data from the departmental income statement of Numbers, Inc. for the year ended December 31, 20X1, is given below. Assuming that a
> Using the data given in Exercise 25.5, prepare an income statement for the company if Department 1 is closed. Data from Exercise 25.5: Data from the departmental income statement of Numbers, Inc. for the year ended December 31, 20X1, is given below. Ass
> Data from the departmental income statement of Numbers, Inc. for the year ended December 31, 20X1, is given below. Assuming that a department’s direct expenses can be eliminated if it is closed, what factors should management consider w
> Data related to the income and expenses of the TNCO Inc. year ending December 31, 20X1, follow: Allocated indirect expenses Outside department $44,500 Inside department 35,500 Interest income $400 Gross profit Outside department $300,500 Inside departmen
> Selected financial data, as of year end, December 31, for Courtney’s Cuties, a children’s retail store, follows. Round all calculations to the nearest percentage point and nearest dollar. Credit sales Women’s clothing, $1,000,000 Men’s clothing, $300,000
> Selected financial data, as of year end, December 31, for Courtney’s Cuties, a children’s retail store, follows. Round all calculations to the nearest percentage point and nearest dollar. Credit sales Women’s clothing, $1,000,000 Men’s clothing, $300,000
> Selected financial data, as of year end, December 31, for Courtney’s Cuties, a children’s retail store, follows. Round all calculations to the nearest percentage point and nearest dollar. Credit sales Women’s clothing, $1,000,000 Men’s clothing, $300,000
> The following transactions occurred at Peter’s Second Company in 2022. Use this information to compute the company’s net cash flow from financing activities for the year. 1. The company reacquired as treasury stock 30,000 shares of its outstanding common
> The following transactions occurred at John Inc. in 2022. Use this information to compute the company’s net cash flow from financing activities for the year. 1. Holders of $200,000 par-value 3 percent bonds surrendered the bonds for redemption and were p
> Assume that you are an independent CPA performing audits of financial statements. In the course of your work, you encounter the following independent situations. Review each of the situations. If you consider the treatment to be in conformity with genera
> The following transactions occurred at Signal Company in 2022. Use this information to compute the company’s net cash flow from investing activities. 1. The company purchased a new building for $450,000. A down payment of $50,000 was made. The balance is
> The following transactions occurred at E Brainerd Inc. during 2022. Use this information to compute the company’s net cash flow from investing activities. 1. The company issued 100,000 shares of its own $1 par-value common stock for land with a fair mark
> The following information is taken from the income statement of Nashville Inc. for 2022: Additional information relating to account balances at the beginning and end of the year appears below: Determine the cash flows from operations for 2022.
> The income statement of Eastwood, Inc., showed net income of $80,000 for 2022. The firm’s beginning inventory was $50,000 and its ending inventory was $54,000. Accounts payable were $44,000 on January 1 and $39,000 on December 31. Compute the net cash pr
> The current assets and current liabilities of Titan Company on December 31, 2022 and 2021, are as follows. The corporation’s net income for 2022 was $50,000. Included in its expenses was depreciation of $12,000. Prepare a schedule of th
> The following data are summarized from the income statement of More, Inc., for the year ended December 31, 2022. Using these data and ignoring changes in current assets, current liabilities, and income taxes, prepare a schedule of cash flows from operati
> What effect would each of the following transactions have on the statement of cash flows? 1. The sum of $16,000 in cash was received from the sale of used office equipment that originally cost $25,000. Depreciation of $12,000 had been taken on the asset
> Calculate the price-earnings ratio for the two years displayed. The common stock selling price at year-end 2022 was $2.00 and for 2021 was $1.60.
> Calculate the earnings per share of common stock for each year.
> Compute the rate of net income before income taxes on total assets for each of these two years. Base your calculation on total ending assets each year.
> Logistics Distribution Center receives a number of different products in its warehouse. Logistics distributes these products by truck to customers within a radius of 150 miles. The company is located near the Jackson Regional Airport, which is owned and
> Compute the rate of net income on stockholders’ equity for 2022 and 2021. ACRH, Inc. uses the average of the beginning and ending balance for common stockholder’s equity. Retained earnings on December 31, 2020, was $69
> Calculate the rate of net income on sales for these two years.
> Prepare a horizontal analysis of all items on the comparative balance sheet for the years shown.
> Using the comparative income statement, prepare a horizontal analysis of all items on the income statement for years displayed.
> Prepare a vertical analysis of all asset items on the comparative balance sheet for these years.
> Compute the accounts receivable turnover on December 31, 2022, for ACRH, Inc. Assume that all sales were credit sales.
