Determine whether the following bonds payable will be issued at par value, at a premium, or at a discount. a. Evergreen Company issued bonds payable that pay stated interest of 61/4%. On the date of issuance, the market interest rate was 63/4%. b. Seven Hills, Inc., issued 3% bonds payable when the market rate was 33/4%. c. Flagstaff Corporation issued 5% bonds when the market interest rate was 5%. d. The market interest rate is 4%. Rainforest Corp. issues bonds payable with a stated rate of 51/2%.
> To follow is the 2018 income statement of Kurzic Imports, Inc. 1. How much gross profit did Kurzic earn on the sale of its products in 2018? How much was income from continuing operations? How much net income did the company earn? 2. At the end of 2018,
> Hasbro, Inc. (NASDAQ: HAS) and Mattel, Inc.(NASDAQ: MAT) are two companies in the toy and game industry. Hasbro’s products include Monopoly board games, G.I. Joe dolls, Furby electronic stuffed animals, Transformers mechanical toys, and
> Take the role of an investment analyst. It is your job to recommend investments for your client. The only information you have is the following ratio values for two companies in the data analytics industry: Recommend one company’s sto
> A skeleton of Gunner Corporation’s balance sheet appears as follows (amounts in thousands): Use the following ratio data to complete Gunner’s balance sheet: a. The debt ratio was 0.56. b. The current ratio was 1.60.
> A skeleton of Canton Auto Corporation’s income statement appears as follows (amounts in thousands): Use the following ratio data to complete Canton Auto’s income statement: a. The inventory turnover was 3 (beginning i
> The annual report of Salem Cars, Inc., for the year ended December 31, 2018, included the following items (in millions): 1. Calculate earnings per share (EPS) and the price-earnings ratio for Salem Cars’ stock. Round to the nearest cen
> Regan Corporation reported the following amounts on its 2018 comparative income statements Perform a horizontal analysis of revenues, expenses, and net income—both in dollar amounts and in percentages—for 2018 and 201
> Use the Thompson Turf Trimmers data in Short Exercise 11-8 to calculate the following; enter all amounts in thousands. a. New borrowing or payment of long-term notes payable. Thompson Turf Trimmers had only one long-term note payable transaction during t
> Thompson Turf Trimmers, Inc., reported the following financial statements for 2018: Calculate the following investing cash flows; enter all amounts in thousands. a. Acquisitions of plant assets (all were for cash). Thompson Turf Trimmers sold no plant a
> data in Short Exercise 11-6 to prepare Elan Corporation’s statement of cash flows for the year ended June 30, 2018. The company uses the indirect method for operating cash flows Data from 11-6:
> Elan Corporation accountants have assembled the following data for the year ended June 30, 2018: Prepare the operating activities section of Elan’s statement of cash flows for the year ended June 30, 2018. The company uses the indirect
> Crater HVAC Systems is preparing its statement of cash flows (indirect method) for the year ended March 31, 2018. To follow, in no particular order, is a list of items that will be used in preparing the company’s statement of cash flows. Identify each it
> This case is part of The Cheesecake Factory serial case contained in every chapter in this textbook. Like many other large companies, The Cheesecake Factory Incorporated has several legal actions pending against it at any given time. It must accrue for a
> Westfall Industries began 2018 with its accounts receivable, inventory, and prepaid expenses totaling $50,000 and its total current liabilities totaling $36,000. At the end of the year, these same current assets totaled $48,000, while its total current l
> The CEO and CFO from Lawrence Hotels, Inc., are reviewing company performance for 2018. The income statement reports a 25% increase in net income over 2017. However, most of the increase resulted from a gain on insurance proceeds from fire damage to a bu
> Examine CooperHall Company’s statement of cash flows that follows. Suppose CooperHall’s operating activities provided, rather than used, cash. Identify three things if using the indirect method that could cause opera
> Use the data in Short Exercise 11-13 to prepare Middleburg Golf Club’s statement of cash flows for the year ended September 30, 2018. The company uses the direct method for operating cash flows Data from 11-13:
> Middleburg Golf Club, Inc., has assembled the following data for the year ended September 30, 2018: Prepare the operating activities section of Middleburg Golf Club’s statement of cash flows for the year ended September 30, 2018. The
> Tally-Ho Horse Farms, Inc., began 2018 with cash of $170,000. During the year, Tally-Ho earned service revenue of $595,000 and collected $590,000 from customers. Expenses for the year totaled $395,000, with $380,000 paid in cash to suppliers and employee
> Use the Thompson Turf Trimmers data in Short Exercise 11-8 to calculate the following; enter all amounts in thousands. a. Payments to employees b. Payments of other expenses Data from 11-8:
> Use the Thompson Turf Trimmers data in Short Exercise 11-8 to calculate the following; enter all amounts in thousands. a. Collections from customers b. Payments for inventory Data from 11-8:
> On February 5, 2018, Festival Rental Corporation’s board of directors declared a dividend of $0.30, to be paid on March 18, 2018, to the shareholders of record as of the close of business on March 9, 2018. Festival has 5,000,000 shares of $0.01 par-value
> January 10, 2019, Mahlon Design Services purchased treasury stock at a cost of $26 million. On July 3, 2019, Mahlon resold some of the treasury stock for $11 million; this resold treasury stock had cost the company $4 million. Record the purchase and res
> The top management of Flashline Services examines the following company accounting records at July 29, immediately before the end of the year, July 31: Requirement: 1. Suppose Flashline’s management wants to achieve a current ratio of
> This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. Case A – Issue stock and buy the assets in separate transactions: Wolford Company issued 12,000 shares of its $35 par common stock for cash of $
> Attorney Kristen Maloney invoiced Dunn for $20,400 and has agreed to accept 1,500 shares of its $0.01 par-value common stock in full payment for this invoice. Dunn issued the common stock to Attorney Maloney on January 29. Record the stock-issuance trans
> At the end of fiscal year 2018, Hammond Legal Services and Delectable Doughnuts reported these adapted amounts on their balance sheets (all amounts in millions except for par value per share) Assume each company issued its stock in a single transaction.
> Saltwell Industries received $11,500,000 for the issuance of its stock on May 14. The par value of the Saltwell stock was only $11,500. Was the excess amount of $11,488,500 a profit to Saltwell? If not, what was it?Suppose the par value of the Saltwell s
> The statement of stockholders’ equity for Bailey Corporation follows. Use Bailey Corporation’s statement to answer these questions: 1. How much cash did the issuance of common stock bring in during 2018? 2. What was th
> Use the following statement of stockholders’ equity to answer the following questions about Flannery Corporation: 1. How much cash did the issuance of common stock bring in during 2018? 2. How much in dividends did Flannery declare duri
> During 2018, Smokey Corporation earned net income of $5.4 billion and paid off $2.5 billion of long-term notes payable. Smokey raised $1.1 billion by issuing common stock, paid $3.7 billion to purchase treasury stock, and paid cash dividends of $1.3 bill
> Zanzibar Corporation is conducting a special meeting of its board of directors to address some concerns raised by the stockholders. Stockholders have submitted the following questions. Answer each question. 1. What are the differences between common stoc
> Waketown Marina needs to raise $2.0 million to expand the company. The company is considering issuing either: ■ $2,000,000 of 6% bonds payable to borrow the money; or ■ 100,000 shares of common stock at $20 per share. Before any new financing, Waketown e
> Toyama Corporation’s 2018 financial statements reported the following information, with 2017 figures shown for comparison (adapted, and in millions): Use the DuPont model to calculate Toyama’s return on assets and re
> The Blue Heron Shop had the following inventory data: Company managers need to know the company’s gross profit percentage and rate of inventory turnover for 2018 under 1. FIFO. 2. LIFO. Which method produces a higher gross profit perc
> Petrov Gold, Inc., has the following stockholders’ equity: The company has not paid any preferred dividends for three years, including the current year. Calculate the book value per share of the company’s common stock
> The financial statements of Ridgeline Employment Services, Inc., reported the following accounts: Prepare the stockholders’ equity section of Ridgeline’s balance sheet. Net income has already been closed to Retained
> Hometown Bancshares has 40,000 shares of $3 par value common stock outstanding. Suppose Hometown declares and distributes a 5% stock dividend when the market value of its stock is $15 per share. 1. Journalize Hometown’s declaration and distribution of th
> Alloy Corporation has 25,000 shares of $1.40 preferred stock outstanding in addition to its common stock. The $1.40 designation means that the preferred stockholders receive an annual cash dividend of $1.40 per share. In 2018, Alloy declares an annual di
> Glenmore Corporation earned net income of $90,000 during the year ended December 31, 2018. On December 15, Glenwood declared the annual cash dividend on its 1% preferred stock (13,000 shares with total par value of $130,000) and a $0.45 per share cash di
> Use the amortization table that you prepared for Leon Corporation’s bonds in S9-8 to answer the following questions: 1. How much cash did Leon Corporation borrow on January 1, 2019? How much cash will Leon Corporation pay back at maturity? 2. How much ca
> Leon Corporation issued $400,000 of 10%, 10-year bonds payable on January 1, 2019. The market interest rate at the date of issuance was 8%, and the bonds pay interest semiannually (on June 30 and December 31). Leon Corporation’s year-end is June 30. 1. U
> Use the amortization table that you prepared for Pearce Corporation’s bonds in S9-6 to answer the following questions: 1. How much cash did Pearce Corporation borrow on March 31, 2019? How much cash will the company pay back at maturity on March 31, 2029
> Pearce Corporation issued $580,000 of 6%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Pearce Corporation’s year-end is March 31. 1. Using the PV function in E
> Windsor Company borrowed money by issuing $3,000,000 of 6% bonds payable at 102.9 on July 1, 2018. The bonds are five-year bonds and pay interest each January 1 and July 1. 1. How much cash did Windsor receive when it issued the bonds payable? Journalize
> Refer to the Data in E6-23A. Compute all ratio values to answer the following questions: â– Which company has the highest and which company has the lowest gross profit percentage? â– Which company has the highest and whi
> The present value of $3,000 at the end of seven years at 8% interest is a. $2,228. b. $1,749. c. $3,000. d. $15,618.
> Starlight Drive-Ins Ltd. borrowed money by issuing $5,000,000 of 7% bonds payable at 95.5 on July 1, 2018. The bonds are 10-year bonds and pay interest each January 1 and July 1. 1. How much cash did Starlight receive when it issued the bonds payable? Jo
> Yancy Corp. issued 6% seven-year bonds payable with a face amount of $110,000 when the market interest rate was 6%. Yancy’s fiscal year-end is December 31. The bonds pay interest on January 1 and July 1. Journalize the following transactions for Yancy. I
> Regal, Inc., includes the following selected accounts in its general ledger at December 31, 2018: Prepare the liabilities section of Regal’s balance sheet at December 31, 2018, to show how the company would report these items. Report
> Examine the following selected financial information for The Deal Corporation and Simple Stores, Inc., as of the end of their fiscal years ending in 2018: 1. Complete the table, calculating all the requested information for the two companies. Use year
> Tolbert Plumbing Products Ltd. reported the following data in 2018 (in millions): Compute Tolbert’s leverage ratio, debt ratio, and times-interest-earned ratio, and write a sentence to explain what those ratio values mean. Use year-en
> Complete the following statements with one of the terms listed here. Commitment Finance lease Leverage ratio Debt ratio Income tax payable Operating lease Deferred income taxes payable Lessee Times-interest-earned ratio 1. The measures the proportion of
> Jamison Corporation has $300 million of debenture bonds outstanding that have an unamortized discount of $30 million. Lower interest rates convinced the company to pay off the bonds now by purchasing them on the market where the price of the bonds is 98.
> Inc., a motorcycle manufacturer, included the following note in its annual report: 1. Why are these contingent (versus real) liabilities? 2. In the United States, how can the contingent liability become a real liability for Martinson? What are the limi
> Employees every other Friday. December 31, 2017, was a Sunday. On Friday, January 5, 2018, Fitzgerald paid wages of $112,000, which covered the 14-day period from December 20, 2017, through January 2, 2018. Wages were earned evenly across all days, inclu
> Supply the missing income statement amounts for each of the following companies: Requirement: 1. Prepare the income statement for Sutherland Company for the year ended December 31, 2018. Use the cost-of-goods-sold model to compute cost of goods sold. S
> data given in S8-6. What amount of warranty expense will North Boulder USA report during 2018? Which accounting principle addresses this situation? Does the warranty expense for the year equal the year’s cash payments for warranties? Explain the relevant
> North Boulder USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose North Boulder USA can expect warranty costs during the five-year period to add up to 3% of sales. Assume that a No
> Authority purchased inventory costing $25,000 by signing a 12%, six-month, short-term note payable. The purchase occurred on January 1, 2018. Jamison will pay the entire note (principal and interest) on the note’s maturity date of July 1, 2018. Journaliz
> Franklin Company purchased inventory costing $90,000 by signing an 8%, nine-month, short-term note payable. Franklin will pay the entire note (principal and interest) on the note’s maturity date. Journalize the company’s (a) purchase of inventory (b)
> Corporation’s accounts payable at the beginning of the most recent year was $50,000. At the end of the year, the accounts payable balance was $54,000. Landy’s sales revenue for the year was $3,105,000, while its cost of goods sold for the year was $1,508
> On Willow Grove Department Stores’ most recent balance sheet, the balance of its inventory at the beginning of the year was $12,000. At the end of the year, the inventory balance was $14,500. During that year, its cost of goods sold was $55,000. All purc
> Identify the current liability associated with each of the following operating activities: 1. Perform work on a warranty claim 2. Pay income taxes 3. Purchase supplies 4. Pay payroll taxes 5. Borrow money for operations using a short-term note 6. Process
> Grafton Company purchased a new car for use in its business on January 1, 2017. It paid $29,000 for the car. Grafton expects the car to have a useful life of four years with an estimated residual value of zero. Grafton expects to drive the car 40,000 m
> Grafton Company purchased a new car for use in its business on January 1, 2017. It paid $29,000 for the car. Grafton expects the car to have a useful life of four years with an estimated residual value of zero. Grafton expects to drive the car 40,000 m
> Grafton Company purchased a new car for use in its business on January 1, 2017. It paid $29,000 for the car. Grafton expects the car to have a useful life of four years with an estimated residual value of zero. Grafton expects to drive the car 40,000 mil
> Oak Ridge Garden Supplies uses a perpetual inventory system. The company has these account balances at May 31, 2018, prior to making the year-end adjustments: A year ago, the net realizable value of ending inventory was $11,500, which exceeded the cost
> This exercise uses the Northeast data from S7-5. Assume Northeast is trying to decide which depreciation method to use for income tax purposes. The company can choose from among the following methods: (a) straight-line, (b) units-of-production, or (c) do
> On January 1, 2017, Northeast Transportation Company purchased a used aircraft at a cost of $58,900,000. Northeast expects the plane to remain useful for five years (7,200,000 miles) and to have a residual value of $4,900,000. Northeast expects to fly
> LimeBike, located in San Mateo, California, is a startup founded in 2017. Its mission is to make shared bicycles accessible and affordable. The company has taken the basic idea of shared bicycles and eliminated the need to return the bike to a docking
> Identify each of the following items as a capital expenditure, an immediate expense, or neither. 1. Constructed a new parking lot on leased property for $300,000. 2. Paid property taxes of $75,000 for the first year a new administrative services building
> During 2018, Silverspring Systems, Inc., purchased two other companies for $10 million in cash. Also during 2018, Silverspring made capital expenditures of $8.6 million in cash to expand its market share. During the year, Silverspring sold its North Amer
> Oscar Optical Corporation provides a full line of designer eyewear to consumers. Oscar reported the following information for 2018 and 2017: Compute return on assets (ROA) for 2018 and 2017. Using the DuPont model, identify the components and state whe
> Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $124,000, the building’s current market value is $31,000, and the equipment’s current market v
> In 2018, Ambrosia Corporation LO 7reported $100 million in sales, $18 million in net income, and average total assets of $200 million. What is Ambrosia’s return on assets in 2018?
> For each of the following scenarios, indicate whether a long-term asset has been impaired (Y for yes and N for no) and, if so, the amount of the loss that should be recorded.
> Munchies, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that Munchies purchased Sweet Snacks Company for $5.4 million cash. The market value of Sweet Snacks’ assets is $10 million, and Sweet Snacks has liabilities with a marke
> Suppose a Walmart store in Fillmore, Missouri, ended January 2018 with 900,000 units of merchandise that cost $5 each. Suppose the store then sold 50,000 units for $510,000 during February. Further, assume the store made two large purchases during Februa
> Jackson Petroleum, a giant oil company, holds reserves of oil and gas assets. At the end of 2018, assume the cost of Jackson’s oil reserves totaled $180 billion, representing 10 billion barrels of oil in the ground. 1. Which depreciation method is simila
> On January 1, 2017, Worldwide Manufacturing purchased a machine for $810,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $50,000. Worldwide Manufacturing used the machine for tw
> Fun Town Amusement Park paid $500,000 for a concession stand. Fun Town started out depreciating the building using the straight-line method over 25 years with a residual value of zero. After using the concession stand for four years, Fun Town determines
> Assume that on September 30, 2017, EuroAir, an international airline based in Germany, purchased a Jumbo aircraft at a cost of €45,000,000 (€ is the symbol for the euro). EuroAir expects the plane to remain useful for four years (4,000,000 miles) and to
> FlavorRite purchased a used van for use in its business on January 1, 2017. It paid $17,000 for the van. FlavorRite expects the van to have a useful life of four years, with an estimated residual value of $1,400. FlavorRite expects to drive the van 16,
> FlavorRite purchased a used van for use in its business on January 1, 2017. It paid $17,000 for the van. FlavorRite expects the van to have a useful life of four years, with an estimated residual value of $1,400. FlavorRite expects to drive the van 16,
> FlavorRite purchased a used van for use in its business on January 1, 2017. It paid $17,000 for the van. FlavorRite expects the van to have a useful life of four years, with an estimated residual value of $1,400. FlavorRite expects to drive the van 16,
> Examine the excerpt of a footnote from Albrecht Corporation’s September 30, 2018, annual report to follow. 1. What are Albrecht’s largest two categories of property and equipment as of September 30, 2018? Describe in
> Using the LIFO method, calculate the cost of ending inventory and cost of goods sold for Sandy Corporation.
> Using the FIFO method, calculate the cost of ending inventory and cost of goods sold for Sandy Corporation.
> Woody’s specializes in sound equipment. Company records indicate the following data for a line of speakers: Requirements: 1. Determine the amounts that Woody’s should report for cost of goods sold and ending inventory
> Using the average-cost method, calculate the cost of ending inventory and cost of goods sold for Sandy Corporation.
> This exercise should be used in conjunction with S6-4. Carson Print Supplies, Inc., is a corporation subject to a 25% income tax. Compute the company’s income tax expense under the average-cost, FIFO, and LIFO inventory costing methods.
> Carson Print Supplies, Inc., sells laser printers and supplies. Assume Carson started the year with 100 containers of ink (average cost of $8.90 each, FIFO cost of $9.00 each, LIFO cost of $7.80 each). During the year, the company purchased 800 container
> Beavercreek Company sold 14,000 jars of its organic honey in the most current year for $15 per jar. The company had paid $10.50 per jar of honey. (Assume that sales returns are nonexistent.) Calculate the following: 1. Sales revenue 2. Cost of goods so
> Beavercreek Company sold 14,000 jars of its organic honey in the most current year for $15 per jar. The company had paid $10.50 per jar of honey. (Assume that sales returns are nonexistent.) Calculate the following: 1. Sales revenue 2. Cost of goods so
> Here is the original schedule of cost of goods sold for Talladega Company for the years of 2016 through 2019: During the preparation of its 2019 financial statements, Talladega Company discovered that its 2017 ending inventory was understated by $400. M
> Warner Supply’s $3.5 million cost of inventory at the end of last year was understated by $1.9 million. 1. Was last year’s reported gross profit of $3.1 million overstated, understated, or correct? What was the correct amount of gross profit last year?
> Volcano Technology began the year with inventory of $275,000 and purchased $1,850,000 of goods during the year. Sales for the year are $2,600,000, and Volcano Technology’s gross profit percentage is 40% of sales. Compute Volcano Technology’s estimated co
> Fairbanks Company made sales of $24,600 million during 2018. Cost of goods sold for the year totaled $9,840 million. At the end of 2017, Fairbanks’ inventory stood at $1,000 million, and Fairbanks ended 2018 with inventory of $1,400 million. Compute Fair
> It is December 31, the end of the year, and the controller of Reed Corporation is applying the lowerof-cost-or-market (LCM) rule to inventories. Before any year-end adjustments, the company reports the following data: Reed determines that the net realiz
