Question: Elliot Company issued $100,000 face value

> On July 1, 2017, Leach Company needs exactly $103,200 in cash to pay an existing obligation. Leach has decided to borrow from State Bank, which charges 14% interest on loans. The loan will be due in one year. Leach is unsure, however, whether to ask the

> The following situations involve the application of the time value of money concept: 1. Janelle Carter deposited $9,750 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1,

> Brian Imhoff’s grandparents want to give him some money when he graduates from high school. They have offered Brian three choices as follows: a. Receive $15,000 immediately. Assume that interest is compounded annually. b. Receive $2,250 at the end of eac

> Table leaf Inc. purchased a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheets as of December 31, 2017 and 2016, included the fol

> On January 1, 2017, Castlewood Company purchased machinery for its production line for $104,000. Using an estimated useful life of eight years and a residual value of $8,000, the annual straight-line depreciation of the machinery was calculated to be $12

> During 2012, Reynosa Inc.’s research and development department developed a new manufacturing process. Research and development costs were $85,000. The process was patented on October 1, 2012. Legal costs to acquire the patent were $11,900. Reynosa decid

> Merton Company purchased a building on January 1, 2016, at a cost of $364,000. Merton estimated that its life would be 25 years and its residual value would be $14,000. On January 1, 2017, the company made several expenditures related to the building. Th

> Early in its first year of business, Toner Company, a fitness and training center, purchased new workout equipment. The acquisition included the following costs: Purchase price ……………………………………………………………….. $150,000 Tax …………………………………………………………………………………….. 1

> The following events took place at Pete’s Painting Company during 2017: a. On January 1, Pete bought a used truck for $14,000. He added a tool chest and side racks for ladders for $4,800. The truck is expected to last four years and then be sold for $800

> As assistant controller of Midwest Construction Company, you are reviewing with your boss, the controller, Dave Jackson, the financial statements for the year just ended. During the review, Jackson reminds you of an existing loan agreement with Southern

> Investors and lenders who read financial statements must determine the age, composition, and productivity of operating assets. Refer to the financial information at the back of the book for Chipotle and Panera Bread. Financial information Chipotle: Fi

> The accounting staff of CCB Enterprises has completed the financial statements for the 2017 calendar year. The statement of income for the current year and the comparative statements of financial position for 2017 and 2016 follow. CCB Enterprises Statem

> McLaughlin Inc. operates with a June 30 year-end. During 2017, the following transactions occurred: a. January 1: Signed a one-year, 10% loan for $35,000. Interest and principal are to be paid at maturity. b. January 10: Signed a line of credit with Lit

> On June 30, 2017, Rolloff Inc. borrowed $25,000 from its bank, signing a 6% note. Principal and interest are due at the end of two years. Required: 1. Assuming that the note earns simple interest for the bank, calculate the amount of interest accrued on

> E-Gen Enterprises Inc. had property, plant, and equipment, net of accumulated depreciation, of $1,555,000 and intangible assets, net of accumulated amortization, of $34,000 at December 31, 2017. The company’s 2017 statement of cash flows, prepared using

> Book Company’s only asset as of January 1, 2017, was a copyright. During 2017, only the following three transactions occurred: Royalties earned from copyright use, $500,000 in cash Cash paid for advertising and salaries, $62,500 Amortization, $50,000 Re

> Payton Delivery Service purchased a delivery truck for $28,200. The truck will have a useful life of six years and zero salvage value. For the purposes of preparing financial statements, Payton is planning to use straight-line depreciation. For tax purpo

> The term tax shield refers to the amount of income tax saved by deducting depreciation for income tax purposes. Assume that Rummy Company is considering the purchase of an asset as of January 1, 2017. The cost of the asset with a five-year life and zero

> Dixon Manufacturing purchased, for cash, three large pieces of equipment. Based on recent sales of similar equipment, the fair market values are as follows: Required: 1. What value is assigned to each piece of equipment if the equipment was purchased f

> Sunset Corp. is a major regional retailer. The chief executive officer (CEO) is concerned with the slow growth both of sales and of net income and the subsequent effect on the trading price of the common stock. Selected financial data for the past three

> The president of Blue Moon Corp. and her department managers are reviewing the operating results of the year just completed. Sales increased by 12% from the previous year to $750,000. Average total assets for the year were $400,000. Net income, after add

> In December 2017, Rangers Inc. invested $100,000 of idle cash in U.S. Treasury notes. The notes mature on October 1, 2018, at which time Rangers expects to redeem them at face value of $100,000. The treasurer believes that the notes should be classified

> Consider completing this problem after Problem 13-1A to ensure that you obtain a clear understanding of the effect of various transactions on this measure of solvency. The following account balances are taken from the records of Degas Inc.: Current liab

> Consider completing Problem 13-2A after this problem to ensure that you obtain a clear understanding of the effect of various transactions on this measure of solvency. The following account balances are taken from the records of Monet’s

> The balance sheet of Poodle Company at the end of 2016 is presented here, along with certain other information for 2017: December 31, 2016 Cash …………………………………………………….…………………………………. $ 155,000 Accounts receivable ……………………………..………………………………….. 140,000 Total

> Refer to all of the facts in Problem 12-6A. Problem 12-6A: The income statement for Pluto Inc. for 2017 is as follows: For the Year Ended December 31, 2017 Sales revenue ………â€&brvb

> Refer to all of the facts in Problem 12-6A. Problem 12-6A: The income statement for Pluto Inc. for 2017 is as follows: For the Year Ended December 31, 2017 Sales revenue ………â€&brvb

> The income statement for Pluto Inc. for 2017 is as follows: For the Year Ended December 31, 2017 Sales revenue ………………â€&br

> Refer to all of the facts in Problem 12-3A. Problem 12-3A: Wabash Corp. just completed another successful year, as indicated by the following income statement: For the Year Ended December 31, 2017 Sales revenue …â€&brvba

> Refer to all of the facts in Problem 12-3A. Problem 12-3A: Wabash Corp. just completed another successful year, as indicated by the following income statement: For the Year Ended December 31, 2017 Sales revenue …â€&brvba

> Wabash Corp. just completed another successful year, as indicated by the following income statement: For the Year Ended December 31, 2017 Sales revenue …………â€&brv

> Refer to all of the facts in Problem 12-1A. Problem 12-1A: The following balances are available for Madison Company: Bonds were issued during 2017 at face value, and plant and equipment were acquired for cash. Depreciation expense for the year was $5

> Refer to the financial statement information of Panera Bread reprinted at the back of the book. Required: 1. Compute the following ratios and other amounts for each of the two years, ending December 30, 2015, and December 31, 2014. Because only two year

> Refer to all of the facts in Problem 12-9A. Problem 12-9A: The balance sheet of Poodle Company at the end of 2016 is presented here, along with certain other information for 2017: December 31, 2016 Cash ……………………………………………………………………………………. $ 155,000 Acco

> The following balances are available for Madison Company: Bonds were issued during 2017 at face value, and plant and equipment were acquired for cash. Depreciation expense for the year was $50,000. A net loss of $21,800 was reported. Required: 1. Prep

> Kay Katz and Doris Kan are partners in a dry-cleaning business. The partnership agreement specifies the manner in which income of the business is to be distributed. Kay is to receive a salary of $40,000 for managing the business. Doris is to receive inte

> Refer to all of the facts in Problem 11-1A. Problem 11-1A: Kebler Company was incorporated as a new business on January 1, 2017. The corporate charter approved on that date authorized the issuance of 2,000 shares of $100 par, 7% cumulative, nonparticip

> Following is the consolidated statement of stockholders’ equity of Costco Wholesale Corporation for the year ended August 30, 2015: Required: 1. Costco has an item in the statement of stockholders’ equity called Accu

> Refer to all of the facts in Problem 11-1A. Problem 11-1A: Kebler Company was incorporated as a new business on January 1, 2017. The corporate charter approved on that date authorized the issuance of 2,000 shares of $100 par, 7% cumulative, nonparticip

> On January 1, 2017, Svenberg Inc.’s Stockholders’ Equity category appeared as follows: Preferred stock, $80 par value, 8%, 1,000 shares issued and outstanding …… $ 80,000 Common stock, $10 par value, 10,000 shares issued and outstanding ………….. 100,000 A

> Travanti Company has a history of paying cash dividends on its common stock. Although the firm has been profitable this year, the board of directors is planning construction of a second manufacturing plant. To reduce the amount that they must borrow to f

> Rob Lowe would like to invest $100,000 in Franklin Inc., which is offering common stock, preferred stock, and bonds on the open market. The common stock has paid $1 per share in dividends for the past three years, and the company expects to be able to do

> Karen Locke and Gina Keyes agreed to form a partnership to operate a sandwich shop. Karen contributed $35,000 cash and will manage the store. Gina contributed computer equipment worth $11,200 and $128,800 cash. Gina will keep the financial records. Durin

> This case should be completed after responding to the requirements in Decision Case 13-2. Refer to the financial statement information of Chipotle and Panera Bread reprinted at the back of the book. Panera Bread’s financial statements:

> On May 1, Chen Chien Lao deposited $150,000 of her own savings in a separate bank account to start a printing business. She purchased copy machines for $52,500. Expenses for the year, including depreciation on the copy machines, were $105,000. Sales for

> Kebler Company was incorporated as a new business on January 1, 2017. The corporate charter approved on that date authorized the issuance of 2,000 shares of $100 par, 7% cumulative, nonparticipating preferred stock and 20,000 shares of $5 par common stoc

> Clemente Inc. has reported income for book purposes as follows for the past three years: Clemente has identified two items that are treated differently in the financial records and in the tax records. The first one is interest income on municipal bonds

> Thad Corporation has compiled its 2017 financial statements. Included in the Long-Term Liabilities category of the balance sheet are the following amounts: Included in the income statement are the following amounts related to income taxes: Required:

> On January 1, 2017, Kiger Manufacturing Company leased a factory machine for six years. Annual payments of $21,980 are to be made every December 31 beginning December 31, 2017. Interest expense is based on a rate of 9%. The present value of the minimum l

> Assume the same set of facts for Ortega Company as in Problem 10-2A except that the market rate of interest of January 1, 2017, is 4% and the proceeds from the bond issuance equal $52,227. Required: 1. Prepare a five-year table (similar to Exhibit 10-5)

> Ortega Company issued five-year, 5% bonds with a face value of $50,000 on January 1, 2017. Interest is paid annually on December 31. The market rate of interest on this date is 8%, and Ortega Company receives proceeds of $44,011 on the bond issuance. Re

> Rivera Inc. is considering the issuance of $500,000 face value, ten-year term bonds. The bonds will pay 10% interest each December 31. The current market rate is 10%; therefore, the bonds will be issued at face value. Required: 1. For each of the follow

> Beck Company sells a product for $3,200. When the customer buys it, Beck provides a one-year warranty. Beck sold 120 products during 2017. Based on analysis of past warranty records, Beck estimates that repairs will average 4% of total sales. Required:

> Refer to the financial statement information of Chipotle reprinted at the back of the book. Financial statement of Chipotle: Required: 1. Using the format in Example 13-5, prepare common-size comparative income statements for 2015 and 2014. Round all

> The following items are included in the Current Liabilities category on the consolidated balance sheet of Darden Restaurants at May 31, 2015 and May 25, 2014: Required: 1. Darden Restaurants uses the indirect method to prepare its statement of cash flo

> The following items are classified as current liabilities on McDonald’s consolidated statements of financial condition (or balance sheet) at December 31 (in millions): Required: 1. McDonald’s uses the indirect method

> On January 1, 2017, Chen Yu’s Office Supply Store plans to remodel the store and install new display cases. Chen has the following options of payment. Chen’s interest rate is 8%. a. Pay $270,000 on January 1, 2017. b. Pay $294,300 on January 1, 2018. c.

> Early in its first year of business, Key Inc., a locksmith and security consultant, purchased new equipment. The acquisition included the following costs: Purchase price ……………………………………………………………………. $168,000 Tax …………………………………………………………………………………………. 16,500

> The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2017: a. January 1, purchased a truck for $16,000 and added a cab and an oven at a cost of $10,900. The truck is expected to last five years and

> The accounting staff of SST Enterprises has completed the financial statements for the 2017 calendar year. The statement of income for the current year and the comparative statements of financial position for 2017 and 2016 follow. SST Enterprises Statem

> Midwest Inc. is a medium-size company that has been in business for 20 years. The industry has become very competitive in the last few years, and Midwest has decided that it must grow if it is going to survive. It has approached the bank for a sizable fi

> Grout Inc. is a wholly owned subsidiary of Slait Co. The philosophy of Slait’s management is to allow the subsidiaries to operate as independent units. Corporate control is exercised through the establishment of minimum objectives for e

> Shepard Company has not yet prepared a formal statement of cash flows for 2017. Comparative balance sheets as of December 31, 2017 and 2016, and a statement of income and retained earnings for the year ended December 31, 2017, appear below and on the fol

> Refer to all of the facts in Problem 12-11A. Problem 12-11A: Bannack Corp. is in the process of preparing its statement of cash flows for the year ended June 30, 2017. An income statement for the year and comparative balance sheets are as follows: For

> Refer to the financial statement information of Chipotle reprinted at the back of the book. Financial statement of Chipotle: Required: 1. Prepare a work sheet with the following headings: 2. Complete the work sheet using each of the account titles o

> Bannack Corp. is in the process of preparing its statement of cash flows for the year ended June 30, 2017. An income statement for the year and comparative balance sheets are as follows: For the Year Ended June 30, 2017 Sales revenue â€&brvba

> The newly hired accountant at Grain field Inc. is considering the following list of accounts as he prepares the balance sheet. All of the accounts have positive balances. The company is authorized to issue 1,000,000 shares of common stock and 10,000 shar

> The following transactions occurred at Hilton Inc. during its first year of operation: a. Issued 10,000 shares of common stock at $10 each; 100,000 shares are authorized at $1 par value. b. Issued 10,000 shares of common stock for a patent, which is expe

> The Stockholders’ Equity section of the December 31, 2017, balance sheet of Carter Company appeared as follows: Preferred stock, $50 par value, 10,000 shares authorized, ? shares issued ……. $ 400,000 Common stock, ? par value, 20,000 shares authorized,

> The following items appear on the consolidated balance sheet of Boeing Inc. at December 31, 2014 (in millions). The information in parentheses was added to aid in your understanding. Accounts payable ………………………………………………………………………………… $10,667 Accrued retir

> Worthington Company issued $1,000,000 face value, six-year, 10% bonds on July 1, 2017, when the market rate of interest was 12%. Interest payments are due every July 1 and January 1. Worthington uses a calendar year-end. Required: 1. Identify and analyz

> On July 1, 2017, Moton Company needs exactly $206,400 in cash to pay an existing obligation. Moton has decided to borrow from State Bank, which charges 14% interest on loans. The loan will be due in one year. Moton is unsure, however, whether to ask the

> The following situations involve the application of the time value of money concept: 1. Jan Cain deposited $19,500 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1, 2017

> Darlene Page’s grandparents want to give her some money when she graduates from high school. They have offered Darlene the following three choices: a. Receive $16,000 immediately. Assume that interest is compounded annually. b. Receive $2,400 at the end

> Quickster Inc. acquired a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheets as of December 31, 2017 and 2016, included the follo

> Refer to Walgreens Boots Alliance’s statement of cash flows shown in the chapter opener on page 555 and answer the following questions for the most recent year. Walgreens Boots Alliance’s of cash flows: Required: 1.

> On January 1, 2017, Mansfield Inc. purchased a medium-sized delivery truck for $45,000. Using an estimated useful life of five years and a residual value of $5,000, the annual straight-line depreciation of the trucks was calculated to be $8,000. Mansfiel

> During 2012, Maciel Inc.’s research and development department developed a new manufacturing process. Research and development costs were $350,000. The process was patented on October 1, 2012. Legal costs to acquire the patent were $23,800. Maciel decide

> Wagner Company purchased a retail shopping center on January 1, 2016, at a cost of $612,000. Wagner estimated that its life would be 25 years and its residual value would be $12,000. On January 1, 2017, the company made several expenditures related to th

> The following income statement, statement of cash flows, and additional information are available for PEK Company: Additional information: a. Beginning inventory and purchases for the one product the company sells are as follows: b. During the year,

> Presented here are a statement of income and retained earnings and comparative balance sheets for Gallagher, Inc., which operates a national chain of sporting goods stores. Gallagher, Inc. Statement of Income and Retained Earnings For the Year Ended Dec

> Following are the financial statements for Griffin Inc. for the year 2017: Additional information: Griffin Inc. has authorized 500,000 shares of 10%, $10 par value, cumulative preferred stock. There were 100,000 shares issued and outstanding at all ti

> Berol Corporation sold 20-year bonds on January 1, 2017. The face value of the bonds was $100,000, and they carry a 9% stated rate of interest, which is paid on December 31 of every year. Berol received $91,526 in return for the issuance of the bonds whe

> On January 1, 2017, White feather Industries issued 300, $1,000 face value bonds. The bonds have a five-year life and pay interest at the rate of 10%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 10%

> Erin Company incurred the following costs during 2017 and 2018: a. Research and development costing $20,000 was conducted on a new product to sell in future years. A product was successfully developed, and a patent for it was granted during 2017. Erin is

> On January 1, 2015, Jose Company purchased a building for $200,000 and a delivery truck for $20,000. The following expenditures have been incurred during 2017: • The building was painted at a cost of $5,000. • To prevent leaking, new windows were install

> You are considering making a loan to Kellogg’s (Kellogg Company). The following information is from the statements of cash flows and the notes to the consolidated financial statements included in Form 10-K for fiscal years 2015 and 2014

> The following events occurred at Handsome Hounds Grooming Company during its first year of business: a. To establish the company, the two owners contributed a total of $50,000 in exchange for common stock. b. Grooming service revenue for the first year

> The Operating Activities section of Washburn Company’s statement of cash flows reported an adjustment for a gain on the retirement of bonds of $5,000. The Financing Activities section of the statement reported a cash outflow of $95,000 from the retiremen

> The Operating Activities section of Miller Corp.’s statement of cash flows reported an adjustment for depreciation expense of $25,000, as well as another for a loss on the sale of equipment of $5,000 (the equipment was sold on the last day of the year).

> The following account balances are taken from the records of Martin Corp. for the past two years. Other information available for 2017 is as follows: a. Net income for the year was $200,000. b. Depreciation expense on plant and equipment was $50,000. c

> Jane Bauer has won the lottery and has the following four options for receiving her winnings: 1. Receive $100,000 at the beginning of the current year 2. Receive $108,000 at the end of the year 3. Receive $20,000 at the end of each year for eight years 4

> Comparative balance sheets for Farinet Company for the past two years are as follows: Required: 1. Using the format in Example 13-4, prepare common-size comparative balance sheets for the two years for Farinet Company. Example 13-4: 2. What observa

> Income statements for Mariners Corp. for the past two years are as follows: Required: 1. Using the format in Example 13-5, prepare common-size comparative income statements for the two years for Mariners Corp. Example 13-5: 2. What observations can

> Assume the same set of facts for Berol Corporation as in Exercise 10-16 except that it received $109,862 in return for the issuance of the bonds when the market rate was 8%. Required: 1. Identify and analyze the effect of the sale of the bonds on Januar

> Assume that Bloomer Company purchased a new machine on January 1, 2017, for $80,000. The machine has an estimated useful life of nine years and a residual value of $8,000. Bloomer has chosen to use the straight-line method of depreciation. On January 1,

> Koffman’s Warehouse purchased a forklift on January 1, 2017, for $6,000. The forklift is expected to last for five years and have a residual value of $600. Koffman’s uses the double declining balance method for depreci

> Refer to the statement of cash flows for both Chipotle and Panera Bread for the most recent year and any other pertinent information reprinted at the back of this book. Cash flows for Chipotle: Cash flows for Panera Bread: Required: 1. Which method,

> Assume that Sample Company purchased factory equipment on January 1, 2017, for $60,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. Sample’s accountant is considering whether to use the straight-line or th

> To add to his growing chain of grocery stores, on January 1, 2017, Danny Marks bought a grocery store of a small competitor for $520,000. An appraiser, hired to assess the acquired assets’ values, determined that the land, building, and equipment had mar