Question: For each of the following cases, respond

> William, Henderson, and Middleton are partners, sharing profits and losses in the ratio of 40 to 30 to 30 percent, respectively. Their partnership agreement provides that if one of them withdraws from the partnership, the assets and liabilities are to be

> Nelson Ellis and Hank Tollis are partners who share profits and losses in the ratio of 40 to 60 percent, respectively. The balances of their capital accounts on December 31, 20X0, are Ellis, $105,000, and Tollis, $115,000. With Tollis’s agreement, Ellis

> The Valley Voice is a local newspaper that is published Monday through Friday. It sells 90,000 copies daily. The paper is currently in a profit squeeze, and the publisher, Tom Turkey, is looking for ways to reduce expenses. A review of current distributi

> Billy Allen and Thomas Klammer are partners who share profits and losses in the ratio of 40:60, respectively. On December 31, 20X1, they decide that Klammer will sell one-half of his interest to Marvel Turner. At that time, the balances of the capital ac

> In 20X1, Ruby Canti invests cash of $220,000 in a newly formed partnership that will operate The Pro Shop. In return, Canti receives a one-third interest in the capital of the partnership. In general journal form, record Canti’s investment in the partner

> At the beginning of the year, it became obvious that the truck purchased the year before was too small to handle many of Starksville’s jobs. On January 2, 20X2, Starksville traded in the old truck on a new, larger lightweight truck. Its sale price (and f

> At the beginning of the year four years ago, Cedar Valley Company purchased construction equipment for $715,000, with a useful life of six years and estimated salvage value of $100,000. The company uses the straight-line method of depreciation. On July 3

> Paxton Company owns a truck that cost $112,000. Depreciation totaling $76,000 had been taken on the truck up to January 8, 20X1, when it was sold for $34,300. 1. Give the journal entry to record the sale. 2. Assume, instead, that the truck is sold for $3

> On January 20, 20X1, Starksville Transport Company purchased a new lightweight truck for $90,000. 1. Into which MACRS “class” is this asset classified? 2. What would be the amount of cost recovery on the truck in 20X1 and in 20X2?

> On January 12, 20X1, Harris Company purchased a machine to mold components for one of its products. Total cost of the machine was $480,000. It is expected to produce 450,000 units and to have a salvage value of $30,000. The company used the units-of-prod

> Atkins Company acquired an asset on January 2, 20X1, at a cost of $142,000. The asset’s useful life is four years and its salvage value is $32,000. Compute the depreciation expense for each of the first two years, using the straight-line method, the doub

> For the year ending December 31, 20X1, Peterson Manufacturing Company had depreciation totaling $42,000 on its office equipment. Give the general journal entry to record the adjusting entry.

> The South Pacific Shipping Company incurred the costs below related to a new packing machine: Invoice price of packing machine $75,000 Cash discount for prompt payment 3,925 Transportation costs 2,880 Installation costs 1,575 What is the capitalized cost

> In each of the following independent situations, decide whether the business organization should treat the person being paid as an employee and should withhold social security, Medicare, and employee income taxes from the payment made. 1. George Jacobs o

> 1. How does the Sales Returns and Allowances account provide management with a measure of operating efficiency? What problems might be indicated by a high level of returns and allowances? 2. Suppose you are the accountant for a small chain of clothing st

> On December 31, 20X1, Warren Company’s Intangible Assets account reflects two assets: 1. Goodwill, $145,000. This amount was recorded in December 20X0 as part of the cost of acquiring an existing business. It represents the excess of the total purchase p

> a. Orison Milling Company operates, on a contract basis, equipment that grinds and mixes grains used as animal feed. In September 20X1 the book value of the equipment was $144,000. Because of declining processing fees, the company’s chief financial offic

> Heath Mining Company acquired a mine in 20X1. Capitalized costs of the minerals were $5,460,000. The company mined 200,000 tons of ore in 20X1 and on December 31, 20X1, it is estimated that 2,200,000 tons of ore remained in the ground. Compute the amount

> The following costs were incurred by Euro Auto Parts in connection with the construction of a retail store building: Cost of land, including $7,500 of legal costs $175,000 Cost to demolish old building 10,325 Costs of grading land for building site 6,500

> Based on the following data, compute the estimated cost of the ending inventory at Kenamond Company. Use the retail method.

> Use the following data to compute the estimated inventory cost for Peterson Company under the gross profit method: Average gross profit rate: 30% of sales Inventory on January 1 (at cost): $230,000 Purchases from January 1 to date of inventory estimate:

> Given the choice between average cost, FIFO, and LIFO, which method will give the lowest net income and which will give the highest net income in a period of rising prices?

> The following information concerns four items that Katy Mayfield Clothiers for Women has in its ending inventory on December 31. Two of these items are in the accessories department, and two are in the women leisure wear department. 1. What is the valuat

> Information about Spiceland Company’s inventory of one item follows. Compute the cost of the ending inventory under (1) the average cost method (round unit cost to the nearest cent), (2) the FIFO method, and (3) the LIFO method.

> Give the entries in general journal form that Georgia State Company would make if Sampson Byrd dishonored the note receivable discounted by Georgia State in Exercise 16.6, assuming the bank deducted the maturity value of the dishonored note plus a $55 se

> Several years ago, Kat Cortz opened Ocho Tacos, a restaurant specializing in homemade tacos. The restaurant was so successful that the company expanded, and now operates eight restaurants in the local area. Cortez tells you that when she first started, s

> In general journal form, give the entry required by Georgia State Company when Sampson Byrd paid the note discounted in Exercise 16.6 on the maturity date. Data from Exercise 16.6: On June 3, 20X1, Georgia State Company received a $10,400, 45-day, 10 pe

> On June 3, 20X1, Georgia State Company received a $10,400, 45-day, 10 percent note from Sampson Byrd, a customer whose account was past due. 1. Record in the general journal receipt of the note. 2. Give the entry in general journal form to record the dis

> On August 1, 20X1, Martinez Company purchased a truck (delivery equipment) for $55,600, signing a 90-day, 8 percent note for the entire purchase price. Give the entry in general journal form to record the purchase of the equipment with the note and the p

> During 20X1, Tolliver Company borrowed money at Natchez State Bank and Trust on two occasions. On June 8, the company borrowed $60,000, giving a 120-day, 5 percent note, and on September 8, the company discounted at 7 percent an $80,000, 90-day note paya

> Find the maturity value of each of the following notes payable: 1. A 60-day note, dated February 15, 20X1, with a face value of $52,000, bearing interest at 8 percent. 2. A six-month note, dated March 10, 20X1, with a face value of $21,600, bearing inter

> Compute the maturity value for each of the following notes: 1. A note payable with a face amount of $50,000, dated June 15, 20X1, due in three months, bearing interest at 7 percent. 2. A note payable with a face amount of $44,000, dated May 5, 20X1, due

> Find the due date of each of the following notes: 1. A note dated May 19, 20X1, due in 120 days. 2. A note dated November 1, 20X1, due two years from that date. 3. A note dated April 10, 20X1, due six months from that date.

> Use the information given in Exercise 15.8, except assume that Conrod Utilities received the check for $1,680 on January 28, 20X2 (instead of on December 8, 20X1). Give the general journal entry necessary. The cash receipt has already been entered in the

> On December 8, 20X1, Conrod Utilities Services Company received a check for $1,680 from Shirley Cosby, whose $3,360 account was written off on September 10 (Exercise 15.7). In the accompanying letter, Cosby apologized and said she probably would be unabl

> Conrod Utilities Services Company uses the direct charge-off method to record uncollectible accounts. On September 10, 20X1, the company learned that Shirley Cosby, a customer who owed $3,360, had moved and left no forwarding address. Conrod Utilities co

> Delta Company pays salaries and wages on the last day of each month. Payments made on December 31, 20X1, for amounts incurred during December are shown below. Cumulative amounts paid prior to the December 31 payroll for the persons named are also shown.

> Assume the same facts as in Exercise 15.5, except that the recovery of the $14,800 from Alexis Watson was received on February 28, 20X2. Give the entry in general journal form to record the reinstatement of Watson’s account and to record the receipt of h

> On December 8, 20X1, after a threatened lawsuit by Richey Plumbing, Alexis Watson paid the $14,800 account charged off on April 30, 20X1 (Exercise 15.4). Give the entries in general journal form to reinstate Watson’s account and to record the receipt of

> On April 30, 20X1, Richey Plumbing, which uses the allowance method, decided that the $14,800 account of Alexis Watson was worthless and should be written off. Give the general journal entry to record the write-off.

> On December 31, 20X1, before adjusting entries, the balances of selected accounts of the Xavier Equipment Company were as follows: Accounts Receivable $930,000 Allowance for Uncollectible Accounts (debit balance) 3,000 dr. The company has determined th

> Assume that Galaxy Company makes its estimate of uncollectible accounts on December 31 as 3.2 percent of total accounts receivable. Compute the estimated amount of uncollectible accounts and give the general journal entry to record the provision for unco

> On December 31, 20X1, certain account balances at Galaxy Company were as follows before year-end adjustments: Accounts Receivable $ 941,500 Allowance for Uncollectible Accounts (credit) 1,860 Sales 9,205,500 Sales Returns and Allowances 38,650 A further

> Diamond Jewelers has never borrowed money. Because of rapid growth, on June 25, 20X1, John Peoples, the owner, applied for a loan of $300,000 from his bank. The banker asked Peoples for copies of financial reports of Diamond Jewelers for 20X0 and quarter

> Ryan & Sabo sells copy equipment. It grants all customers a 12-month warranty, agreeing to make necessary repairs within the following 12-month after-sale period free of charge. At the end of each year, the company estimates the total cost to be incurred

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Lane Company charges off the cost of all magazine advertising in the year it is incurred even though the advertising probably

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Sanchez Company has decided to charge off as a loss the portion of its accounts receivable that it estimates will be uncollec

> Mike Ryan is the owner of Ryan Contractors, a successful small construction company. He spends most of his time out of the office supervising work at various construction sites, leaving the operation of the office to the company’s cashi

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Patterson Company purchased many small tools during 20X1 at a total cost of $3,000. Some tools were expected to last for a fe

> The following selected accounts were taken from the financial records of Sonoma Valley Distributors at December 31, 20X1. All accounts have normal balances. Cash $31,340 Accounts Receivable 67,900 Note Receivable, due 20X2 10,250 Merchandise Inventory 36

> The Adjusted Trial Balance section of the worksheet for Hendricks Janitorial Supplies follows. The owner made no additional investments during the year. Prepare a postclosing trial balance for the firm on December 31, 20X1.

> Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 20X2. Include appropriate descriptions. 20X1 (Adjustment a) Dec. 31 Uncollecti

> On December 31, 20X1, the Income Statement columns of the worksheet for The Sax Shop contained the following information. Give the entries that should be made in the general journal to close the revenue, cost of goods sold, expense, and other temporary a

> The worksheet of Lantz’s Office Supplies contains the following asset and liability accounts. The balance of the Notes Payable account consists of notes that are due within a year. Prepare a balance sheet dated December 31, 20X1. Obtain

> The worksheet of Lantz’s Office Supplies contains the following owner’s equity accounts. Use this data and the net income determined in Exercise 13.3 to prepare a statement of owner’s equity for the year ended December 31, 20X1. No additional investments

> The worksheet of Lantz’s Office Supplies contains the following revenue, cost, and expense accounts. Prepare a classified income statement for this firm for the year ended December 31, 20X1. The merchandise inventory amounted to $59,775

> The following accounts appear on the worksheet of Commonwealth Crafts at December 31, 20X1. Indicate the section of the classified balance sheet in which each account will be reported. SECTIONS OF CLASSIFIED BALANCE SHEET a. Current Assets b. Plant and E

> During September 20X1, Interior Designs Specialty Shop, a retail store, had the transactions listed below. The general ledger accounts used to record these transactions are also provided below. INSTRUCTIONS 1. Open the general ledger accounts and enter t

> Selected accounts and other information from the records of Calderone Company for the year ended December 31 follow: Merchandise Inventory, January 1 $ 20,000 Merchandise Inventory, December 31 22,000 Sales Returns and Allowances 1,000 Store Supplies Exp

> Tsang Company reports the following in its most recent year of operations: - Net sales, $2,000,000 (all on account) - Cost of goods sold, $977,500 - Gross profit, $1,022,500 - Accounts receivable, beginning of year, $220,000 - Accounts receivable, end of

> The accounts listed below appear on the worksheet of Commonwealth Crafts. Indicate the section of the classified income statement in which each account will be reported. SECTIONS OF CLASSIFIED INCOME STATEMENT a. Operating Revenue b. Cost of Goods Sold c

> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Receivable account at Sufen Materials Corporation had a balance of $25,000, which

> On December 31, 20X1, the Notes Payable account at Cherie’s Boutique Shop had a balance of $72,000. This amount represented funds borrowed on a six-month, 6 percent note from the firm’s bank on December 1. Prepare the adjusting journal entry for interest

> On December 1, 20X1, Jenny’s Java Joint borrowed $50,000 from its bank in order to expand its operations. The firm issued a four-month, 9 percent note for $50,000 to the bank and received $48,500 in cash because the bank deducted the interest for the ent

> For each of the following independent situations, prepare the adjusting entry that must be made on December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Payable account at Tsang Manufacturing Company had a balance of $18,000. This bala

> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. During the year 20X1, Alenikov Company had net credit sales of $2,020,000. Past experience shows that 1.5 percent

> The Income Statement section of the Johnson Company worksheet for the year ended December 31, 20X1, has $201,000 recorded in the Debit column and $216,250 in the Credit column on the line for the Income Summary account. What were the beginning and ending

> The beginning inventory of SoCal Wholesalers was $121,000, and the ending inventory is $116,500. What entries are needed at the end of the fiscal period to adjust Merchandise Inventory?

> Celeste Renard, owner of Sensual Linens Shop, was preparing checks for payment of the current month’s purchase invoices when she realized that there were two invoices from Passionate Linens Company, each for the purchase of 100 red, heart-imprinted king-

> Meri Medical Supplies estimates that its office employees will earn $175,000 next year and its factory employees will earn $600,000. The firm pays the following rates for workers’ compensation insurance: $0.60 per $100 of wages for the office employees a

> On January 31, AC Gourmet Shop prepared its Employer’s Annual Federal Unemployment Tax Return, Form 940. During the previous year, the business paid total wages of $462,150 to its 14 employees. Of this amount, $98,000 was subject to FUTA tax. Using a rat

> On June 30, the State Unemployment Tax Payable account in the general ledger of Your Office Supplies showed a balance of $2,148. This represents the SUTA tax owed for the second quarter of the year. On July 31, the business issued a check to the state un

> On April 30, Quality Furniture Company prepared its state unemployment tax return for the first quarter of the year. The firm had taxable wages of $85,000. Because of a favorable experience rating, Quality pays SUTA tax at a rate of 1.4 percent. How much

> On March 31, the Federal Unemployment Tax Payable account in the general ledger of The Argosy Company showed a balance of $1,507. This represents the FUTA tax owed for the first quarter of the year. On April 30, the firm deposited the amount owed in the

> At the end of the weekly payroll period on June 30, the payroll register of Known Consultants showed employee earnings of $50,000. Determine the firm’s payroll taxes for the period. Use a social security rate of 6.2 percent, Medicare rate of 1.45 percent

> After Copper Corporation paid its employees on July 15 and recorded the corporation’s share of payroll taxes for the payroll paid that date, the firm’s general ledger showed a balance of $20,584 in the Social Security Tax Payable account, a balance of $4

> Given the following scenario, choose the best answer. At the end of the quarter, the business owed $2,000 in total payroll taxes. The amount due must be deposited: a. on the last business day of the quarter. b. on the last day of the quarter. c. on the d

> On July 31, the payroll register for Red Company showed the following totals for the month: gross earnings, $38,950; social security tax, $2,414.90; Medicare tax, $564.78; income tax, $5,842.00; and net amount due, $30,128.32. Of the total earnings, $30,

> Private Investigations has two office employees. A summary of their earnings and the related taxes withheld from their pay for the week ending June 7, 20X1, follows. 1. Prepare the general journal entry to record the company’s payroll f

> Fashion Standards is a retail clothing store. Sales of merchandise and purchases of goods on account for January 20X1, the first month of operations, appear below. INSTRUCTIONS 1. Record the purchases of goods on account on page 1 of a three-column purch

> Data about the marital status, withholding allowances, and weekly salaries of the four office workers at Ollie’s Office Supply Company follow. Use the tax tables in Figure 10.2 to find the amount of federal income tax to be deducted fro

> Using the earnings data given in Exercise 10.3, determine the amount of Medicare tax to be withheld from each employee’s gross pay for December. Assume a 1.45 percent Medicare tax rate and that all salaries and wages are subject to the

> The monthly salaries for December and the year-to-date earnings of the employees of Cross Consulting Company as of November 30 follow. Determine the amount of social security tax to be withheld from each employee’s gross pay for Decembe

> During one week, four production employees of Morgan Manufacturing Company worked the hours shown below. All these employees receive overtime pay at one and one-half times their regular hourly rate for any hours worked beyond 40 in a week. Determine the

> The hourly rates of four employees of European Enterprises follow, along with the hours that these employees worked during one week. Determine the gross earnings of each employee.

> After returning from a three-day business trip, the accountant for Southeast Sales, Johanna Estrada, checked bank activity in the company’s checking account online. The activity for the last three days follows. After matching these tran

> Flores Company received a bank statement showing a balance of $13,000 on November 30, 20X1. During the bank reconciliation process, Flores Company’s accountant noted the following bank errors: 1. A check for $153 issued by Flora, Inc., was mistakenly cha

> Venturi Office Supplies received a bank statement showing a balance of $73,027 as of March 31, 20X1. The firm’s records showed a book balance of $72,987 on March 31. The difference between the two balances was caused by the following items. Prepare a ban

> At Livermore Delivery and Courier Service, the following items were found to cause a difference between the bank statement and the firm’s records. Indicate whether each item will affect the bank balance or the book balance when the bank reconciliation st

> Johnson Corporation received a bank statement showing a balance of $15,900 as of October 31, 20X1. The firm’s records showed a book balance of $15,572 on October 31. The difference between the two balances was caused by the following items. Prepare a ban

> Tony Zendejas is the owner of Housewares Galore, a housewares store that sells a wide variety of items for the kitchen, bathroom, and home. Housewares Galore offers a company credit card to customers. The company has experienced an increase in sales sinc

> On January 2, Vanessa’s Floral Supplies Inc. issued Check 3100 for $400 to establish a petty cash fund. On January 31, Check 3159 was issued to replenish the petty cash fund. An analysis of payments from the fund showed these totals: Supplies, $78; Deliv

> On January 2, The Orange Legal Clinic issued Check 2108 for $400 to establish a petty cash fund. Indicate how this transaction would be recorded in a cash payments journal. Use 1 as the page number for the cash payments journal.

> The following transactions took place at Nickie’s Sports Gear during the first week of October 20X1. Record these transactions in a cash payments journal. Use 15 as the page number of the cash payments journal.

> Bushell Company (buyer) and Schiff, Inc. (seller), engaged in the following transactions during February 20X1. Schiff, Inc. operates in a state with no sales tax. BUSHELL COMPANY SCHIFF, INC. Both companies use the perpetual inventory system. Journalize

> On April 1, Manning Meat Distributors sold merchandise on account to Fichman’s Franks for $3,700 on Invoice 1001, terms 2/10, n/30. The cost of merchandise sold was $2,200. Payment was received in full from Fichman’s Franks, less discount, on April 10. R

> Record the following transactions of Fashion Park in a general journal. Use 1 as the page number for the general journal. Fashion Park must charge 8 percent sales tax on all sales. The company uses the perpetual inventory system.

> Wang Corporation operates in a state with no sales tax. The company uses the perpetual inventory system. Record the following transactions in a general journal. Use 1 as the page number for the general journal.

> Record the following transactions of Evelyn’s Designs in a general journal. The company uses the perpetual inventory system.

> Rubino Corporation engaged in the following transactions during June. The company uses the perpetual inventory system. Record these transactions in a general journal.