Question: Hair World Inc. is a wholesaler of

> A condensed balance sheet for Simultech Corporation and a partially completed vertical analysis are presented below. Required: 1. Complete the vertical analysis by computing each line item (a)–(d) as a percentage of total assets. Roun

> Use the data given in PA13-1 for Pinnacle Plus. Required: 1. Compute the gross profit percentage in the current and previous years. Round the percentages to one decimal place. Are the current year results better, or worse, than those for the previous

> Pinnacle Plus declared and paid a cash dividend of $6,600 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Required: 1. Complete the two final columns shown beside each i

> Assume the same facts as PA12-4, except for the income statement and additional data item (a). The new income statement is shown below. Instead of item (a) from PA12-4, assume that the company bought new equipment for $1,800 cash and sold existing equipm

> Sim ko Company issued $600,000, 10-year, 5 percent bonds on January 1, 2018. The bonds were issued for $580,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on Jan

> What is the primary internal control goal for cash payments?

> Refer to PA12-4. Required: Complete requirements 1 and 2 using the direct method Heads Up Company was started several years ago by two hockey instructors. The company’s comparative balance sheets and income statement follow, along

> Refer to the information in PA12-2. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. The income statement and selected balance sheet information for Direct Products Company for

> Heads Up Company was started several years ago by two hockey instructors. The company’s comparative balance sheets and income statement follow, along with additional information. Additional Data: a. Bought new hockey equipment for cas

> XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Additional Data: a. Bought

> The income statement and selected balance sheet information for Direct Products Company for the year ended December 31 are presented below. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indi

> Motif Furniture is an Austin-based furniture company. For each of the following first-quarter transactions, indicate whether operating (O), investing (I), or financing activities (F) are affected and whether the effect is a cash inflow (+) or outflow (&a

> Two online magazine companies reported the following in their financial statements: Required: 1. Compute the 2018 ROE for each company (express ROE as a percentage rounded to one decimal place). Which company appears to generate greater returns on stoc

> Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2018: On December 31, 2018, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were decl

> At December 31, the records of Kozmetsky Corporation provided the following selected and incomplete data: Required: 1. Complete the following: Shares issued . Shares outstanding . 2. The balance in Additional Paid-In Capital would be $ . 3. Earnings

> BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same. Each item is indep

> National Chocolate Corp. produces chocolate bars and snacks under the brand names Blast and Soothe. A press release contained the following information: Required: 1. Prepare any journal entries that National Chocolate Corp. should make on the four date

> What are the three points of the fraud triangle? Is fraud more or less likely to occur if one of these elements is missing?

> Cucina Corp. signed a new installment note on January 1, 2018, and deposited the proceeds of $50,000 in its bank account. The note has a three-year term, compounds 5 percent interest annually, and requires an annual installment payment on December 31. Cu

> Assume the same facts as PA10-7, except that Surreal uses the simplified effective-interest bond amortization method, as shown in Chapter Supplement 10C. Required: 1. Prepare a bond amortization schedule. 2. Give the journal entry to record the bond

> On January 1, 2018, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 4 pe

> On January 1, 2018, Loop Raceway issued 600 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 6 percent, so

> Macromedia, Inc., is the original maker of shockwave and flash technologies. One of its annual reports indicated a lawsuit had been filed against the company and five of its former officers for securities fraud in connection with allegedly making false o

> Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds: Required: For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immedia

> Lakeview Company completed the following two transactions. The annual accounting period ends December 31. a. On December 31, calculated the payroll, which indicates gross earnings for wages ($80,000), payroll deductions for income tax ($8,000), payroll

> Using data from PA10-1, complete the following requirements. Required: 1. Prepare journal entries for each of the transactions through August 31. 2. Prepare all adjusting entries required on December 31. 3. Show how all of the liabilities arising fr

> The balance sheet for Shaver Corporation reported the following: cash, $5,000; short-term investments, $10,000; net accounts receivable, $35,000; inventory, $40,000; prepaids, $10,000; equipment, $100,000; current liabilities, $40,000; notes payable (lon

> Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects (+ for increase, âˆ&#1

> The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance d

> How is cash received in person independently verified?

> Precision Construction entered into the following transactions during a recent year Required: 1. Analyze the accounting equation effects and record journal entries for each of the transactions. 2. For the tangible and intangible assets acquired in the

> Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: The machines were disposed of in the following ways: a. Machine A: Sold on January 1 for $9,000 cash. b. Machine B: On January 1,

> At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in th

> Coca-Cola and PepsiCo are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the follow

> Web Wizard, Inc., has provided information technology services for several years. For the first two months of the current year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first quarter, the company

> C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2018, to advance Jeff $50,000 on a one-year, 8 percent note, with interest to be paid at m

> Expedia, Inc., disclosed the following rounded amounts (in thousands) concerning the Allowance for Doubtful Accounts on its Form 10-K annual report. Required: 1. Create a T-account for the Allowance for Doubtful Accounts and enter into it the 2014 amou

> Buzz Coffee Shops is famous for its large servings of hot coffee. After a famous case involving McDonald’s, the lawyer for Buzz warned management (during 2014) that it could be sued if someone were to spill hot coffee and be burned. “With the temperature

> The Kraft Heinz Company was formed in 2015 with the merger of Kraft Foods and H. J. Heinz Corporation. The company reported the following rounded amounts for the year ended January 3, 2016 (all amounts in millions): Required: 1. Assume Kraft Heinz uses

> Partial income statements for Sherwood Company summarized for a four-year period show the following: An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $20,000. The inventory balance on December 31, 2017

> Using the information in PA7-1, calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale. Compare these amounts to the periodic LIFO calculations in requirem

> What internal control functions are performed by a cash register and point-of-sale system? How are these functions performed when cash is received by mail?

> Harman International Industries is a world-leading producer of loudspeakers and other electronics products, which are sold under brand names like JBL, Infinity, and Harman/Kardon. The company reported the following amounts in its financial statements (in

> Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory using the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost

> Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the fo

> Home Hardware reported beginning inventory of 20 shovels, for a total cost of $100. The company had the following transactions during the month: Required: 1. Prepare the journal entries that would be recorded using a periodic inventory system. 2. Prep

> Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The bookkeeper prepared the following statement at year-end (assume that all amounts are correct, but note the incorrect format): Required: 1. Prepare a properly

> Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $2,300 per machine. HEC usually sells these machines to hospitals at a price of $5,800. HEC also separately sells 12 months of training and repair services for

> What is the difference between Accounts Payable for advertising and Advertising Expense?

> Use the information in PA6-1 to complete the following requirements. Required: 1. For each of the events (a) through (c), indicate the amount and direction of the effect (+ for increase, − for decrease, and NE for no effect) on New B

> The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are mad

> Harristown Hockey Club (HHC) maintains a petty cash fund for minor club expenditures. The petty cash custodian, Wayne Crosby, describes the events that occurred during the last two months: a. I established the fund by cashing a check from HHC for $250 m

> What is the primary internal control goal for cash receipts?

> The December bank statement and cash T-account for Stewart Company follow: There were no deposits in transit or outstanding checks at November 30. Required: 1. Identify and list the deposits in transit at the end of December. 2. Identify and list t

> The bookkeeper at Martin Company has asked you to prepare a bank reconciliation as of May 31. The May 31 bank statement and the May T-account for cash (summarized) are below. Martin Company’s bank reconciliation at the end of April show

> The following procedures are used by The Taco Shop. a. Customers pay cash for all food orders. Cash is placed in a cash register and a receipt is issued upon request by the customer. b. At the end of each day, the cashier counts the cash, prepares a ca

> Val’s Hair Emporium operates a hair salon. Its unadjusted trial balance as of December 31, 2018, follows, along with information about selected accounts. Required: 1. Calculate the (preliminary) unadjusted net income for the year ende

> Indicate the accounting equation effects (amount and direction) of each adjusting journal entry. Use + for increase, − for decrease, and NE for no effect. Provide an appropriate account name for any revenue and expense effects. Data fr

> Schlitterbahn Waterslide Company issued 25,000, 10-year, 5 percent, $100 bonds on January 1 at face value. Interest is payable each December 31. Show the accounting equation effects and prepare journal entries for (a) the issuance of these bonds on Janua

> Brokeback Towing Company is at the end of its accounting year, December 31, 2018. The following data that must be considered were developed from the company’s records and related documents: a. On July 1, 2018, a two-year insurance premium on equipment i

> Star books Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and amounts reported in its accounting records. The accounts have normal debit or credit balances. Assume the year ended on September

> On September 1, Pat Hopkins established Ona Cloud Corporation (OCC) as a provider of cloud computing services. Pat contributed $10,000 for 1,000 shares of OCC. On September 8, OCC borrowed $30,000 from a bank, promising to repay the bank in two years. On

> Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions fo

> Diana Mark is the president of ServicePro, Inc., a company that provides temporary employees for not-for-profit companies. ServicePro has been operating for five years; its revenues are increasing with each passing year. You have been hired to help Diana

> What are two limitations of internal control?

> The following is a series of accounts for Dewan & Allard, Incorporated, which has been operating for two years. The accounts are listed alphabetically and numbered for identification. Following the accounts is a series of transactions. For each trans

> Ethan Allen Interiors Inc. is a leading manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Ethan Allen’s September 30, 2016, trial balance. (The amounts shown represent millions

> Deliberate Speed Corporation (DSC) was incorporated as a private company. The company’s accounts included the following at June 30: During the month of July, the company had the following activities: a. Issued 4,000 shares of common s

> Mallard Incorporated (MI) is a small manufacturing company that makes model trains to sell to toy stores. It has a small service department that repairs customers’ trains for a fee. The company has been in business for five years. At th

> Repeat M10-9 assuming the bonds are issued at 102 Data from M10-9: E-Tech Initiatives Limited plans to issue $500,000, 10-year, 4 percent bonds. Interest is payable annually on December 31. All of the bonds will be issued on January 1, 2019. Show how t

> 1. Did Nice Bite rely more on creditors or stockholders for its financing at December 31, 2016? What is your information source? 2. Did the retained earnings at December 31, 2016, arise primarily from current year earnings or earnings retained from prio

> The following information for the year ended December 31, 2016, was reported by Nice Bite, Inc. Required: Prepare the four basic financial statements for 2016.

> 1. Is the company financed mainly by creditors or stockholders? Which financial statement provides the information to answer this question? 2. By how much did cash increase (decrease)? Which financial statement would report the business activities respo

> Assume you are the president of High Power Corporation. At the end of the first year of operations (December 31), the following financial data for the company are available: Required: Prepare an income statement for the year ended December 31. 2 . Prep

> Lisa Company had outstanding 100,000 shares of common stock. On January 10, 2018, Marg Company purchased a block of these shares in the open market at $20 per share, with the intent of holding the shares for a long time. At the end of 2018, Lisa reported

> On July 12, 2018, Rossow Corporation purchased 1,000 shares of Reimer Company for $30,000. The following information applies to the fair value of Reimer Company: Reimer Company declares and pays cash dividends of $2 per share on May 1 of each year. Re

> In what way does a mandatory vacation policy act as a control?

> The following table shows three cases, each with one missing element. Required: Use the bond calculator at www.fncalculator.com to determine the missing element for each case. Assume simple annual compounding and round to the nearest dollar or whole pe

> On August 4, 2018, Cappio Corporation purchased 1,000 shares of Maxwell Company for $45,000. The following information applies to the fair value of Maxwell Company: Maxwell Company declares and pays cash dividends of $2 per share on June 1 of each year.

> The following table shows three cases, each with one missing element. Required: Use the bond calculator at www.fncalculator.com to determine the missing element for each case. Assume simple annual compounding and round amounts to the nearest dollar or

> A local theater company sells 1,500 season ticket packages at a price of $250 per package. The first show in the 10-show season starts this week. Show the accounting equation effects and prepare the journal entries related to (a) the sale of the season t

> Legendary Corporation purchased equipment and in exchange signed a three-year promissory note. The note requires Legendary to make equal annual payments of $10,000 at the end of each of the next three years. Legendary has other promissory notes that char

> Stellar Corporation purchased equipment and in exchange signed a two-year promissory note. The note requires Stellar to make a single payment of $100,000 in two years. Stellar has other promissory notes that charge interest at the annual rate of 5 percen

> Assume you won the big prize of “$20 million” on a game show. This prize will be paid out in one of three ways: (1) you can receive $1 million per year for the next 20 years, (2) you can have $8 million today, or (3) you can have $2 million today and rec

> You have the opportunity to invest $10,000 in one of two companies from a single industry. The only information you have follows. The word high refers to the top third of the industry; average is the middle third; low is the bottom third. Required: Whi

> The financial statements for Armstrong and Blair companies are summarized here: The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately 10 years and each has had st

> Kohl’s Corporation is a national retail department store. The company’s total revenues for the twelve months ended October 31, 2016, were $19 billion. Macy’s is a larger department store company with

> A condensed income statement for Electronic Arts and a partially completed vertical analysis follow. Required: 1. Complete the vertical analysis by computing each line item (a)–(d) as a percentage of net revenues. Round to

> In what ways can independent verification occur?

> Use Tables C.1 to C.4 to complete the following schedule:

> Electronic Arts is a video game company that competes with Activision Blizzard. A condensed balance sheet for Electronic Arts and a partially completed vertical analysis are presented below Required: 1. Complete the vertical analysis by computing each

> Prepare journal entries to record these transactions: (a) Morrell Corporation disposed of two computers at the end of their useful lives. The computers had cost $4,800 and their Accumulated Depreciation was $4,800. No residual value was received. (b) Ass

> Use the data given in CP13-1 for Golden Corporation. Required: 1. Compute the gross profit percentage for the current and previous years. Round the percentages to one decimal place. Are the current year results better, or worse, than those for the pre

> Golden Corporation declared and paid $3,000 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Required: 1. Complete the two final columns shown beside each item in Golden

> Assume the same facts as CP12-4, except for additional data item (a) and the income statement. Instead of item (a) from CP12-4, assume that the company bought new golf clubs for $3,000 cash and sold existing clubs for $1,000 cash. The clubs that were sol

> Refer to CP12-4. Required: Complete requirements 1 and 2 using the direct method. TIP: Remember to exclude depreciation expense when converting to the cash basis. Data from CP12-4: Soft Touch Company was started several years ago by two golf instruct

> Refer to the information in CP12-2. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. TIP: Convert the cost of goods sold to cash paid to suppliers by adding the increase in inve

> Soft Touch Company was started several years ago by two golf instructors. The company’s comparative balance sheets and income statement are presented below, along with additional information. Additional Data: a. Bought new golf clubs

> Hunter Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Additional Data: a. Bought eq

> Hamburger Heaven’s income statement for the current year and selected balance sheet data for the current and prior years ended December 31 are presented below. Required: Prepare the cash flows from operating activities section of the