Homestead Oil Corp. was incorporated on January 1, 2022, and issued the following stock for cash: - 600,000 shares of no-par common stock were authorized; 120,000 shares were issued on January 1, 2022, at $26 per share. - 100,000 shares of $100 par value, 5.5% cumulative, preferred stock were authorized; 70,000 shares were issued on January 1, 2022, at $109 per share. - Net income for the years ended December 31, 2022 and 2023 was $2,100,000 and $4,700,000, respectively. - No dividends were declared or paid during 2022. However, on December 27, 2023, the board of directors of Homestead declared dividends of $1,190,000, payable on February 11, 2024, to holders of record as of January 16, 2024. Required: a. Use the horizontal model (or write the entry) to show the effects of: 1. The issuance of common stock and preferred stock on January 1, 2022. 2. The declaration of dividends on December 27, 2023. 3. The payment of dividends on February 11, 2024. b. Of the total amount of dividends declared during 2023, how much will be received by preferred shareholders?
> D&J Furniture, a retail store, has an average gross profit ratio of 48%. The sales forecast for the next four months follows: Management’s inventory policy is to have ending inventory equal to 200% of the cost of sales for the subse
> Morrison & Company incurred the following costs during August: Manufacturing overhead is applied on the basis of $25 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the y
> The following table summarizes the beginning and ending inventories of Springfield Manufacturing Inc. for the month of September: Raw materials purchased during the month of September totaled $247,800. Direct labor costs incurred totaled $624,400 for the
> GrandSlam Inc. incurred the following costs during March: Required: During the month, 3,900 units of product were manufactured and 2,200 units of product were sold. On March 1, GrandSlam carried no inventories. On March 31, there were no inventories for
> Maryville Inc. incurred the following costs during June: Required: During the month, 53,000 units of product were manufactured and 48,000 units of product were sold. On June 1, Maryville carried no inventories. On June 30, there were no inventories other
> You were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term. Required: Please review the note disclosures provided in your focus company’s annual report and identify at least three items
> Williamson Inc. manufactures digital voice recorders. During 2022, total costs associated with manufacturing 52,000 of the new EZ 9900 model (introduced this year) were as follows: Required: a. Calculate the cost per recorder under both variable costing
> TopBass Inc. manufactures fishing equipment. During 2022, total costs associated with manufacturing 30,000 fly-cast fishing rods (a new product introduced this year) were as follows: Required: a. Calculate the cost per fishing rod under both variable cos
> Woodland Industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manu
> HealthTech Inc. manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with infor
> Austin Inc. produces small-scale replicas of vintage automobiles for collectors and museums. Finished products are built on a 1/20 scale of originals. The firm’s income statement showed the following: An automated stamping machine has b
> Gonzales Inc. makes and sells a single product. The current selling price is $16 per unit. Variable expenses are $10 per unit, and fixed expenses total $21,600 per month. Sales volume for March totaled 4,100 units. Required: a. Calculate operating income
> Muscle Beach Inc. makes three models of high-performance weight-training benches. Current operating data are summarized here: Required: a. Calculate the contribution margin ratio of each product. b. Calculate the firm’s overall contribu
> HighTide Canvas Co. currently makes and sells two model sizes of a boat cover. Data applicable to the current operation are summarized in the following columns labeled Current Operation. Management is considering adding a Medium model to its current Larg
> Ozark Metal Co. makes a single product that sells for $42 per unit. Variable costs are $27.30 per unit, and fixed costs total $65,415 per month. Required: a. Calculate the number of units that must be sold each month for the firm to break even. b. Assume
> Marathon Co. makes and sells a single product. The current selling price is $18 per unit. Variable expenses are $12 per unit, and fixed expenses total $36,000 per month. Required: a. Calculate the breakeven point expressed in terms of total sales dollars
> Assume that Home and Office City Inc. provided the following comparative data concerning long-term debt in the notes to its 2023 annual report (amounts in millions): Required: a. As indicated, Home and Office City’s 3¼% Co
> Refer to the Campbell Soup Company annual report for 2020 in the appendix or to the most recent full annual report that you have downloaded from Campbell’s website. Find and scan the notes to consolidated financial statements. Read the independent audito
> Presented here is the income statement for Fairchild Co. for March: Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 30%. Required: a. Rearrange the preceding income
> Presented here is the income statement for Big Sky Inc. for the month of February: Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 25%. Required: a. Rearrange the pr
> Shown here is an income statement in the traditional format for a firm with a sales volume of 18,000 units: Required: a. Prepare an income statement in the contribution margin format b. Calculate the contribution margin per unit and the contribution marg
> Shown here is an income statement in the traditional format for a firm with a sales volume of 10,000 units. Cost formulas also are shown: Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per
> The following data have been extracted from the records of Puzzle Inc.: Required: a. Calculate the missing costs. b. Calculate the cost formula for mixed cost using the high–low method. c. Calculate the total cost that would be incurred
> A department of Delta Co. incurred the following costs for the month of June. Variable costs, and the variable portion of mixed costs, are a function of the number of units of activity: During July, the activity level was 16,000 units, and the total cost
> This problem is based on the 2020 annual report of Campbell Soup Company in the appendix. Required: a. Compute the following profitability measures for the year ended August 2, 2020: (1) Return on investment, based on net earnings (perform a DuPont analy
> Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: Required: a. Calculate return on investment, based on net income and average total assets, for 2023 and 2022. Show both margin and turnover in your calculatio
> Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2023: Required: Prepare a statement of cash flows that explains the change that occurred in cash during the month. You may assume that the change in each balance shee
> Following are a statement of cash flows (indirect method) for Harris Inc. for the year ended December 31, 2023, and the firm’s balance sheet at December 31, 2022: Required: a. Using the preceding information, prepare the balance sheet f
> You were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term. Required: Review the note disclosures provided in your focus company’s annual report and discuss what you’ve learned about how
> Following is a statement of cash flows (indirect method) for Hartford Inc. for the year ended December 31, 2023. Also shown is a partially completed comparative balance sheet as of December 31, 2023 and 2022: Required: a. Complete the December 31, 2023 a
> Following is a partially completed balance sheet for Hoeman Inc. at December 31, 2023, together with comparative data for the year ended December 31, 2022. From the statement of cash flows for the year ended December 31, 2023, you determine the following
> The following information is available from Gray Co.’s accounting records for the year ended December 31, 2022 (amounts in millions): Required: a. The net cash provided by operating activities for Gray Co. for the year ended December 31
> The following information is available from Bromfield Co.’s accounting records for the year ended December 31, 2022 (amounts in millions): Required: a. Calculate the net cash provided (used) by operating activities for Bromfield Co. for
> The financial statements of Pouchie Co. included the following information for the year ended December 31, 2022 (amounts in millions): Required: Complete the following statement of cash flows, using the indirect method:
> The financial statements of Simon Co. include the following items (amounts in thousands): Required: a. Calculate the net cash flow provided by operations for Simon Co. for the year ended December 31, 2023. b. Explain why net income is different from the
> On April 8, 2022, a flood destroyed the warehouse of Marmaron Distributing Co. From the waterlogged records of the company, management was able to determine that the firm’s gross profit ratio had averaged 45% for the past several years and that the inven
> Franklin Co. has experienced gross profit ratios for 2022, 2021, and 2020 of 41%, 38%, and 40%, respectively. On April 6, 2023, the firm’s plant and all its inventory were destroyed by a tornado. Accounting records for 2023, which were
> The following information is available from the accounting records of Spenser Co. for the year ended December 31, 2022: Required: a. Calculate the operating income for Spenser Co. for the year ended December 31, 2022. b. Calculate the companyâ€
> The following information is available from the accounting records of Manahan Co. for the year ended December 31, 2022: Required: a. Calculate the operating income for Manahan Co. for the year ended December 31, 2022. b. Calculate the companyâ€
> A review of the accounting records at Corless Co. revealed the following information concerning the company’s liabilities that were outstanding at December 31, 2023 and 2022, respectively: Required: a. Corless Co. has not yet made an ad
> Bacon Inc. has the following stockholders’ equity section in its May 31, 2022, comparative balance sheets: Required: a. Calculate the amount that should be shown on the balance sheet for common stock at May 31, 2022. b. The only transac
> Francis Inc. has the following stockholders’ equity section in its November 30, 2022, balance sheet: Required: a. Calculate the amount of the total annual dividend requirement on preferred stock. b. Calculate the amount that should be s
> Enter the following column headings across the top of a sheet of paper: Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or min
> Enter the following column headings across the top of a sheet of paper: Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or mi
> Enter the following column headings across the top of a sheet of paper: Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or mi
> Enter the following column headings across the top of a sheet of paper: Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or min
> On January 1, 2022, Metco Inc. reported 411,050 shares of $5 par value common stock as being issued and outstanding. On March 24, 2022, Metco Inc. purchased for its treasury 3,600 shares of its common stock at a price of $37 per share. On August 19, 2022
> On March 3, 2022, Docker Inc. purchased 800 shares of its own common stock in the market at a price of $10.75 per share. On August 29, 2022, 500 of these shares were sold in the open market at a price of $11.50 per share. There were 33,600 shares of Dock
> Permabilt Corp. was incorporated on January 1, 2022, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2022, at $35 per share. 800,000 shares of $100 par value, 7.5
> You have been approached by Gary Gerrard, president and CEO of Gerrard Construction Co., who would like your advice on a number of business and accounting related matters. Your conversation with Mr. Gerrard, which took place in February 2023, proceeded a
> On January 1, 2022, Learned, Inc., issued $105 million face amount of 20- year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2041. Required: a. Usin
> On January 1, 2022, Drennen, Inc., issued $6 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2031. Required: a. Using the
> Hurley Co. has outstanding $420 million face amount of 9% bonds that were issued on January 1, 2010, for $409,500,000. The 20-year bonds mature on December 31, 2029, and are callable at 102 (i.e., they can be paid off at any time by paying the bondholder
> Hayden Co. has outstanding $50 million face amount of 6% bonds that were issued on January 1, 2015, for $50,750,000. The 20-year bonds mature on December 31, 2034, and are callable at 102 (that is, they can be paid off at any time by paying the bondholde
> The following summary data for the payroll period ended December 27, 2021, are available for Cayman Coating Co.: Additional information - For employees, FICA tax rates for 2021 were 7.65% on the first $142,800 of each employee’s annual
> The following summary data for the payroll period ended on July 14, 2021, are available for Brac Construction Ltd.: Required: a. Calculate the missing amounts and then determine the FICA tax withholding percentage. b. Use the horizontal model (or write t
> Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $60 in advance for a one-year subscription. During the month of August 2022, Evans Ltd. sold 500 one-year subscriptions and received payments in a
> On November 1, 2022, Gordon Co. collected $31,800 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2023, at which time the contract may be renewed. Required: a. Use the horizontal mode
> Using a present value table, your calculator, or a computer program present value function, answer the following questions: Required: a. What is the present value of nine annual cash payments of $58,000, to be paid at the end of each year using an intere
> Renter Co. acquired the use of a machine by agreeing to pay the manufacturer of the machine $7,500 per year for 10 years. At the time the lease was signed, the interest rate for a 10-year loan was 12%. Required: a. Use the appropriate factor from Table 6
> Answer the following questions using data from the Campbell Soup Company 2020 annual report: Required: a. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell’s. Explain why the particular method is used for the
> Ambrose Co. has the option of purchasing a new delivery truck for $63,450 or leasing the truck for $13,725 per year, payable at the end of each year for six years. The truck also has a useful life of six years and will be depreciated on a straight-line b
> On January 1, 2022, Carey Inc. entered into a noncancelable lease agreement, agreeing to pay $21,000 at the end of each year for four years to acquire a new computer system having a market value of $61,200. The expected useful life of the computer system
> The balance sheets of HiROE Inc. showed the following at December 31, 2023 and 2022: Required: a. If there have not been any purchases, sales, or other transactions affecting this equipment account since the equipment was first acquired, what is the amou
> The balance sheets of Tully Corp. showed the following at December 31, 2023 and 2022: Required: a. If there have not been any purchases, sales, or other transactions affecting this equipment account since the equipment was first acquired, what is the amo
> Moyle Co. acquired a machine on January 1, 2022, at a cost of $1,500,000. The machine is expected to have a five-year useful life, with a salvage value of $300,000. The machine is capable of producing 1,500,000 units of product in its lifetime. Actual pr
> Grove Co. acquired a production machine on January 1, 2022, at a cost of $720,000. The machine is expected to have a four-year useful life, with a salvage value of $120,000. The machine is capable of producing 100,000 units of product in its lifetime. Ac
> Porter Inc. acquired a machine that cost $720,000 on October 1, 2022. The machine is expected to have a four-year useful life and an estimated salvage value of $80,000 at the end of its life. Porter uses the calendar year for financial reporting. Depreci
> Freedom Co. purchased a new machine on July 2, 2022, at a total installed cost of $198,000. The machine has an estimated life of five years and an estimated salvage value of $27,000. Required: a. Calculate the depreciation expense for each year of the as
> Early in January 2022, Tellco Inc. acquired a new machine and incurred $100,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $750,000 on average total assets
> During the first month of its current fiscal year, Green Co. incurred repair costs of $30,000 on a machine that had five years of remaining depreciable life. The repair cost was inappropriately capitalized. Green Co. reported operating income of $182,000
> You were asked to obtain the most recent annual report of a company that you were interested in reviewing throughout this term. Required: Please review the note disclosures provided in your focus company’s annual report and discuss what you’ve learned ab
> Following are condensed income statements for Uncle Bill’s Home Improvement Center for the years ended December 31, 2023 and 2022: Uncle Bill was concerned about the operating results for 2023 and asked his recently hired accountant, &a
> a. If the beginning balance of the Inventory account and the cost of items purchased or made during the period are correct, but an error resulted in overstating the firm’s ending inventory balance by $12,000, how would the firm’s cost of goods sold be af
> The inventory records of Cushing Inc. reflected the following information for the year ended December 31, 2022: Required: a. Assume that Cushing, Inc., uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIF
> The inventory records of Kuffel Co. reflected the following information for the year ended December 31, 2022: Required: a. Assume that Kuffel Co. uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO. b.
> The following data are available for Sellco for the fiscal year ended on January 31, 2023: Required: a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system): 1. FIFO. 2. LIFO. 3.
> Mower-Blower Sales Co. started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2022 were as follows: The December 31, 2022, inventory included 10 blowers and 20 mowers. Assume
> A portion of the current assets section of the December 31, 2022, balance sheet for Gibbs Co. is presented here: The company’s accounting records revealed the following information for the year ended December 31, 2023: Required: Calcula
> A portion of the current assets section of the December 31, 2023, balance sheet for Carr Co. is presented here: The company’s accounting records revealed the following information for the year ended December 31, 2023: Required: Using th
> The following is a portion of the current asset section of the balance sheets of HiROE Co., at December 31, 2023 and 2022: Required: a. Describe how the allowance amount at December 31, 2023, was most likely determined. b. If bad debts expense for 2023 t
> The following is a portion of the current assets section of the balance sheets of Avanti’s, Inc., at December 31, 2023 and 2022: Required: a. If $9,100 of accounts receivable were written off during 2023, what was the amount of bad debt
> HighTech Inc. and OldTime Co. compete within the same industry and had the following operating results in 2022: Required: a. Calculate the breakeven point for each firm in terms of revenue. b. What observations can you draw by examining the breakeven poi
> Branson Co. received its bank statement for the month ending May 31, 2022, and reconciled the statement balance to the May 31, 2022, balance in the Cash account. The reconciled balance was determined to be $36,400. The reconciliation recognized the follo
> Beckett Co. received its bank statement for the month ending June 30, 2022, and reconciled the statement balance to the June 30, 2022, balance in the Cash account. The reconciled balance was determined to be $5,800. The reconciliation recognized the foll
> Big Blue Rental Corp. provides rental agent services to apartment building owners. Big Blue Rental Corp.’s preliminary income statement for August 2022 and its August 31, 2022, preliminary balance sheet did not reflect the following: a.
> Set up a horizontal model in the following format: Required: a. Enter the beginning (July 28, 2019) and ending (August 2, 2020) account balances for Accounts Receivable, Inventories, and Payable to Suppliers and Others. Find these amounts on the Consolid
> Calco Inc. rents its store location. Rent is $9,000 per month, payable quarterly in advance. On July 1, a check for $27,000 was issued to the landlord for the July–September quarter. Required: Use the horizontal model to show the effects on the financia
> On January 10, 2022, the first day of the spring semester, the cafeteria of The Defiance College purchased for cash enough paper napkins to last the entire 16-week semester. The total cost was $3,600. Required: Use the horizontal model to show the effect
> Selected information taken from the financial statements of Fordstar Co. for the year ended December 31, 2022, follows: a. Calculate income from operations (operating income) for the year ended December 31, 2022. b. Calculate net income for the year ende
> Selected information taken from the financial statements of Verbeke Co. for the year ended December 31, 2022, follows: a. Calculate income from operations (operating income) for the year ended December 31, 2022. (Hint: You may want to review Exhibit 2-2.
> Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 800,000 shares of $5-par-value common stock for $400,000 in cash. b. B
> Charlie’s Furniture Store has been in business for several years. The firm’s owners have described the store as a “high-price, high-service” operation that provides lots of assistance to its customers. Margin has averaged a relatively high 40% per year f
> The concept of financial leverage was introduced and expanded. You were asked to describe the risks associated with financial leverage. Required: a. Describe the risks associated with operating leverage. b. Outline the similarities and differences betwee
> Following are the current asset and current liability sections of the balance sheets for Around square Inc. at August 31, 2023 and 2022 (in millions): Required: a. Calculate the working capital and current ratio at each balance sheet date. Round your cur
> Following are the current asset and current liability sections of the balance sheets for Freedom Inc. at January 31, 2023 and 2022 (in millions): Required: a. Calculate the working capital and current ratio at each balance sheet date. Round your current
> Presented here are the comparative balance sheets of Hames Inc. at December 31, 2023 and 2022. Sales for the year ended December 31, 2023, totaled $1,700,000. Required: a. Calculate ROI for 2023. Round your percentage answer to two decimal places. b. Cal
> Calculate profitability measures using annual report data Using data from the financial statements of Campbell Soup Company in the appendix, calculate the following: a. ROI for 2020. Round your percentage answer to one decimal place. b. ROE for 2020. Rou
> Selected data from the September 26, 2020, and September 28, 2019, consolidated balance sheets and income statements (statements of operations) for the years then ended for Apple Inc. follow. All amounts are reported in millions. Required: a. Calculate t
> The following selected data are adapted from the February 2, 2020, and February 3, 2019, consolidated balance sheets and income statements for the years then ended for The Home Depot, Inc. All amounts are reported in millions. Required: Calculate the mis
