Question: How does the quick ratio differ from

> On January 2, Haskins Company purchases a laser cutting machine for use in fabrication of a part for one of its key products. The machine cost $80,000, and its estimated useful life is five years, after which the expected salvage value is $5,000. Compute

> Use the information in Exercise 2-44 to complete the following. a. Prepare journal entries for each of the transactions (I) through (9). b. Set up T-accounts for each of the accounts used in part a and post the journal entries to those T-accounts . (The

> Following are selected accounts for Kimberly-Clark Corporation for 2017. a. Indicate the appropriate classification of each account as appearing in either its balance sheet (B) or its income statement ( I). b. Using the data, compute its amounts for tota

> El Puerto de Liverpool (Liverpool) is a large retailer in Mexico. The following accounts are selected from its annual report for the fiscal year ended December 3 1, 2017. The amounts below are in thousands of Mexican pesos. a. Indicate the appropriate cl

> Shoprite Holdings Ltd is an African food retailer listed on the Johannesburg Stock Exchange. The following accounts are selected from its annual report for the fiscal year ended July 2, 2017. The amounts below are in millions of South African rand. a. In

> Following are selected accounts for The Procter & Gamble Company for June 30, 2017. a. Indicate the appropriate classification of each account as appearing in either its balance sheet (B) or its income statement (I). b. Using the data, compute the am

> The following balance sheet data are reported for Brownlee Catering at September 30, 2019. Assume that on October I, 2019, only the following two transactions occurred: October I Purchased additional equipment costing $11,000, giving $3,000 cash and sign

> Following is balance sheet information for Lynch Services at the end of 2018 and 2017. a. Prepare balance sheets at December 31 of each year. b. The firm declared and paid a cash dividend of $10,000 in December 2018. Compute its net income for 2018.

> Hewlett Packard Enterprise Company reports the following information on its cash-flow hedges (derivatives) in comprehensive income (net income plus other comprehensive income) in its 2018 10-K report: a. Identify and describe the usual applications for d

> Refer to the Easton Company acquisition described in El2-42. Instead of a 100% acquisition, assume that Easton purchased 40% of the outstanding shares of Harris Company on January I , 2019, for $ 156,000 in cash. Also assume that the undervalued building

> Easton Company acquires 100% of the outstanding voting shares of Harris Company on January 1, 2019. To obtain these shares, Easton pays $210,000 in cash and issues 5,000 of its $10 par value common stock. On this date, Easton's stock has a fair value of

> What does the term current denote when referring to assets?

> On January 1, 2019, Engel Company purchases I 00% of Ball Company for $16.8 million. At the a time of acquisition, Ball's stockholders' equity (and the fair value of its identifiable net assets) is reported at $ 10.2 million. Engel ascribes the excess of

> Rayburn Company purchased all of Kanodia Company's common stock for cash on January 1, at which time the separate balance sheets of the two corporations appeared as follows: During purchase negotiations, Rayburn determined that the appraised value of Kan

> On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms at acquisition follow. During purchase negotiations, Miller's plant assets were appraised at $425,000;

> Merck & Co., Inc., reports a December 31, 2016, balance of $715 million in "Investments in affiliates accounted for using the equity method" ("Investments in affiliates"). Provide the entries for the following events for fiscal year 2017: a. Merck's shar

> Kasznik Company began operations on January 2, 2019, and by year-end (December 31) had made the following investments in financial securities. Year-end information on these investments follows. a. At what total amount are the trading stock investments re

> Refer to the data for Guay Company in Exercise 12-35. Assume that Guay Company reports under International Financial Reporting Standards (IFRS). Under IFRS, Guay can designate an equity investment for accounting based on FVOCI (fair value-other comprehen

> Guay Company had the following transactions and adjustment related to a passive equity investment. 2019 Nov. 15 Purchased 5,000 shares of Core, Inc.'s common stock at $16 per share plus a brokerage commission of $900. Guay Company expects to sell the sto

> On August 2 1, 2017, upon the completion of a tender offer, Intel Corporation acquired 97 .3% of the outstanding ordinary shares of Mobileye. This acquisition "combines Mobileye's leading computer vision expertise with Intel's high-performance computing

> During 2017, Amazon.com, Inc., made two significant acqu1s1t1ons intending to expand the company's retail presence. On May I 2, 2017, Amazon acquired Souq Group Ltd. ("Souq"), ane-commerce company, for approximately $583 million, net of cash acquired and

> On January 1, 2019, Ball Corporation purchased, as a stock investment, I 0,000 shares of Leftwich Company common stock for $ 15 cash per share. On December 3 1, 2019, Leftwich announced net income of $80,000 for the year and paid a cash dividend of $1.10

> Janice Utley is saving for a real estate investment. If she invests $1,000 now and then at the beginning of each of the next 35 months (36 months in total) at an interest rate of 1% per month, what will be the investment balance at the end of month 36?

> The following transactions involve investments in marketable securities and are accounted for using the equity method. (1) Healy Co. purchases 15,000 common shares of Palepu Co. at $8 cash per share; the shares represent 25% ownership of Palepu. (2) Heal

> The following transactions involve investments in marketable securities and are accounted for using the equity method. (1) Purchased 12,000 common shares of Barth Co. at $9 cash per share; the shares represent 30% ownership in Barth. (2) Received a cash

> CNA Financial Corporation provides the following information from its 2018 10-K report: Investments The Company classifies its fixed maturity securities as either available-for-sale or trading, and as such, they are carried at fair value. Changes in fair

> Baylor Company purchased 75% of the common stock of Reed Company for $600,000 in cash when the stockholders' equity of Reed Company consisted of $500,000 in common stock and $300,000 in retained earnings. On the acquisition date, the stockholders' equity

> Barclay, Inc., had the following transactions and adjustments related to a bond investment that is classified as a trading security. 2018 Nov. 1 Purchased $300,000 face value of Joos, Inc.'s 9% bonds at l02 plus a brokerage commission of $900. The bonds

> For the following transactions involving investments in marketable securities, assume that: (1) Ohlson Co. purchases 5,000 common shares of Freeman Co. at $ 16 cash per share. (2) Ohlson Co. receives a cash dividend of $ 1.25 per common share from Freema

> Four transactions involving investments in marketable debt securities classified as trading follow. (1) On July I, purchased US Treasury Bonds for $407,000 in cash. The bonds have a face value of $400,000 and pay interest semi-annually (June 30 and Decem

> The 2018 statement of stockholders' equity for Walt Disney Co. is presented bel ow. (Disney includes both par value and additional paid-in capital under the heading "Common Stock." Non-controlling interests have been excluded for simplicity, so the rows

> Warren Buffett, CEO of Berkshire Hathaway. and known as the "Sage of Omaha" for his investment success has stated that his firm is not interested in investing in a company whose business model he does not understand through reading its financial statemen

> What does the concept of liquidity refer to? Explain.

> Leslie Porter is planning a trip to Europe upon graduation in two years. She anticipates that her trip will cost $14,000. She would like to set aside an amount now to save for the trip. How much should she set aside if her savings earns 4% interest compo

> A portion of Note 2: Earnings per Share from Facebook, lnc.'s 10-K is as follows: a. Explain why employee stock options and restricted stock units are adjustments to the denominator for diluted EPS. b. Facebook computes EPS separately for its Class B sha

> Does a balance sheet report on a period of time or at a point in time? Also, explain the information conveyed in that report. Does an income statement report on a period of time or at a point in time? Also, explain the information conveyed in that report

> Following is the stockholders' equity section of the Merck & Co., Inc., balance sheet. / a. Explain the derivation of the $ 1,788 million in the common stock account. b. Using December 3 1, 20 17, balances, at what average issue price were the Merck comm

> Companies prepare four primary financial statements. What are those financial statements and what information is typically conveyed in each?

> Following is the stockholders' equity section of the Intuit Inc. balance sheet (dollars in millions, except par value; shares in thousands). Changes in the company's outstanding shares are due to (1) treasury share purchases by the company and (2) issue

> The accounting equation (Assets= Liabilities+ Equity) is a fundamental business concept. Explain what this equation reveals about a company's sources and uses of funds and the claims on company resources.

> On March I of the current year Xie Company has 400,000 shares of $20 par value common stock that are issued and outstanding. Its balance sheet shows the following account balances relating to a common stock. On March 2, Xie Company splits its common stoc

> What are the three major business activities of a company that are motivated and shaped by planning activities? Explain each activity.

> The stockholders' equity of Kinney Company at December 31, 2018 is shown below: The following transactions among others occurred during 2019. Apr 1 Declared and issued a IO0% stock dividend on all outstanding shares of common stock. The market value of

> Define net working capital. Explain how increasing the amount of trade credit can reduce the net working capital for a company.

> Despite his relative youth, Samuel Hunter has started planning for his retirement. At present, he has $2,400 he can invest, and he believes that he will be able to invest that amount each year for the next 39 years-40 contributions in total. a. If his in

> The stockholders equity of Palepu Company at December 31, 2018 appears below. During 2019. the following transactions occurred: May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a c

> What three conditions must be satisfied to require reporting of a liability on the balance sheet?

> Chaney Company has outstanding 25,000 shares of $JO par value common stock. It also has $405.000 of retained earnings. Near the current year-end. the company declares and pays a cash dividend of $1.90 per share and declares and issues a 4% stock dividend

> Skinner Company began business on June 30, 2018. At that time, it issued 18,000 shares of $50 par value, 6% cumulative preferred stock, and 90,000 shares of $10 par value common stock. Through the end of 2020, there has been no change in the number of pr

> The balance sheet consists of assets, liabilities, and equity. Define each category and provide two examples of accounts reported within each category.

> The following is the stockholders' equity section from Chipotle Mexican Grill, lnc.'s balance sheet (in thousands, except per share data). a. Show the computation to derive the $359 thousand for common stock. b. At what average price has Chipolle issued

> Return on equity (ROE) is an important summary measure of financial performance. How is it computed? Describe what this metric reveals about company performance.

> Potter Company has outstanding 15,000 shares of $50 par value, 8% preferred stock, and 50,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $280,000 in the second

> What ethical issues might managers face in dealing with confidential information?

> What are the two essential characteristics of an asset?

> Soliman Corporation began the year 2018 with 25,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May I, an additional 9,000 shares of common stock were issued. On July I, 6,000 shares of common stock were acquire

> Financial statements are used by several interested stakeholders. Develop a listing of three or more potential external users of financial statements and their applications.

> Moser Company began business on March I, 2018. At that time, it issued 20,000 shares of $60 par value, 7% cumulative preferred stock, and I 00,000 shares of $5 par value common stock. Through the end of 2020, there has been no change in the number of pre

> Why might a company voluntarily disclose more information than is required by GAAP?

> Following is the stockholders' equity section from the The Coca-Cola Company 2017 balance sheet. (All amounts in millions except par value.) a. Compute the number of shares outstanding. b. At what average price were the Coca-Cola shares issued? c. At wha

> The trade-off between risk and return is a fundamental business concept. Briefly describe both risk and return and their trade-off. Provide some examples that demonstrate investments of varying risk and the approximate returns that you might expect to ea

> McNichols Corp. reports the following transactions relating to its stock accounts. Jan. 15 Issued 25,000 shares of $5 par value common stock at $ 17 cash per share. Jan. 20 Issued 6,000 shares of $50 par value, 8% preferred stock at $78 cash per share. M

> Explain what is meant by the articulation of financial statements.

> Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued I 0,000 shares of $1 par value common stock at $25 cash per share. Feb. 21 Issued 15,000 shares of$ I 00 par value, 8% preferred stock at $275 cash per share.

> Does a statement of cash flows report on a period of time or at a point in time? Also, explain the information and activities conveyed in that report.

> On January 2, 2019, DeSantis Company is comparing two alternatives for leasing a machine. Alternative A is a lease that requires 24 quarterly payments of $3,000 with the first payment due on March 31, 2019. Alternative B is a lease that requires five ann

> The Boeing Company reports the following tax information in its 2018 financial report. a. Record Boeing's provision for income taxes for 2018 using the financial statement effects template. b. Record Boeing's provision for income taxes for 2018 using jou

> Bradshaw Company owns I 00% of Dee Company. At year-end, Dee owes Bradshaw $75,000. If a consolidated balance sheet is prepared at year-end, how is the $75,000 handled? Explain.

> Nike, Inc., reports the following tax information in the notes to its 2018 financial report. Income before income taxes is as follows: The provision for income taxes is as follows: Nike also states the following: The effective tax rate for the year ended

> Finn Company purchases all of the common stock or Murray Company for $750.000 when Murray Company has $300,000 of common stock and $450,000 of retained earnings. Book values of the assets and liabilities of Murray Company equal their fair values. If a co

> Bens' Corporation paid $ 12,000 on December 31, 20 I 9, for equipment with a three-year useful life. The equipment will be depreciated in the amount of $4,000 each year. Bens' took the entire $12,000 as an expense in its tax return in 2019. Assume this i

> What is the underlying objective of consolidated financial statements'!

> Early in January 2019, Oler, Inc., purchased equipment costing $ I 6,000. The equipment had a 2-year useful life and was depreciated in the amount of $8,000 in 2019 and 2020. Oler deducted the entire $16,000 on its tax return in 2019. This difference was

> What accounting method is used when a stock investment represents more than 50% of the investee company"s voting clock? Explain.

> Verizon Communications Inc. reports the following pension data in its 2017 10-K report. a. Describe what is meant by service cost and interest cost. b. What is the source of funds to make payments to retirees'.' c. Show the computation of Vcrizonâ&

> On January 1 of the current year, Yetman Company purchases 40% of the common stock of Livnat Company for $250.000 cash. During the year. Livnat reports $80.000 of net income and pays $60.000 in cash dividends. At year-end. what amount should appear in Ye

> What is the statement of stockholders' equity? What information is conveyed in that statement?

> YUM! Brands, Inc., reports the following pension footnote in its 10-K report. a. Describe what is meant by service cost and interest cost. b. What is the source of funds to make payments to retirees? c. Show the computation of the 2017 funded status for

> What does significant influence imply regarding financial investments? Describe the accounting procedures used for such investments.

> Where are unrealized holding gains and losses related to trading securities reported in the financial statements? Where are unrealized holding gains and losses related to available-for-sale securities reported in the financial statements?

> Under Armour, Inc., provides the following disclosure in the notes to its 20 18 financial statements: 7. Commitments and Contingencies (excerpts only) Sports Marketing and Other Commitments Within the normal course of business, the Company enters into co

> What is an unrealized holding gain (loss)? Explain. For passive investments in equity securities how are unrealized holding gains (losses) treated?

> Verizon Communications Inc. provides the following balance sheet (excerpted and abbreviated) and discussion and disclosure of leases: The aggregate minimum rental commitments under non-cancelable leases for the periods shown at December 31, 2018, are as

> What are some limitations of consolidated financial statements?

> JetBlue's balance sheet and discussion of the new lease standard is as follows in their 2018 I 0-K: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) of the Codification, which requires lessees to recognize leases on the balance sheet and

> For investments in debt securities. what measure l fair value or amortized cost is used for the balance sheet to report (a) trading securities. (b) available-for-sale securities and (c) held-to-maturity securities?

> Burnham Corporation is comparing two alternatives for leasing a machine. Alternative A is a lease that requires six annual payments of $8,000 with the first payment due immediately. Alternative B is a lease that requires two payments of $11,000 and three

> Target Corporation provides the following footnote relating to its retirement plans in its 2017 10-K report: Defined Contribution Plans Team members who meet eligibility requirements can participate in a defined contribution 401 (k) plan by investing up

> Define treasury stock. Why might a corporation acquire treasury stock? How is treasury stock reported in the balance sheet?

> Core Co. leased a piece of manufacturing equipment from E-So Co. with the following terms: a. Compute the value of the right-of-use asset and the lease liability on the date the lease commences. b. Prepare a lease liability amortization schedule and righ

> Define stock split. What are the major reasons for a stock split'?

> On December 31, Dehning, Inc .. borrowed $500,000 on an 8%. I 0-year mortgage note payable. The note is to be repaid in equal quarterly installments of $18,278 (beginning March 31). a. Prepare journal entries to reflect (1) the issuance of the mortgage

> How does the account "additional paid-in capital" (APIC) arise? What inferences if any can you draw from the amount of APlC as reported on the balance sheet relative to the common stock amount in relation to the financial condition of the company?

> The adjusted trial balance for the Hass Corporation at the end of2018 contains the following accounts: Prepare the long-term liabilities section of the balance shee1. Indicate the proper balance sheet classification for accounts listed above that do not

> Describe the difference between contributed capital and earned capital. Specifically, how can earned capital be considered as an investment by the company's shareholders'!

> On January 1, 2019 Trueman Corp. issued $600,000 of 20-year. 11 % bonds for $554.860, yielding a market (yield) rate of I 2%. Interest is payable semiannually on June 30 and December 31. a. Confirm the bond issue price. b. Prepare journal entries to reco

> Distinguish between authorized stock and issued stock. Why might the number of shares issued be more than the number of shares outstanding?

> GAAP is based on the concept of accrual accounting. Define and describe accrual accounting.

> Following is a price quote for $200 million of 6.55% coupon bonds issued by Deere & Company that mature in October 2028: This quote indicates that, on this day, Deere's bonds have a market price of 123.962 ( 123.962% of face value) resulting in a yie

> What is meant by dividend arrearage on preferred stock? If dividends are two years in arrears on $500.000 of 6% preferred stock and dividends arc declared at the end of this year, what amount of tow dividends must preferred shareholders receive before an