Question: Identify the errors in the following income

> MacLean Mining Co. acquired mineral rights for $72,000,000. The mineral deposit is estimated at 120,000,000 tons. During the current year, 44,000,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. b. Illustra

> Equipment acquired on January 8, 20Y1, at a cost of $280,000, has an estimated useful life of 8 years and an estimated residual value of $30,000. a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line me

> Equipment acquired on January 9, 20Y3, at a cost of $560,000, has an estimated useful life of 20 years, an estimated residual value of $40,000, and is depreciated by the straight-line method. a. What was the book value of the equipment at the end of the

> The following data (in millions) were adapted from recent annual reports of United Parcel Service, Inc. (UPS). UPS provides delivery and freight services throughout the world. a. Compute the net property, plant, and equipment (book value) for Years 1 a

> Using the data in Exercise 6-7, assume that the allowance for doubtful accounts for Easy Rider International had a negative balance of $(13,300) as of December 31, 20Y3. Illustrate the effects of the adjustment for uncollectible accounts as of December 3

> The following data (in millions) were adapted from recent financial statements of CVS Health Corporation (CVS). 1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal place. 2. Compute the daysâ€&#

> Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follo

> Quantum Technologies, a computer consulting firm, has decided to write off the $13,000 balance of an account owed by a customer. Illustrate the effects on the accounts and financial statements to record the write-off (a) assuming that the direct write-off

> Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Kitchen Depot Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: July 3 Received

> Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Valley Care & Supplies Co., a local hospital supply company that uses the direct write-off method of accounting for uncollectible receivables:

> MGM Resorts International (MGM) owns and operates casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. For a recent year, the MGM Resorts International reported accounts and notes receivable of $562,947,000 and allowance for doubtful ac

> Determine the due date and the amount of interest due at maturity on the following notes: Date of Note Face Amount Interest Rate Term of Note January 15 April 1 a. $50,000 6% 30 days b. 27,000 4 90 days С. June 22 30,000 45 days d. August 30 90,000

> Based on the data in Exercise 6-18 and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet. Data from Exercise 6-18: On the basis of the following data, determine the value of the inventory at t

> On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9. Inventory Quantity Market Value per Unit (Net Realizable Value) Product Cost per Unit Ad

> List any errors you can find in the following partial balance sheet: ZABEL COMPANY Balance Sheet December 31, 20Y4 Assets Current assets: Cash $ 75,000 Notes receivable $115,000 Less interest receivable 9,000 106,000 Account receivabl

> Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. 1. In each space below, place the correct sign [less than (), or equal (=)] for each comparison, assuming periods of rising prices. a. FIFO ending invent

> Compare and comment on Apple and HP using the results of MBA 6-6 and MBA 6-7. Data from MBA 6-6: The following data (in millions) were adapted from recent financial statements of Apple Inc (AAPL). 1. Compute the accounts receivable turn

> The units of an item available for sale during the year were as follows: There are 18 units of the item in the physical inventory at December 31. Determine the cost of ending inventory and the cost of goods sold by three methods, presenting your answer

> The units of an item available for sale during the year were as follows: There are 45 units of the item in the physical inventory at December 31. Determine the cost of ending inventory using (a) the first-in, first-out method, (b) the last-in, first-ou

> DreamWorks Animation SKG Inc. (DWA) shows “film costs” as an asset on its balance sheet. In the notes to its financial statements, the following disclosure was made: a. Interpret the fil

> Qualcomm Incorporated (QCOM) is a leading developer and manufacturer of digital wireless telecommunications products and services. Qualcomm reported the following inventories (in millions) in the notes to recent financial statements: a.

> Boeing (BA) is one of the world’s major aerospace firms, with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management systems. Recently, Boeing reported $4,281 million of receivables

> At the close of each day’s business, the sales clerks count the cash in their respective cash drawers and compare the total cash to the cash register tapes. They then prepare a cash memo noting any discrepancies between the actual cash and the cash tapes

> A former chairman, chief financial officer, and controller of an apparel company pleaded guilty to financial statement fraud. These managers used false journal entries to record fictitious sales, hid inventory in public warehouses so that it could be recorde

> Awesome Sound Inc. discovered a fraud wherein one of its front office administrative employees used company funds to purchase goods, such as computers, digital cameras, DVD players, and other electronic items, for her own use. The fraud was discovered wh

> An employee of a trucking company was responsible for resolving roadway accident claims under $25,000. The employee created fake accident claims and wrote settlement checks of between $5,000 and $25,000 to friends or acquaintances acting as phony “victim

> One of the largest losses in history from unauthorized securities trading involved a securities trader for a French bank. The trader was able to circumvent internal controls and create over a billion in trading losses. The trader apparently escaped detec

> The following data (in millions) were adapted from recent financial statements of HP Inc. (HPQ) formerly Hewlett-Packard Company. 1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal place. 2. Compute days&

> AcelRx Pharmaceuticals, Inc. (ACRX), develops therapies for pain relief for a variety of patients, including cancer and trauma patients. The following data (in thousands) were adapted from financial statements of a recent year. 1. Comput

> Republic City Bank provides loans to businesses in the community through its Commercial Lending Department. Small loans (less than $250,000) may be approved by an individual loan officer, while larger loans (greater than $250,000) must be approved by a bo

> Sherry’s Fashions is a retail store specializing in women’s clothing. The store has established a liberal return policy for the holiday season in order to encourage gift purchases. Any item purchased during November and December may be returned through J

> Illustrate the effect on the accounts and financial statements of the following transactions: a. Established a petty cash fund of $500. b. The amount of cash in the petty cash fund is now $45. Replenished the fund, based on the following summary of petty

> Illustrate the effect on the accounts and financial statements of the following transactions: a. Established a petty cash fund of $750. b. The amount of cash in the petty cash fund is now $140. Replenished the fund, based on the following summary of petty

> Pala Co. records all cash receipts on the basis of its cash register tapes. Pala Co. discovered during April 20Y1 that one of its sales clerks had stolen an undetermined amount of cash receipts when she took the daily deposits to the bank. The following

> Identify the errors in the following bank reconciliation: DAKOTA CO. Bank Reconciliation For the Month Ended June 30, 20Y3 Cash balance according to bank statement Add outstanding checks: No. 7715 $22,900 $1,450 7760 915 7764 1,850 775 4,990 $27,890

> An accounting clerk for Westwind Co. prepared the following bank reconciliation: a. From the bank reconciliation data, prepare a new bank reconciliation for Westwind Co., using the format shown in Exhibit 10. b. If a balance sheet were prepared for Wes

> Accompanying a bank statement for Nite Lighting Company is a credit memo for $26,500, representing the principal ($25,000) and interest ($1,500) on a note that had been collected by the bank. The company had been notified by the bank at the time of the co

> Lyle Steinberg has recently been hired as the manager of Laramie Coffee, a national chain of franchised coffee shops. During her first month as store manager, Lyle encountered the following internal control situations: a. Laramie Coffee has one cash regis

> Using the data presented in Exercise 5-18, record the effects on the accounts and financial statements of the company based upon the bank reconciliation. Data from Exercise 5-18: The following data were accumulated for use in reconciling the bank account

> The following data (in millions) were adapted from recent financial statements of Apple Inc (AAPL). 1. Compute the accounts receivable turnover for Years 1 and 2. Round to one decimal place. 2. Compute days’ sales in re

> The following data were accumulated for use in reconciling the bank account of Kaycee Sisters Inc. for August 20Y9: a. Cash balance according to the company’s records at August 31, $14,190. b. Cash balance according to the bank statement at August 31, $1

> Torpedo Digital Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Torpedo’s procedures for the purchase of services. The purchas

> Greenleaf Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments

> Jodi Rostad works at the drive-through window of Mamma’s Burgers. Occasionally, when a drive-through customer orders, Jodi fills the order and pockets the customer’s money. She does not ring up the order on the cash register. Identify the internal control

> Using Wikipedia (www.wikipedia.org.), look up the entry for the Sarbanes- Oxley Act. Look over the table of contents and find the section that describes Section 404. What does Section 404 require of management’s internal control report?

> After the amount due on a sale of $16,000, terms 2/10, n/eom, is received from a customer within the discount period, the seller consents to the return of the entire shipment. The cost of the merchandise returned was $10,000. (a) What is the amount of th

> Illustrate the effects on the accounts and financial statements of recording the following transactions: a. Sold merchandise for cash, $62,500. The cost of the goods sold was $30,000. b. Sold merchandise on account, $27,800. The cost of the goods sold was

> Illustrate the effects on the accounts and financial statements of the following related transactions of Bowen Inc. a. Purchased $400,000 of merchandise from Swanson Co. on account, terms 1/10, n/30. b. Paid the amount owed on the invoice within the disco

> Milan Co., a women’s clothing store, purchased $120,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Milan Co. returned $16,000 of the merchandise, receiving a credit memorandum, and then paid the amount due within the di

> The following data (in millions) were adapted from recent financial statements of International Paper Company (IP) and Wal-Mart Stores Inc. (WMT) 1. Compute the accounts receivable turnover for International Paper and Wal-Mart. Round to one decimal pla

> Summary operating data for Loma Company during the current year ended April 30, 20Y6, are as follows: cost of goods sold, $7,500,000; administrative expenses, $750,000; interest expense, $100,000; rent revenue, $120,000; sales, $13,580,000 and selling ex

> On March 31, 20Y5, the balances of the accounts appearing in the ledger of Lange Daughters Inc. are as follows: a. Prepare a multiple-step income statement for the year ended March 31, 20Y5. b. Compare the major advantages and disadvantages of the mult

> Assume the following data for Alpine Technologies for the year ending July 31, 20Y2. Illustrate the effects of the adjustments for customer refunds and returns on the accounts and financial statements of Alpine Technologies for the year

> Intrax Inc.’s perpetual inventory records indicate that $815,400 of merchandise should be on hand on December 31, 20Y4. The physical inventory indicates that $798,300 of merchandise is actually on hand. Illustrate the effects on the accounts and financial

> Based on the data presented in Exercise 4-13, illustrate the effects on the accounts and financial statements of Butler Co. for (a) the purchase, (b) the credit for damaged merchandise, and (c) the payment of the invoice within the discount period. Data

> Steritech Co., a furniture wholesaler, sells merchandise to Butler Co. on account, $86,000, terms 2/10, n/30. The cost of the merchandise sold is $51,600. Steritech Co. issues a credit memorandum for $5,000 ($4,900 net of the 2% discount) for merchandise

> La-Z-Boy Inc. (LZB) is one of the world’s largest manufacturer of furniture and is best known for its reclining chairs. The following data (in thousands) were adapted from recent financial statements: Prepare a classi&i

> Pounds-Away Services Co. offers personal weight reduction consulting services to individuals. On November 30, 20Y9, the balances of selected accounts of Pounds-Away Services Co. are as follows: Prepare a classified balance sheet that inc

> Clean Air Company is a consulting firm specializing in pollution control. The following adjustments were made for Clean Air Company: Identify each of the six pairs of adjustments. For each adjustment, indicate the account, whether the ac

> The accountant for Healthy Medical Co., a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($175,000) and (b) accrued wages ($12,300). Indicate the effect of each error

> Wal-Mart Stores Inc. (WMT) operates over retail stores throughout the world. In contrast, Alphabet Inc. (GOOG) is a technology company, formerly known as Google, that provides a variety of online services. 1. Using the following data (in millions) adapte

> List any errors you can find in the following balance sheet. Prepare a corrected balance sheet. ATLAS SERVICES CO. Balance Sheet For the Year Ended May 31, 20Y5 Assets Current assets: Cash....... $ 12,000 Accounts payable.. Supplies..

> Describe how the following transactions of McDonald’s Corp. (MCD), would affect the three elements of the accounting equation. a. Paid research and development expenses for the current year. b. Purchased machinery and equipment for cash. c. Received cash

> Using the financial data shown in Exercise 2-17 for Big Mountain Realty Inc., prepare a statement of cash flows for the month ending June 30, 20Y9. Data from Exercise 2-17: After its first month of operations

> Financial information related to Abby’s Interiors for October and November of 20Y6 is as follows: a. Prepare balance sheets for Abby’s Interiors as of October 31 and November 30, 20Y6. b. Determine the amount of net

> Use the following data (in millions) for Oracle Corporation (ORCL), for a recent year to answer the questions below: a. Determine the amount of earnings retained in Oracle for the year, assuming no dividends were paid during the year. b. Determine the

> Outlaw Realty, organized August 1, 20Y7, is owned and operated by Julie Baxter. How many errors can you find in the following financial statements for Outlaw Realty, prepared after its first month of operation

> One item is omitted from each of the following summaries of balance sheet and income statement data for four different corporations. Determine the amounts of the missing items, identifying them by letter. (Suggestion: First determine the amount of incr

> Based on the Amazon.com, Inc., financial statement data s

> Four different companies, Sierra, Tango, Yankee, and Zulu, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders’ equity, are summarized as follows: On the basis of th

> A company’s stakeholders often differ in their financial statement focus. For example, some stakeholders focus primarily on the income statement, while others focus primarily on the statement of cash flows or the balance sheet. For each of the following si

> Compare The Gap Inc. (MBA 3-6) and American Eagle Outfitters Inc. (MBA 3-7) liquidity positions for Year 2. Comment on the differences. Data from MBA 3-6: The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and B

> Looney Inc. was organized on July 1, Year 1. A summary of cash flows for July follows. Prepare a statement of cash flows for the month ended July 31, Year 1. Cash receipts: Cash received from customers $600,000 Cash re

> Using the financial data shown in Exercise 2-17 for Big Mountain Realty Inc., prepare a balance sheet as of June 30, 20Y9. Data from Exercise 2-17: After its first month of operations, the following amounts were taken from

> Using the financial data shown in Exercise 2-17 for Big Mountain Realty Inc., prepare a statement of stockholders’ equity for the month ending June 30, 20Y9. Data from Exercise 17:

> After its first month of operations, the following amounts were taken from the accounting records of Big Mountain Realty Inc. as of June 30, 20Y9. Prepare an income statement for the month ending June 30, 20Y9. $ 43,000 $ 50,000 8,00

> Financial information related to Montana Interiors for October and November 20Y8 is as follows: a. Prepare balance sheets for Montana Interiors as of October 31 and as of November 30, 20Y8. b. Determine the amount of net income for November, assuming t

> One item is omitted in each of the following summaries of balance sheet and income statement data for four different corporations, AL, CO, KS, and MT. Determine the missing amounts, identifying them by letter. AL co KS MT Beginning of the year: $ (

> Maynard Services was organized on August 1, 20Y5. A summary of the revenue and expense transactions for August follows: Prepare an income statement for the month ended August 31. Fees earned $3,400,000 2,150,000 55,000 320,000 Wages expense Miscell

> Financial information related to Webber Company for the month ended June 30, 20Y7, is as follows: Prepare a statement of stockholders’ equity for the month ended June 30, 20Y7. Common Stock, June 1, 20Y7 $ 60,000 Stock issued in J

> Illustrate the effects on the accounts and financial statements of recording the following selected transactions: a. Sold $11,250 of merchandise on account, subject to a sales tax of 6%. The cost of the merchandise sold was $6,750. b. Paid $63,120 to the

> Cheryl Alder operates her own catering service. Summary financial data for March are presented in the following equation form. Each line, designated by a number, indicates the effect of a transaction on the balance sheet. Each increase and

> American Eagle Outfitters Inc. (AEO) operates specialty retail stores, selling clothing such as denim, sweaters, t-shirts, and fleece outerwear that targets 15 to 25-year-old men and women. that targets 15 to 25-year-old men and women. The

> A retailer is considering the purchase of 100 units of a specific item from either of two suppliers. Their offers are as follows: A: $390 a unit, total of $39,000, 1/10, n/30, plus freight of $750. B: $400 a unit, total of $40,000, 2/10, n/30, no charge f

> Using the income statement and statement of cash flows you prepared in Exercise 3-3, reconcile net income with the net cash flows from operations.

> Four different companies—Chang, Henry, Nagel, and Wilcox—show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders’ equity, are summarize

> The following accounts were taken from the unadjusted trial balance of Inter Circle Co., a congressional lobbying firm. Indicate whether or not each account would normally require an adjusting entry. If the account normally requires an adj

> Classify the following items as (a) deferred expense (prepaid expense), (b) deferred revenue (unearned revenue), (c) accrued expense (accrued liability), or (d) accrued revenue (accrued asset). 1. Subscriptions received in advance by a magazine publis

> Margie Van Epps established Health Services, P.C., a professional corporation, in March of the current year. Health Services offers healthy living advice to its clients. The effect of each transaction on the balance sheet and the balances after each tran

> The following are recent year summaries of balance sheet and income statement data (in millions) for Apple Inc. (AAPL) and Verizon Communications (VZ). Determine the amounts of the missing items (a) through (i). Apple Verizon Year 1: Assets $231,83

> Using the data from Exercises 3-1 and 3-2, prepare financial statements for February, including income statement, statement of stockholders’ equity, balance sheet, and statement of cash flows. Data from Exercise 3.1: Terry Mason organized The Fifth Season

> Using the data from Exercise 3-1, record the adjusting entries at the end of February to record the insurance expense and supplies expense. There was $150 of supplies on hand as of February 28. Identify the adjusting entry for insurance as (a1) and suppl

> Terry Mason organized The Fifth Season at the beginning of February 20Y4. During February, The Fifth Season entered into the following transactions: a. Terry Mason invested $15,000 in The Fifth Season in exchange for common stock. b. Paid $2,700 on Febru

> The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements. 1. Compute quick assets

> Match each of the following statements with the appropriate accounting concept. Some concepts may be used more than once, while others may not be used at all. Use the notations shown to indicate the appropriate accounting concept. Statements: 1. Assume

> For a recent year, Barnes & Noble Inc. (BKS) reported (in thousands) Property and Equipment of $3,076,299 and Accumulated Depreciation of $2,627,007. a. What was the book value of the fixed assets? b. Would the book values of Barnes & Noble’s fixed asset

> Though the McDonald’s (MCD) menu of hamburgers, cheeseburgers, the Big Mac®, Quarter Pounder®, Filet-O-Fish®, and Chicken McNuggets® is easily recognized, McDonald’s ï&n

> Based upon the financial transactions for McDonald’s Corp. (MCD), shown in Exercise 2-21, indicate whether the transaction would be reported in the cash flows from operating, investing, or financing sections of the statement of cash flows. Data from Exercis

> Amazon.com, Inc., (AMZN) operates as an online retailer in North America and internationally. Both Amazon and third parties, via the Amazon.com Web site, sell products across various product categories. The following items were adapted from a recent annu

> Describe how the following business transactions affect the three elements of the accounting equation. a. Received cash for services performed. b. Paid for utilities used in the business. c. Borrowed cash at local bank. d. Issued common stock for cash. e