Josselle Corporation retires its bonds at 106 on January 1, after the payment of interest. The face value of the bonds is $750,000. The carrying value of the bonds at retirement is $775,600. The entry to record the retirement will include a a. debit of $19,400 to Premium on Bonds Payable. b. credit of $19,400 to Premium on Bonds Payable. c. debit of $25,600 to Premium on Bonds Payable. d. credit of $25,600 to Premium on Bonds Payable.
> Orlando Medical’s inventory turnover during fiscal year 2018 was a. $35,147. b. very slow. c. 83 times. d. 137.9 times
> Use the data for Griffin Company in E6-16A to answer the following. Requirements: 1. Compute cost of goods sold and ending inventory, using each of the following methods: a. Specific identification, with seven $165 units and four $175 units still on h
> Orlando Medical’s days’ sales in receivables during 2018 was (assuming all revenue is on credit) a. 137.9 days. b. 25 days. c. 35 days. d. 20.1 days.
> Orlando Medical’s common-size income statement for 2018 would report cost of goods sold as a. 82.4%. b. $35,147 million. c. up by 20.1%. d. 137.9%.
> Using the earliest year available as the base year, the trend percentage for Orlando Medical’s net revenue during 2018 was a. 121%. b. up by 21.1%. c. up by $11,555 million. d. 137%.
> What is the largest single item included in Orlando Medical’s debt ratio at December 31, 2018? a. Accounts payable b. Cash and cash equivalents c. Common stock d. Investments
> Orlando Medical’s quick (acid-test) ratio at year-end 2018 is closest to a. 0.68. b. $8,578 million. c. 0.45. d. 0.75.
> Orlando Medical’s current ratio at year-end 2018 is closest to a. $735. b. $8,578. c. 0.94. d. 1.2
> During 2018, Orlando Medical’s total assets a. increased by $1,863 million. b. increased by 28.3%. c. Both a and b. d. increased by 22.1%.
> Movens Company gathered the following data (in millions) for the past two years: In a vertical analysis of 2019, the gross profit percentage would be closest to a. 18%. b. 46%. c. 100%. d. 325%
> Bond Company reported the following inventory data: Use 2016 as the base year. The trend percentage in 2019 is closest to a. 83%. b. 87%. c. 92%. d. 115%
> If you want an indication of the direction a business is taking, you would use a. benchmarking. b. trend percentages. c. industry analysis. d. vertical analysis.
> Simon Granite & Stone Corporation reported the following comparative income statements for the years ended September 30, 2018, and 2017: Simon’s president and shareholders are thrilled by the company’s boost in
> public company’s annual report filed with the SEC includes a. a description of the business. b. financial statements. c. management’s explanations for trends in sales. d. All of the above are included in an annual report.
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question Assume Cramer uses the direct method to prepare the statement of cash flows. Income tax payable wa
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question Assume Cramer uses the direct method to prepare the statement of cash flows. Credit sales totaled
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question Cramer’s net cash flow from financing activities for 2018 was (assume no stock di
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question Cramer’s largest financing cash flow for 2018 resulted from (assume no stock divi
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question How many items enter the computation of Cramer’s net cash flow from financing ac
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question The book value of equipment sold during 2018 was $22,000. Cramer’s net cash flow
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question How many items enter the computation of Cramer’s net cash flow from investing ac
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question Cramer’s net cash provided by operating activities during 2018 was a. $32,000. b.
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question How do accounts receivable affect Cramer’s cash flows from operating activities f
> Sokol Antiques, Inc., began June with inventory of $48,400. The business made net purchases of $51,300 and had net sales of $104,000 before a fire destroyed the company’s inventory. For the past several years, Sokol’s gross profit percentage has been 3
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question How do Cramer’s accrued liabilities affect the company’s statem
> Cramer Corporation formats operating cash flows using the indirect method in questions 46–54. Cramer uses the direct method in question How many items enter the computation of Cramer’s net cash provided by operating a
> PhotoEase Camera Co. sold equipment with a cost of $19,000 and accumulated depreciation of $7,000 for an amount that resulted in a gain of $1,000. What amount should PhotoEase report on the statement of cash flows as “proceeds from sale of plant assets”?
> If the indirect method is used, which of the following items appears on a statement of cash flows? a. Collections from customers b. Payments to suppliers c. Cash receipt of interest revenue d. Depreciation expense
> The issuance of stock for cash is reported on the statement of cash flows under a. financing activities. b. operating activities. c. noncash investing and financing activities. d. investing activities.
> The issuance of common stock in exchange for cash is reported in: a. the operating activities section of the statement of cash flows. b. the investing activities section of the statement of cash flows. c. the financing activities section of the statement
> In a DuPont analysis, what are the components of return on assets? a. Net Profit Margin Ratio and Debt Ratio b. Net Profit Margin Ratio and Leverage Ratio c. Net Profit Margin Ratio and Asset Turnover Ratio d. Asset Turnover Ratio and Leverage Ratio
> Amir Company’s net income and net sales are $18,000 and $1,100,000, respectively, and average total assets are $100,000. What is Amir’s return on assets? a. 20.0% b. 18.0% c. 3.7% d. 7.0%
> A corporation has 100,000 shares of 4% preferred stock outstanding. Also, there are 100,000 shares of common stock outstanding. Par value for each is $100. If a $825,000 dividend is paid, how much goes to the preferred stockholders? a. None b. $400,000 c
> A corporation has 100,000 shares of 4% preferred stock outstanding. Also, there are 100,000 shares of common stock outstanding. Par value for each is $100. If a $825,000 dividend is paid, how much goes to the preferred stockholders? a. None b. $400,000 c
> Spicer Industries prepares budgets to help manage the company. Spicer is budgeting for the fiscal year ended January 31, 2018. During the preceding year ended January 31, 2017, sales totaled $9,700 million and cost of goods sold was $6,400 million. At
> Hodson Corp. purchased ten $1,000 8% bonds of Eagle Corporation when the market rate of interest was 6%. Interest is paid semiannually, and the bonds will mature in four years. Using the PV function in Excel®, compute the price Hodson paid (the present v
> Marvin’s Foods has outstanding 400 shares of 2% preferred stock, $100 par value; and 1,500 shares of common stock, $15 par value. Marvin’s declares dividends of $13,800. Which of the following is the correct entry?
> Quill Corporation paid $28 per share to purchase 900 shares of its common stock as treasury stock. The stock was originally issued at $12 per share. Which of the following would be the journal entry that Quill would make to record the purchase of the tre
> Sportplace’s net income for the period is $119,600 and its average common stockholders’ equity is $699,415. Sportplace’s return on common stockholders’ equity is closest to a. 17.1%. b. 17.2%. c. 18.4%. d. 17.3%.
> What is total paid-in capital for Sportplace? (Assume that treasury stock does not reduce total paid-in capital.) a. $632,300 b. $709,900 c. $643,700 d. $638,000 e. None of the above
> What is total paid-in capital for Sportplace? (Assume that treasury stock does not reduce total paid-in capital.) a. $632,300 b. $709,900 c. $643,700 d. $638,000 e. None of the above
> Spirit World, Inc., issued 250,000 shares of no-par common stock for $5 per share. The journal entry to record the issuance would be:
> The basic form of capital stock is a. par value stock. b. the corporate charter. c. a share of preferred stock. d. a share of common stock.
> Apollo Corporation issued $300,000, five-year bonds at 98 on January 1, 2016. On December 31, 2020, the bonds matured. The payment of the bonds at maturity would be reported on the statement of cash flows as a cash outflow of a. $294,000 in the financing
> The leverage ratio is equal to average total divided by average. a. long-term debt; common stockholders’ equity b. assets; common stockholders’ equity c. debt; total assets d. debt; common stockholders’ equity
> Cases Unlimited reported operating income of $780,000, interest expense of $120,000, and net income of $575,000. The weighted-average number of shares of common stock outstanding during the year was 100,000 shares. What is the times-interest-earned ratio
> The Red Wagon Shop had the following inventory data: Company managers need to know the company’s gross profit percentage and rate of inventory turnover for 2018 under 1. FIFO. 2. LIFO. Which method produces a higher gross profit perce
> Which of the following items is most likely a short-term liability? a. Deferred income taxes b. Finance lease covering 30-year term c. Bonds payable d. Accounts payable
> Corporate bonds that can be exchanged for shares of the corporation’s common stock if certain conditions are met are called a. callable bonds. b. equity bonds. c. convertible bonds. d. exchangeable bonds
> On January 1, 2020, Fergus Corporation issued $800,000, 10%, 5-year bonds. The bond interest is payable on January 1 and July 1. The bonds sold for $864,887. The market rate of interest when the bonds were issued was 8%. Under the effective-interest meth
> Maridell’s Fashions has a debt that has been properly reported as a long-term liability up to the present year (2018). Some of this debt comes due in 2018. If Maridell’s Fashions continues to report the current position as a long-term liability, the effe
> Using the facts in the preceding question, Mcdonaugh’s entry to record the interest expense on July 1, 2019, will include a a. debit to Premium on Bonds Payable. b. credit to Discount on Bonds Payable. c. debit to Bonds Payable. d. credit to Interest Exp
> Mcdonaugh Corporation issued $250,000 of 5%, 10-year bonds payable on January 1, 2019. The market interest rate when the bonds were issued was 8%. Interest is paid semiannually on January 1 and July 1. The first interest payment is July 1, 2019. Using th
> Cheyenne Company sells $400,000 of 14%, 10-year bonds for 92.613 on April 1, 2018. The market rate of interest on that day is 15.5%. Interest is paid each year on April 1.Cheyenne Company uses the straight-line amortization method. The amount of interest
> Cheyenne Company sells $400,000 of 14%, 10-year bonds for 92.613 on April 1, 2018. The market rate of interest on that day is 15.5%. Interest is paid each year on April 1. The entry to record the sale of the bonds on April 1 would be as follows:
> The carrying value on bonds equals Bonds Payable a. minus Premium on Bonds Payable. b. plus Discount on Bonds Payable. c. plus Premium on Bonds Payable. d. minus Discount on Bonds Payable. e. both a and b f. both c and d
> Refer to the data in E6-37B. Compute all ratio values to answer the following questions: ■ Which company has the highest and which company has the lowest gross profit percentage? ■ Which company has the highest and which has the lowest rate of inventory
> Madison Corporation acquired a machine for $27,000 and has recorded depreciation for two years using the straight-line method over a five-year life and $8,000 residual value. At the start of the third year of use, Madison revised the estimated useful lif
> At the beginning of last year, Bratworth Corporation purchased a piece of heavy equipment for $99,000. The equipment has a life of five years or 100,000 hours. The estimated residual value is $9,000. Bratworth used the equipment for 21,000 hours last yea
> Text World, Inc., reported sales revenue of $450,000, net income of $54,000, and average total assets of $360,000. Text World’s return on assets is a. 12.0%. b. 1.25%. c. 15.0%. d. 80.0%.
> Harlem, Inc., was reviewing its assets for impairment at the end of the current year. Information about one of its assets is as follows: Harlem should report an impairment loss for the current year of a. $275,000. b. $25,000. c. $0. d. $250,000
> Suppose Speedy Delivery pays $62 million to buy Lone Star Overnight. The fair value of Lone Star’s assets is $80 million, and the fair value of its liabilities is $24 million. How much goodwill did Speedy Delivery purchase in its acquisition of Lone Star
> A company purchased mineral assets holding approximately 240,000 tons of ore for $960,000. The estimated residual value of the assets is zero. During the first year, 40,000 tons are extracted and sold. What is the amount of depletion for the first year?
> Taylor Company purchased a machine for $9,800 on January 1, 2016. The machine has been depreciated using the straight-line method assuming it has a five-year life with a $1,400 residual value. Taylor sold the machine on January 1, 2018, for $7,600 What g
> Taylor Company purchased a machine for $9,800 on January 1, 2016. The machine has been depreciated using the straight-line method assuming it has a five-year life with a $1,400 residual value. Taylor sold the machine on January 1, 2018, for $7,600 What i
> Suppose you buy land for $2,800,000 and spend $1,100,000 to develop the property. You then divide the land into lots as follows: How much did each Hilltop lot cost you? a. $176,800 b. $83,200 c. $510,000 d. $36,667
> An error understated Power Corporation’s December 31, 2018, ending inventory by $54,000. What effect will this error have on total assets and net income for 2018? Assets Net income a. Understate b. Understate No effect c. No effect Overstate d. No effect
> Supply the missing amounts for each of the following companies: Requirement: 1. Prepare the income statement for Altieri Company for the year ended December 31, 2018. Use the cost-of-goods-sold model to compute cost of goods sold. Altieriâ€
> Scott Equine Supplies had the following beginning inventory, net purchases, net sales, and gross profit percentage for the first quarter of 2018: By the gross profit method, the ending inventory should be a. $75,200. b. $48,800. c. $105,200. d. $124,000
> Roswell Corporation reported the following data: Roswell’s gross profit percentage is a. 49.2. b. 50.8. c. 56.0. d. 48.2
> A company’s sales are $550,000 and cost of goods sold is $350,000. Beginning and ending inventories are $27,000 and $38,000, respectively. How many times did the company turn its inventory over during this period? a. 10.8 times b. 6.2 times c. 7.4 time
> A capital expenditure a. adds to an asset. b. is expensed immediately. c. is a credit like capital (equity). d. records additional capital.
> An error understated Golden Flash Company’s December 31, 2018, ending inventory by $27,000. What effect will this error have on net income for 2019? a. Understate it b. Have no effect on it c. Overstate it
> Pineview Company ended the month of March with inventory of $26,000. Pineview expects to end April with inventory of $14,000 after selling goods with a cost of $98,000. How much inventory must Pineview purchase during April in order to accomplish these r
> The following data come from the inventory records of Albrecht Company: Based on these facts, the gross profit for Albrecht Company is a. $120,000. b. $223,000. c. $195,000. d. $205,000.
> The income statement for Gilmore Uniforms shows gross profit of $143,000, operating expenses of $130,000, and cost of goods sold of $219,000. What is the amount of net sales revenue? a. $362,000 b. $492,000 c. $273,000 d. $349,000
> A bond with a face amount of $12,000 has a current price quote of 107.15. What is the bond’s price? a. $12,107.15 b. $1,285.80 c. $12,858.00 d. $128,580
> If The Corner Frame Shop uses the LIFO method, cost of goods sold will be a. $21,200. b. $21,240. c. $20,900. d. $22,340.
> Huron Garden Supplies uses a perpetual inventory system. The company has these account Balances at October 31, 2018, prior to making the year-end adjustments: A year ago, the net realizable value of ending inventory was $12,800, which exceeded the cost
> If The Corner Frame Shop uses the FIFO method, the cost of the ending inventory will be a. $21,200. b. $20,900. c. $21,240. d. $27,840
> Swisher Company sold inventory with a selling price of $5,000 to customers for cash. It also collected sales taxes of $250. The journal entry to record this information includes a a. credit to Sales Tax Expense $250. b. credit to Sales Revenue $5,250. c.
> Connors Company paid $700 cash to make a repair on equipment it sold under a one-year warranty in the prior year. The entry to record the payment will debit a. Accrued Warranty Payable and credit Cash. b. Operating Expense and credit Cash. c. Warranty Ex
> What was Lakeside’s gross profit for January? a. $7,500 b. $ – 0 – c. $1,900 d. $5,600
> Lakeside Software began January with $3,900 of merchandise inventory. During January, Lakeside made the following entries for its inventory transactions: How much was Lakeside’s inventory at the end of January? a. $4,300 b. $9,900 c. $
> Which of the following statements is false? a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur. b. All contingent liabilities should be reported
> Blue Jay, Inc., manufactures and sells computer monitors with a three-year warranty. Warranty costs are expected to average 7% of sales during the warranty period. The following table shows the sales and actual warranty payments during the first two year
> Lexter Corporation borrows cash by signing a $90,000, 8%, eight-month note on December 1 with its local bank. The total cash paid for interest (only) at the maturity of the note by Lexter will be a. $600. b. $3,600. c. $4,800. d. $7,200.
> Gravel Corporation borrowed $250,000 from a bank on January 1, 2019, by signing a 10%, six-month note. The journal entry made by Gravel on January 1, 2019, will debit a. Interest Expense for $25,000 and credit Interest Payable for $25,000. b. Cash for $2
> A company reports purchases of $388,000, a beginning accounts payable balance of $27,000, and an ending accounts payable balance of $48,000. All purchases were on account. The company’s accounts payable turnover would be closest to: a. 7.26 b. 8.33 c. 10
> Suppose a Target store in Chicago, Illinois, ended November 2018 with 500,000 units of merchandise that cost $8.00 each. Suppose the store then sold 110,000 units for $960,000 during December. Further, assume the store made two large purchases during Dec
> On November 1, 2018, Sigma Inc. invests in $1,000,000 of 5%, 10-year bonds issued by Microsoft Corporation, intending to hold the bonds until their maturity. The bonds pay interest each January 1 and July 1. What account related to the bonds will be on S
> Consolidation accounting a. eliminates all liabilities. b. reports the receivables and payables of the parent company only. c. combines the accounts of the parent company and its subsidiary companies. d. all of the above
> Jackson Bank lends Jabbour Clothing Company $125,000 on September 1. Jabbour signs a $125,000, 6%, six-month note. The journal entry made by Jabbour on December 31, its fiscal year-end, is a. debit Interest Payable and credit Interest Expense for $2,500.
> Reliable Networks owns the following long-term equity investments (it does not have significant influence over any of its investments) Reliable’s income statement for the year should report a. investments of $68,800. b. an unrealized
> Reliable Networks owns the following long-term equity investments (it does not have significant influence over any of its investments) Reliable’s balance sheet at year-end should report a. investments of $100,000. b. an unrealized loss
> Refer to the Continental data in E-Q-32. On December 31, Continental’s balance sheet should report a. dividend revenue of $37,000. b. investment in equity securities of $554,000. c. investment in equity securities of $550,000. d. an unrealized gain o
> Continental Bank, a nationwide banking company, owns many types of investments. Continental paid $550,000 for equity securities on December 5. Continental owns less than 10% of the stock of the companies in which it invests. Two weeks later, Continental
> The beginning balance sheet of Homesby Corporation included the following long-term asset: Homesby completed the following investment transactions during the year: At year-end, the fair values of Homesby’s investments were as follows:
> Oregon Exchange Company completed the following long-term investment transactions during 2018: At year-end, the fair value of the Columbus stock is $30,100. The fair value of the Nashua stock is $658,000. Requirements: 1. For which investment is fair
> During the fourth quarter of 2018, Rainbarrel, Inc. generated excess cash, which the company invested in equity securities as follows: Requirements: 1. Open T-accounts for Cash (including its beginning balance of $23,000), Investment in Equity Securitie
