Katy Williams is the manager of Blue Light Arcade. The company provides entertainment for parties and special events. Prepare journal entries for the following events relating to the year ended December 31. If the event is not a transaction, write “no transaction.” a. Blue Light Arcade received $50 cash on account for a birthday party held two months ago. b. Agreed to hire a new employee at a monthly salary of $3,000. The employee starts work next month. c. Paid $2,000 for a table top hockey game purchased last month on account. d. Repaid a $5,000 bank loan that had been outstanding for six months. (Ignore interest.) e. The company purchased an air hockey table for $2,200, paying $1,000 cash and signing a short-term note for $1,200.
> The Sky Blue Corporation has the following adjusted trial balance at December 31. Prepare an income statement for the year ended December 31. How much net income did the Sky Blue Corporation generate during the year?
> Macro Company has the following adjusted accounts and balances at (June 30): Required: Prepare an adjusted trial balance for Macro Company at June 30.
> Briefly explain what is meant by transaction analysis. What are the two principles underlying transaction analysis?
> Indicate whether each of the following accounts would be reported on the balance sheet (B/S) or income statement (I/S) of Home Repair Company. Further, if the account is reported on the balance sheet, indicate whether it would be classified with current
> Service Pro Corp. (SPC) is preparing adjustments for its September 30 year-end. For the following transactions and events, show the September 30 adjusting entries SPC would make. a. Prepaid Insurance shows a balance of zero at September 30, but Insuranc
> For each of the following independent situations, prepare journal entries to record the initial transaction on December 31 and the adjustment required on January 31. a. Magnificent Magazines received $12,000 on December 31, 2018, for subscription servic
> Match each situation below to two applicable reasons that require an adjustment to be made
> Given the transactions in M3-7 and M3-8 (including the examples), prepare an income statement for Bill’s Extreme Bowling, Inc., for the month ended July 31. (This income statement would be considered â€
> The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers. For each of the following transactions, complete the spreadsheet, indicating the amount and effect (+ for increase a
> The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers. For each of the following transactions, complete the spv indicating the amount and effect (+ for increase and â
> For each of the transactions in M3-4, write the journal entry using the format shown in the chapter Data from M3-4: The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers.
> For each of the transactions in M3-3, write the journal entry using the format shown in the chapter. Data from M3-3: The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers
> The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers. If an expense is to be recognized in July, indicate the amount. If an expense is not to be recognized in July, expla
> Explain what debit and credit mean.
> The following transactions are July activities of Bill’s Extreme Bowling, Inc., which operates several bowling centers. If revenue is to be recognized in July, indicate the amount. If revenue is not to be recognized in July, explain why
> Kijijo Auctions runs an online auction company. Its end-of-year financial statements indicate the following results. Calculate the company’s net profit margin expressed as a percent (to one decimal place) and indicate whether it represe
> Expedia and Priceline compete as online travel agencies. Historically, Expedia has focused more on flights, whereas Priceline has focused on hotel bookings. The following amounts were reported by the two companies in 2015. Calculate each companyâ&#
> For each of the following items in Old Time Cable, Inc.’s financial statements, indicate (1) whether it is reported in the income statement (I/S) or balance sheet (B/S) and (2) whether it is an asset (A), liability (L), stoc
> The following accounts are taken from Equilibrium Riding, Inc., a company that specializes in occupational therapy and horseback riding lessons, as of December 31. Required: Using the unadjusted trial balance provided, create a classified Balance Sheet
> Given the transactions in M3-18 and M3-19 (including the examples), prepare an income statement for Swing Hard Incorporated for the month ended February 28. (This income statement would be considered “preliminary
> Mostert Music Company had the following transactions in March: a. Sold music lessons to customers for $10,000; received $6,000 in cash and the rest on account. b. Paid $600 in wages for the month. c. Received a $200 bill for utilities that will be pai
> The following transactions are February activities of Swing Hard Incorporated, which offers golfing lessons in the northeastern United States. For each of the following transactions, complete the spreadsheet, indicating the amount and effect (+ for incre
> The following transactions are February activities of Swing Hard Incorporated, which offers golfing lessons in the northeastern United States. For each of the following transactions, complete the spreadsheet, indicating the amount and effect (+ for incre
> Andy’s Autobody Shop has the following balances at the beginning of September: Cash, $10,000; Accounts Receivable, $1,450; Equipment, $40,000; Accounts Payable, $2,000; Common Stock, $20,000; and Retained Earnings, $29,450. Prepare journal entries for th
> What is the basic accounting equation?
> An international children’s charity collects donations, which are used to buy clothing and toys for children in need. The charity records donations of cash and other items as Donations Revenue when received. Prepare journal entries for the following tran
> Junktrader is an online company that specializes in matching buyers and sellers of used items. Buyers and sellers can purchase a membership with Junktrader, which provides them advance notice of potentially attractive offers. Prepare journal entries for
> Quick Cleaners, Inc. (QCI), has been in business for several years. It specializes in cleaning houses but has some small business clients as well. Prepare journal entries for the following transactions, which occurred during a recent month, and determine
> For each of the transactions in M3-11, write the journal entry using the format shown in the chapter. Data from M3-11: The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern
> For each of the transactions in M3-10, write the journal entry using the format shown in the chapter. Data from M3-10: The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern
> The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States. If an expense is to be recognized in February, indicate the amount. If an expense is not to be recognize
> The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States. If revenue is to be recognized in February, indicate the amount. If revenue is not to be recognized in F
> Lakeside Indoor Tennis Club (LITC) sells a tennis membership for $2,400 per year, which entitles members to 50 “free” court bookings. The price for nonmembers is $40 per court booking. LITC’s membership also allows members to participate in a competitive
> For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. a. (Sample) Borrowed $3,940 from a local bank on a not
> Half Price Books is the country’s largest family-owned new and used bookstore chain. Do the following events result in a recordable transaction for Half Price Books? Answer yes or no for each.
> For accounting purposes, what is an account? Explain why accounts are used in an accounting system.
> Do the following events result in a recordable transaction for The Toro Company? Answer yes or no for each.
> Netflix, Inc., is the world’s leading Internet subscription service for movies and TV shows. The following are several of the accounts included in a recent balance sheet: 1. Accrued Liabilities 2. Prepaid Rent 3. Cash 4. Common Stock 5. Notes Payable (l
> Hasbro, Inc., produces products under several brands including Transformers, Nerf, My Little Pony, and Monopoly. The following are several of the accounts from a recent balance sheet: 1. Accounts Receivable 2. Notes Payable (short-term) 3. Common Stock
> The following are a few of the accounts of Aim Delivery Corporation: In the space provided, classify each as it would be reported on a balance sheet. Use the following codes: CA = Current Asset CL = Current Liability SE = Stockholders’
> Match each term with its related definition by entering the appropriate letter in the space provided. There should be only one definition per term. (That is, there are more definitions than terms.)
> BSO, Inc., has current assets of $1,000,000 and current liabilities of $500,000, resulting in a current ratio of 2.0. For each of the following transactions, determine whether the current ratio will increase, decrease, or remain the same. Consider each i
> Refer to M2-23. Evaluate whether the current ratio of Mister Ribs Restaurant will increase or decrease as a result of the following transactions. Consider each item, (a)–(d), independent of the others. a. Paid $2,000 cash for a new oven. b. Received a
> The balance sheet of Mister Ribs Restaurant reports current assets of $30,000 and current liabilities of $15,000. Calculate and interpret the current ratio. Does it appear likely that Mister Ribs will be able to pay its current liabilities as they come d
> The following accounts are taken from the financial statements of Facebook Inc. at September 30, 2016. (Amounts are in millions.) Required: 1. Prepare a classified balance sheet at September 30, 2016. TIP: This exercise requires you to remember material
> Charlie’s Crispy Chicken (CCC) operates a fast-food restaurant. When accounting for its first year of business, CCC created several accounts. Using the following descriptions, prepare a classified balance sheet at September 30. Are CCC&
> Define a transaction and give an example of each of the two types of events that are considered transactions.
> Analyze the accounting equation effects of the transactions in M2-19 using the format shown in the chapter and compute total assets, total liabilities, and total stockholders’ equity. Data from M2-19: a. Blue Light Arcade received $50 cash on account f
> Complete the following table by entering either the word debit or credit in each column.
> Analyze the accounting equation effects of the transactions in M2-17 using the format shown in the chapter and compute total assets, total liabilities, and total stockholders’ equity Data from M2-17: a. Ordered and received $12,000 worth of cotton candy
> Sweet Shop Co. is a chain of candy stores that has been in operation for the past 10 years. Prepare journal entries for the following events, which occurred at the end of the most recent year. If the event is not a transaction, write “no transaction.” a.
> Analyze the accounting equation effects of the transactions in M2-15 using the format shown in the chapter and compute total assets, total liabilities, and total stockholders’ equity. Data from M2-15: a. The company purchased equipment for $4,000 cash.
> At the beginning of August, Joel Henry founded Bookmart.com, which sells new and used books online. He is passionate about books but does not have a lot of accounting experience. Help Joel by preparing journal entries for the following events. If the e
> Analyze the accounting equation effects of the transactions in M2-13 using the format shown in the chapter and compute total assets, total liabilities, and total stockholders’ equity Data from M2-13: J.K. Builders was incorporated on July 1. Prepare jo
> J.K. Builders was incorporated on July 1. Prepare journal entries for the following events from the first month of business. If the event is not a transaction, write “no transaction.” a. Received $70,000 cash invested by owners and issued common stock. b
> Given the transactions in M2-9 (including the sample), prepare a classified balance sheet for Spotlighter, Inc., as of January 31.
> To obtain financing for her hair salon, Valeri asked you to prepare a balance sheet for her business. When she sees it, she is disappointed that the assets exclude a value for her list of loyal customers. What can you tell her to explain why this “asset”
> Explain the concept of the time value of money.
> For each of the transactions in M2-9 (including the sample), post the effects to the appropriate T-accounts and determine ending account balances. Show a beginning balance of zero.
> For each of the transactions in M2-9 (including the sample), write the journal entry using the format shown in this chapter (omit explanations)
> Complete the following table by entering either the word increases or decreases in each column.
> Match each element with its financial statement by entering the appropriate letter in the space provided.
> Oakley, Inc., reported the following items in its financial statements. For each item, indicate (1) the type of account (A = asset, L = liability, SE = stockholders’ equity, R = revenue, E = expense, D = dividend) and (2) whether it is reported on the in
> General Mills is a manufacturer of food products, such as Lucky Charms cereal, Pillsbury crescent rolls, and Green Giant vegetables. The following items were presented in the company’s financial statements. For each item, indicate (1) the type of account
> Tootsie Roll Industries manufactures and sells more than 64 million Tootsie Rolls each day. The following items were listed on Tootsie Roll’s recent income statement and balance sheet. For each item, indicate (1) the type of account (A = asset, L = liabi
> For each item, indicate (1) whether it is reported on the income statement (I/S) or balance sheet (B/S) and (2) the type of account (A = asset, L = liability, SE = stockholders’ equity, R = revenue, E = expense).
> For each of the following items in Procter & Gamble’s financial statements, indicate (1) whether it is reported in the income statement (I/S) or balance sheet (B/S) and (2) whether it is an asset (A), liability (L), stockholders&aci
> Match each definition with its related term by entering the appropriate letter in the space provided.
> Explain the cost principle.
> Match each definition with its related term or abbreviation by entering the appropriate letter in the space provided.
> The following information was reported in the December 31, 2017, financial statements of National Airways, Inc. (listed alphabetically, amounts in millions). 1. Prepare an income statement for the year ended December 31, 2017. 2. Prepare a statement of
> Items from the 2015 income statement, statement of retained earnings, and balance sheet of Activision Blizzard, Inc., are listed below in alphabetical order. Solve for the missing amounts, and explain whether the company was profitable. TIP: Use Exhibit
> Items from the income statement, statement of retained earnings, and balance sheet are listed below in alphabetical order. For the companies shown in each column, solve for the missing amounts.
> Items from the income statement, statement of retained earnings, and balance sheet are listed below in alphabetical order. For the companies shown in each column, solve for the missing amounts. TIP: Use Exhibit 1.7 to identify relations among
> Stone Culture Corporation was organized on January 1, 2017. For its first two years of operations, it reported the following: On the basis of the data given, prepare a statement of retained earnings for both 2017 (its first year of operations) and 2018.
> Learning which items belong in each category of the statement of cash flows is an important first step in understanding their meaning. Use a letter to mark each item in the following list as a cash flow from Operating, Investing, or Financing activities.
> Learning which items belong in each cash flow statement category is an important first step in understanding their meaning. Use a letter to mark each item in the following list as a cash flow from Operating, Investing, or Financing activities. Put parent
> The following is a list of important abbreviations used in the chapter. These abbreviations also are used widely in business. For each abbreviation, give the full designation. The first one is an example.
> Rock town Corporation bought 600 shares of General Eccentric stock on March 20 at $29 per share. Immediately prior to selling the General Eccentric stock on June 23, Rocktown updated its investment account to report the fair value of $33 per share. Prepa
> Define the following: a. Asset b. Current asset c. Liability d. Current liability e. Common stock f. Retained earnings
> Using the following categories, indicate the effects (direction and amount) of the transactions listed in MD-3. Use + for increase and − for decrease.
> Princeton Company acquired some of the 50,000 outstanding shares of the common stock of Cox Corporation as marketable equity securities. The accounting period for both companies ends December 31. Give the journal entries for each of the following transac
> Using the following categories, indicate the effects (direction and amount) of the transactions listed in MD-1. Use + for increase and − for decrease.
> On January 2, Ubuy.com paid $100,000 to acquire 25 percent (10,000 shares) of the common stock of E-Net Corporation. The accounting period for both companies ends December 31. Give the journal entries for the purchase on January 2 and for each of the fol
> Use the financial calculator app shown in the appendix to answer MC-4. Round to the nearest dollar. MC-4: You plan to retire in 20 years. Use the time value of money tables to calculate whether it is better for you to save $25,000 a year for the last 1
> Use the financial calculator app shown in the appendix to answer MC-3. Round to the nearest dollar. MC-3: As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been terminated a severance package of $100,000 cash,
> Use the financial calculator app shown in the appendix to answer MC-2. Round to the nearest dollar MC-2: Use present value tables to compute the present value of 10 equal payments of $15,000, with an interest rate of 10 percent. Round to the nearest do
> Use the financial calculator app shown in the appendix to answer MC-1. Round to the nearest dollar.
> Use Excel to answer MC-4. Round to the nearest dollar. MC-4: You plan to retire in 20 years. Use the time value of money tables to calculate whether it is better for you to save $25,000 a year for the last 10 years before retirement or $15,000 for each
> Use Excel to answer MC-3. Round to the nearest dollar. MC-3: As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been terminated a severance package of $100,000 cash, another $100,000 to be paid in one year, and
> What information should be included in the heading of each of the four primary financial statements?
> Use Excel to answer MC-2. Round to the nearest dollar. MC-2: Use present value tables to compute the present value of 10 equal payments of $15,000, with an interest rate of 10 percent. Round to the nearest dollar.
> Mystic Laboratories reported total assets of $11,200,000 and noncurrent assets of $1,480,000. The company also reported a current ratio of 1.5. What amount of current liabilities did the company report?
> A manufacturer reported an inventory turnover ratio of 8.6 last year. During the current year, managreement introduced a new inventory control system that was expected to reduce average inventory levels by 25 percent without affecting sales volume. Given
> Given the following data, compute the return on equity ratio for the current year (expressed as a percentage with one decimal place).
> A consumer products company reported a 25 percent increase in sales from last year to this year. Sales last year were $200,000. This year, the company reported Cost of Goods Sold in the amount of $150,000. What was the gross profit percentage this year?
> Your campus computer store reported Sales Revenue of $168,000. The company’s gross profit percentage was 60.0 percent. What amount of Cost of Goods Sold did the company report?
> Refer to the calculations from M13-2. Which of the ratios from Exhibit 13.5 have been included in these calculations? Have these two ratios improved or deteriorated in the current year compared to the previous year? Data from M13-2: Using the following
> Refer to the calculations from M13-1. What are the two most significant year-over-year changes in terms of dollars and in terms of percentages? Give one potential cause of each of these changes. Data from M13-1: Using the following income statements, p
> Refer to M13-1. Perform the calculations needed for vertical analyses. Round percentages to one decimal place. Data from M13-1: Using the following income statements, perform the calculations needed for horizontal analyses. Round percentages to one dec
