Question: Mary began a business, and after collecting $

> Merck, a major pharmaceutical, generated $9.78 billion in net income for the year ended December 31, 2019. 1. The company paid $5.82 billion in dividends during 2019. 2. Merck stock was selling for $73.59 per share on January l , 2019, and for $90.95 per

> The following information refers to the financial records of McDonald's Corporation over a three-year period (dollar amounts in millions except share price). a. Compute dividends declared as a percentage of net income during each of the three years. b. C

> When Radio Shack announced a 2: 1 stock split, the company had 97 million shares outstanding, trading at $100 per share. a. Estimate the number of shares outstanding and market price per share immediately after the split. b. Estimate the company's overal

> At the end of 2020, Montvale Associates borrowed $120,000 from the Bay liner Bank. The debt covenant specified that Montvale's debt/equity ratio could not exceed 1.5: I during the period of the loan. A summary of Montvale's balance sheet after the loan f

> Excerpts from the fiscal 2019 financial report of Cisco Systems, a leading Internet networker, are provided below (dollars in millions). From the information below, compute ROE, ROA, capital structure leverage, profit margin, and total asset turnover for

> Small and Associates, a small manufacturing firm, entered into the following cash transactions during January 2020: 1. Issued 600 shares of stork for $25 each. 2. Sold services for $4,000 cash. 3. Incurred and paid payroll of $ 1,600. 4. Purchased land a

> The following cash T-account for Miller Manufacturing summarizes all the transactions affecting cash during 2020 with a December 3 I closing date. a. Compute the ending cash balance. b. Prepare a statement of cash flows using the direct method.

> The following information was taken from the 2019 annual report of Bristol-Myers Squibb, a world-leading drug company (dollars in millions). Prepare an income statement, balance sheet, and statement of cash flows, and comment on the financial performance

> The following accounts and balances were taken from the records of American Airlines (dollars in millions). Identify each account as an income statement or balance sheet account. Where is each account reflected in the basic accounting equation?

> The Brown Corporation experienced the following financial events on October 10, 2020: 1. The company entered into a new contract with the employees’ union that calls for a $2.00 per hour increase in wages, a longer lunch break, and cost-of-living adjustm

> Assume that Cathedral Enterprises, which is in its first year of operations (i.e., 2020 with a December 31 year end) entered into the following transactions. Show how the six transactions affect the accounting equation, and prepare an income statement, s

> Total each asset, liability, rind shareholders’ equity account in E4.2, and prepare an income statement, a statement of shareholders’ equity, a balance sheet, and a statement of cash flows. Assume that the current year (i.e., 2020) is the company's first

> Tony’s Business is a small retailer that began operations on January 1. 2020. During 2020, the following transactions occurred: 1. Tony contributed $20,000 of his own money to the business. 2. $60,000 in cash was borrowed from the bank. 3. Property, plan

> The following information was taken from the 2019 statement of shareholders' equity of Home Depot (dollars in millions): a. What portion of net income was paid out in dividends during the year? b. Explain how the issuance of shares affected the basic acc

> Excerpts from the financial statements of Dunbar Manufacturing are provided below. a. Compute the payroll payable as of December 3 I , 2019. b. Compute the cash payments for rent during 2020. c. Compute the accounts receivable as of December 31, 2020.

> Condensed balance sheets for 2017 and 2018 and the world’s largest tire company, are as follows (dollars in millions). 2018 income statement for Goodyear, a. Assume that early in 2019 Goodyear is considering the following transactions (

> Consider the same transactions as in E4—1, but this time complete the following chart, using a separate sheet of paper.

> Peters Company was in business for two years, during which time it entered into the following transactions: Year 1. 1. The owners contributed $24.000 cash. 2. At the beginning of the year, rented a warehouse for two years with a prepaid rent payment of $

> Rahal and Watson, a small manufacturing company, entered into the following cash trans- actions during January 2020: 1. Issued 800 shares of common stock for $30 each. 2. Collected $3,900 on outstanding accounts receivable. 3. Paid payroll for the month

> The following journal entries were recorded by Lauren Retailing during the month of July: a. Prepare an income statement and the operating section of a statement of cash flows. b. Explain why net income is not equal to net cash flow from operating activi

> Washington Forest Products began operations on January I, 2020. On December 31, 2020, the company’s accountant ascertains that the following amounts should be reported as expenses on the income statement: A review of the companyâ&

> During 2018, Starbucks purchased fixed assets costing approximately $ 1.8 billion. Assume that the company purchased the assets at the beginning of the year, uses straight-line depreciation, and normally depreciates its equipment over four years. Assume

> The Hurst Corporation pays its employees every Friday for the five-day week just ended. On January 1, 2021, the company paid its employees $70,000 for the week beginning Monday, December 28, 2020. a. Assuming that the employees earned salaries and wages

> Hog Heaven Rib Joint made the following journal entries on December 31, 2020: Place each of the transactions above in one of the following five categories: (1) operating activity cash flow, (2) investing activity cash flow, (3) financing activity cash

> During fiscal 2020, Delta Airlines, which leases most of its aircraft, paid approximately $1.3 billion on its lease contracts-$269 million on financing leases and a little over $1 billion on operating leases. a. How did the lease payments on contracts wi

> Eaton Enterprises made the following adjusting journal entries on December 31, 2020: a. Give a brief explanation for each of the above entries. b. Classify each of the above entries as either a cost expiration adjusting entry or an accrual adjusting entr

> The following cash T-account for Holcomb Manufacturing summarizes n1l ihe transactions affecting cash during 2020. a. Compute the ending cash balance. b. Prepare a statement of cash flows (direct method).

> Ed’s Lawn Service entered into the following transactions during 2020, its first year of operations: 1. Collected $12,000 in cash from shareholders. 2. Borrowed $5,000 cash from a brink. 3. Purchased two parcels of property for a total of $10,00d in cash

> On a separate piece of paper, complete the following chart to show the effect of each transaction on the accounting equation.

> The Atlantic Bears, a major league sports team, began the season with five home games to be played in March. Other financial information follows: • During January and February 2020, the team received $600,000 ($200,00d in January and $400,000 in February

> All large U.S. companies have policies in which all expenditures (i.e., costs) under a certain dollar amount arc expensed. Many of these costs are for assets, items that are useful to the company beyond the period in which they were purchased. a. Explain

> RDP and Brothers purchased a panel truck for $25,000 on January 1, 2020. It estimated the life of the truck is be five years and estimated its value to be zero at the end of the five years, and it will be depreciated by an equal amount in each of the fiv

> Micro IT manufactures and sells computers. Each of its computers includes Micro lT soft- ware that is created by the company and included in the sales price of the computer. As part of the sales agreement, Micro IT provides updates to its software for fo

> Cascades Enterprises ordered 4,000 brackets from McKey and Company on December 1, 2020, for a contracted price of $40,000. McKey completed manufacturing the brackets on January 17 of the next year and delivered them to Cascades on February 9. McKey recei

> The 2019 annual report for Cisco Systems contains the following information (dollars in millions): On the income statement, Cisco reported that the cost of sales related to the inventory was $14.9 billion ($14.4 billion for the year ending 7/28/2018).

> Hewlett-Packard issued zero coupon (stated interest rate = zero) bonds with a face value of $1.8 billion, due in ten years, for proceeds of $968 million. a. What is the life of these bonds? b. What is the stated interest rate on these bonds? c. Estimate

> Name the valuations that are used for each of the asset and liability accounts shown here. Some assets and liabilities can use more than one type of valuation.

> Palomar Paper Products purchased Fund in 2002 for $ 15,000 cash. The company has held the land since that time. In 2020. Palomar purchased another tract of land for $15,000 cash. Assume that prices in general increased by 60 percent from 20£12 to 2020. a

> At the end of every year, Nike and Adidas record inventory write-downs for items (footwear and apparel) that have lost value due to a variety of reasons, such as changing styles, defective merchandise, and lost items. Occasionally, the values of some of

> Recently, Boeing has maintained a cash balance of over $10 billion. At an annual inflation rate of about 2 percent does cash have more or less purchasing power at the end of a given year than at the beginning’? By how much? Is such a gain or loss reflect

> The information below was taken from the 2019 annual report of Cisco Systems, a world- wide leader in networking for the Internet. Compute the missing amounts in the following table. Describe and evaluate the company’s cash management a

> Suppose that La-Z-Boy in E2.7 signed a debt covenant specifying that current assets must exceed current liabilities by $300 million. Assume further that in early January 2020, the company planned to purchase a 5300-million piece of machinery and had two

> la-Z-Boy Incorporated included the following information in its 2019 annual report (dollars in millions). Define solvency and discuss how this information might be useful in assessing the company’s solvency position. What drawbacks are

> At the end of 2020, a fast-growing advertising agency had a negative balance of $596 million in its retained earnings account. Compute the missing amounts in the following table, and comment on the company’s performance. Specifically, a

> Duke Energy Corporation is one of America’s leading diversified energy companies. At the end of 2019, the company had a balance in its retained earnings account of $4.1 billion. Compute the missing amounts in the following table and com

> Assume a banker is interested in finding answers to the following questions about a company applying for a loan. In each case, indicate which of the four financial statements the banker should examine lust to answer the question. If appropriate, also ind

> The following table was summarized from the 2019 annual report of U.S. Steel: Long-term debt (in millions): a. Briefly explain the transactions entered into by U.S. Steel during 2019. Which financial statements were affected? b. Assuming an interest rate

> Listed below are accounts that may appear on either the balance sheet or the income statement. a. Equipment b. Service Revenue c. Retained Earnings d. Salaries and Wages Expense e. Patent f. Cost of Goods Sold g. Common Stock h. Dividends Payable

> Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing, or opening activities and which of the financial statements it would affect. 1. Company borrows $50,000 in cash, signing a ten-year

> George began a property rental business, and after collecting $6,000 from an equity inves- tor and borrowing $5,000 from a bank, he purchased a piece of land for $8,000. During the year, he leased the land to Sheila and received $3,000 in cash. He paid $

> From the following transactions, prepare a statement of cash flows for Emory Inc. in the proper form. The company began the year with a cash balance of $25,000. Describe and evaluate the company*s cash management activities during the year. 1. Borrowed $

> From the following transactions, prepare a statement of cash flows for Lana and Sons in the proper form. The company began the year with a cash balance of $13,000. Describe and evaluate the company’s cash management activities during the year. 1. The sha

> Southwest Airlines is a major airline. The following information was taken from its 2019 annual report. Compute the missing amounts in the following table. Describe and evaluate the company’s cash management activities in each of the th

> Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing, or operating activities and which of the financial statements it would affect. 1. Common stock is issued for $500,000 in cash. 2. T

> Selected financial information appearing in the SEC Form 10-K for Exxon, the huge oil company, is reported below (dollars in millions). INSTRUCTIONS: Assume that company management expects sales growth during 2020 to be the same as from 2018 to 2019; pro

> Selected financial information appearing in the SEC Form 10-K for Delta Airlines is reported below (dollars in millions). INSTRUCTIONS: Assume that company management expects sales growth during 2020 to be the same as from 2018 to 2019; profit margin (i

> Target Corporation's 2019 financial statements included the following items (dollars in millions): a. Assuming that accounts payable refers only to inventory suppliers, compute the cash payments made by Target during 2019 to inventory suppliers. b. Revie

> Selected financial information appearing in the SEC Form 10-K for Deere, Inc., is reported below (dollars in millions). INSTRUCTIONS: Assume that company management expects sales growth during 2020 to be the same as from 2018 to 2019; profit margin (i.e.

> Review the Amazon financial statements contained in IDS.12 and, based on the following assumptions, prepare a simplified 2020 income statement and balance sheet. • Sales growth in 2020 is 20 percent. • Expense to sales ratio is 90 percent. • Total assets

> Selected financial information appearing in the SEC Form 10-K for Johnson & Johnson is reported below (dollars in millions). INSTRUCTIONS: Assume that company management expects sales growth of 8 percent during 2020, and during 2020 expects stable re

> Barnhiser Goods needs $100,000 to finance a project. It is negotiating a loan, and the bank has offered several different payment schedules. Compute the effective interest rate on each schedule, and identify the schedule with the lowest effective interes

> Begley Enterprises is considering investing in a project estimated to produce annual cash flows of approximately $10,000 over the next ten years. The initial cost of the investment is $53,280. Assume that the cash flows will be received at the end of eac

> The Taylors have a nine-year-old daughter named Emily, and they wish to provide for her college education. They estimate that it will cost $30,000 per year for four years when Emily enters college ten years from now. Assume that all investments can earn

> The Croziers have a three-year-old son named Ryan, and they want to provide for Ryan's college education. They estimate that it will cost $40,000 per year for four years when Ryan enters college 15 years from now. Assume that all investments can earn a 1

> Dunn Drafting Company is considering expanding its business by purchasing new equipment. Because of constraints on how much the company can spend for new equipment, the president wants to make sure that the company enters into the best possible deal. Dun

> Consider a three-year, $700 ordinary annuity (the first payment is due one year from now) and a three-year, $700 annuity due (the first payment is due now). Assume a discount rate of 10 percent. For each of the two annuities, compute the equivalent value

> Congratulations! You have just won the lottery. The lottery board offers you three different options for collecting your winnings: 1. You will receive payments of $500,000 at the end of each year for 20 years. 2. You will receive a lump-sum payment of $4

> Eastman Chemical's 2019 annual report stated that the company's liabilities for environmental contingent liabilities were $287 million and $296 million for 2019 and 2018, respectively. a. Describe how the liabilities affected the basic accounting equatio

> Rudnicki Corporation raises money by issuing bonds. The bond agreement states that Rudnicki must make interest payments in the amount of $40,000 at the end of each year for ten years and make a $500,000 payment at the end of the tenth year. Assume that t

> Ben Watson found $25,000 lying on the sidewalk and decided to invest the money. He believes that he can earn a 10 percent rate (compounded annually) on his investment for the first four years, 12 percent for the following three years, and 15 percent for

> Compute the present value of the payment patterns provided below, given an 8 percent discount rate. a. $50 at the end of Year 2; $100 at the end of Year 5; $80 at the beginning of Year 8. b. $100 at the beginning of Years 1, 2, 3, 4; $100 at the beginnin

> Driftwood Shipbuilders entered into the following transactions during 2021 : 1. Sold $6,000 of no-par common stock. 2. Purchased $6,000 of inventory on account. 3. Purchased new equipment for $5,000 in cash. 4. Collected accounts receivable amounts total

> Tony began a small retailing operation on January 1, 2021. During 2021, the following transactions occurred: 1. Tony contributed $20,000 of his own money to the business. 2. $60,000 was borrowed from the bank. 3. Property, plant, and equipment assets wer

> Your boss asks you to examine the following income statements of Hamilton Hardware and Watson Glass: In the notes to the financial statements, you notice that Hamilton Hardware uses the straight-line method of depreciation and that Watson Glass uses the

> The following are several account titles that could appear on an income statement: l. Cost of Goods Sold 2. Insurance Expense 3. Sales Revenue 4. Dividend Revenue 5. Salaries and Wages Expense 6. Supplies Expense 7. Interest Expense 8. Rent Revenue 9

> The following is a list of transactions entered into by Kaitland Manufacturing during 2021: l. Recorded depreciation expense of $170,000. 2. Sold 10,000 shares of common stock ($10 par value) for $18 per share. 3. Purchased 5,000 shares of IBM for $75 pe

> Excerpts of statements of cash flows reported by Kraft Foods, Kellogg's, and General Mills, three companies in the food industry, are provided in the following table (dollars in millions): For each company, compute the missing dollar amount, and briefly

> Summaries of the 2021 statements of cash flows for five different companies follow. For each company compute the missing dollar amount, and briefly describe the company's cash management policy for 2021.

> The following information was taken from the 2019 annual report of Target Corporation ( dollars in millions): a. Compute the inventory purchases made by Target during 2019. Record a single entry that reflects these purchases. b. How much cash did Target

> The following information was taken from the IFRS-based 2019 financial statements published by Carrefour, a French retailer (in million euros): From the information above, estimate net cash from operations.

> The following balance sheet and income statement data were taken from the records of Standard Center Manufacturing for the year ended December 31, 2021. The company sells goods and provides services. All sales are made on account, and cash is received in

> The following balance sheet and income statement data were taken from the records of Harbaugh Auto Supply for the year ended December 31, 2021: The company sells goods and provides services. All sales are made on account, and cash is received in advance

> The following balance sheet and income statement data were taken from the records of Steeler and Jones for the year ended December 31, 2021: Prepare the operating section of the statement of cash flows, and present it under both the direct and indirect m

> The following are several activities that Wallingford Inc. engaged in during 2021: l. Wrote off an open receivable as uncollected. 2. Purchased a piece of plant equipment. 3. Reacquired 5,000 shares of its common stock. 4. Sold a building in exchange for

> The following balance sheet and income statement data were taken from the records of Mako Retail Supply for the year ended December 31, 2021: Prepare the operating section of the statement of cash flows, and present it under both the direct and indirect

> The following balance sheet and income statement data were taken from the records of Martland Stores for the year ended December 31, 2021: Prepare the operating section of the statement of cash flows, and present it under both the direct and indirect met

> The following balance sheet and income statement data were taken from the records of L. L. Beeno for the year ended December 31, 2021: Prepare the operating section of the statement of cash flows, and present it under both the direct and indirect methods

> The operating cash flows and balance sheet excerpts of Schlee and Associates for the period ending December 31, 2021, follow. Compute net income for the period ending December 31, 2021.

> The following information was taken from the records of Romora Supply House. Prepare a statement of cash flows ( direct method) for the period ending December 31, 2021. Assume that all transactions involve cash.

> In the 2019 operating section of its IFRS-based statement of cash flows, European retailer Carrefour reported the following (in millions of euros): a. Describe the basic form of the entries recorded by Carrefour related to the two adjustments listed abov

> The following information was taken from the records of Grimes Pools. Prepare a statement of cash flows (direct method) for the period ending December 31, 2021. Assume that all transactions involve cash.

> Income statement and balance sheet excerpts of Shevlin and Liberty for the period ending December 31, 2021, follow. Compute cash provided (used) by operating activities for the period ending December 31, 2021. Use both the direct and indirect forms of pr

> Excerpts from the 2019 financial statements of General Mills are as follows ( dollars in millions): For 2019, compute estimates of cash receipts from customers and cash payments to suppliers. Assume that all sales are on account and that accounts payable

> The following information was taken from the records of Dylan's Toys: Equipment with a cost of $8,000 was sold during 2021. a. How much equipment was purchased during 2021? b. How much cash was collected on the sale of the equipment during 2021? c. Provi

> The following year-end totals were taken from the records of Landau's Supply House. Compute the cash outflows associated with insurance and salaries and wages during 2021.

> Classify each of the following transactions as an operating, investing, or financing activity, even those that would not appear explicitly on the statement of cash flows. Some transactions may be Classifying in more than one category: 1. Purchase of mach

> The 2019 income statement for Bayer, a German-based pharmaceutical company that publishes IFRS-based financial statements, follows (in million euros): a. Briefly explain each of the line items on the income statement. b. Comment on the persistence of the

> It is December 2021, and Rob Blandig, the CEO of Carmich Industries, has decided to sell the chemical division. He has received an offer for $350,000, but he is undecided about whether he wishes to complete the sale in 2021 or 2022. He is currently evalu

> It is December 2021, and Sharon Sowers, the CEO of Mallory Services, has decided to sell the clerical division. She has received an offer for $105,000 but is undecided about whether she wishes to complete the sale in 2021 or 2022. She is currently evalua

> LTB Enterprises consists of four separate divisions: building products, chemicals, mining, and plastics. On March 15, 2021 , LTB sold the chemicals division for $625,000 cash. Financial information related to the chemicals division follows: a. Provide th