Question: Nelson Ellis and Hank Tollis are partners

> Prepare a vertical analysis of all asset items on the comparative balance sheet for these years.

> Compute the accounts receivable turnover on December 31, 2022, for ACRH, Inc. Assume that all sales were credit sales.

> Using the data for the two years, calculate the inventory turnover for each year. The beginning inventory for year 2021 was $59,000.

> Calculate the current ratio for each year.

> Using the comparative income statement, prepare a vertical analysis of all items from sales through gross profit on sales for the years shown.

> On April 1, 2022, Dave’s Deli issued $70,000 of its 9 percent bonds, maturing 10 years later. Interest is payable semiannually on April 1 and October 1. The issue price was 94.0. Dave’s has decided to retire the bonds on August 1, 2025, three years and f

> Brandon Marchand is the owner of Divine Jewels, a store specializing in gold, platinum, and special stones. During the past year, in response to increased demand, Brandon doubled his selling space by expanding into the vacant building space next door to

> Record the appropriation of $75,000 of retained earnings on December 31, 2022, by Dawn Inc. to establish an appropriation for bond retirement.

> Give the general journal entries to record the following transactions: a. On December 31, 2021, Blue Co. established a bond sinking fund investment by depositing $25,000 with the fund trustee. b. On December 31, 2022, Blue Co. recorded $2,000 net income

> Jon Inc. was authorized to issue $1,000,000 of 6 percent bonds. On April 1, 2022, the corporation issued bonds with a face value of $500,000 at a price of 102.0. The bonds mature 10 years from the date of issue. Interest is payable semiannually on Octobe

> Jon Inc. was authorized to issue $1,000,000 of 6 percent bonds. On April 1, 2022, the corporation issued bonds with a face value of $500,000 at a price of 102.0. The bonds mature 10 years from the date of issue. Interest is payable semiannually on Octobe

> Jon Inc. was authorized to issue $1,000,000 of 6 percent bonds. On April 1, 2022, the corporation issued bonds with a face value of $500,000 at a price of 102.0. The bonds mature 10 years from the date of issue. Interest is payable semiannually on Octobe

> First Corp issued $500,000 of its 5 percent bonds payable on April 1, 2022. The bonds were issued at face value. Interest is payable semiannually on October 1 and April 1. Give the entry to accrue bond interest on First’s bonds payable on December 31, 20

> First Corp issued $500,000 of its 5 percent bonds payable on April 1, 2022. The bonds were issued at face value. Interest is payable semiannually on October 1 and April 1. Give the entry in general journal form to record the interest payment on October 1

> First Corp issued $500,000 of its 5 percent bonds payable on April 1, 2022. The bonds were issued at face value. Interest is payable semiannually on October 1 and April 1. Give the general journal entry to record the April 1, 2022, bond issue.

> Because of fears about the outcome of several lawsuits in progress during the past five years, Falcon Corporation had appropriated retained earnings of $250,000, and transferred that amount from the Retained Earnings account to Retained Earnings Appropri

> On December 31, 20X1, the board of directors of NoCal Corporation voted to appropriate $100,000 of retained earnings each year for five years to establish a reserve for contingencies. Give the general journal entry on December 31, 20X1, to record the app

> Programs Plus is a retail firm that sells computer programs for home and business use. Programs Plus operates in a state with no sales tax. On December 31, 20X1, its general ledger contained the accounts and balances shown below: The following accounts h

> TNCO Corporation had outstanding 100,000 shares of no-par-value common stock, with a stated value of $12, on December 1, 20X1. The directors voted to split the stock on a 2-for-1 basis, issuing one new share to stockholders for each share presently owned

> ACH Company had outstanding 100,000 shares of $5 par-value common stock on August 13, 20X1. On that date, it declared a 10 percent common stock dividend distributable on September 15 to stockholders of record on September 1. The estimated fair value of t

> On October 15, 20X1, the board of directors of Trump Inc. declared a cash dividend of $1 per share on its 100,000 outstanding shares of common stock. The dividend is payable on November 15 to stockholders of record on October 30. Give any general journal

> After the revenue and expense accounts were closed into Income Summary on December 31, 20X1, the Income Summary account showed a net loss for the year of $50,000. Prepare the general journal entry to close the Income Summary account.

> In each of the following situations, what is the amount of profit or loss? In each situation, what accounts will be debited and credited, and for what amount, in the journal entry to close the Income Summary account? a. The total of the Debit column in t

> A corporation has paid estimated income taxes of $50,000 during the year 20X1. At the end of the year, the corporation’s tax bill is computed to be $52,000. Give the general journal entry to adjust the Income Tax Expense account.

> The following are selected accounts from the general ledger of the First Company on December 31, 20X1. Show how the corporation’s Stockholders’ Equity section would appear on the December 31, 20X1, balance sheet. Common Stock, $1 par, authorized 100,000

> On March 31, 20X1, Alpha Corporation had outstanding 100,000 shares of 5 percent preferred stock with a par value of $100. The stock was originally issued for $110 per share. On that date, the corporation repurchased 10,000 shares of the preferred stock,

> The city of Springfield contributed to Orange Corporation a tract of land on which to build a plant. When the contribution was made on April 1, 20X1, the land’s appraised value was $350,000. Give the general journal entry, if any, necessary to record the

> After all revenue and expense accounts, other than Income Tax Expense, have been extended to the Income Statement section of the worksheet of US Trucks, Inc., the net income is determined to be $305,000. Using the corporate tax rate given in this chapter

> When Sandra Michaels’s father took seriously ill suddenly, Sandra had just completed the semester in college, so she stepped in to run the family business, ASAP Couriers, until it could be sold. Under her father’s dire

> On January 2, 20X1, AC Company issued 50,000 shares of its no-par-value common stock ($50 stated value) for cash at $51 a share. Give the entry in general journal form to record the issuance of the stock.

> On January 2, 20X1, BYU Corporation issued 5,000 shares of its $10 par-value common stock for cash at $12 a share. Prepare the entry in general journal form to record the issuance of the stock.

> On January 2, 20X1, Cotton Inc. issued 50,000 shares of $10 par-value common stock and 10,000 shares of 5 percent, $100 par-value preferred stock for cash at par value. Prepare the entry in general journal form to record the issuance of the stock.

> Alway Company, a newly organized corporation, received a bill from its lawyers for $10,000 for time spent in organizing the company. 1. How should these costs be treated in the financial reports? 2. How should they be treated for federal income tax purpo

> Juan Joseph, the owner of a sole proprietorship, is planning to incorporate his business. His capital account has a balance of $480,000 after revaluation of the assets. His cash account totals $80,000. He will receive 8 percent, $100 par-value preferred

> Daily Corporation has outstanding 50,000 shares of $30 par-value preferred stock, issued at an average price of $37 a share. The preferred stock is convertible into common stock at the rate of three shares of common stock for each share of preferred stoc

> CBoxCorporation has outstanding 110,000 shares of 12 percent, $80 par-value cumulative preferred stock and 500,000 shares of no-par-value common stock. 1. During 20X1, the corporation distributed dividends of $792,000. What amount will be paid on each sh

> SFC has outstanding 50,000 shares of noncumulative, 5 percent, $100 par-value preferred stock and 100,000 shares of no-par-value common stock. 1. During 20X1, the corporation distributed dividends of $250,000. What amount will be paid on each share of pr

> On May 1, 20X1, TONI Inc. received a subscription from Angel Paz for 700 shares of its $1 par value common stock at a price of $28 a share. Paz made a payment of $14.00 per share on the stock at the time of the subscription. Give the entries in general j

> Florida Corporation has only one class of stock. There are 200,000 shares outstanding. During 20X1, the corporation’s net income after taxes was $800,000. The policy of the corporation is to declare dividends equal to 20 percent of its net income. Black

> The unadjusted trial balance of Ben’s Jewelers on December 31, 20X1, the end of its fiscal year, appears below. INSTRUCTIONS 1. Copy the unadjusted trial balance onto a worksheet and complete the worksheet using the following informatio

> The partnership agreement of Emily Adams and Shaun McGowan does not indicate how the profits and losses will be shared. Before dividing the net income, Adams’ capital account balance was $80,000, and McGowan’s capital balance was $20,000. The net income

> The net income for the new partnership known as The Pit Stop for the year ended December 31, 20X1, was $34,000. The partners, Robert Taylor and David Brown, share profits in the ratio of 40 to 60 percent, respectively. Record the general journal entry (o

> After revenue and expense accounts of The In and Out Stop were closed on December 31, 20X1, Income Summary contained a credit balance of $198,200. The drawing accounts of the two partners, Thomas Muir and Kerry Goree, showed debit balances of $80,000 and

> Charles Brown and Robert Huddleston are partners who share profits and losses in the ratio of 70 to 30 percent, respectively. Their partnership agreement provides that each will be paid a yearly salary of $120,000. The salaries were paid to the partners

> Collins and Allen are partners. Their partnership agreement provides that, in dividing profits, each is to be allocated interest at 10 percent of her beginning capital balance. The balance of net income or loss after the interest allowances is to be spli

> Alexis Wells and Jessica Harris are partners who share profits and losses in the following manner. Wells receives a salary of $106,000 and Harris receives a salary of $150,000. These amounts were paid to the partners and charged to their drawing accounts

> On May 1, 20X1, James Dear and Jerold Morgan formed The Wine Shop. The two partners invested cash and other assets and liabilities with the following agreed-upon values: Dear: Cash, $6,500; Merchandise inventory, $12,500; Equipment, $38,500; Accounts pay

> Wade Wilson operates a sole proprietorship business that sells golf equipment. In 20X1, Wilson agrees to transfer his assets and liabilities to a partnership that will operate The Golf Shop. Wilson will own a two-thirds interest in the capital of the par

> William, Henderson, and Middleton are partners, sharing profits and losses in the ratio of 40 to 30 to 30 percent, respectively. Their partnership agreement provides that if one of them withdraws from the partnership, the assets and liabilities are to be

> The Valley Voice is a local newspaper that is published Monday through Friday. It sells 90,000 copies daily. The paper is currently in a profit squeeze, and the publisher, Tom Turkey, is looking for ways to reduce expenses. A review of current distributi

> Billy Allen and Thomas Klammer are partners who share profits and losses in the ratio of 40:60, respectively. On December 31, 20X1, they decide that Klammer will sell one-half of his interest to Marvel Turner. At that time, the balances of the capital ac

> In 20X1, Ruby Canti invests cash of $220,000 in a newly formed partnership that will operate The Pro Shop. In return, Canti receives a one-third interest in the capital of the partnership. In general journal form, record Canti’s investment in the partner

> At the beginning of the year, it became obvious that the truck purchased the year before was too small to handle many of Starksville’s jobs. On January 2, 20X2, Starksville traded in the old truck on a new, larger lightweight truck. Its sale price (and f

> At the beginning of the year four years ago, Cedar Valley Company purchased construction equipment for $715,000, with a useful life of six years and estimated salvage value of $100,000. The company uses the straight-line method of depreciation. On July 3

> Paxton Company owns a truck that cost $112,000. Depreciation totaling $76,000 had been taken on the truck up to January 8, 20X1, when it was sold for $34,300. 1. Give the journal entry to record the sale. 2. Assume, instead, that the truck is sold for $3

> On January 20, 20X1, Starksville Transport Company purchased a new lightweight truck for $90,000. 1. Into which MACRS “class” is this asset classified? 2. What would be the amount of cost recovery on the truck in 20X1 and in 20X2?

> On January 12, 20X1, Harris Company purchased a machine to mold components for one of its products. Total cost of the machine was $480,000. It is expected to produce 450,000 units and to have a salvage value of $30,000. The company used the units-of-prod

> Atkins Company acquired an asset on January 2, 20X1, at a cost of $142,000. The asset’s useful life is four years and its salvage value is $32,000. Compute the depreciation expense for each of the first two years, using the straight-line method, the doub

> For the year ending December 31, 20X1, Peterson Manufacturing Company had depreciation totaling $42,000 on its office equipment. Give the general journal entry to record the adjusting entry.

> The South Pacific Shipping Company incurred the costs below related to a new packing machine: Invoice price of packing machine $75,000 Cash discount for prompt payment 3,925 Transportation costs 2,880 Installation costs 1,575 What is the capitalized cost

> In each of the following independent situations, decide whether the business organization should treat the person being paid as an employee and should withhold social security, Medicare, and employee income taxes from the payment made. 1. George Jacobs o

> 1. How does the Sales Returns and Allowances account provide management with a measure of operating efficiency? What problems might be indicated by a high level of returns and allowances? 2. Suppose you are the accountant for a small chain of clothing st

> On December 31, 20X1, Warren Company’s Intangible Assets account reflects two assets: 1. Goodwill, $145,000. This amount was recorded in December 20X0 as part of the cost of acquiring an existing business. It represents the excess of the total purchase p

> a. Orison Milling Company operates, on a contract basis, equipment that grinds and mixes grains used as animal feed. In September 20X1 the book value of the equipment was $144,000. Because of declining processing fees, the company’s chief financial offic

> Heath Mining Company acquired a mine in 20X1. Capitalized costs of the minerals were $5,460,000. The company mined 200,000 tons of ore in 20X1 and on December 31, 20X1, it is estimated that 2,200,000 tons of ore remained in the ground. Compute the amount

> The following costs were incurred by Euro Auto Parts in connection with the construction of a retail store building: Cost of land, including $7,500 of legal costs $175,000 Cost to demolish old building 10,325 Costs of grading land for building site 6,500

> Based on the following data, compute the estimated cost of the ending inventory at Kenamond Company. Use the retail method.

> Use the following data to compute the estimated inventory cost for Peterson Company under the gross profit method: Average gross profit rate: 30% of sales Inventory on January 1 (at cost): $230,000 Purchases from January 1 to date of inventory estimate:

> Given the choice between average cost, FIFO, and LIFO, which method will give the lowest net income and which will give the highest net income in a period of rising prices?

> The following information concerns four items that Katy Mayfield Clothiers for Women has in its ending inventory on December 31. Two of these items are in the accessories department, and two are in the women leisure wear department. 1. What is the valuat

> Information about Spiceland Company’s inventory of one item follows. Compute the cost of the ending inventory under (1) the average cost method (round unit cost to the nearest cent), (2) the FIFO method, and (3) the LIFO method.

> Give the entries in general journal form that Georgia State Company would make if Sampson Byrd dishonored the note receivable discounted by Georgia State in Exercise 16.6, assuming the bank deducted the maturity value of the dishonored note plus a $55 se

> Several years ago, Kat Cortz opened Ocho Tacos, a restaurant specializing in homemade tacos. The restaurant was so successful that the company expanded, and now operates eight restaurants in the local area. Cortez tells you that when she first started, s

> In general journal form, give the entry required by Georgia State Company when Sampson Byrd paid the note discounted in Exercise 16.6 on the maturity date. Data from Exercise 16.6: On June 3, 20X1, Georgia State Company received a $10,400, 45-day, 10 pe

> On June 3, 20X1, Georgia State Company received a $10,400, 45-day, 10 percent note from Sampson Byrd, a customer whose account was past due. 1. Record in the general journal receipt of the note. 2. Give the entry in general journal form to record the dis

> On August 1, 20X1, Martinez Company purchased a truck (delivery equipment) for $55,600, signing a 90-day, 8 percent note for the entire purchase price. Give the entry in general journal form to record the purchase of the equipment with the note and the p

> During 20X1, Tolliver Company borrowed money at Natchez State Bank and Trust on two occasions. On June 8, the company borrowed $60,000, giving a 120-day, 5 percent note, and on September 8, the company discounted at 7 percent an $80,000, 90-day note paya

> Find the maturity value of each of the following notes payable: 1. A 60-day note, dated February 15, 20X1, with a face value of $52,000, bearing interest at 8 percent. 2. A six-month note, dated March 10, 20X1, with a face value of $21,600, bearing inter

> Compute the maturity value for each of the following notes: 1. A note payable with a face amount of $50,000, dated June 15, 20X1, due in three months, bearing interest at 7 percent. 2. A note payable with a face amount of $44,000, dated May 5, 20X1, due

> Find the due date of each of the following notes: 1. A note dated May 19, 20X1, due in 120 days. 2. A note dated November 1, 20X1, due two years from that date. 3. A note dated April 10, 20X1, due six months from that date.

> Use the information given in Exercise 15.8, except assume that Conrod Utilities received the check for $1,680 on January 28, 20X2 (instead of on December 8, 20X1). Give the general journal entry necessary. The cash receipt has already been entered in the

> On December 8, 20X1, Conrod Utilities Services Company received a check for $1,680 from Shirley Cosby, whose $3,360 account was written off on September 10 (Exercise 15.7). In the accompanying letter, Cosby apologized and said she probably would be unabl

> Conrod Utilities Services Company uses the direct charge-off method to record uncollectible accounts. On September 10, 20X1, the company learned that Shirley Cosby, a customer who owed $3,360, had moved and left no forwarding address. Conrod Utilities co

> Delta Company pays salaries and wages on the last day of each month. Payments made on December 31, 20X1, for amounts incurred during December are shown below. Cumulative amounts paid prior to the December 31 payroll for the persons named are also shown.

> Assume the same facts as in Exercise 15.5, except that the recovery of the $14,800 from Alexis Watson was received on February 28, 20X2. Give the entry in general journal form to record the reinstatement of Watson’s account and to record the receipt of h

> On December 8, 20X1, after a threatened lawsuit by Richey Plumbing, Alexis Watson paid the $14,800 account charged off on April 30, 20X1 (Exercise 15.4). Give the entries in general journal form to reinstate Watson’s account and to record the receipt of

> On April 30, 20X1, Richey Plumbing, which uses the allowance method, decided that the $14,800 account of Alexis Watson was worthless and should be written off. Give the general journal entry to record the write-off.

> On December 31, 20X1, before adjusting entries, the balances of selected accounts of the Xavier Equipment Company were as follows: Accounts Receivable $930,000 Allowance for Uncollectible Accounts (debit balance) 3,000 dr. The company has determined th

> Assume that Galaxy Company makes its estimate of uncollectible accounts on December 31 as 3.2 percent of total accounts receivable. Compute the estimated amount of uncollectible accounts and give the general journal entry to record the provision for unco

> On December 31, 20X1, certain account balances at Galaxy Company were as follows before year-end adjustments: Accounts Receivable $ 941,500 Allowance for Uncollectible Accounts (credit) 1,860 Sales 9,205,500 Sales Returns and Allowances 38,650 A further

> Diamond Jewelers has never borrowed money. Because of rapid growth, on June 25, 20X1, John Peoples, the owner, applied for a loan of $300,000 from his bank. The banker asked Peoples for copies of financial reports of Diamond Jewelers for 20X0 and quarter

> Ryan & Sabo sells copy equipment. It grants all customers a 12-month warranty, agreeing to make necessary repairs within the following 12-month after-sale period free of charge. At the end of each year, the company estimates the total cost to be incurred

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Lane Company charges off the cost of all magazine advertising in the year it is incurred even though the advertising probably

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Sanchez Company has decided to charge off as a loss the portion of its accounts receivable that it estimates will be uncollec

> Mike Ryan is the owner of Ryan Contractors, a successful small construction company. He spends most of his time out of the office supervising work at various construction sites, leaving the operation of the office to the company’s cashi

> For each of the following cases, respond to the question asked and indicate the accounting principle or concept that applies. 1. Patterson Company purchased many small tools during 20X1 at a total cost of $3,000. Some tools were expected to last for a fe

> For each of the following cases, respond to the question and indicate the accounting principle or concept that applies. 1. Princeton, LLC, paid insurance premiums of $9,600 on December 1, 20X1. These premiums covered a two-year period beginning on that d

> The following selected accounts were taken from the financial records of Sonoma Valley Distributors at December 31, 20X1. All accounts have normal balances. Cash $31,340 Accounts Receivable 67,900 Note Receivable, due 20X2 10,250 Merchandise Inventory 36

> The Adjusted Trial Balance section of the worksheet for Hendricks Janitorial Supplies follows. The owner made no additional investments during the year. Prepare a postclosing trial balance for the firm on December 31, 20X1.

> Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 20X2. Include appropriate descriptions. 20X1 (Adjustment a) Dec. 31 Uncollecti