Nick’s Liquidators reported 450,000 shares of common stock outstanding for the year. The company also had stock options outstanding all year that will result in 125,000 incremental shares upon exercise. The company reported a net loss of $680,000 for the year, but income from continuing operations was equal to $1,500,000. Compute basic and diluted earnings per share for the year for both income from continuing operations and net loss.
> Mirat, Inc. has net income of $49,400 in the current year. Additional information for the year follows: • It experienced net unrealized losses on investment securities of $4,900 reported in net income and net unrealized losses of $2,200 reported in othe
> Salat, Inc. has net income of $78,800 in the current year. Pertinent company information follows. • Salat experiences net unrealized gains on investment securities of $6,200 reported in net income and net unrealized losses of $2,200 reported in other com
> Donegal Industries reported net income of $67,000 for the current year. The balances and activity in its accounts receivable accounts follow. In addition, the company recorded $3,300 of bad debt expense and wrote off $2,800 of uncollectible accounts. Re
> During the year, Zurry Coach Service reported an increase in income taxes payable of $1,400 during the year and a decrease in deferred-tax asset of $2,000. Its income tax expense was $5,700. Required: a. What is cash paid for income taxes? b. What wo
> Roadster Car Service reported a decrease in income taxes payable of $4,500 during the year and an increase in deferred-tax liability of $3,000. Its income tax expense was $2,300. Required: a. What is cash paid for income taxes? b. What would Roadster
> IFRS. Blanc Corporation sold a piece of land for $620,000. The land originally cost $450,000, but Blanc revalued it to $600,000 last year. a. What is the gain or loss on the sale? b. What are the journal entries to record the sale?
> During the year, Big Ben Corporation sold equipment for $2,000. The equipment’s cost was $25,000 and accumulated depreciation was $18,000. There were no other transactions conducted during the period. Big Ben also purchased a new building for $44,000 and
> During the year, Solar Corporation sold equipment with a net book value of $6,000 for $9,000. It also purchased equity securities for $8,000. Net income for the year is $22,000. There were no other transactions conducted during the period. Required: a.
> Using the information provided in BE22-15, prepare the financing activities section of Simons Products’ cash flow statement. Data from BE22-15:
> Using the information provided in BE22-15, prepare the investing activities section of Simons Products’ cash flow statement. Data from BE22-15:
> Classify each item in the following list of cash receipts and cash payments as operating, investing, or financing under IFRS
> Soccer Emporium provides the following information for the current year. Compute cash flows from operating activities for Soccer Emporium under the direct reporting format.
> Use the information from BE22-17 assuming that Soccer Emporium is an IFRS reporter that reconciles operating income to operating cash flows. Compute cash flows from operating activities for Soccer Emporium under the indirect reporting format. Data from
> Soccer Emporium provided the following information for the current year. Compute cash flows from operating activities for Soccer Emporium under the indirect reporting format.
> Using the information provided in BE22-15, prepare the operating activities section of the statement of cash flows using the direct method. Data from BE22-15:
> Simons Products, Inc. reports the following comparative balance sheets and income statement for the current year.
> IFRS. Esta Company, an IFRS reporter, has opted to revalue land. The land originally cost €2,000,000 on January 1. At the end of the year, the land is appraised at €1,800,000. Determine the amount of gain or loss on the asset revaluation and indicate whe
> Prepare the operating activities section of the statement of cash flows for Polly’s Imported Goods in BE22-12 using the indirect method assuming that Polly reports under IFRS. Polly begins the operating activities section with operating income. It report
> Prepare the operating activities section of the statement of cash flows for Polly’s Imported Goods in BE22-12 using the indirect method.
> Polly’s Imported Goods, Ltd. recently issued its annual report for the current year. Its comparative balance sheets for the current year follow. Prepare the operating activities section of the statement of cash flows using the direct me
> Repeat the requirements in BE22-10 using the indirect method Data from BE22-10:
> Rodent World Exotic Pet Shops, Incorporated reported the following comparative balance sheets and income statement for the current year. Prepare the operating activities section of the statement of cash flows using the direct method. Assume that accrued
> Classify each item in the following list of cash receipts and cash payments as operating, investing, or financing.
> Natalie Charles Designs elected to change its method of depreciation from the double-declining balance method to the straight-line method. Cumulative depreciation up to—but not including—the year of the change would have been $345,000 lower had the compa
> Using the information in BE21-7, prepare the footnote to disclose the change in accounting estimate for Enko Incorporated. Data from BE21-7: Enko Incorporated has one plant asset. The asset’s original cost was $750,000. There is a $50,000 expected resid
> Enko Incorporated has one plant asset. The asset’s original cost was $750,000. There is a $50,000 expected residual value and the estimated useful life is 20 years. On January 1 of the current year, following 10 full years of depreciation, the company de
> Assume now that Cole Construction Company from BE21-5 compensates its management team by offering a base salary and a 2% bonus based on reported earnings before tax. The bonus plan requires adjustment for changes in accounting methods that includes prior
> IFRS. Esta Company, an IFRS reporter, has opted to revalue land. The land originally cost €2,000,000 on January 1. At the end of the year, the land is appraised at €2,200,000. Determine the amount of gain or loss on the asset revaluation and indicate whe
> Cole Construction Company elected to change its method of accounting from the completed-contract method to the percentage-ofcompletion method. Prior-years income (cumulative) would have been $550,000 higher if Cole had always used the percentage-of-compl
> Serat Construction Company elected to change its method of accounting from the percentage-of-completion method to the completedcontract method. Prior-years income (cumulative) would have been $300,000 lower if Serat had always used the completed contract
> Draft a footnote to disclose the accounting change implemented by the Mills Abrams Manufacturing Company using the information provided in BE21-2. Assume that pre-tax income for the current year is $230,000 under the LIFO method but would have been $455,
> Mills Abrams Manufacturing Company changed its method of accounting for inventory from the average-cost method to the LIFO basis as of January 1 of the current year. It still uses the average-cost method for tax purposes. The company is subject to a 40%
> Tyrion Retailers, Inc. incorrectly recorded inventory in 2016. Rather than recording ending inventory as $570,000, Tyrion’s accounting manager entered $750,000. Tyrion’s controller discovered the error in 2017. Prepare the journal entry necessary to corr
> Using the information from BE21-12, prepare the journal entry necessary to correct the inventory error, assuming that Barin’s controller discovered the error in 2017 after the books had been closed for 2016. Ignore any income tax effects. Data from BE21
> Barin Retail Outlets incorrectly recorded inventory in 2016. Rather than recording ending inventory as $960,000, Barin’s accounting manager entered $690,000, understating ending inventory by $270,000. Barin’s controller discovered the error in 2018. Prep
> Using the data from BE21-10 for Wilson Incorporated, assume now that the general accountant discovered the error in 2019 when the books had already been closed for 2018. Prepare the correcting entry for this transaction. Data from BE21-10: Wilson Incorp
> Wilson Incorporated acquired a leather-cutting machine for $200,000 on December 31, 2018. The general accountant incorrectly coded the invoice as Miscellaneous Expense. The general accountant discovered the error in 2018 before the books were closed. The
> For each of the following events, indicate the type of change and the proper accounting treatment (retrospective or prospective).
> IFRS. Perlu Products, an IFRS reporter, reported a write-down loss of $65,000 for one of its plant assets on December 31, 2018. The asset is currently held for disposal. At December 31, 2019, the fair value of the asset increased by $90,000. Can Perlu re
> Fillepeel Manufacturing, Inc. has only one plant asset used in production. The asset had a cost of $500,000 and has been depreciated for 2 full years since the date of acquisition. This accounting resulted in a total accumulated depreciation of $200,000.
> Ardmore Pet Food Suppliers reported $7,000,000 net income for the current year. The company indicated that it has $6,000,000, 5% convertible debt issued at par and $450,000 par value, 6% nonconvertible, cumulative preferred shares outstanding. The firm d
> Fill in the following chart to indicate the capital structure type— simple or complex—for a company holding only this type of security.
> Bee-Boy Honey Products began the current year with 5,000 common shares outstanding. The firm issued additional shares of 1,500 and 1,800 on February 1 and June 1, respectively. In addition, the firm purchased 600 shares of treasury stock on September 1.
> Using the information provided in BE20-5, compute the weighted-average number of common shares outstanding for Elmwood Excavation Consultants assuming that the company implemented a 10% stock dividend on December Data From BE20-5: Elmwood Excavation Co
> Elmwood Excavation Consultants began the current year with 30,000 common shares outstanding. It issued additional shares of 15,000 and 18,000 on March 1 and August 1, respectively. The company also purchased 3,000 shares of treasury stock on November 1.
> Jackson Pet Food Suppliers reported $7,000,000 net income for the current year. The company indicated that it has $450,000 par value, 6% nonconvertible, cumulative preferred shares outstanding. The firm did not declare dividends for the current year. The
> Russo Watches, Ltd. reported $1,625,000 net income for the current year. Russo has $5,000,000, 6% convertible debt issued at par and $320,000 par value, 4% nonconvertible, noncumulative preferred shares outstanding. The firm declared dividends for the cu
> Rainbow Company reported $239,000 net income for the current year. It has 100,000 shares of common shares outstanding for the entire year and another 50,000 shares of 3% nonconvertible, cumulative, $10 par value preferred shares outstanding for the entir
> Axelon Enterprises has asked you to determine whether its proposed issue of convertible debt will have dilutive effects on earnings per share. If the convertible bonds prove to be dilutive, the company might consider an alternate vehicle to finance the $
> Perlu Products reported a write-down loss of $65,000 for one of its plant assets on December 31, 2018. The asset is currently held for disposal. At December 31, 2019, the fair value of the asset increased by $90,000. Can Perlu record a recovery? Prepare
> Nickelfront Welders, Inc. granted 300,000 employee options on July 1 of the current year. Employees can exercise each option and receive two shares of the company’s common stock at an exercise price of $15 per share. The average market price of Nickelfro
> Crowe Interior Designs of Santa Monica granted 300,000 qualified employee options on June 1 of the current year. The options allow employees to exchange each option for 36 shares of the company’s common stock at an exercise price of $20 per share. The av
> Molino Motors, Inc. reported net income equal to $1,200,000, which includes a $650,000 after-tax loss from discontinued operations. Molino has 700,000 common shares outstanding for the entire year. Prepare a partial income statement beginning with income
> Togo Incorporation started a share appreciation plan on January 1, 2018, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2020. The fair val
> Tommi-Boy Jeans, Inc. awarded 4,000 options to acquire 4,000 shares of its preferred stock that can be sold back to the company. At the grant date, the options have a fair value of $12 each and cannot be exercised until employees complete a 2-year servic
> The Goldwick Company awarded 1,000 options to acquire 1,000 shares of its common stock, which can be sold back to the company. The options vest over 3 years. The market price and the exercise price were both equal to $12 per share on the date of the gran
> Prepare the necessary journal entry assuming that all the options granted by On-the-Fly in BE19-5 expired and were not exercised by any of the company’s employees.
> On-the-Fly Limousine Services granted 5,000 options to acquire 5,000 shares of its $1 par value common stock. At the grant date, the fair value of the options is $100,000 and the exercise price per option is $8 each. Assuming that employees exercise all
> Hillview Homes, Ltd. granted options at the beginning of the current year to all its salaried employees. At the grant date, the options had afair value of $900,000 and can be exercised only over a 3-year vesting period. At the end of the year, Hillview c
> B-Boy Jeans, Inc. awarded 2,000 options to acquire 2,000 shares of its common stock. The options have a fair value of $30 each and cannot be exercised until employees complete a 3-year service period. The market price and the exercise price were both equ
> IFRS. Airwave Corporation, an IFRS reporter, was required to write down one of its plant assets by $1,650,000 on December 31 of the current year because the asset’s technology was rendered obsolete. It used a discounted cash-flow model to estimate the as
> At December 31, 2019, the following information was provided by the Oscar Group: Determine the pension asset or liability that will be reported on Oscar’s balance sheet on December 31, 2019.
> OZ Leasing Associates provides you with the following information for the current year: Determine the pension asset or liability to be reported on the balance sheet of OZ Leasing Associates at the end of the year.
> The following information is provided regarding a company’s defined benefit pension plan. The projected benefit obligation (PBO) was $600,000 at the beginning of the current year. During the year, pension benefits paid were $165,000, service cost for the
> Using the data provided in BE19-24, determine the ending balance of the plan assets and indicate the funded status of the plan at the end of the year under IFRS. Data from BE19-24: Silva Blanca Fashions, Inc. sponsors a defined-benefit pension plan for
> Silva Blanca Fashions, Inc. sponsors a defined-benefit pension plan for its employees. The company’s pension trust provided the following information: fair value of beginning plan assets, $569,000; projected benefit obligation at the beginning of the yea
> Using the data provided in BE19-22, determine the ending balance of the plan assets and indicate the funded status of the plan at the end of the year. Data from BE19-22: Armando Hernandez Fashions, Inc. sponsors a defined-benefit pension plan for its em
> Armando Hernandez Fashions, Inc. sponsors a defined-benefit pension plan for its employees. The company’s pension trust provided the following information: fair value of beginning plan assets, $569,000; projected benefit obligation at the beginning of th
> IFRS. Bidell Builders, an IFRS reporter, has $500,000 of pension cost for the current year. In making this computation, Bidell informs you that the current-year actual return on plan asset in excess of expected returns is a $231,000 net actuarial gain. I
> Bidell Builders reported $500,000 of pension cost for the current year. In making this computation, Bidell informs you that the actual return on plan asset in excess of expected returns in the current year is a $231,000 net gain. In addition, the amortiz
> Vince Pickwick Company awarded 1,000 options to acquire 1,000 shares of its common stock. The options have a fair value of $12 each. The market price and the exercise price were both equal to $6 per share on the date of the grant. Prepare the journal ent
> Airwave Corporation was required to write down one of its plant assets by $1,650,000 on December 31 of the current year because the asset’s technology has been rendered obsolete. It estimated the fair value of the asset using a discounted cash-flow model
> Chester West Shoes, Inc., provided the following information regarding its defined-benefit pension plan: service cost, $257,000; interest on the PVDBO, $121,000; expected return on plan assets, $56,000; past service costs of $24,000, and net actuarial ga
> Chester West Shoes, Inc., provided the following information regarding its defined-benefit pension plan: service cost, $257,000; interest on the beginning PBO, $121,000; expected return on plan assets, $56,000; amortization of prior service costs related
> Northhead Equipment offers its unionized employees a defined-benefit plan. The company determines that the beginning balance of its unamortized net actuarial gain is equal to $136,000. A recent report from the pension plan indicates that the beginning ba
> Jen and Benny’s Ice Cream offers a defined-contribution plan to its employees. Under the terms of the plan, Jen and Benny must contribute 2% of its employees’ salaries. Prepare the journal entry required to record the cost of this plan assuming that tota
> Tash Company offers select executives the opportunity to purchase its $1 par value common stock at a 10% discount. The employees have 2 weeks to elect to participate in the plan. The current market price of the stock is $40 per share. Employees purchased
> Using the information from BE19-13, now assume that Siry Company offers the plan only to top executives. What journal entry will the company make on the date the employees purchase the shares? Data from BE19-13: Siry Company offers all its employees the
> Siry Company offers all its employees the opportunity to purchase its $2 par value common stock at a 5% discount. The employees have 3 weeks to elect to participate in the plan. The current market price of the stock is $80 per share. Employees purchased
> Samsong Company issued 100,000 shares of $1 par value, restricted stock to its top five key employees on January 1, 2017. The market value of Samsong’s shares is $45 per share on the date of issue. The restricted shares require a vesting period of 4 year
> Kogo Incorporation started a share appreciation plan on January 1, 2017, when it granted 100,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2019. The fair va
> Using the information from BE19-9, now assume that the stock appreciation rights are settled for stock. Prepare the journal entries to record the SAR plan. The par value of common stock is $1 per share. What journal entry will the company make on the dat
> IFRS. Local Craft Designs, Inc., an IFRS reporter, reported goodwill at $600,000 related to its Central Avenue Division. The fair value less costs to sell Central Avenue is $2,500,000. Its value in use is $2,550,000. The firm reports Central Avenue’s car
> Match the type or form of stock compensation with its definition. Form or Type a. Option b. Equity-classified awards c. Liability-classified award d. Stock appreciation rights e. Restricted stock plans f. Employee stock purchase plan
> Using the information provided in BE18-7, prepare the journal entries at the commencement of the lease and at the end of the first year for Perry Leasing assuming now that Perry paid $23,000 to acquire the equipment Data from BE18-7: Jenkins Manufacturi
> Repeat the requirements of BE18-7 for the lessor, Perry Leasing. Data from BE18-7: Jenkins Manufacturing Company leased a piece of nonspecialized machinery for use in its operations from Perry Leasing on January 1. The 10-year lease requires lease payme
> Jenkins Manufacturing Company leased a piece of nonspecialized machinery for use in its operations from Perry Leasing on January 1. The 10-year lease requires lease payments of $4,000 due on January 1 of each year. The machinery is estimated to have a 10
> Using the information provided in BE18-5, prepare the journal entries for the lessee at the commencement of the lease. Data from BE18-5: Iman Iron Works signed a lease on January 1 with Borko Bank for an iron-stamping machine. The equipment is not speci
> Iman Iron Works signed a lease on January 1 with Borko Bank for an iron-stamping machine. The equipment is not specialized in nature. The lease has a 12-year term with no purchase option or transfer of ownership. Under the terms of the contract, Iman mus
> Using the information provided in BE18-3, determine whether this lease is a finance or an operating lease if Dial Digital knows that the lessor’s implicit rate is 6%. Data from BE18-3: Dial Digital Solutions signed a 3-year lease at the beginning of the
> Dial Digital Solutions signed a 3-year lease at the beginning of the current year. The leased equipment has an economic life of 5 years and a fair value of $1,450. Under the terms of the lease, Dial is required to pay $500 on January 1 of each year. Ther
> Scott Manufacturing is considering a lease to acquire new equipment. The useful life of the asset is 10 years. Scott can lease the equipment from New City Bank for $1,000 per year over an 8-year period. The lease does not contain a purchase option. There
> IFRS. Aviata Products, Inc. leases a high-capacity printer from Dewey Office Services for $4,200. The original cost of the printer was $4,900. Under the terms of the agreement, Aviata will make even payments over the 42-month rental period. What is the j
> IFRS. Lenny Schaeffer Bakeries, an IFRS reporter, is required to test goodwill for impairment each year. The current carrying value of its reported goodwill is $800,000. The goodwill pertains to the cash-generating unit. The book value of the net assets
> Morris Products, Inc. leases several copy machines from Stanley Office Services. Under the terms of the agreement, Morris will pay rentals of $800 per month for an 11-month period. Morris elects to apply the exemption for short-term leases. That is, Morr
> Assume that you are given the following information for a 5-year lease (with payments due on January 1 of each year): • The lease payments are $60,000 per year. • The fair value of the underlying asset is $500,000. • The deferred initial indirect cost
> Assume that Anderson Associates, Inc. leases conference and training facilities from The Learning Company. Anderson will conduct training seminars for the clients at the leased space. The lease requires annual payments of $400,000 plus a percentage of sa
> Assume that Sting Stores leases office space from Ramona Realty for $15,000 per month. According to the terms of the lease, monthly rentals will increase by the annual increase in the Consumer Price Index (CPI). Index decreases will not be considered. Wh
> Sun Bank recently leased machinery to Claude Company. The 8-year lease contract requires rental payments of $100,000 due on January 1 of each year. The lease is classified as a finance lease for the lessee and a sales-type lease for the lessor. Claude kn
> VJ Leasing Company recently leased machinery to Berg Building Associates. The 5-year lease contract requires rental payments of $20,000 on January 1 of each year. The lease meets at least one of the Group I criteria. The 9% implicit rate on the lease is
