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Question: Now that operations for outdoor clinics and


Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won’t damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2025. All watches are sold for $500 each.
Jul. 17 Purchased 50 watches for $7,500 ($150 per watch) on account.
Jul. 31 Sold 40 watches for $20,000 cash.
Aug. 12 Purchased 40 watches for $6,400 ($160 per watch) cash.
Aug. 22 Sold 30 watches for $15,000 on account.
Sep. 19 Paid for watches purchased on July 17.
Sep. 27 Receive cash of $9,000 for watches sold on account on August 22.
Oct. 27 Purchased 80 watches for $13,600 ($170 per watch) cash.
Nov. 20 Sold 90 watches for $45,000 cash.
Dec. 4 Purchased 100 watches for $18,000 ($180 per watch) on account.
Dec. 8 Sold 40 watches for $20,000 on account.
Required:
1. (a) Record each of these transactions, assuming a FIFO perpetual inventory system. (b) Calculate ending inventory as of December 31, 2025. (c) Prepare the gross profit section of a partial income statement for transactions related to MU watches.
2. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31, the estimated net realizable value of MU watches is only $100 per watch.
(a) Record any necessary adjusting entry on December 31, for the lower of cost and net realizable value of inventory. (Hint: Determine the number of units remaining from the purchase on December 4 after subtracting the units assumed sold under FIFO.)
(b) For what amount would MU inventory be reported in the December 31, 2025, balance sheet?
(c) Prepare an updated gross profit section of a partial income statement accounting for this additional information. Compare your answer to requirement 1(b).
The Great Adventures continuing problem also can be assigned using the General Ledger software in Connect. Students will be given an existing trial balance and asked to prepare (1) the journal entries above, (2) financial statements, and (3) closing entries.


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> Financial information for American Eagle book, and financial information for Buckle is presented. Required: 1. Calculate American Eagle’s cash return on assets, cash flow to sales, and asset turnover ratio. 2. Calculate Buckle’s cash return on assets, ca

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> Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million,

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> The Tony Hawk Skate Park was built in early 2024. The construction was financed by a $3,000,000, 7% note due in six years, with payments of $51,147 required each month. The first year has not been as profitable as hoped. The discussion at the executive b

> Refer to the information in BE6–14. Record any necessary adjusting entry for the lower of cost and net realizable value. Data from BE6-14: Powder Ski Shop reports inventory using the lower of cost and net realizable value (NRV). Inform

> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Six Flags Entertainment Corporation for the year ended December 31, 2019. Locate the “Consolidated Statement of Operations” (income statement) and

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> Financial information for Buckle is presented. Required: 1. Calculate the debt to equity ratio for the past two years. Did the ratio increase or decrease in the more recent year? 2. Calculate the return on assets for the most recent year. Does the return

> Financial information for American Eagle is presented. Required: 1. Calculate the debt to equity ratio for the past two years. Did the ratio increase or decrease the more recent year? 2. Calculate the return on assets for the most recent year. Does the r

> Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and sa

> Quattro Technologies, a hydraulic manufacturer in the aeronautics industry, has reported steadily increasing net income over the past few years. The company reported net income of $120 million in 2022 and $140 million in 2023. The stock is receiving incr

> Western Manufacturing is involved with several potential contingent liabilities. Your assignment is to draft the appropriate accounting treatment for each situation described below. Western’s fiscal year-end is December 31, 2024, and the financial statem

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> Refer to the information in BE5–6. Determine the financial statement effects of collecting cash from an account previously written off as uncollectible. Data from BE 5-6: Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer

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> At the end of 2025, the following information is available for Great Adventures. • Additional interest for five months needs to be accrued on the $30,000, 6% note payable obtained on August 1, 2024. Recall that annual interest is paid each July 31. • A

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> An examination of the cash activities during the year shows the following. Suzie has not reconciled the company’s cash balance with that of the bank since the company was started. She asks Summit Bank to provide her with a six-month ban

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> Financial information for Buckle. Required: 1. For the most recent year, what amount does Buckle report for current assets? What is the ratio of current assets to total assets? 2. For the most recent year, what amount does Buckle report for current liabi

> Financial information for American Eagle. Required: 1. For the most recent year, what amount does American Eagle report for current assets? What is the ratio of current assets to total assets? 2. For the most recent year, what amount does American Eagle

> You may refer to the opening story of Tony and Suzie and their decision to start Great Adventures. July 1 Sell $10,000 of common stock to Suzie. 1 Sell $10,000 of common stock to Tony. 1 Purchase a one-year insurance policy for $4,800 ($400 per month) to

> What difficulties do differences in accounting standards create for investors?

> Which factor explaining why accounting practices differ across countries do you think is most important? Explain why.

> Refer to the information in BE5–17. Record (a) lending of $40,000 cash to an employee on October 1, 2024, (b) the adjusting entry for interest on December 31, 2024, and (c) collection of cash for the note and interest on October 1, 2025. Data from BE 5-

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> What is meant by convergence of U.S. GAAP?

> We compared Live Nation Entertainment and AMC Networks at the end of this chapter. What reasons were given for the differences of amounts held in their Cash accounts?

> What is the definition of a liability?

> Disney has several types of long-term assets. What are the primary ones shown in its balance sheet?

> What is the purpose of the adjusted trial balance? How do the adjusted trial balance and the (unadjusted) trial balance differ?

> For each of the following accounts, indicate whether we use a debit or a credit to decrease the balance of the account. a. Cash. b. Salaries Payable. c. Utilities Expense. d. Service Revenue.

> Explain what it means to say that an accounting class is not the same as a math class.

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> What is meant by a conceptual framework in accounting? Why is it important that the FASB and the IASB develop a common conceptual framework?

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> Explain the difference between principles-based accounting standards and rules-based accounting standards.

> What is the main objective of the International Accounting Standards Board (IASB)?

> Refer to the information in BE5–18. Determine the financial statement effects of (a) lending $40,000 cash to an employee, (b) interest on the note as of December 31, 2024, and (c) collecting cash for the note and interest on October 1, 2025. Data from B

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> Tar Heel Corporation provides the following information at the end of 2024. Required: Prepare the income statement, statement of stockholders’ equity, and balance sheet for Tar Heel Corporation on December 31, 2024.

> Below are incomplete financial statements for Cyclone, Inc. Required: Calculate the missing amounts.

> Gator Investments provides financial services related to investment selections, retirement planning, and general insurance needs. At the end of the year on December 31, 2024, the company reports the following amounts: In addition, the company had common

> Horned Frogs Fine Cooking maintains its books using cash-basis accounting. However, the company recently borrowed $50,000 from a local bank, and the bank requires the company to provide annual financial statements prepared using accrual-basis accounting

> Consider the following transactions. Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting.

> Income statement and balance sheet data for The Athletic Attic are provided below. Required: 1. Calculate the following risk ratios for 2024 and 2025: a. Receivables turnover ratio b. Inventory turnover ratio. c. Current ratio. d. Debt to equity ratio. 2

> Data for The Athletic Attic are provided in P12–4B. Earnings per share for the year ended December 31, 2024, are $1.36. The closing stock price on December 31, 2024, is $22.42. Required: Calculate the following profitability ratios for

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