On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company’s balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021. 2. Record the necessary entry(ies) to adjust the balance for cash.
> DS Unlimited has the following transactions during August. August 6 Purchases 70 handheld game devices on account from GameGirl, Inc., for $200 each, terms 1/10, n/60. August 7 Pays $400 to Sure Shipping for freight charges associated with the August 6
> Sundance Systems has the following transactions during July. July 5 Purchases 40 LCD televisions on account from Red River Supplies for $2,500 each, terms 3/10, n/30. July 8 Returns to Red River two televisions that had defective sound. July 13 Pays the
> Russell Retail Group begins the year with inventory of $55,000 and ends the year with inventory of $45,000. During the year, the company has four purchases for the following amounts. Required: Calculate cost of goods sold for the year.
> At the end of 2022, the following information is available for Great Adventures. • Additional interest for five months needs to be accrued on the $30,000, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31. • Assume that
> Southwest Pediatrics has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $130,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2021, Southwest estimates uncollectible accounts to be 20%
> Physicians’ Hospital has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $60,000; Allowance for Uncollectible Accounts = $1,100 (credit). On December 31, 2021, Physicians’ estimates uncollectible accounts to be 1
> During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 20
> On April 25, Foreman Electric installs wiring in a new home for $3,500 on account. However, on April 27, Foreman’s electrical work does not pass inspection, and Foreman grants the customer an allowance of $600 because of the problem. The customer makes f
> Refer to the information in E5–4. Required: For Grace Hospital, record the purchase of services on account on March 12 and the payment of cash on March 31.
> Refer to the information in E5–3, but now assume that Grace does not pay for services until March 31, missing the 2% sales discount. Required: For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 31.
> On March 12, Medical Waste Services provides services on account to Grace Hospital for $11,000, terms 2/10, n/30. Grace pays for those services on March 20. Required: For Medical Waste Services, record the service on account on March 12 and the collectio
> The general ledger of Pop’s Fireworks includes the following account balances in 2021: In addition, the following transactions occurred during 2021 and are not yet reflected in the account balances above: 1. Provide additional services
> On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $35,100. January 6 Provide services to custom
> Refer to the information in E5–19, but now assume that the balance of the Allowance for Uncollectible Accounts on December 31, 2021, is $1,100 (debit) (before adjustment). Required: 1. Record the adjustment for uncollectible accounts using the percentage
> Edward L. Vincent is CFO of Energy Resources, Inc. The company specializes in the exploration and development of natural gas. It’s near year-end, and Edward is feeling terrific. Natural gas prices have risen throughout the year, and Energy Resources is s
> Merry Maidens Cleaning generally charges $300 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house an
> Suzuki Supply reports the following amounts at the end of 2021 (before adjustment). Required: 1. Record the adjustment for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 12% of receivables will not be collected. 2. Re
> Below are amounts (in millions) from three companies’ annual reports. Required: For each company, calculate the receivables turnover ratio and the average collection period (rounded to one decimal place). Which company appears most effi
> On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker’s business. The supplier explains that it has a temporary lack of funds that is slowing its produc
> Refer to the information in E5–15. Required: For Whole Grain Bakery, record the issuance of the note payable on March 1 and the cash payment on September 1.
> On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $11,000. In payment for the services, Whole Grain Bakery signs a 9% note requiring the payment of the fac
> During 2021, LeBron Corporation accepts the following notes receivable. 1. On April 1, LeBron provides services to a customer on account. The customer signs a four- month, 9% note for $7,000. 2. On June 1, LeBron lends cash to one of the company’s vendor
> At the beginning of 2021, Brad’s Heating & Air (BHA) has a balance of $26,000 in accounts receivable. Because BHA is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the e
> Consider the following transactions associated with accounts receivable and the allowance for uncollectible accounts. Required: For each transaction, indicate whether it would increase (I), decrease (D), or have no effect (NE) on the account totals. (Hin
> The Physical Therapy Center specializes in helping patients regain motor skills after serious accidents. The center has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $110,000; Allowance for Uncollectible Accoun
> At a recent luncheon, you were seated next to Mr. Fogle, the president of a local company that manufactures food processors. He heard that you were in a financial accounting class and asked: “Why is it that I’m forced to record depreciation expense on my
> Mercy Hospital has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable
> On May 7, Juanita Construction provides services on account to Michael Wolfe for $4,000. Michael pays for those services on May 13. Required: For Juanita Construction, record the service on account on May 7 and the collection of cash on May 13.
> Spielberg Company’s general ledger shows a checking account balance of $22,970 on July 31, 2021. The July cash receipts of $1,885, included in the general ledger balance, are placed in the night depository at the bank on July 31 and processed by the bank
> Janice Dodds opens the mail for Ajax Plumbing Company. She lists all customer checks on a spreadsheet that includes the name of the customer and the check amount. The checks, along with the spreadsheet, are then sent to Jim Seymour in the accounting depa
> Goldie and Kate operate a small clothing store that has annual revenues of about $100,000. The company has established the following procedures related to cash disbursements: The petty cash fund consists of $10,000. Employees place a receipt in the fund
> Douglas and Son, Inc., uses the following process for its cash receipts: The company typically receives cash and check sales each day and places them in a single drawer. Each Friday, the cash clerk records the amount of cash received and deposits the mon
> Below are several amounts reported at the end of the year. Required: Calculate the amount of cash to report in the balance sheet.
> Below are several scenarios related to control activities of a company. 1. A manufacturing company compares total sales in the current year to those in the previous year but does not compare the cost of production. 2. So that employees can have easy acce
> Below are several statements about internal controls. 1. The components of internal control are built on the foundation of the ethical tone set by top management. 2. Once every three months, managers need to review operations to ensure that control proce
> Below are amounts (in millions) for Glasco Company and Sullivan Company. Both companies have total revenues of $2,500, $3,000, and $3,500 in each year. Required: Make a prediction as to which firm will have the higher ratio of cash to noncash assets at t
> Companies are increasingly making their accounting information, especially their annual reports, available through their websites. Select a well-known publicly traded company and go to its website. Look for the investment section, and then click on annua
> Below are several statements about the Sarbanes-Oxley Act (SOX). 1. SOX represents legislation passed in response to several accounting scandals in the early 2000s. 2. The requirements outlined in SOX apply only to those companies expected to have weak i
> 1. Service Revenue for the year = $80,000. Of this amount, $70,000 is collected during the year and $10,000 is expected to be collected next year. 2. Salaries Expense for the year = $40,000. Of this amount, $35,000 is paid during the year and $5,000 is e
> Refer to the information in E4–16. Required: Calculate cash flows from financing activities.
> Refer to the information in E4–16. Required: Calculate cash flows from investing activities.
> Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals. a. Cash used for purchase of office supplies, $2,400. b. Cash provided from consulting to customers, $50,600. c. Cash used for
> Below are several transactions for Meyers Corporation for 2021. Required: 1. For each transaction, determine the amount of cash flows (indicate inflows with a “+” and outflows with a “âˆ
> Below are several transactions for Witherspoon Incorporated, a small manufacturer of decorative glass designs. Required: For each transaction, indicate (1) whether cash is involved (yes or no), and, if cash is involved, (2) whether Witherspoon should c
> T. L. Jones Trucking Services establishes a petty cash fund on April 3 for $200. By the end of April, the fund has a cash balance of $97. The company has also issued a credit card and authorized its office manager to make purchases. Expenditures for the
> Halle’s Berry Farm establishes a $200 petty cash fund on September 4 to pay for minor cash expenditures. The fund is replenished at the end of each month. At the end of September, the fund contains $30 in cash. The company has also issu
> On October 31, 2021, Damon Company’s general ledger shows a checking account balance of $8,397. The company’s cash receipts for the month total $74,320, of which $71,295 has been deposited in the bank. In addition, the company has written checks for $72,
> Companies often are under pressure to meet or beat Wall Street earnings projections in order to increase stock prices and also to increase the value of stock options. Such pressure may cause some managers to alter their estimates for depreciation to arti
> Obtain a copy of the annual report of Apple Inc. for the most recent year. You can find the annual report at the company’s website (www.apple.com) in the investor information section or at the Securities and Exchange Commission’s website (www.sec.gov) us
> Below are several statements about occupational fraud. 1. For most large companies, occupational fraud is minimal and internal control procedures are unnecessary. 2. Managers have a variety of reasons for manipulating the numbers in financial statements,
> Refer to the information in E3–8. Required: For each of the adjustments in E3–8, indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded.
> Consider the following transactions for Huskies Insurance Company: 1. Equipment costing $42,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $7,000 per year. 2. On June 30, the company lends its chief financial off
> Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information: The following information is known for the month of December: 1. Purchases of supplies during Dece
> Listed below are all the steps in the accounting cycle. Required: List the steps in proper order.
> During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2021, you come across several items needing further consideration. Currently, net income is $100,000. 1. An insurance policy covering
> Refer to the situation discussed in E3–2. Required: For each situation, determine the date for which the company recognizes the expense using cash-basis accounting.
> Refer to the situations discussed in E3–1. Required: For each situation, determine the date for which the company recognizes revenue using cash- basis accounting.
> On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances: During January 2021, the following transactions occur: January 2 Purchase rental space for one year in advance, $6,000 ($500/month). January 9 Purchase
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Calculate American Eagle’s return on assets, profit margin, a
> On January 1, 2021, Red Flash Photography had the following balances: Cash, $12,000; Supplies, $8,000; Land, $60,000; Deferred Revenue, $5,000; Common Stock $50,000; and Retained Earnings, $25,000. During 2021, the company had the following transactions:
> Consider the following situations: 1. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots’ salaries associated with the flight are paid on September 2. 2. Eddie Bauer pays cash on January 6 to purchase sunglasses from
> Refer to the adjusted trial balance in E3–16. Required: 1. Record the necessary closing entries at December 31, 2021. 2. Prepare a post-closing trial balance.
> Laker Incorporated’s fiscal year-end is December 31, 2021. The following is an adjusted trial balance as of December 31. Required: 1. Prepare the necessary closing entries. 2. Calculate the ending balance of Retained Earnings. 3. Prepar
> Seminoles Corporation’s fiscal year-end is December 31, 2021. The following is a partial adjusted trial balance as of December 31. Required: 1. Prepare the necessary closing entries. 2. Calculate the ending balance of Retained Earnings.
> The December 31, 2021, adjusted trial balance for Fightin’ Blue Hens Corporation is presented below. Required: 1. Prepare an income statement for the year ended December 31, 2021. 2. Prepare a statement of stockholders’
> Below are the restated amounts of net income and retained earnings for Volunteers Inc. and Raiders Inc. for the period 2012–2021. Volunteers began operations in 2013, while Raiders began several years earlier. Required: Calculate the ba
> The December 31, 2021, unadjusted trial balance for Demon Deacons Corporation is presented below. At year-end, the following additional information is available: 1. The balance of Prepaid Rent, $7,200, represents payment on October 31, 2021, for rent fro
> Below are transactions for Hurricane Company during 2021. 1. On October 1, 2021, Hurricane lends $9,000 to another company. The other company signs a note indicating principal and 12% interest will be paid to Hurricane on September 30, 2022. 2. On Novemb
> Below are transactions for Wolverine Company during 2021. 1. On December 1, 2021, Wolverine receives $4,000 cash from a company that is renting office space from Wolverine. The payment, representing rent for December and January, is credited to Deferred
> Financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. The summary of significant accounting policies is located in note A to the financial statements. Locate the section on property and equipment. What depreciat
> Refer to the information in E3–10. Required: For each of the adjustments recorded in E3–10, indicate by how much the assets, liabilities, and stockholders’ equity in the December 31, 2021, balance sheet is higher or lower if the adjustment is not recorde
> Consider the following situations for Shocker: 1. On November 28, 2021, Shocker receives a $4,500 payment from a customer for services to be rendered evenly over the next three months. Deferred Revenue is credited. 2. On December 1, 2021, the company pay
> 1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs on August 16. 2. A customer purchases sunglasses from Eddie Bauer on January 27 on account. Eddie Bauer receives payment from the customer on Februar
> Below are recorded transactions of Yellow Jacket Corporation for August. Required: Provide an explanation for each transaction.
> Terrapin Company engages in the following external transactions for November. 1. Purchase equipment in exchange for cash of $23,400. 2. Provide services to customers and receive cash of $6,800. 3. Pay the current month’s rent of $1,300. 4. Purchase offic
> Below are several external transactions for Hokies Company. Hokies uses the following accounts: Accounts Payable Equipment Accounts Receivable Cash Supplies Utilities Expense Prepaid Rent Rent Expense Service Revenue Common Stock Notes Payable Re
> Below is a list of common accounts. Required: Indicate whether the normal balance of each account is a debit or a credit.
> At the beginning of April, Owl Corporation has a balance of $13,000 in the Retained Earnings account. During the month of April, Owl had the following external transactions. 1. Issue common stock for cash, $11,000. 2. Provide services to customers on acc
> Boilermaker House Painting Company incurs the following transactions for September. 1. Paint houses in the current month for $15,000 on account. 2. Purchase painting equipment for $16,000 cash. 3. Purchase office supplies on account for $2,500. 4. Pay em
> Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company had the following transactions. 1. Issue 10,000 shares of common stock in exchange for $32,000 in cash. 2. Purchase land for $19,000. A
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. The summary of significant accounting policies is located in note 2 to the financial statements. Locate the section on property and equipment. What d
> Boilermaker House Painting Company incurs the following transactions for September. 1. September 3 Paint houses in the current month for $20,000 on account. 2. September 8 Purchase painting equipment for $21,000 cash. 3. September 12 Purchase office
> Below are the external transactions for Shockers Incorporated. 1. Issue common stock in exchange for cash. 2. Purchase equipment by signing a note payable. 3. Provide services to customers on account. 4. Pay rent for the current month. 5. Pay insurance f
> Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions. 1. January 1 Issue 10,000 shares of common stock in exchange for $42,000 in cash. 2. January 5 Purch
> Below is the complete list of accounts of Cobras Incorporated and the related balance at the end of March. All accounts have their normal debit or credit balance. Supplies, $1,000; Buildings, $55,000; Salaries Payable, $500; Common Stock, $35,000; Accoun
> Below is the complete list of accounts of Sooner Company and the related balance at the end of April. All accounts have their normal debit or credit balance. Cash, $3,900; Prepaid Rent, $7,400; Accounts Payable $4,300; Common Stock, $40,000; Service Reve
> Below are T-accounts. The first row in each is the beginning balance, and the numbers in parentheses are transaction numbers. Required: Provide an explanation for each transaction.
> Consider the recorded transactions below. Required: Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is: Cash, $3,400; Accounts Receivable, $4,200; Supplies,
> Consider the following transactions. 1. Receive cash from customers, $15,000. 2. Pay cash for employee salaries, $9,000. 3. Pay cash for rent, $3,000. 4. Receive cash from sale of equipment, $8,000. 5. Pay cash for utilities, $1,000. 6. Receive cash from
> Below are several transactions for Crimson Tide Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions. Required: Assess whether the junior accountant correctly proposes how to record each transa
> Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions. Required: Assess whether the junior accountant correctly proposes how to record each tran
> Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $12,000. They expect to use the Suburban for five years and then sell the vehicle for $4,500
> Bearcat Construction begins operations in March and has the following transactions. March 1 Issue common stock for $21,000. March 5 Obtain $9,000 loan from the bank by signing a note. March 10 Purchase construction equipment for $25,000 cash. March
> Sun Devil Hair Design has the following transactions during the month of February. February 2 Pay $700 for radio advertising for February. February 7 Purchase beauty supplies of $1,300 on account. February 14 Provide beauty services of $2,900 to custome
> Listed below are several terms and phrases associated with the measurement process for external transactions. Required: Pair each item from List A with the item from List B to which it is most appropriately associated.
> Tiger Trade has the following cash transactions for the period. Required: 1. Calculate the ending balance of cash, assuming the balance of cash at the beginning of the period is $5,000. 2. Prepare a statement of cash flows.
> Wolfpack Construction has the following account balances at the end of the year. Required: Use only the appropriate accounts to prepare a balance sheet.
> At the beginning of the year (January 1), Buffalo Drilling has $11,000 of common stock outstanding and retained earnings of $8,200. During the year, Buffalo reports net income of $8,500 and pays dividends of $3,200. In addition, Buffalo issues additional
> Below are the account balances for Cowboy Law Firm at the end of December. Required: Use only the appropriate accounts to prepare an income statement.
> Cougar’s Accounting Services provides low-cost tax advice and preparation to those with financial need. At the end of the current period, the company reports the following amounts: Assets = $19,000; Liabilities = $15,000; Revenues = $28,000; Expenses = $
