Question: On January 1, 2017, Stockton Manufacturing

> On December 31, 2018, Mainland Corporation issues 6%, 10-year convertible bonds payable with a face value of $4,000,000. The semiannual interest dates are June 30 and December 31. The market interest rate is 8%. Mainland amortizes bond discounts using th

> At December 31, 2018, Filbert Corporation’s adjusted trial balance shows the following balances: Filbert Corporation provides multi-year warranties with its products. Half of the Accrued Warranty Liability relates to warranty liabiliti

> The following transactions of Smooth Sounds Music Company occurred during 2018 and 2019: Requirement: 1. Record the transactions in Smooth Sounds’ journal. Explanations are not required.

> Bennett Go-Karts sells motorized go-karts. Bennett Go-Karts are motorized and are typically purchased by amusement parks and other recreation facilities, but are also occasionally purchased by individuals for their own personal use. The company uses a pe

> December 31, 2018, Jackson Corporation’s adjusted trial balance shows the following balances: Jackson Corporation provides multi-year warranties with its products. Half of the Accrued Warranty Liability relates to warranty liabilities

> The following transactions of Melody Music Company occurred during 2018 and 2019: Requirement: 1. Record the transactions in Melody Music Company’s journal. Explanations are not required.

> Marine experienced these events during the current year. a. December revenue totaled $110,000; and, in addition, Big Wave collected sales tax of 7%. The tax amount will be sent to the state of Delaware early in January. b. On August 31, Big Wave signed a

> Amherst Corporation, an investment banking company, often has extra cash to invest. Suppose Amherst buys 900 shares of Hurricane Corporation stock at $57 per share, representing less than 5% of Hurricane’s outstanding stock. Amherst expects to hold the H

> Randall Go-Karts sells motorized go-karts. Randall Go-Karts are motorized and are typically purchased by amusement parks and other recreation facilities, but are also occasionally purchased by individuals for their own personal use. The company uses a pe

> Insurance companies and pension plans hold large quantities of bond investments. Rainy Day Corp. purchased $1,500,000 of 8% bonds of Quantrill, Inc., for 95 on January 1, 2018. These bonds pay interest on January 1 and July 1 each year. They mature on Ja

> The beginning balance sheet of Lansing Corporation included the following long-term asset: Lansing completed the following investment transactions during the year: At year-end, the fair values of Lansing’s investments were as follows:

> Illinois Exchange Company completed the following long-term investment transactions during 2018: At year-end, the fair value of the Amsterdam stock is $30,900. The fair value of the Exeter stock is $652,000. Requirements: 1. For which investment is fa

> During the fourth quarter of 2018, Harvestology, Inc. generated excess cash, which the company invested in equity securities as follows: Requirements: 1. Open T-accounts for Cash (including its beginning balance of $21,000), Investment in Equity Securit

> Insurance companies and pension plans hold large quantities of bond investments. Sea Insurance Corp. purchased $2,000,000 of 9% bonds of Sheehan, Inc., for 96 on January 1, 2018. These bonds pay interest on January 1 and July 1 each year. They mature on

> EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,780 million. At December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current asse

> Western Electronics completed these selected transactions during March 2018: a. Sales of $2,400,000 are subject to an accrued warranty cost of 9%. The accrued warranty payable at the beginning of the year was $37,000, and warranty payments for the year

> Buckeye has an annual payroll of $170,000. In addition, the company incurs payroll tax expense of 9% of the annual payroll. At December 31, Buckeye owes salaries of $7,800 and FICA and other payroll tax of $850. The company will pay these amounts early n

> Centennial Publishing completed the following transactions for one subscriber during 2018: Requirement: 1. Journalize these transactions (explanations not required). Then report any liability on the company’s balance sheet at December

> On September 30, 2018, Baytex, Inc., purchased 6.8% bonds of Whitmore Corporation at 98 as a long-term, held-to-maturity investment. The maturity value of the bonds will be $35,000 on September 30, 2023. The bonds pay interest on March 31 and September 3

> The LO 4accounting records of Carmen Appliances included the following balances at the end of the period: In the past, Carmen’s warranty expense has been 8% of sales. During the current period, the business paid $7,500 to satisfy the w

> Sherlock Sports Authority purchased inventory costing $30,000 by signing a 4%, short-term, one-year note payable. The purchase occurred on July 31, 2018. Sherlock pays annual interest each year on July 31. Journalize the company’s (a) purchase of invento

> Cape Cod Sales Company completed the following note payable transactions: Requirements: 1. How much interest expense must be accrued at December 31, 2018? (Round your answer to the nearest whole dollar.) 2. Determine the amount of Cape Cod Salesâ&

> On September 1, 2019, The Shoppes at Forest Lake, Inc., purchased inventory costing $63,000 by signing an 8%, six-month, short-term note payable. The company will pay the entire note (principal and interest) on the note’s maturity date. Requirements: 1.

> Barnacle Sales, Inc.’s, comparative income statements and balance sheets show the following selected information for 2017 and 2018: Requirements: 1. Calculate the company’s accounts payable turnover and daysâ&#1

> Green Earth Homes, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,770 million. At December 31, 2018, and 2017, the company had, respectively, $663 million and $613 million in current assets. Th

> Pine Systems’ revenues for LO 52018 totaled $27.1 million. As with most companies, Pine is a defendant in lawsuits related to its products. Note 14 of the Pine annual report for 2018 reported the following: Requirements: 1. Suppose Pin

> Electronics completed these selected transactions during March 2018: a. Sales of $2,050,000 are subject to an accrued warranty cost of 9%. The accrued warranty payable at the beginning of the year was $32,000, and warranty payments for the year totaled $

> Key West has an annual payroll of $150,000. In addition, the company incurs payroll tax expense of 10% of the annual payroll. At December 31, Key West owes salaries of $8,000 and FICA and other payroll tax of $1,000. The company will pay these amounts ea

> Travis Publishing completed the following transactions for one subscriber during 2018: Requirement: 1. Journalize these transactions (explanations not required). Then report any liability on the company’s balance sheet at December 31,

> Kingman Financial paid $590,000 for a 30% investment in the common stock of Cavalier, Inc. For the first year, Cavalier reported net income of $240,000, and at year-end declared and paid cash dividends of $110,000. On the balance-sheet date, the fair val

> Accounting records of Artie’s Appliances included the following balances at the end of the period: In the past, Artie’s warranty expense has been 8% of sales. During the current period, the business paid $7,500 to sati

> Assume Howard Manufacturing Corporation completed the following transactions: a. Sold a store building for $690,000. The building had cost Howard Manufacturing $1,200,000, and at the time of the sale, its accumulated depreciation totaled $510,000. b. Los

> Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018: Requirements: 1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did it i

> Assume Voltron Company paid $22 million to acquire Brighton Industries. Assume further that Brighton had the following summarized data at the time of the Voltron acquisition (amounts in millions): Brighton’s current assets had a curr

> 1. Milton Printers incurred external costs of $700,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Milton with a competitive advantage for only eight years due to expected tech

> Bearcreek Mines paid $433,000 for the right to extract ore from a 450,000-ton mineral deposit. In addition to the purchase price, Bearcreek Mines paid a $155 filing fee to the county recorder, a $2,800 license fee to the state of Utah, and $95,045 for a

> Canyon Truck Company is a large trucking company. The company uses the units-of-production (UOP) method to depreciate its trucks.To follow are facts about one Mack truck in the company’s fleet. When this truck was acquired in 2018, the tractor-trailer ha

> On January 2, 2018, Drake Furnishings purchased display shelving for $8,100 cash, expecting the shelving to remain in service for five years. Drake depreciated the shelving on a double-declining-balance basis, with $1,300 estimated residual value. On Sep

> On January 1, 2017, Lincoln Manufacturing purchased a machine for $930,000. The company expected the machine to remain useful for eight years and to have a residual value of $110,000. Lincoln Manufacturing uses the straight-line method to depreciate its

> Chester Consultants purchased a building for $430,000 and depreciated it on a straight-line basis over 40 years. The estimated residual value was $70,000. After using the building for 20 years, Chester realized that the building would remain useful only

> Without making journal entries, record the transactions of E-E-20A directly in the Shay T-account, Equity-method Investment. Assume that after all the noted transactions took place, Shay sold its entire investment in Faulk for cash of $1,600,000. How muc

> On January 1, 2018, Black Iron Bar & Grill purchased a building, paying $56,000 cash and signing a $101,000 note payable. The company paid another $60,000 to remodel the building. Furniture and fixtures cost $51,000, and dishes and supplies—a current ass

> Lima Pizza bought a used Toyota delivery van on January 2, 2018, for $18,600. The van was expected to remain in service for four years (57,000 miles). At the end of its useful life, Lima management estimated that the van’s residual value would be $1,500.

> During 2018, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit, which Ming’s paid. Ming’s also paid $15,000 for architect’s fees

> Belvidere Self Storage purchased land, paying $170,000 cash as a down payment and signing a $180,000 note payable for the balance. Belvidere also had to pay delinquent property tax of $2,000, title insurance costing $2,500, and $3,000 to level the land a

> Assume Alfonso Corporation completed the following transactions: a. Sold a store building for $670,000. The building had cost Alfonso $1,600,000, and at the time of the sale, its accumulated depreciation totaled $930,000. b. Lost a store building in a fi

> Handley Grocery Corporation reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018: Requirements: 1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did i

> Assume Kaledan Company paid $15 million to acquire Roeder Industries. Assume further that Roeder had the following summarized data at the time of the Kaledan acquisition (amounts in millions): Roeder’s current assets had a current mark

> Sweitzer Printers incurred external costs of $400,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Sweitzer with a competitive advantage for only ten years due to expected tech

> Fresno Consultants purchased a building for $440,000 and depreciated it on a straight-line basis over 40 years. The estimated residual value was $82,000. After using the building for 20 years, Fresno realized that the building would remain useful only 14

> Shay Corporation owns equity-method investments in several companies. Shay paid $1,600,000 to acquire a 25% investment in Faulk Software Company. Faulk reported net income of $620,000 for the first year and declared and paid cash dividends of $480,000.

> Ardmore Investments purchased Columbia Corporation shares on December 16 for $110,000. Ardmore plans on holding the securities a few months. Ardmore owns less than 2% of the outstanding shares of Columbia. 1. Suppose the Columbia shares decreased in val

> On January 1, 2018, Little City Bar & Grill purchased a building, paying $58,000 cash and signing a $110,000 note payable. The company paid another $62,000 to remodel the building. Furniture and fixtures cost $55,000, and dishes and supplies—a current

> Accounting records for Allegheny Corporation yield the following data for the year ended June 30, 2018: Requirements: 1. Journalize Allegheny’s inventory transactions for the year under the perpetual system. 2. Report ending inventory,

> Banta Tile & Marble Corporation reported the following comparative income statements for the years ended November 30, 2018, and 2017: Banta’s president and shareholders are thrilled by the company’s boost in sales

> Valentine Antiques, Inc., began May with inventory of $49,300. The business made net purchases of $50,200 and had net sales of $81,300 before a fire destroyed the company’s inventory.For the past several years, Valentine’s gross profit percentage has bee

> McGuire Industries prepares budgets to help manage the company. McGuire is budgeting for the fiscal year ended January 31, 2018. During the preceding year ended January 31, 2017, sales totaled $9,200 million and cost of goods sold was $6,300 million. A

> The Hooper Book Company’s accounting records include the following for 2018 (in thousands): Requirements: 1. Prepare Hooper Book Company’s single-step income statement for the year ended December 31, 2018, including e

> Evaluate the common stock of Tristan Distributing Company as an investment. Specifically, use the two common stock ratios to determine whether the common stock became more or less attractive during the past year. (The number of common stock shares was th

> Altar Loan Company’s balance sheet at December 31, 2018, reports the following: During 2018, Altar Loan earned net income of $6,200,000. Calculate Altar Loan’s earnings per common share (EPS) for 2018; round EPS to t

> For 2018 and 2017, calculate return on sales, asset turnover, return on assets (ROA), leverage, return on common stockholders’ equity (ROE), gross profit percentage, operating income percentage, and earnings per share to measure the abi

> Evansville Furniture Company has asked you to determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2018. To answer this question, calculate the following ratios for 2

> During the most recent year, Quinn Co. bought 2,800 shares of Germana-Hall Corporation common stock at $35, 590 shares of Barlengo Corporation stock at $45.50, and 1,000 shares of Frumley Corporation stock at $70. At December 31, Hoover’s Online reports

> The financial statements of Big City News, Inc., include the following items: Requirements: 1. Calculate the following ratios for 2018 and 2017. When calculating days, round your answer to the nearest whole number. a. Current ratio b. Quick (acid-test)

> The following information is for Leary Lodge. What were the dollar amount of change and the percentage of each change in Leary Lodge’s net working capital during 2018 and 2017? Is this trend favorable or unfavorable?

> Prepare a comparative common-size income statement for Monroe Music Co. using the 2018 and 2017 data of E12-27B and rounding to four decimal places. Data from E12-27B:

> Perform a vertical analysis of Chapel Hill Golf Company’s balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity.

> Calculate trend percentages LO 2for Oak View Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest full percent. Which grew faster during the period,

> Prepare a horizontal analysis of the comparative income statements of Monroe Music Co. Round percentage changes to the nearest one-tenth percent (three decimal places)

> The Calloway Book Company’s accounting records include the following for 2018 (in thousands): Requirements: 1. Prepare Calloway Book Company’s single-step income statement for the year ended December 31, 2018, includ

> Evaluate the common stock of Carver Distributing Company as an investment. Specifically, use the two common stock ratios to determine whether the common stock became more or less attractive during the past year. (The number of common stock shares was the

> Palace Loan Company’s balance sheet at December 31, 2018, reports the following: During 2018, Palace Loan earned net income of $6,300,000. Calculate Palace Loan’s earnings per common share (EPS) for 2018. (Round EPS

> For 2018 and 2017, calculate return on sales, asset turnover, return on assets (ROA), leverage, return on common stockholders’ equity (ROE), gross profit percentage, operating income percentage, and earnings per share to measure the abi

> Journalize the following long-term, equity security transactions of Jeakin Department Stores: a. Purchased 450 shares of Fordham Fine Foods common stock at $33 per share (less than 10% of Fordham’s outstanding stock), with the intent of holding the stoc

> Jalbert Furniture Company has asked you to determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2018. To answer this question, calculate the following ratios for 2018

> The financial statements of Explorer News, Inc., include the following items: Requirements: 1. Calculate the following ratios for 2018 and 2017. When calculating days, round your answer to the nearest whole number. a. Current ratio b. Quick (acid-test

> The following information is for Nature Lodge. What were the dollar amounts of change and the percentage of each change in Nature Lodge’s net working capital during 2018 and 2017? Is this trend favorable or unfavorable?

> Prepare a comparative common-size income statement for Norman Music Co., using the 2018 and 2017 data of E12-16A and rounding to four decimal places. Data from E12-16A:

> Perform a vertical analysis of Beta Golf Company’s balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity

> Calculate trend percentages LO 2for Blueberry Valley Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest full percent. Which grew faster during the

> Prepare a horizontal analysis of the comparative income statements of Norman Music Co. Round percentage changes to the nearest one-tenth percent (three decimal places).

> Calculate the following items for the statement of cash flows: a. Beginning and ending Accounts Receivable were $25,000 and $24,000, respectively. Credit sales for the period totaled $69,000. How much were the cash collections from customers? b. Cost of

> The income statement and additional data of Jubilee World, Inc., follow: Additional data: a. Collections from customers are $15,500 more than sales. b. Payments to suppliers are $1,700 less than the sum of cost of goods sold plus advertising expense. c.

> Selected accounts of Roosevelt Framing Company show the following: Requirement: 1. For each account, identify the item or items that should appear on a statement of cash flows prepared using the direct method. State where to report the item.

> Lancaster Corporation, an investment banking company, often has extra cash to invest. Suppose Lancaster buys 500 shares of Knight Corporation stock at $40 per share, representing less than 5% of Knight’s outstanding stock. Lancaster expects to hold the K

> The accounting records of Pepperell Pharmaceuticals, Inc., reveal the following: Requirement: 1. Prepare cash flows from operating activities using the direct method. Also evaluate Pepperell’s operating cash flow. Give the rationale f

> Calculate the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, were $101,000 and $98,000, respectively. Depreciation for the period was $20,000, and purchases of new plant assets were $38,000. Plant assets were

> Consider three independent cases for the cash flows of Lucky Merchandise Company. For each case, identify from the statement of cash flows how the company generated the cash to acquire new plant assets. Rank the three cases from the most healthy financ

> The income statement and additional data of Casey Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $153,000. Of this amount, $102,000 was paid in cash and $51,000 was financed by signing a note payable. b. Proceeds fro

> The accounting records of the Ashby Trading Post Company include these accounts: Requirement: 1. Prepare the company’s net cash provided by (used for) operating activities section of the statement of cash flows for the month of July.

> The accounting records of Steven Corporation reveal the following: Requirements: 1. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. 2. Evaluate the operating cash flow of Steven Corporat

> Vanderpool Investments specializes in low-risk government bonds. Identify each of Vanderpool’s transactions as operating (O), investing (I), financing (F), noncash investing and financing (NIF), or a transaction that is not reported on

> Calculate the following items for the statement of cash flows: a. Beginning and ending Accounts Receivable were $28,000 and $27,000, respectively. Credit sales for the period totaled $66,000. How much were the cash collections from customers? b. Cost of

> income statement and additional data of Hapland Light, Inc., follow: Additional data: a. Collections from customers are $15,500 less than sales. b. Payments to suppliers are $1,500 more than the sum of cost of goods sold plus advertising expense. c. Pay

> Selected accounts of McKay Bricker Framing show the following: Requirement: 1. For each account, identify the item or items that should appear on a statement of cash flows prepared using the direct method. State where to report the item.

> Griffin Company’s inventory records for its retail division show the following at December 31: At December 31, 11 of these units are on hand. Journalize the following for Griffin Company under the perpetual system: 1. Total December p

> The accounting records of Grand Pharmaceuticals, Inc., reveal the following: Requirement: 1. Prepare cash flows from operating activities using the direct method. Also evaluate Grand’s operating cash flow. Give the rationale for your

> Calculate the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, were $115,000 and $109,000, respectively. Depreciation for the period was $11,000, and purchases of new plant assets were $25,000. Plant assets were

> Consider three independent cases for the cash flows of Winter Merchandising Corporation. For each case, identify from the statement of cash flows how the company generated the cash to acquire new plant assets. Rank the three cases from the most healthy f

> The income statement and additional data of Barnaby Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $156,000. Of this amount, $104,000 was paid in cash and $52,000 was financed by signing a note payable. b. Proceeds f