Question: On January 1, MM Co. borrows $340,

> Key figures for Apple and Google follow. Required 1. Compute times interest earned for the three years’ data shown for each company. 2. In the current year, and using times interest earned, which company appears better able to pay inter

> Use the table below and Apple’s financial statements in Appendix A to answer the following. 1. Compute times interest earned for each of the three years shown. 2. Is Apple in a good or bad position to pay interest obligations? Assume an

> Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. The following six-column table contains the company’s unadjusted trial balance as of December 31, 2020. The followin

> Review the February 26 and March 25 transactions for Business Solutions (SP 4) from Chapter 4. Feb. 26 The Company paid cash to Lyn Addie for eight days’ work at $125 per day. Mar. 25 The Company sold merchandise with a $2,002 cost for $2,800 on credit t

> MLS Company has five employees, each of whom earns $1,600 per month and is paid on the last day of each month. All five have been employed continuously at this amount since January 1. On June 1, the following accounts and balances exist in its general le

> Shown here are condensed income statements for two different companies (assume no income taxes). Required 1. Compute times interest earned for Ellis Company and for Seidel Company. 2. What happens to each company’s net income if sales i

> On November 10, Lee Co. began operations by purchasing coffee grinders for resale. The grinders have a 60-day warranty. When a grinder is returned, the company discards it and mails a new one from merchandise inventory to the customer. The company’s cost

> Fishing Guides Co. has four employees. FICA Social Security taxes are 6.2% of the first $132,900 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company’s FUTA

> Use the information in Problem 1-3A to prepare the current year-end balance sheet for Armani Company.

> Tavella Company’s first weekly pay period of the year ends on January 8. On that date, Tavella’s sales employees earned $34,745, office employees earned $21,225, and delivery employees earned $1,030 in salaries. The employees are to have withheld from th

> Merger Co. has 10 employees, each of whom earns $2,000 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $132,900 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% a

> Warner Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 22 Purchased $5,000 of merchandise on credit from Fox-Pro, terms n∕30. May 23 Replaced the April 22 account payable to Fox-Pro with a 60-day, 15%, $4,600 not

> Francisco Company has 10 employees, each of whom earns $2,800 per month and is paid on the last day of each month. All 10 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general

> Shown here are condensed income statements for two different companies (assume no income taxes). Required 1. Compute times interest earned for Miller Company and for Weaver Company. 2. What happens to each company’s net income if sales

> On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from merchandise inventory to the customer. The company’s cost per new razo

> Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $132,900 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company’s FUTA taxes a

> On January 8, the end of the first weekly pay period of the year, Regis Company’s employees earned $22,760 of office salaries and $65,840 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%,

> Tyrell Co. entered into the following transactions involving short-term liabilities. Required 1. Determine the maturity date for each of the three notes described. 2. Determine the interest due at maturity for each of the three notes. Assume a 360-day ye

> Nishi Corporation prepares financial statements for each month-end. As part of its accounting process, estimated income taxes are accrued each month for 30% of the current month’s net income. The income taxes are paid in the first month

> Use the information in Problem 1-3A to prepare the statement of retained earnings for Armani Company for the current year ended December 31.

> Stark Company has five employees. Employees paid by the hour earn $10 per hour for the regular 40-hour workweek and $15 per hour beyond the 40 hours per week. Hourly employees are paid every two weeks, but salaried employees are paid monthly on the last

> Lenny Florita, an unmarried employee, works 48 hours in the week ended January 12. His pay rate is $14 per hour, and his wages have deductions for FICA Social Security, FICA Medicare, and federal income taxes. He claims two withholding allowances. Comput

> At the end of the first pay period of the year, Sofia earned $4,000 of salary. Withholdings from Sofia’s salary include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $500 of federal income taxes, $160 of medica

> Use the following information from separate companies a through d to compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due?

> Selected accounts from Lue Co.’s adjusted trial balance for the year ended December 31 follow. Prepare a classified balance sheet.

> For each separate situation, indicate whether Cruz Company should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Cruz Company guarantees the $100,000 debt of a supplier. It is not probable that the supplier will default on t

> Vander Co. provides medical care and insurance benefits to its retirees. In the current year, Vander agrees to pay $9,500 for medical insurance and contribute an additional 5% of the employees’ $200,000 gross salaries to a retirement program. (1) Record

> Prepare adjusting entries at December 31 for Maxum Company’s year-end financial statements for each of the following separate transactions. 1. Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $13,000 of accrued

> For the year ended December 31, Lopez Company implements an employee bonus program based on company net income, which the employees share equally. Lopez’s bonus expense is computed as $14,563. 1. Prepare the journal entry at December 31 to record the bon

> Analyze each of the following transactions from Exercise 9-12: (a) the copier’s sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction’s effect on

> Mead Inc. began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 Jan.20 Purchased Johnson & Johnson bonds for $20,500. Feb.9 Purchased Sony notes for

> Kitty Company began operations in the current year and acquired short-term debt investments in trading securities. The year-end cost and fair values for its portfolio of these debt investments follow. Prepare the journal entry to record the December 31 y

> Hitzu Co. sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On

> Mest Company has nine employees. FICA Social Security taxes are 6.2% of the first $132,900 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Cumul

> The following monthly data are taken from Ramirez Company at July 31: sales salaries, $200,000; office salaries, $160,000; federal income taxes withheld, $90,000; state income taxes withheld, $20,000; Social Security taxes withheld, $22,320; Medicare tax

> The liabilities of Organic Foods are made up of $60,000 in notes payable as of its December 31 year-end. For those notes payable, $3,000 is due within the next year. Prepare the liabilities section of Organic Foods’s December 31 year-end balance sheet.

> Using the data in situation (a) of Exercise 9-7, prepare the employer’s September 30 journal entry to record the employer’s payroll taxes expense and its related liabilities. Round amounts to cents.

> Using the data in situation (a) of Exercise 9-7, prepare the employer’s September 30 journal entry to record salary expense and its related payroll liabilities for this employee. The employee’s federal income taxes withheld by the employer are $80 for th

> BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $132,900 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to its employe

> On March 1, LGE asks to extend its past-due $1,200 account payable to Tyson. Tyson agrees to accept $200 cash and a 180-day, 8%, $1,000 note payable to replace the account payable. (1) Prepare the March 1 entry for LGE. (2) Prepare the September 27 entry

> Keesha Co. borrows $200,000 cash on November 1 of the current year by signing a 90-day, 9%, $200,000 note. 1. On what date does this note mature? 2. How much interest expense is recorded in the current year? (Assume a 360-day year.) 3. How much interest

> Sylvestor Systems borrows $110,000 cash on May 15 by signing a 60-day, 12%, $110,000 note. 1. On what date does this note mature? 2. Prepare the entries to record (a) issuance of the note and (b) payment of the note at maturity.

> Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. Aug.2 Purchased Verizon bonds for $10,000. Sep.7 Purchased Apple bonds for $35,000. 12 Purchased Mastercar

> Analyze each separate transaction from Exercise 9-2 by showing its effects on the accounting equation— specifically, identify the accounts and amounts (including + or –) for each transaction.

> 1. On July 15, Piper Co. sold $10,000 of merchandise (costing $5,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government. Record entries for the July 15 and August 1 transactions. 2. On Nov

> The following items appear on the balance sheet of a company with a one-year operating cycle. Identify each item as a current liability, a long-term liability, or not a liability. 1. Notes payable (due in 13 to 24 months). 2. Notes payable (due in 6 to 1

> Organic Farmers Co-Op has three employees and pays them weekly. Using the withholding bracket table in Exhibit 9A.6, determine each employee’s federal income tax withholding. 1. Maria earns $735 per week and claims three withholding allowances. 2. Jeff e

> Which of the following items are normally classified as current liabilities for a company that has a one-year operating cycle? 1. Portion of long-term note due in 10 months. 2. Note payable maturing in 2 years. 3. Note payable due in 18 months. 4. Accoun

> Refer to QS 10-14 and separately analyze transactions 1 and 2, involving issuance of the note and its first annual payment, by showing their effects on the accounting equation—specifically, identify the accounts and amounts (including + or −) for each tr

> On July 1, Aloha Co. exercises a call option that requires Aloha to pay $408,000 for its outstanding bonds that have a carrying value of $416,000 and a par value of $400,000. The company exercises the call option after the semiannual interest is paid the

> In each separate situation, show how bonds payable is reported in the long-term liabilities section of the December 31 balance sheet. 1. Bonds payable with a par value of $10,000 and a premium on bonds payable of $240. 2. Bonds payable with a par value o

> Visit your city or county library. Ask the librarian to help you locate the most recent financial records of your city or county government. Examine those records. Required 1. Determine the amount of long-term bonds and notes currently outstanding. 2. Re

> Following are financial data for Nike and Under Armour. (1) Compute return on total assets for the current year for (a) Nike and (b) Under Armour. (2) Compute both profit margin and total asset turnover for the current year for (a) Nike and (b) Under Arm

> Brian, Joe, and Nate are the founders of Airbnb. Assume that the company currently has $250,000 in equity and is considering a $100,000 expansion to meet increased demand. The $100,000 expansion would yield $16,000 in additional annual income before inte

> Access the March 23, 2017, filing of the 10-K report of Home Depot for the year ended January 29, 2017, from SEC.gov (ticker: HD). Refer to Home Depot’s balance sheet, including its note 4 (on debt). Required 1. Identify Home Depot’s long-term liabilitie

> Refer to the statements for Google in Appendix A. For the year ended December 31, 2018, what was its debt-to-equity ratio? What does this ratio tell us?

> Refer to the statement of cash flows for Samsung in Appendix A. For the year ended December 31, 2018, what was the amount for repayment of long-term borrowings and debentures?

> Selected results from Samsung, Apple, and Google follow. Required 1. Compute Samsung’s debt-to-equity ratio for the current year and the prior year. 2. Is Samsung’s financing structure more risky or less risky in the c

> Snap Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $100,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on January 1, (b

> Key figures for Apple and Google follow. Required 1. Compute the debt-to-equity ratios for Apple and Google for both the current year and the prior year. 2. Use the ratios from part 1 to determine which company’s financing structure is

> Use Apple’s financial statements in Appendix A to answer the following. 1. Identify Apple’s long-term debt as reported on its balance sheet at (a) September 29, 2018, and (b) September 30, 2017. 2. Calculate the percentage change in long-term debt from S

> Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2021, for Business Solutions follow. Required 1. The bank has offered a l

> Refer to the lease details in Problem 10-11B. Assume that this lease is classified as an operating lease instead of a finance lease. Required 1. Prepare the January 1 journal entry at the start of the lease to record any asset or liability. 2. Prepare th

> Use the following information of Prescrip Co. to prepare a calendar year-end statement of comprehensive income.

> On January 1, Kwak (lessee) signs a three-year lease for equipment that is accounted for as a finance lease. The lease requires three $14,000 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Year

> Valdez issues $450,000 of 13%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $493,608 when the market rate is 10%. Required 1. Prepare the January 1 journal entry to record the bonds’

> Refer to the bond details in Problem 10-3B. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 10B.2 for the bonds’ life. 3. Prepare the journal entries to

> Refer to the bond details in Problem 10-4B. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3. Prepare an effective interest amortization t

> On October 1, 2020, Gordon borrows $150,000 cash from a bank by signing a three-year installment note bearing 10% interest. The note requires equal payments of $60,316 each year on September 30. Required 1. Complete an amortization table for this install

> Gomez issues $240,000 of 6%, 15-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $198,494 when the market rate is 8%. Required 1. Prepare the January 1 journal entry to record the bonds’ issu

> Allegiant issues 6%, 20-year bonds with a par value of $2,000,000 and semiannual interest payments. In each separate situation, determine whether the bond is issued at par value, at a discount, or at a premium. 1. Market rate for the bond is 5%. 2. Marke

> Ripkin Company issues 9%, five-year bonds dated January 1, 2020, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market rate is 8% on the issue date. Required 1. Calculate t

> Refer to the bond details in Problem 10-1B, except assume that the bonds are issued at a price of $4,192,932. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. For each semiannual period, compute (a) the cash payment, (b)

> Romero issues $3,400,000 of 10%, 10-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance.

> Wixi Co. has the following equity investments in FSN, DELL, and ATI. (1) Which of these companies are subsidiaries of Wixi? (2) How are individual assets and liabilities of a parent and its subsidiary (ies) reported on a balance sheet? FSN stock: Wixi ow

> Refer to the lease details in Problem 10-11A. Assume that this lease is classified as an operating lease instead of a finance lease. Required 1. Prepare the January 1 journal entry at the start of the lease to record any asset or liability. 2. Prepare th

> On January 1, Rogers (lessee) signs a three-year lease for machinery that is accounted for as a finance lease. The lease requires three $18,000 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Yea

> Ike issues $180,000 of 11%, three-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $184,566 when the market rate is 10%. Required 1. Prepare the January 1 journal entry to record the bonds’ i

> Refer to the bond details in Problem 10-3A. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 10B.2 for the bonds’ life. 3. Prepare the journal entries to

> Refer to the bond details in Problem 10-4A. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3. Prepare an effective interest amortization t

> On November 1, 2020, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal payments of $50,091 each year on October 31. Required 1. Complete an amortization table for this installme

> Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required 1. Prepare the January 1 journal entry to record the bonds’ i

> On January 1, Renewable Energy issues bonds that have a $20,000 par value, mature in eight years, and pay 12% interest semiannually on June 30 and December 31. 1. Prepare the journal entry for issuance assuming the bonds are issued at (a) 99 and (b) 1031

> Ellis Company issues 6.5%, five-year bonds dated January 1, 2020, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required 1. Calculate th

> Refer to the bond details in Problem 10-1A, except assume that the bonds are issued at a price of $4,895,980. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. For each semiannual period, compute (a) the cash payment, (b)

> Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Prepare journal entries to record each year-end fair value

> On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $10,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of Years 1, 2, 3,

> In each separate case, indicate whether the company has a finance lease or an operating lease. 1. The lessor retains title to the asset, and the lease term is 3 years on an asset that has a 10-year useful life. 2. The title is transferred to the lessee.

> Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issu

> Stanford issues bonds dated January 1, 2020, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuanc

> Selected accounts from WooHoo Co.’s adjusted trial balance for the year ended December 31 follow. Prepare the liabilities section of its classified balance sheet.

> Use the information in Exercise 10-12 to prepare the journal entries for Eagle to record the note’s issuance and each of the four payments.

> On January 1, 2020, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2020 through 2023. Prepar

> On January 1, 2020, Shay Company issues $700,000 of 10%, 15-year bonds. The bonds sell for $684,250. Six years later, on January 1, 2026, Shay retires these bonds by buying them on the open market for $731,500. All interest is accounted for and paid thro

> Separately analyze transactions a and b from QS 10-2 by showing their effects on the accounting equation—specifically, identify the accounts and amounts (including + or −) for each transaction.

> Tyrell Company issued callable bonds with a par value of $10,000. The call option requires Tyrell to pay a call premium of $500 plus par (or a total of $10,500) to bondholders to retire the bonds. On July 1, Tyrell exercises the call option. The call opt

> Fivio Co. reports the following information. (1) Compute return on total assets for the current year and for 1 year ago. (2) Is Fivio more efficient or less efficient in using total assets to produce income in the cur- rent year versus 1 year ago?

> Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issu

> Wookie Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on January 1,

> Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2020, at a price of $95,952. The annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. 1. Prepare a straight-line amortization table like Exhibit