Question: On July 1, Paxson Corporation takes out

> The following items appeared in the Investing Activities section of Apple Inc.’s statement of cash flows included in Form 10-K for the year ended September 26, 2015. (All amounts are in millions of dollars.) Required: 1. What amount d

> The loan department in a bank is subject to regulation. Internal auditors work for the bank to ensure that the loan department complies with requirements. The internal auditors must verify that each car loan file has a note signed by the maker, verificat

> The following information is available to assist you in preparing a bank reconciliation for Karen’s Catering on March 31: a. The balance on the March 31 bank statement is $6,506.10. b. Not included on the bank statement is a $423 depos

> Carpetland City reported net income of $78,500 for the year ended December 31, 2017. The following items were included on Carpetland’s balance sheet at December 31, 2017 and 2016: Carpetland uses the indirect method to prepare its sta

> You are considering an investment in the common stock of Wal-Mart. The following information is from the financial statements of Wal-Mart Stores, Inc. and Subsidiaries included in Form 10-K for fiscal years 2016 and 2015 (in millions of dollars): Cost o

> The following condensed income statements and balance sheets are available for Planter Stores for a two-year period. (All amounts are stated in thousands of dollars.) Before releasing the 2017 annual report, Planter’s controller lear

> Three large mass merchandisers use the following methods to value ending inventory: Company X—weighted average cost Company Y—first-in, first-out (FIFO) Company Z—last-in, first-out (LIFO) The cost of inventory has steadily increased over the past ten

> You are considering an investment in the common stock of Coca-Cola. The following information is from the consolidated statements of income of The Coca-Cola Company and Subsidiaries for the years ended December 31, 2015 and 2014 and for its competitor Pe

> Sound Traxs Inc. sells and rents DVDs to retail customers. The accountant is aware that at the end of the year, she must account for inventory, but is unsure what DVDs are considered inventory and how to value them. DVDs purchased by the company are plac

> The following account balances are taken from the records of Laugherty Inc. at December 31, 2017. The Supplies account represents the cost of supplies on hand at the beginning of the year plus all purchases. A physical count on December 31, 2017, shows o

> Ogonquit Enterprises prepares annual financial statements and adjusts its accounts only at the end of the year. The following information is available for the year ended December 31, 2017: a. Ogonquit purchased office furniture last year for $25,000. Th

> The following current asset appears on the balance sheet in 3M Company’s Form 10-K for the year ended December 31, 2014 (amounts in millions of dollars): Required: 1. What is the balance in 3M Company’s Allowance for

> Flood Relief Inc. prepares monthly financial statements and therefore adjusts its accounts at the end of every month. The following information is available for June 2017: a. Flood received a $10,000, 4%, two-year note receivable from a customer for serv

> Lewis and Associates has been in the termite inspection and treatment business for five years. The following is a list of accounts for Lewis on June 30, 2017. It reflects the recurring transactions for the month of June but does not reflect any month-end

> Zola Corporation records adjustments each month before preparing monthly financial statements. The following selected account balances reflect the month-end adjustments. Required: 1. The company paid for a six-month lease on April 1, 2017. Identify and

> Two years ago, Sue Stern opened an audio book rental shop. Sue reports the following accounts on her income statement: Sales ……………………………………………………………………………….… $84,000 Advertising Expense ……………………………………………………………… 10,500 Salaries Expense ………………………………………………

> Krittersbegone Inc. was organized on July 1 by a group of technicians to provide termite inspections and treatment to homeowners and small businesses. The following transactions occurred during the first month of business: Required: 1. Prepare a table

> Overnight Delivery Inc. is incorporated on February 1 and enters into the following transactions during its first month of operations: Required: 1. Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the

> Many events are linked to a source document. The following is a list of events that occurred in an entity: a. Paid a security deposit and six months’ rent on a building. b. Hired three employees and agreed to pay them $400 per week. c. Provided services

> The following current assets are listed in a company’s general ledger: Required: 1. Which items are cash equivalents? 2. Explain where items that are not cash equivalents should be classified on the balance sheet. 3. What are the amou

> Tuscon Inc. sold merchandise for $6,000 to P. Paxton on July 31, 2017, with payment due in 30 days. Subsequent to this, Paxton experienced cash-flow problems and was unable to pay its debt. On December 24, 2017, Tuscon stopped trying to collect the outst

> Abbott Inc. is expanding and needs to hire more personnel in the accounting office. Barbara Barker, the chief accounting clerk, knew that her cousin Cheryl was looking for a job. Barbara and Cheryl are also roommates. Barbara offered Cheryl a job as her

> IBM’s Form 10-K for the year ended December 31, 2015, includes the following section from its Report of Management found on page 74: Management Responsibility for Financial Information Responsibility for the integrity and objectivity of the financial inf

> A list of accounts for Lloyd Inc. at December 31, 2017, follows: Required: 1. Determine cost of goods sold for 2017. 2. Determine net income for 2017. 3. Prepare a balance sheet dated December 31, 2017. Accounts Receivable $56,359 Net purchases $ 6

> The following information was summarized from the consolidated balance sheets of Walgreens Boots Alliance, Inc. and Subsidiaries (the company created with the combination of Walgreens and Boots Alliance) as of August 31, 2015 and 2014 and the consolidate

> Chestnut Corp., a ski shop, opened for business on October 1. It uses a periodic inventory system. The following transactions occurred during the first month of business: Required: 1. Identify and analyze each of the preceding transactions of Chestnut.

> The 2015 Form 10-K of The New York Times Company includes the following in the note that summarizes its significant accounting policies: Inventories Inventories are stated at the lower of cost or current market value. Inventory cost is generally based o

> Following is an inventory acquisition schedule for Fees Corp. for 2017: During the year, Fees sold 11,000 units at $30 each. All expenses except cost of goods sold and taxes amounted to $60,000. The tax rate is 30%. Required: 1. Compute cost of goods

> Story Company’s inventory records for the month of November reveal the following: Inventory, November 1 ……………………………………………… 300 units @ $27.00 November 4, purchase ………………………………………………. 375 units @ $26.50 November 7, sale ………………………………………………………. 450 units @

> Repeat Problem 5-10A using the perpetual system. Problem 5-10A: Stellar Inc.’s inventory records show 300 units on hand on November 1 with a unit cost of $4 each. The following transactions occurred during the month of November: All

> Stellar Inc.’s inventory records show 300 units on hand on November 1 with a unit cost of $4 each. The following transactions occurred during the month of November: All expenses other than cost of goods sold amount to $2,000 for the m

> The following account balances are available for Tenfour Trucking Company on January 31, 2017: Cash …………………………………………………………………………….. $ 27,340 Accounts Receivable ………………………………………………………… 41,500 Prepaid Insurance ……………………………………………………………. 18,000 Warehouse ……

> Refer to the transactions for Krittersbegone in Problem 3-7A. Problem 3-7A: Krittersbegone Inc. was organized on July 1 by a group of technicians to provide termite inspections and treatment to homeowners and small businesses. The following transaction

> Refer to the financial information for Chipotle and Panera Bread reproduced at the back of this book. Chipotle reproduced: Panera Bread: Required: 1. What is the balance in Cash and cash equivalents on the balance sheet of each company at the end of

> Refer to the transactions for Overnight Delivery Inc. in Problem 3-6A. Problem 3-6: Overnight Delivery Inc. is incorporated on February 1 and enters into the following transactions during its first month of operations: Required: 1. Prepare journal en

> Russell Company was incorporated on January 1 with the issuance of capital stock in return for $120,000 of cash contributed by the owners. The only other transaction entered into prior to beginning operations was the issuance of a $50,000 note payable in

> Refer to the transactions for Castle Consulting Agency in Problem 3-11A. Problem 3-11A: Castle Consulting Agency began business in February. The transactions entered into by Castle during its first month of operations are as follows: a. Acquired artic

> Castle Consulting Agency began business in February. The transactions entered into by Castle during its first month of operations are as follows: a. Acquired articles of incorporation from the state and issued 10,000 shares of capital stock in exchange

> Refer to the table for Rapid City Roller Rink in part (1) of Problem 3-9A. Problem 3-9A: Three friends organized Rapid City Roller Rink on October 1. The following transactions occurred during the first month of operations: Required: 1. Prepare a tri

> Three friends organized Rapid City Roller Rink on October 1. The following transactions occurred during the first month of operations: Required: 1. Prepare a table to summarize the preceding transactions as they affect the accounting equation. Ignore d

> Fill in the missing amounts in the following income statement for Carpenters Department Store Inc. Net sales $122,040 Cost of goods sold: Beginning inventory $ 23,400 Net purchases $ (a) Transportation-in 6,550 Cost of goods purchased 81,150 Cost of

> On June 1, Campbell Corporation purchased ten acres of land in exchange for a promissory note in the amount of $50,000. Using the formats shown in Example 3-6, prepare the journal entry to record this transaction in a general journal and post it to the a

> Refer to the income statement for Vail Resorts shown in the chapter opener. Using the account titles reported there, prepare the journal entry for each of the following hypothetical transactions. Assume that all transactions include either a debit or a c

> Following is a list of transactions entered into during the first month of operations of Gardener Corporation, a new landscape service. Prepare in journal form the entry to record each transaction. April 1: Articles of incorporation are filed with t

> The 2015 Form 10-K for Gap Inc. includes the following information in the note that summarizes its accounting policies: Merchandise Inventory We value inventory at the lower of cost or market, with cost determined using the weighted average cost method.

> Prepare the journal entry to record each of the following independent transactions. (Use the number of the transaction in lieu of a date for identification purposes.) 1. Services provided on account of $1,530 2. Purchases of supplies on account for $1,36

> Record each of the following transactions directly in T accounts using the numbers preceding the transactions to identify them in the accounts. Each account needs a separate T account. 1. Received contribution of $6,500 from each of the three principal o

> The following information is available concerning Stillwater Inc.: Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year. Sales occurred on the following dates: Units February 12 …â€&br

> Texas Corp.’s statement of cash flows reported an addition of $6,000 for the change in the Inventory account during the year. Cost of goods sold expense on the income statement amounted to $50,000. Required: Determine the amount of purchases during the

> During 2017, Carter Company acquired three assets with the following costs, estimated useful lives, and estimated salvage values: The company uses the straight-line method to depreciate all assets and computes depreciation to the nearest month. For exa

> Hathaway Health Club sold three-year memberships at a reduced rate during its opening promotion. It sold 1,000 three-year nonrefundable memberships for $366 each. The club expects to sell 100 additional three-year memberships for $900 each over each of t

> Awards Etc. carries an inventory of trophies and ribbons for local sports teams and school clubs. The cost of trophies has dropped in the past year, which pleases the company except for the fact that it has on hand considerable inventory that was purchas

> The following information is available concerning the inventory of Carter Inc.: During the year, Carter sold 1,000 units. It uses a periodic inventory system. Required: 1. Calculate ending inventory and cost of goods sold for each of the following thr

> Martin Corp. began the year with 2,000 units of inventory that had been purchased for $6 per unit. During the year, 5,000 units were purchased for $8 each and 8,000 units for $10 each. Martin sold 9,000 units during the year for $15 each. The company use

> Walgreens Boots Alliance, Inc. and Subsidiaries’ (the company created with the combination of Walgreens and Boots Alliance) Form 10-K includes the following in the note that summarizes its accounting policies: Inventory The Company’s Retail Pharmacy USA

> Kramer began operations early in 2017 and made the following purchases: Kramer used the FIFO method to value its inventory and reported cost of goods sold expense for the year of $4,000. Required: Determine the cost of goods sold expense assuming Kram

> LaPine Company has the following account balances as of December 31, 2017: Inventory, January 1 …………………………………………………………………….. $ 4,000 Net sales …………………………………………..…………………………………..………. 78,300 Transportation-in …………………………………………..………………………..……….. 1,000 Invent

> There are three elements to the accounting equation: assets, liabilities, and stockholders’ equity. Although other possibilities exist, five types of transactions are described here. For each of these five types, write descriptions of t

> For each of the following transactions, indicate whether it increases (I), decreases (D), or has no effect (NE) on the total dollar amount of each of the elements of the accounting equation. Transactions Assets = Liabilities + Stockholders' Equity E

> On January 1, Campus Internet Connection opened for business across the street from Upper Eastern University. The company charges students a monthly fee of $20 and $1 for each hour they are online. During January, 500 students signed up for the service,

> For each of the following events, identify whether it is an external event that would be recorded as a transaction (E), an internal event that would be recorded as a transaction (I), or not recorded (NR). 1. A vendor for a company's supplies is paid

> Darlene’s Diner accepts American Express¤ credit cards from its customers. Darlene’s is closed on Sundays and on that day records the weekly sales and remits the credit card receipts to American Express. For the week ending on Sunday, June 12, cash sales

> On December 1, 2017, Roper Corp. accepted a two-month, $24,000 interest-bearing note from a customer in payment of an account receivable. On December 31, 2017, Roper made an adjustment with the following effect on the accounting equation: Required: 1.

> On September 1, 2017, Dougherty Corp. accepted a six-month, 7%, $45,000 interest-bearing note from Rozelle Company in payment of an account receivable. Dougherty’s year-end is December 31. Rozelle paid the note and interest on the due date. Required: 1.

> It takes Carlson Corp. 30 days on average to collect its accounts receivable. The company began the year with $10,500 in accounts receivable. Sales on credit for the year amounted to $150,000. Required: Assuming 360 days in a year, determine the amount

> Refer to the financial information for Chipotle and Panera Bread reproduced at the end of this book and answer the following questions: Chipotle reproduced: Panera Bread: Required: 1. What is the dollar amount of inventories that each company report

> The financial statements included in the 2015 Form 10-K of Nike reported the following amounts (in millions of dollars): Revenues, for the year ended May 31, 2015 ………………………………….. $30,601 Accounts receivable, net, May 31, 2015 …………………………………………….. 3,358 A

> Carter Company sells on credit with terms of n/30. For the $500,000 of accounts at the end of the year that are not overdue, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estimates the

> Olson Corp. reported the following in the Current Assets section of its December 31, 2017, balance sheet: During 2017, Olson recorded $80,000 of sales on credit and wrote off $4,000 of uncollectible accounts. Required: 1. Determine the amount of cash

> Kandel Company had the following data available for 2017 (before making any adjustments): Accounts receivable, 12/31/17 ………………………………………………………. $320,100 Allowance for doubtful accounts ……………………………………………………….. 2,600 Net credit sales, 2017 …………………………………………

> Emily Enterprises’ comparative balance sheets included accounts receivable of $224,600 at December 31, 2016, and $205,700 at December 31, 2017. Sales reported on Emily’s 2017 income statement amounted to $2,250,000. What is the amount of cash collections

> Troy Corp.’s statement of cash flows reported an addition of $2,000 for the change in the Accounts Receivable account during the year. Sales on account for the year amounted to $24,500. Required: Determine the cash collected on accounts receivable for t

> On its December 31, 2017, income statement, Durango reported a loss on sale of stock of $4,500. The loss resulted from the sale of 2,000 shares of ABC Corp. stock that Durango purchased during 2017 at $25 per share, excluding $500 in commissions to buy t

> On August 15, 2017, Cubs Corp. purchases 5,000 shares of common stock in Sox Inc. at a market price of $15 per share. In addition, Cubs pays brokerage fees of $1,000. On October 20, 2017, Cubs sells the Sox stock for $10 per share. Required: Identify an

> On October 1, 2017, Chicago Corp. purchases 1,000 shares of the preferred stock of Denver Corp. for $40 per share. Chicago pays another $1,000 in commissions. On October 20, 2017, Denver declares and pays a dividend of $1 per share. Chicago sells the sto

> Starship Enterprises enters into the following transactions during 2017 and 2018: Required: 1. Identify and analyze all transactions on Starship’s records to account for its investment in the Northern Lights bonds. 2. Why was Starship

> The following excerpt is taken from page 66 of the Sears Holdings Corporation (parent company of Kmart and Sears) 10-K for the fiscal year ended January 30, 2016: ‘‘Revenues from the sale of service contracts and the related direct acquisition costs are

> On May 31, 2017, Elmer Corp. purchased a 120-day, 9% certificate of deposit for $50,000. The CD was redeemed on September 28, 2017. Identify and analyze the transactions or adjustments on Elmer’s books to account for: a. The purchase of the CD. b. The a

> In its first year of business, Rideaway Bikes has net income of $145,000, exclusive of any adjustment for bad debts expense. The president of the company has asked you to calculate net income under each of two alternatives of accounting for bad debts: th

> The following tasks are performed by three employees, each of whom is capable of performing all of the tasks. Do not be concerned with the time required to perform the tasks, but with the need to provide for segregation of duties. Assign the duties by us

> The university drama club is planning a raffle. The president overheard you talking about internal control to another accounting student, so she asked you to set up some guidelines to ‘‘make sure’’ that all money collected for the raffle is accounted for

> Dexter Company’s bank reconciliation shows an adjusted cash balance of $3,254.33. The following items also appear on the reconciliation: NSF check …………………………………………………………………. $110.50 Deposit in transit …………………………………………………………. 332.10 Interest earned ……………

> Identify whether the transactions described should be recorded by Cameron Companies during December 2017 (fill in the blank with a D) or January 2018 (fill in the blank with a J). Purchases of merchandise that are in transit from vendors to Cameron Compa

> On December 23, 2017, Miller Wholesalers ships merchandise to Michael Retailers with terms of FOB destination point. The merchandise arrives at Michael’s warehouse on January 3, 2018. Required: 1. Identify who pays to ship the merchandise. 2. Determine

> Identify and analyze each of the following transactions of Buckeye Corporation. (All purchases on credit are made with terms of 1/10, n/30, and Buckeye uses the periodic system of inventory.) July July 3: Purchased merchandise on credit from Wildcat

> For each of the following independent cases, fill in the missing amounts. Case 1 Case 2 Case 3 Beginning inventory $ (a) $2,350 $1,890 Purchases (net) 5,560 (c) (e) Transportation-in 150 500 420 Cost of goods available for sale 7,110 (d) 8,790 Endin

> From the following list, identify whether the merchandisers described would most likely use a perpetual or a periodic inventory system. How might changes in technology affect the ability of merchandisers to use perpetual inventory systems? Grocery

> The following excerpt is taken from Note 1 on page 41 of Nordstrom’s Form 10-K for the fiscal year ended January 30, 2016: Net Sales We recognize revenue net of estimated returns and excluding sales taxes. Revenue from sales to customers shipped directly

> Refer to the financial information for Chipotle reproduced at the back of the book and identify where each of the following users of accounting information would first look to answer their respective questions about Chipotle. Chipotle reproduced: 1. I

> A retailer is considering the purchase of 1,000 units of a specific item from either of two suppliers. Their offers are as follows: Supplier One: $34.80 a unit, 1/10, n/30, no charge for freight. Supplier Two: $35.00 a unit, 2/10, n/30, plus freight of

> The Stationery Company purchased merchandise on account from a supplier for $14,500, terms 2/10, n/30. The Stationery Company returned merchandise with an invoice amount of $3,500 and received full credit. a. What is the amount of cash required for the p

> What is the normal balance of the following accounts: (a) Cost of Goods Sold, (b) Customer Refunds Payable, (c) Delivery Expense, (d) Estimated Returns Inventory, (e) Inventory, (f) Sales, (g) Sales Tax Payable.

> One item is omitted in each of the following four lists of income statement data. Determine the amounts of the missing items, identifying them by letter. Chase Company Jessup Inc. Osterman Company Snyder Co. Sales $735,000 (b) $8,220,000 (d) Cost of

> Journalize the entries to record the following selected transactions: a. Sold $640,000 of merchandise on account, subject to a sales tax of 7%. The cost of the goods sold was $385,000. b. Paid $61,750 to the state sales tax department for taxes collected

> Based on the data presented in Exercise 5-16, journalize Balboa Co.’s entries for (a) the purchase, (b) the return of the merchandise for credit, and (c) the payment of the invoice. Exercise 5-16: Showcase Co., a furniture wholesaler, sells merchandise

> Scott Company had sales of $12,350,000 and related cost of goods sold of $7,500,000 for the year ending December 31, 20Y8. Scott provides customers a refund for any returned or damaged merchandise. Scott Company estimates that customers will request refu

> Omega Tire Co.’s perpetual inventory records indicate that $3,145,000 of merchandise should be on hand on August 31, 20Y4. The physical inventory indicates that $3,113,500 of merchandise is actually on hand. Journalize the adjusting entry for the invento

> Sayers Co. sold merchandise on account to a customer for $80,000 terms 2/10, n/30. The cost of the goods sold was $58,000. Journalize Sayers’ entries to record (a) the sale, (b) the receipt of payment within the discount period, and (c) the receipt of pa

> Summit Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at May 31, the end of the fiscal year, the following balances were taken from the ledger of Summit Services: Journal

> At the end of the current year, $17,555 of fees have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees.