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 installment note similar to the one in Exhibit 10.12. 2. Prepare the journal entries in which Norwood records (a) accrued interest as of December 31, 2020 (the end of its annual reporting period), and (b) the first annual payment on the note.
> 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 January 1, MM Co. borrows $340,000 cash from a bank and in return signs an 8% installment note for five annual payments of $85,155 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $85,155 annual payment at December 3
> 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
> 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
> Tano Company issues bonds with a par value of $180,000 on January 1, 2020. The bonds’ annual contract rate is 8%, 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
> Brussels Enterprises issues bonds at par dated January 1, 2020, that have a $3,400,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. R
> No-Toxic-Toys currently have $200,000 of equity and is planning an $80,000 expansion to meet increasing demand for its product. The company currently earns $50,000 in net income, and the expansion will yield $25,000 in additional income before any intere
> Compute the selling price of 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. The annual market rate for these bonds is 8%. Use present value tables B.1 and B.3 in Appendix B.
> Compute the selling price of 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. The annual market rate for these bonds is 10%. Use present value tables B.1 and B.3 in Appendix B.
> Select the description that best fits each term or phrase. A. Records and tracks the bondholders’ names. B. Is unsecured; backed only by the issuer’s credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issue
> Dunphy Company issued $10,000 of 6%, 10-year bonds at par value on January 1. Interest is paid semiannually each June 30 and December 31. Prepare the entries for (a) the issuance of the bonds and (b) the first interest payment on June 30.
> Prepare journal entries to record the following transactions and events of Kodax Company. Year 1 Jan.2 Purchased 30,000 shares of Grecco Co. common stock for $411,000 cash. Grecco has 90,000 shares of common stock outstanding, and its activities will be
> Identify whether stockholders’ equity would increase, decrease, or have no effect as a result of each separate transaction listed below. 1. A stock dividend equal to 30% of the previously outstanding shares is declared. 2. New shares of common stock are
> Anthem Co. has 100,000 shares authorized, 90,000 shares issued, and 20,000 shares of treasury stock. Determine the number of shares outstanding.
> For each transaction, determine the impact—increase, decrease, or no effect—on total assets, total liabilities, and total equity.
> Use the information in QS 11-13 to compute the dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative.
> Green Planet Corp. has 5,000 shares of noncumulative 10% preferred stock with a $2 par value and 17,000 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash divide
> Review 30 to 60 minutes of financial news programming on television. Take notes on companies that are catching analysts’ attention. You might hear reference to over- and undervaluation of firms and to reports about PE ratios, dividend yields, and earning
> Assume that Eventbrite decides to launch a new website to market discount bookkeeping services to consumers. This chain, named Aladin, requires $500,000 of start-up capital. The founder con- tributes $375,000 of personal assets in return for 15,000 share
> Access the February 22, 2019, filing of the 2018 calendar-year 10-K report of McDonald’s (Ticker: MCD) from SEC.gov. Required 1. Review McDonald’s balance sheet and identify how many classes of stock it has issued. 2. What are the par values, number of a
> 1. Prepare the journal entry to record Tamas Company’s issuance of 5,000 shares of $100 par value, 7% cumulative preferred stock for $102 cash per share. 2. Assuming the facts in part 1, if Tamas declares a year-end cash dividend, what is the amount of d
> Teams are to select an industry, and each team member is to select a different company in that industry. Each team member then is to acquire the selected company’s financial statements (or Form 10-K) from the SEC site (SEC.gov). Use these data to identif
> Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. a. On February 15, paid $160,000 cash to purchase GMI’s 90-day short-term
> Refer to the financial statements for Samsung in Appendix A. How much were its cash payments for treasury stock acquisitions for the year ended December 31, 2018?
> Refer to the 2018 balance sheet for google in Appendix A. What is the par value per share of its preferred stock? Suggest a rationale for the amount of par value it assigned.
> Refer to Apple’s fiscal 2018 balance sheet in Appendix A. How many shares of common stock are authorized? How many shares of common stock are issued and outstanding?
> Use the following financial information for Samsung. Required 1. Compute earnings per share (EPS) for Samsung. 2. If Samsung buys back outstanding shares from investors, would we expect EPS to increase or decrease from the buyback?
> Use the following comparative figures for Apple and Google. Required 1. Compute the basic EPS for each company using these data. 2. Compute the dividend yield for each company using these data. 3. Compute the price-earnings ratio for each company using t
> Use Apple’s financial statements in Appendix A to answer the following. 1. How many shares of Apple common stock are issued and outstanding at (a) September 29, 2018, and (b) September 30, 2017? 2. What is the total amount of cash dividends paid to commo
> Santana Rey created Business Solutions on October 1, 2020. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources. a. Santana’s sister Cicely
> Soltech Company’s balance sheet shows the following stockholders’ equity section. Required 1. Determine the par values of the corporation’s preferred stock and its common stock. 2. If two yearsâ
> The equity sections for Hovo Corp. at the beginning of the year (January 1) and end of the year (December 31) follow. The following transactions and events affected its equity during the year. Feb. 15 declared a $0.40 per share cash dividend, date of rec
> Indicate whether each of the following statements regarding dividends is true or false. 1. Cash and stock dividends reduce retained earnings. 2. Dividends payable is recorded at the time a cash dividend is declared. 3. The date of record is the date a ca
> Carlsville Company began operations in the current year and had no prior stock investments. The following transactions are from its short-term stock investments with insignificant influence. Prepare journal entries to record these transactions. On Decemb
> Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Required 1. Determine the par values of the corporation’s preferred stock and its common stock. 2. If two years&a
> Kohler Corporation reports the following components of stockholders’ equity at December 31, 2019. During 2020, the following transactions affected its stockholders’ equity accounts. Jan.Purchased 4,000 shares of its
