Refer to the transactions in ED–4, but now assume the 1,000 shares are sold on February 1, 2025, for $80 per share. Required: 1. Record each of these transactions in 2024, including an adjusting entry on December 31 for the investment’s fair value, if appropriate. 2. Record the sale on February 1, 2025. Data from ED-4: Gator Shoes, Inc., manufactures a line of stylish waterproof footwear. The following transactions relate to investments in common stock during 2024. March 1 Purchases 3,000 shares (10%) of Power Drive Corporation’s common stock for $62 per share. July 1 Receives a cash dividend of $1.25 per share. December 31 The fair value of Power Drive Corporation’s common stock is $75 per share. On February 1, 2025 (the following year), Gator Shoes sells 1,000 shares of Power Drive Corporation’s common stock for $70 per share.
> RiverHawk Expeditions provides guided tours in scenic mountainous areas. After the first 11 months of operations in 2024, RiverHawk has the following account balances. The following transactions occur during December 2024: December  1 P
> The general ledger of Red Storm Cleaners at January 1, 2024, includes the following account balances: The following is a summary of the transactions for the year: 1. March 12 Provide services to customers, $60,000, of which $21,000 is on account. 2. May
> Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2024, appears below. December 31 is the company’s fiscal year-end. In addition, the company had th
> Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day but makes bank deposits only once per week. The following provides information from the company’s
> Cornhusker Company provides the following information at the end of 2024. Required: Prepare the income statement, statement of stockholders’ equity, and balance sheet for Cornhusker Company on December 31, 2024. No common stock is issue
> The information necessary for preparing the 2024 year-end adjusting entries for Gamecock Advertising Agency appears below. Gamecock’s fiscal year-end is December 31. 1. On July 1, 2024, Gamecock received $6,000 from a customer for advertising services to
> Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2024, the company reports the following amounts: In addition, the company had common stock of $40,000 at the beginning of the year an
> Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual-basis accounting as p
> Refer to the information in BE3–6. Determine the financial statement effects for (1) the purchase of supplies during the year and (2) the adjusting entry for supplies used by the end of the year. Data from BE 3-6: At the beginning of the year, Golden Go
> Scenario 1: During 2024, IBM provides consulting services on its mainframe computer for $11,000 on account. The customer does not pay for those services until 2025. Scenario 2: On January 1, 2024, Gold’s Gym sells a one-year membership for $1,200 cash. N
> Income statement and balance sheet data for Virtual Gaming Systems are provided below. Required: 1. Calculate the following risk ratios for 2024 and 2025: a. Receivables turnover ratio. b. Inventory turnover ratio. c. Current ratio. d. Debt to equity rat
> Earnings per share for the year ended December 31, 2024, are $1.40. The closing stock price on December 31, 2024, is $28.30. Required: Calculate the following profitability ratios for 2024. 1. Gross profit ratio. 2. Return on assets. 3. Profit margin. 4.
> The following income statement and balance sheets for Virtual Gaming Systems are provided. Required: Assuming that all sales were on account, calculate the following risk ratios for 2024. 1. Receivables turnover ratio. 2. Average collection period. 3. In
> The balance sheets for Sports Unlimited for 2024 and 2023 are provided below. Required: 1. Prepare a vertical analysis of Sports Unlimited’s 2024 and 2023 balance sheets. Express each amount as a percentage of total assets for that year
> The income statements for Anything Tennis for the years ending December 31, 2024 and 2023, are provided below. Required: 1. Complete the “Amount” and “%” columns to be used in a hori
> Sports Emporium has two operating segments: sporting goods and sports apparel. The income statement for each operating segment is presented below. Required: 1. Complete the “%” columns to be used in a vertical analysis
> Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s). Required: Complete the following income statement for Reverse Logic. Assume all accounts payable are to Su
> The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. Additional Information for 2024: 1. Purchased investment in bonds for $115,000. 2. Sold land for $31,000. The land originally was purchased for $40,000
> Portions of the financial statements for Alliance Technologies are provided below. Required: Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the indirect method.
> Sanders Inc. is a small brick manufacturer that uses the direct write-off method to account for uncollectible accounts. At the end of 2024, its balance for Accounts Receivable is $35,000. The company estimates that of this amount, $4,000 is not likely to
> An investments account offers a 12% annual return. If $50,000 is placed in the account for two years, by how much will the investment grow if interest is compounded (a) annually, (b) semiannually, (c) quarterly, or (d) monthly?
> Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2024, its first year of operations: January 2 Issue 110,000 shares of common stock for
> Refer to the information provided in P10–2A. Required: Taking into consideration the beginning balances on January 1, 2024 and all the transactions during 2024, respond to the following for Donnie Hilfiger: 1. Prepare the stockholders’ equity section of
> Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2024, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders
> On January 1, 2024, Coney Island Entertainment issues $1,300,000 of 7% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: Calculate the issue price of a bond and complete the first three rows of an
> On January 1, 2024, Universe of Fun issues $900,000, 8% bonds that mature in 10 years. The market interest rate for bonds of similar risk and maturity is 9%, and the bonds issue for $841,464. Interest is paid semiannually on June 30 and December 31. Requ
> On January 1, 2024, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Required: 1. Were the bonds issued at face amount, a discount, or a
> On January 1, 2024, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $600,000 of 8% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1. If the market interest r
> On September 1, 2024, a company decides to lease office space in a building. The building’s owner offers the company the following options, with the first monthly payment beginning September 30, 2024: 1. Sign a two-year lease with monthly payments of $3,
> On January 1, 2024, Strato Corporation borrowed $2 million from a local bank to construct a new building over the next three years. The loan will be paid back in three equal installments of $776,067 on December 31 of each year. The payments include inter
> On January 1, 2024, Gundy Enterprises purchases an office for $360,000, paying $60,000 down and borrowing the remaining $300,000, signing a 7%, 10-year mortgage. Installment payments of $3,483.25 are due at the end of each month, with the first payment d
> At the end of 2024, Worthy Co.’s balance for Accounts Receivable is $20,000, while the company’s total assets equal $1,500,000. In addition, the company expects to collect all of its receivables in 2025. In 2025, however, one customer owing $2,000 become
> The ink-jet printing division of Environmental Printing has grown tremendously in recent years. Assume the following transactions related to the ink-jet division occur during the year ended December 31, 2024. Required: Determine the appropriate way Envir
> Caribbean Tours’ total payroll for the month of January was $600,000. The following withholdings, fringe benefits, and payroll taxes apply: Assume that none of the withholdings or payroll taxes has been paid by the end of January (recor
> Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $41 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to M
> Solich Sandwich Shop had the following long-term asset balances as of January 1, 2024: Additional information: · Solich purchased all the assets at the beginning of 2022. · The building is depreciated over a 10-year service l
> The following information relates to the intangible assets of University Testing Services (UTS): a. On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,510,000 in cash. The fair value of the net identifiable assets of Heinrich w
> University Car Wash purchased new soap dispensing equipment that cost $270,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will use the machine for six year
> Baskin-Robbins is one of the world’s largest specialty ice cream shops. The company offers dozens of different flavors, from Very Berry Strawberry to lowfat Espresso ’n Cream. Assume that a local Baskin-Robbins in Rale
> At the beginning of July, CD City has a balance in inventory of $3,400. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $2,300, terms 1/10, n/30. July 4 Pay cash for freight charges relat
> Over a four-year period, Jackie Corporation reported the following series of gross profits. In 2024, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory w
> On December 1, 2024, Liang Chemical provides services to a customer for $90,000. In payment for the services, the customer signs a three-year, 10% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Re
> The following account balances appear in the 2024 adjusted trial balance of Blue Devils Corporation: Cash, $5,000; Accounts Receivable, $9,000; Supplies, $19,000; Land, $75,000; Accounts Payable, $26,000; Salaries Payable, $16,000; Common Stock, $60,000;
> Humanity International sells medical and food supplies to those in need in underdeveloped countries. Customers in these countries are often very poor and must purchase items on account. At the end of 2024, total accounts receivable equal $1,300,000. The
> Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2024, Pearl provides services on account of $590,000. Of this amount, $80,000 remains receivable at the end of the year. An aging schedule as of December 31, 2024, is provided
> The following events occur for The Underwood Corporation during 2024 and 2025, its first two years of operations. June 12, 2024 Provide services to customers on account for $41,000. September 17, 2024 Receive $25,000 from customers on account. December 3
> Rocky owns and operates Balboa’s Gym located in Philadelphia. The following transactions occur for the month of October: 1. October 2 Receive membership dues for the month of October totaling $8,500. 2. October 5 Issue common stock in exchange for cash,
> Below is a summary of all transactions of Pixar Toy Manufacturing for the month of August 2024. Required: Prepare a statement of cash flows for the month of August 2024, properly classifying each of the transactions into operating, investing, and financi
> During 2018, Noval Company sells 270 units of inventory for $100 each. The company has the following inventory purchase transactions for 2018. Required: 1. Calculate ending inventory, cost of goods sold, and gross profit for 2018, assuming the company us
> Gator Shoes, Inc., manufactures a line of stylish waterproof footwear. The following transactions relate to investments in common stock during 2024. March 1 Purchases 3,000 shares (10%) of Power Drive Corporation’s common stock for $62 per share. July 1
> International Financial Reporting Standards are gaining support around the globe. In 2007, the SEC eliminated the requirement for foreign companies that issue stock in the United States to include in their financial statements a reconciliation of IFRS to
> Listed next are seven reasons for differences in accounting practices among countries. For each reason, at least two options are provided. Required: For each of the countries listed below, select the seven options that best describe that country. For ins
> The following account balances appear in the 2024 adjusted trial balance of Spiders Corporation: Common Stock, $30,000; Retained Earnings, $8,000; Dividends, $1,000; Service Revenue, $28,000; Salaries Expense, $16,000; and Rent Expense, $9,000. No common
> Match each reason with its description.
> In its first five years of operations, Monster Hats reports the following net income and dividends (the first year is a net loss). Required: Calculate the balance of Retained Earnings at the end of each year.
> January 1, 2024, Paradise Partners decides to upgrade recreational equipment at its resorts. The company is contemplating whether to purchase or lease the new equipment. Required: 1. The company can purchase the equipment by borrowing $250,000 with a 30-
> On June 30, 2024, Exploration Inc. signs a lease requiring quarterly payments each year for the next five years. Each of the 20 quarterly payments is $29,122.87, with the first lease payment beginning September 30. The company’s normal borrowing rate is
> On June 1, 2024, Florida National leased a building. The lease agreement calls for Florida National to make lease payments of $3,618.18 each month for the next two years, with the first lease payment beginning June 30. The company’s normal borrowing rate
> A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two options: a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years. b. Borrow $200,000 at 7% with monthly pa
> On January 1, 2024, Mitchell Company purchases new equipment for $700,000. Mitchell is required to make a down payment of $100,000 and issue an installment note for the remaining balance of $600,000. The note requires payments of $81,905.88 every three m
> On January 1, 2024, Jalen Company purchased land costing $800,000. Instead of paying cash at the time of purchase, Jalen plans to make four installment payments of $215,221.64 on June 30 and December 31 in 2024 and 2025. The payments include interest at
> On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: During January 2024, the following transactions occur: January 1 Borrow $100,000 from Captive Credit Corporation. The installment note bears interest at
> On January 1, 2024, Water World issues $26 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world’s largest water avalanche and the “tornado”—
> The following account balances appear in the 2024 adjusted trial balance of Beavers Corporation: Service Revenue, $275,000; Salaries Expense, $110,000; Supplies Expense, $20,000; Rent Expense, $26,000; Advertising Expense Expense, $44,000; and Delivery E
> On January 1, 2024, Frontier World issues $41 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dar
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 6% and the bonds issued at $644,632. Required: 1. Using a
> On January 1, 2024, Tropical Paradise borrows $50,000 by agreeing to a 6%, six-year note with the bank. Loan payments of $828.64 are due at the end of each month with the first installment due on January 31, 2024. Required: Record the issuance of the ins
> On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 10% and the bonds issued at $457,102. Required: 1. Using
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable annually on December 31 each year. Required: Assuming the market interest rate on the issue date is 6%, the bonds will issue at $644,161. 1. Complete the
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable annually on December 31 each year. Required: Assuming the market interest rate on the issue date is 8%, the bonds will issue at $559,740. 1. Complete the
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable annually on December 31 each year. Required: Assuming the bonds issue for $600,000, record the bond issue on January 1, 2024, and the first two interest p
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 6%, the bonds will issue at $644,632.
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 8%, the bonds will issue at $559,229.
> On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the bonds issue for $600,000, record the bond issue on January 1, 2024, and the firs
> Brady is hired in 2024 to be the accountant for Anderson Manufacturing, a private company. At the end of 2024, the balance of Accounts Receivable is $29,000. In the past, Anderson has used only the direct write-off method to account for bad debts. Based
> On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 8%, the bonds will issue at $549,482.
> On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 10%, the bonds will issue at $457,102.
> On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the bonds issue for $500,000, record the bond issue on January 1, 2024, and the firs
> On August 1, 2024, Trico Technologies, an aeronautic electronics company, borrows $21 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 9% promissory note. Inter
> On August 1, 2024, Trico Technologies, an aeronautic electronics company, borrows $21 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 9% promissory note. Inter
> On November 1, 2024, Aviation Training Corp. borrows $60,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 7% note payable. Interest is payable at maturity. Aviation’s year-end is December 31. Required: 1. Record the note p
> On January 1, 2024, the general ledger of ACME Fireworks includes the following account balances: During January 2024, the following transactions occur: January  2 Sold gift cards totaling $8,000. The cards are redeemable for merchandis
> Micro Facilities incurs the following costs during the year. • A new patent is purchased for $600,000 from Techno Company. The patent gives Micro exclusive right to sell specialized data storage units. • Internal costs of $500,000 were used to research
> On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances: During January 2024, the following transactions occur: January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a five-
> On January 1, 2024, Weaver Corporation purchased a patent for $237,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2026, the company incurred legal fees of $57,000 in succ
> Brangelina Adoption Agency’s general ledger shows a cash balance of $11,663. The balance of cash in the March-end bank statement is $7,345. A review of the bank statement reveals the following additional information: deposits outstanding of $2,803, bank
> Tasty Subs acquired a food service truck on October 1, 2024, for $120,000. The company estimates a residual value of $40,000 and a four-year service life. It expects to drive the truck 100,000 miles. Actual mileage was 5,000 miles in 2024 and 28,000 mile
> Tasty Subs acquired a food-service truck on October 1, 2024, for $120,000. The company estimates a residual value of $40,000 and a four-year service life. Required: Calculate depreciation expense using the straight-line method for 2024 and 2025, assuming
> Togo’s Sandwiches acquired equipment on April 1, 2024, for $18,000. The company estimates a residual value of $2,000 and a five-year service life. Required: Calculate depreciation expense using the straight-line method for 2024 and 2025, assuming a Decem
> On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2024, Big Blast Fireworks had the following invent
> Mulligan Corporation purchases inventory on account with terms FOB shipping point. The goods are shipped on December 30, 2024, but do not reach Mulligan until January 5, 2025. Mulligan correctly records accounts payable associated with the purchase but d
> Southwest Pediatrics has the following balances on December 31, 2024, before any adjustment: Accounts Receivable = $130,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2024, Southwest estimates uncollectible accounts to be 20%
> Physicians’ Hospital has the following balances on December 31, 2024, before any adjustment: Accounts Receivable = $60,000; Allowance for Uncollectible Accounts = $1,100 (credit). On December 31, 2024, Physicians’ estimates uncollectible accounts to be 1
> During 2024, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2024, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 20
> The general ledger of Pop’s Fireworks includes the following account balances in 2024: In addition, the following transactions occurred during 2024 and are not yet reflected in the account balances above: 1. Provide additional services
> On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances: During January 2024, the following transactions occur: January 2 Provide services to customers for cash, $35,100. January 6 Provide services to custome
> Refer to the information in BE3–12. (1) Record the lending for Falcon on July 1, 2024. (2) Record the adjusting entry for Falcon on December 31, 2024. (3) Calculate the 2024 year-end adjusted balances of Interest Receivable and Interest Revenue (assuming
> Refer to the information in E5–19, but now assume that the balance of the Allowance for Uncollectible Accounts on December 31, 2024, is $1,100 (debit) (before adjustment). Required: 1. Record the adjusting entry for uncollectible accoun
> Suzuki Supply reports the following amounts at the end of 2024 (before adjustment). Required: 1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 12% of receivables will not be collected.
> On April 1, 2024, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker’s business. The supplier explains that it has a temporary lack of funds that is slowing its produc
