Question: Return to the Musicality data in S11-

> Mitchell Corporation received $11,500,000 for the issuance of its stock on May 14. The par value of the Mitchell Corporation stock was only $11,500. Was the excess amount of $11,488,500 a profit to Mitchell Corporation? If not, what was it? Suppose the p

> Answer the following questions about the characteristics of a corporation’s stock: 1. Who are the real owners of a corporation? 2. What privileges do preferred stockholders have over common stockholders? 3. Which class of stockholders reaps greater be

> What are two main advantages that a corporation has over a proprietorship and a partnership? What are two main disadvantages of a corporation? Describe the authority structure of a corporation. Who holds ultimate power?

> Use the financial statements of Gagnon, Inc., in S13-6 and S13-7 to compute these profitability measures for 2016. Show each computation. a. Rate of return on sales b. Asset turnover ratio c. Rate of return on total asset

> Use the financial statements of Gagnon, Inc., in S13-6 and S13-7. 1. Compute the company’s debt ratio at December 31, 2016. 2. Compute the company’s times-interest-earned ratio for 2016. For operating

> Use the Gagnon 2016 income statement that follows and the balance sheet from S13-6 to compute the following: a. Gagnon, Inc.’s, rate of inventory turnover and days’ inventory outstanding for 2016. b. Daysâ&#12

> Use the Gagnon, Inc., balance-sheet data to answer the following questions. 1. Compute Gagnon, Inc.’s, quick (acid-test) ratio at December 31, 2016, and 2015. 2. Use the comparative information from the table given for Horner, Inc., I

> Examine the financial data of Peterson Corporation. Show how to compute Peterson’s current ratio for each year 2014 through 2016. Is the company’s ability to pay its current liabilities improving or de

> The stockholders’ equity for Rightwell Corporation on June 16, 2017, follows: On June 16, 2017, the market price of Rightwell common stock was $18 per share. Assume Rightwell declared and distributed a 12% stock dividend on this date.

> Carlton, Inc., and Lofton Corporation are competitors. Compare the two companies by converting their condensed income statements to common size. Which company earned more net income? Which company’s net income was a higher percentage

> Crafton Software reported the following amounts on its balance sheets at December 31, 2016, 2015, and 2014: Sales and profits are high. Nevertheless, Crafton is experiencing a cash shortage. Perform a vertical analysis of Cra

> Breen, Inc., reported the following sales and net income amounts: Show Breen’s trend percentages for sales and net income. Use 2013 as the base year. (In thousands) 2016 2015 2014 2013 Sales. $10,962 $10,266 $9,570 392 $8,700 350

> Compute economic value added (EVA®) for Beecher Software. The company’s cost of capital is 12%. Net income before taxes was $730 thousand, interest expense $403 thousand, beginning long-term debt $750 thousand, and beginning stockholders’ equity was $3,2

> Take the role of an investment analyst at Cole Binder. It is your job to recommend investments for your client. The only information you have is the following ratio values for two companies in the graphics software industry: Write a report to the Cole

> A skeleton of Pine Florals’ balance sheet appears as follows (amounts in thousands): Use the following ratio data to complete Pine Florals’ balance sheet: a. Debt ratio is 0.58. b. Current ratio is 1.10. c. Quick

> A skeleton of Pine Florals’ income statement appears as follows (amounts in thousands): Use the following ratio data to complete Pine Florals’ income statement: a. Inventory turnover was 4 (beginning inventory was $

> The annual report of Ferguson Cars, Inc., for the year ended December 31, 2016, included the following items (in millions): 1. Compute earnings per share (EPS) and the price-earnings ratio for Ferguson Cars’ stock. Round to the neares

> Verifine Corporation reported the following amounts on its 2016 comparative income Statements: Perform a horizontal analysis of revenues and net income—both in dollar amounts and in percentages—for 20

> Pratt Computer Sales, Inc., reported the following financial statements for 2016: Compute the following investing cash flows; enter all amounts in thousands. a. Acquisitions of plant assets (all were for cash). Pratt Com

> Supreme Manufacturing, Inc., reported the following at December 31, 2016, and December 31, 2017: Supreme Manufacturing has paid all preferred dividends through 2013. Requirement 1. Compute the total amounts of dividends to both preferred and common

> Prudhoe Bay Oil Co. is having its initial public offering (IPO) of company stock. To create public interest in its stock, Prudhoe Bay’s chief financial officer has blitzed the media with press releases. One in particular caught your eye. On November 19, P

> Use the data in SE12-7 to prepare Williams Corporation’s statement of cash flows for the year ended June 30, 2016. Williams uses the indirect method for operating activities. From SE12-7 Williams Corporation accountants

> Williams Corporation accountants have assembled the following data for the year ended June 30, 2016: Prepare the operating activities section of Williams’ statement of cash flows for the year ended June 30, 2016. Willia

> Peabody Cruiselines is preparing its statement of cash flows (indirect method) for the year ended March 31, 2016. Consider the following items in preparing the company’s statement of cash flows. Identify ea

> Smythe Transportation began 2016 with accounts receivable, inventory, and prepaid expenses totaling $60,000. At the end of the year, Smythe had a total of $62,000 for these current assets. At the beginning of 2016, Smythe owed current liabilities of $35

> The CEO and CFO from Jolson Hotels, Inc., are reviewing company performance for 2016. The income statement reports a 20% increase in net income over 2015. However, most of the increase resulted from a gain on insurance proceeds from fire d

> Examine the statement of cash flows of Chadwell Company. Suppose Chadwell’s operating activities provided, rather than used, cash. Identify three things under the indirect method that could cause operating cash flows to

> Sowell Enterprises, Inc., has experienced an unbroken string of nine years of growth in net income. Nevertheless, the company is facing bankruptcy. Creditors are calling all of Sowell’s loans for immediate payment, and the cash is simply not available. I

> Use the data in SE12-14 to prepare Mulberry Golf Club, Inc.’s, statement of cash flows for the year ended September 30, 2016. The company uses the direct method for operating cash flows. From SE12-14 Mulb

> Mulberry Golf Club, Inc., has assembled the following data for the year ended September 30, 2016: Prepare the operating activities section of Mulberry Golf Club, Inc.’s, statement of cash flows for the year

> Laughlin Horse Farms, Inc., began 2016 with cash of $190,000. During the year, Laughlin earned service revenue of $591,000 and collected $570,000 from customers. Expenses for the year totaled $425,000, with $410,000 paid in cash to suppliers and employee

> Quanto Products Company reported the following stockholders’ equity on its balance sheet: Requirements 1. What caused Quanto’s preferred stock to decrease during 2017? Cite all possible causes. 2. What caused Quant

> Use the Pratt Computer Sales data in SE12-9 to compute the following; enter all amounts in thousands. a. Payments to employees b. Payments of other expenses From SE12-9 Pratt Computer Sales, Inc., reported the following financial state

> Use the Pratt Computer Sales data in SE12-9 to compute the following; enter all amounts in thousands. a. Collections from customers b. Payments for inventory From SE12-9 Pratt Computer Sales, Inc., reported the following financial stat

> Use the Pratt Computer Sales data in SE12-9 to compute the following; enter all amounts in thousands. a. New borrowing or payment of long-term notes payable. Pratt Computer Sales had only one long-term note payable transaction during the year. b. Issua

> State how the statement of cash flows helps investors and creditors perform each of the following functions: a. Predict future cash flows b. Evaluate management decisions

> Weather Seal Windows Company has preferred stock outstanding and issued additional common stock during the year. 1. Give the basic equation to compute earnings per share of common stock for net income. 2. List the income items for which Weather Seal Wi

> Colossal Marine, Inc., had income before income tax of $171,000 and taxable income of $148,000 for 2016, the company’s first year of operations. The income tax rate is 40%. 1. Make the entry to record Colossal Marine’s income taxes for 2016. 2. Show wha

> Juneau Cruise Lines, Inc., reported the following income statement for the year ended December 31, 2016: Requirements 1. Were Juneau Cruise Line’s discontinued operations more like an expense or revenue? How can you tell? 2. Should

> Industrial Belting sells goods on account for 700,000 Mexican pesos. The foreign-exchange rate for a peso is $0.092 on the date of sale. Industrial Belting then collects cash on April 24 when the exchange rate for a peso is $0.096. Record Industrial Belt

> Suppose Natural Soda Corp. sells soft-drink syrup on account to a Russian company on September 12. Natural Soda Corp. agrees to accept 200,000 Russian rubles. On the date of sale, the ruble is quoted at $0.36. Natural Soda Corp. collects half the receiva

> For fiscal year 2016, Orange Computer, Inc., reported net sales of $19,320 million, net income of $1,991 million, and no significant discontinued operations or accounting changes. Earnings per share was $2.10. At a capitalization rate of 10%, how much shou

> Use the Sidestep Corporation data in E10-27A to prepare the stockholders’ equity section of the company’s balance sheet at December 31, 2017. From E10-27A Common stock $1.00 par value per share, 26 million shares issued……………………………......................

> Musicality, Inc., reported the following items, listed in no particular order, at December 31, 2016 (in thousands): Income tax of 40% applies to all items. Prepare Musicality’s multistep income statement for the year ended December 3

> Study the 2016 income statement of Kurzic Imports, Inc., and answer these questions about the company: 1. How much gross profit did Kurzic Imports earn on the sale of its products in 2016? How much was income from continuing operations? Net income? 2.

> The annual report of Meinike Computer, Inc., included the following: 1. Who is responsible for Meinike’s financial statements? 2. By what accounting standards are the financial statements prepared? 3. Identify one concrete action th

> Worldwide Electronics Corporation, based in New Jersey, sells electronics equipment through 150 retail and 25 outlet stores across the United States and in 18 different foreign countries. In addition, the company has a well-designed website through which

> iWorld, Inc., was set to report the following statement of retained earnings for the year ended December 31, 2016: Before issuing its 2016 financial statements, iWorld learned that net income of 2015 was overstated by $10,000. Prepare iW

> Use the Musicality data in S11-3. In addition, Musicality had unrealized gains of $2,100 on available-for-sale investments and a $3,200 foreign-currency translation adjustment (a gain) during 2016. Both amounts are net of tax and in thousands. Start with

> Research has shown that over 50% of financial statement frauds are committed by companies that recognize revenue improperly. What does this mean? Describe the most common ways companies improperly recognize revenue.

> The statement of stockholders’ equity for Hammer Corporation follows. Use Hammer Corporation’s statement to answer the questions: 1. How much cash did the issuance of common stock bring in during 2016? 2. What was

> Use the following statement of stockholders’ equity to answer the following questions about Beckett Corporation: 1. How much cash did the issuance of common stock bring in during 2016? 2. How much in dividends did Beckett declare dur

> At December 31, 2016, Sidestep Corporation reported the stockholders’ equity accounts shown here (with dollar amounts in millions, except per-share amounts). Common stock $1.00 par value per share, 26 million shares issued……………………………....................

> During 2016, Advantage Corporation earned net income of $5.8 billion and paid off $2.7 billion of long-term notes payable. Advantage raised $1.4 billion by issuing common stock, paid $3.0 billion to purchase treasury stock, and paid cash dividends of $1.

> Wallace Corporation is conducting a special meeting of its board of directors to address some concerns raised by the stockholders. Stockholders have submitted the following questions. Answer each question. 1. What is the difference between the redemptio

> Nestor Corporation’s 2016 financial statements reported the following items, with 2015 figures given for comparison (adapted, and in millions): Use the DuPont model to compute Nestor’s r

> Give the DuPont model formula for computing a. rate of return on total assets (ROA) and b. rate of return on common stockholders’ equity (ROE). Then answer these questions about the rate-of-return computations. 1. Explain the meaning of the component

> Fresco Ambulatory, Inc., has the following stockholders’ equity: Preferred stock, 1%, $4 par, 34,000 shares authorized and issued……………………………………………………................................... 136,000 Common stock, $4 par, 100,000 shares authorized, 65,000 shar

> Downtown Bancshares has 40,000 shares of $8 par common stock outstanding. Suppose Downtown declares and distributes a 16% stock dividend when the market value of its stock is $20 per share. 1. Journalize Downtown’s declaration and distribution of the st

> Baxter, Inc., has 25,000 shares of $1.35 preferred stock outstanding in addition to its common stock. The $1.35 designation means that the preferred stockholders receive an annual cash dividend of $1.35 per share. In 2016, Baxter declares an annual divid

> Greenwood Corporation earned net income of $90,000 during the year ended December 31, 2016. On December 15, Greenwood declared the annual cash dividend on its 2% preferred stock (15,000 shares with total par value of $150,000) and a $0.45 per share cash

> On February 5, 2016, Jubilee Rental Corporation’s board of directors declared a dividend of $0.24, to be paid on March 18, 2016, to the shareholders of record as of the close of business on March 9, 2016. Jubilee has 2,000,000 shares of $0.01 par-value c

> Lucinda Lowery Exports, Inc., is located in Clancy, New Mexico. Lowery is the only company with reliable sources for its imported gifts. The company does a brisk business with specialty stores such as Neiman Marcus. Lowery’s recent success has made the c

> Cinders Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock.................................. $ 281 Additional paid-in capital.................. 275 Retained earnings.................

> On January 10, 2016, Jenson Corporation purchased treasury stock at a cost of $21 million. On July 3, 2016, Jenson Corporation resold some of the treasury stock for $12 million; this resold treasury stock had cost Jenson Corporation $4 million. Record th

> Refer to the data in S10-7. Using only year-end figures rather than averages, compute the following for Hillcrest Employment Services: a. Net income b. Total liabilities c. Total assets (use the accounting equation) d. Net proï&no

> The financial statements of Hillcrest Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders’ equity section of Hillcrest&ac

> This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. Compare the balances in all the accounts after making both sets of entries. Are the account balances similar or different? Case A–Issue sto

> Which of the following items is most closely related to prior-period adjustments? a. Preferred stock dividends b. Retained earnings c. Treasury stock d. Earnings per share

> Use the Copyking Corporation data in Q11-42 and Q11-43. At the end of its first year of operations, Copyking’s deferred tax liability is a. $20,000. b. $30,000. c. $50,000. d. $120,000.

> Copyking Corporation in the preceding question must immediately pay income tax of a. $120,000. b. $50,000. c. $90,000. d. $30,000.

> Copyking Corporation has income before income tax of $200,000 and taxable income of $120,000. The income tax rate is 25%. Copyking’s income statement will report net income of a. $30,000. b. $50,000. c. $120,000. d. $150,000.

> Earnings per share is not reported for a. income from discontinued operations. b. comprehensive income. c. income from continuing operations.

> Foreign-currency transaction gains and losses are reported on the a. income statement. b. balance sheet. c. statement of cash flows. d. consolidation work sheet.

> Alistair Software had the following selected account balances at December 31, 2016 (all numbers and amounts are in thousands, except par value per share): Requirements 1. Prepare the stockholders’ equity section of Alistairâ&#1

> One way to hedge a foreign-currency transaction loss is to a. pay debts as late as possible. b. pay in the foreign currency. c. offset foreign-currency inventory and plant assets. d. collect in your own currency.

> Providence Systems purchased inventory on account from Megaplex. The price was ¥150,000, and a yen was quoted at $0.0088. Providence paid the debt in yen a month later when the price of a yen was $0.0093. Providence a. debited Inventory for $1,320. b.

> Return to the preceding question. Suppose you are evaluating Marva’s Lotion Company stock as an investment. You require a 10% rate of return on investments, so you capitalize Marva’s earnings at 10%. How much are you w

> Marva’s Lotion Company reports several earnings numbers on its current-year income statement (parentheses indicate a loss): How much net income would most investment analysts predict for Marva’s to earn next year? a

> What is the most relevant net income figure on a corporate multistep income statement for predicting future profits and for use in investment valuation? a. Prior-period adjustments b. Gain on sale of plant assets c. Income from continuing operations d.

> Book value per share of Miami Medical’s common stock outstanding at December 31, 2016, was a. 134.9. b. $4.73. c. 35,164. d. 20.8. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Mil

> How many shares of common stock did Miami Medical have outstanding, on average, during 2016? a. 35,164 million b. 1,122 million c. 20.8 million d. 134.9 million A1 Miami Medical Corporation Consolidated Statements of Financial Position December 3

> Miami Medical’s trend of return on sales is a. improving in 2016 as compared to 2014. b. declining. c. stuck at 21.1%. d. worrisome. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Mil

> Miami Medical’s long-term debt bears interest at 11%. During the year ended December 31, 2016, Miami’s times-interest-earned ratio was closest to: a. 20.8 times. b. 134.9 times. c. 75.6 times. d. 35,164. A1 Mia

> Miami Medical’s inventory turnover during fiscal year 2016 was a. 134.9 times. b. very slow. c. $835,164. d. 84 times. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In

> The financial statements of Wellman Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders’ equity section of Wellmanâ

> Assuming all sales were on account, Miami Medical’s days’ sales in receivables during 2016 was a. 134.9 days. b. 35 days. c. 20.8 days. d. 25 days. A1 Miami Medical Corporation Consolidated Statements of Financ

> Miami Medical’s common-size income statement for 2016 would report cost of goods sold as a. 134.9%. b. $35,164 million. c. 83.6%. d. up by 20.8%. A1 Miami Medical Corporation Consolidated Statements of Financial Position Decembe

> Using the earliest year available as the base year, the trend percentage for Miami Medical’s net revenue during 2016 was a. 135%. b. up by $10,850 million. c. 119%. d. up by 19.1%. A1 Miami Medical Corporation Consolidated State

> What is the largest single item included in Miami Medical’s debt ratio at December 31, 2016? a. Accounts payable b. Cash and cash equivalents c. Common stock d. Investments A1 Miami Medical Corporation Consolidated Statements of

> Miami Medical’s quick (acid-test) ratio at year-end 2016 is closest to a. 0.46. b. $8,623 million. c. 0.76. d. 0.68. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Millions) 2016 20

> Miami Medical’s current ratio at year-end 2016 is closest to a. 1.2. b. 0.94. c. 0.739. d. 21.1 A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Millions) 2016 2015 4 Assets: Current

> During 2016, Miami Medical’s total assets a. increased by 26.7%. b. increased by $1,902 million. c. Both a and b d. increased by 21.1%. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In

> Assume Sheehan uses the direct method to prepare the statement of cash flows. Income tax payable was $4,000 at the end of the year and $3,000 at the beginning. Income tax expense for the year totaled $59,700. What amount of cash did the co

> Assume Sheehan uses the direct method to prepare the statement of cash flows. Credit sales totaled $850,000, accounts receivable increased by $60,000, and accounts payable decreased by $20,000. How much cash did the company collect from cu

> Sheehan’s net cash flow from financing activities for 2016 was (assume no stock dividends were distributed) a. net cash used of $37,500. b. net cash used of $26,500. c. net cash provided of $12,000. d. n

> Journey Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $15,000 to help organize the corporation. Journey Publishing also issued common stock to an inventor in exchange for her patent wi

> Sheehan’s largest financing cash flow for 2016 resulted from (assume no stock dividends were distributed) a. issuance of common stock. b. payment of dividends. c. purchase of equipment. d. sale of equip

> How many items enter the computation of Sheehan’s net cash flow from financing activities for 2016? a. 2 b. 7 c. 3 d. 5 A1 Sheehan's Income Statement for 2016 1 2 Sales revenue 3 Gain on sale of equ

> The book value of equipment sold during 2016 was $20,000. Sheehan’s net cash flow from investing activities for 2016 was a. net cash used of $52,000. b. net cash used of $58,000. c. net cash used of $24,500. d. net ca