Question: Selected accounts of the Mayo Medical Labs

> 1. Carolina Customs recently discovered that a payroll clerk had issued checks to nonexistent employees for several years and cashed the checks himself. The company does not have any internal control procedures for its payroll operations. What specific c

> HiTech Computer Company is currently manufacturing a part that goes into its main product. Each year, 2,000 of these parts are used. Cost data for the past year that relate to the 2.000 parts are given below. Fixed costs are allocated on the basis of dir

> Washington Architectural Manufacturing makes architectural wood products, such as crown molding, onlays, and panels, which it sells to commercial builders. The firm’s finishing department is not mechanized. Employees use hand tools to finish the product.

> Pitt Corporation began operations in 20X1 to manufacture a single product. Relevant data for the year follow. There are no work-in-process inventories. OPERATING DATA FOR 20X1 Quantities: Beginning inventories, finished goods –0– Units produced during th

> The following data pertains to the operations of Eastern Industries for the year ended December 31, 20X1, its first year of operations. Eastern Industries makes kitchen appliances. Round ending inventory computations to the nearest dollar. DATA FOR 20X1

> Milano Leather Goods, Inc., makes one product that is processed through two departments: cutting and accessory. All materials are added in the first department. During the month of January 20X1, 8,000 units of the product were made. Standard costs and ac

> Organic Manufacturing Co. manufactures the product Orgex, which requires three raw materials. Production is in batches of 2,500 pounds of materials. Any waste is thrown away. The firm uses standard costs as a control device. Its standard costs for materi

> Midwest Manufacturing Company makes a single product that requires one hour of labor for each unit. The budgeted output for 20X1 is 36,000 units. Fixed and variable overhead cost data are as follows: INSTRUCTIONS 1. Prepare a flexible budget for Midwest

> The accountant for BioSafe Products, Inc., has compiled the following information about the direct labor hours and utility costs for each month of 20X1: INSTRUCTIONS 1. Compute the monthly fixed costs (rounded to nearest whole dollar) and the variable co

> TX Chemical Company manufactures a pharmaceutical chemical. All materials are put into process at the beginning of production. On April 1, 20X1, 3,000 pounds of the product were in process in the first department. During the month of April, 57,000 pounds

> H20 Inc. has two producing departments—fabricating and assembly. The data below is from the firm’s records for the month of July 20X1. There were no beginning inventories. INSTRUCTIONS 1. In general journal form, recor

> What type of accounts are kept in the accounts payable ledger?

> C8K Company manufactures plastic hats. The monthly production report for October 20X1 follows: INSTRUCTIONS Prepare the equivalent production computations for each department. Analyze: What portion of materials was added in October in the assembly depart

> Custom Cabinet Company builds kitchen cabinets. On November 1, 20X1, two jobs, Job 045 and Job 048, were in progress. The order is from Grace Apartments and was begun on October 5, 20X1. The accumulated costs for each job are detailed as follows: During

> In June 20X1, Red Fab, Inc., had the following cost data: COST DATA a. Raw materials costing $150,000 were purchased. b. Raw materials costing $105,000 were used: direct materials, $100,000; indirect materials, $5,000. c. Factory wages of $100,000 were i

> Holding Inc. makes shipping containers. The Trial Balance section of its worksheet and other yearend data follow. INSTRUCTIONS 1. Prepare a 12-column manufacturing worksheet for the fiscal year ended December 31, 20X1. Enter the trial balance in the firs

> Tebow Manufacturing Company makes camping equipment. Selected account balances (listed alphabetically) for this firm on December 31, 20X1, the end of its fiscal year, are given below. Data about the beginning and ending inventories is also shown. INSTRUC

> Solutions Inc. has three departments: printing, supplies, and cards. Certain information about the revenues and expenses of the departments for the year ending December 31, 20X1, is given below. Indirect expenses have been allocated on bases similar to t

> Selected information from the adjusted trial balance of Woo Books, LLC, as of December 31, 20X1, is shown below: INSTRUCTIONS Prepare a departmental income statement for the year ended December 31, 20X1. The bases for allocating indirect expenses are giv

> The comparative balance sheet for MP, Inc., as of December 31, 2022 and 2021, is shown below, followed by the condensed income statement for 2022. INSTRUCTIONS Prepare a statement of cash flows for 2022. Other financial data for the year follow: a. Sold

> Lee Corporation’s comparative balance sheet as of December 31, 2022 and 2021, and 2022 condensed income statement appear below. INSTRUCTIONS Prepare a statement of cash flows for 2022. Additional information for the year follows: a. Dep

> Postclosing trial balance data and other financial data for Char, Inc., as of December 31, 2022 and 2021, follow. INSTRUCTIONS Prepare a statement of cash flows for 2022. Additional information for the year follows: a. Sold an unused lot for $25,000 in c

> What is the relationship of the Accounts Payable account in the general ledger to the accounts payable subsidiary ledger?

> A comparative balance sheet for U&ME Corporation as of December 31, 2022 and 2021, is given below. INSTRUCTIONS Use these data to prepare a statement of cash flows for 2022. Additional information for the year follows: a. Had net income of $25,100. b

> Condensed financial statements for Alpha Corp. and Omega Corp. for 2022 follow: INSTRUCTIONS 1. Compute the following ratios for each company (rounding to 2 decimal places when appropriate): a. Rate of return on net sales b. Rate of return on total asset

> Using the data from Problem 23.1B, Chevy Hill, Inc., calculate the following financial ratios. Comment on any ratio that merits further consideration. Inventory on December 31, 2021, was $40,000. Please round percentages to nearest 0.1 percent. 1. Curren

> Chevy Hill, Inc., sells vintage clothes. The firm’s comparative income statement and balance sheet for the years 2021 and 2022 follow: INSTRUCTIONS 1. Prepare both a horizontal and a vertical analysis of the two statements. Round all ca

> On April 1, 2022, Big Sky Corporation issued $400,000 face value, 10 percent bonds at 99.16. The bonds were dated April 1, 2022, and will mature in 10 years. The discount is to be amortized on each interest payment date. The interest is payable semiannua

> TV Products, Inc., has outstanding $400,000 face value, 5 percent bonds payable dated January 1, 2022, and maturing 10 years later. The corporation is required under the bond contract to transfer $36,000 each year to a sinking fund. The directors have al

> The board of directors of Amora Company authorized issuance of $1,000,000 of 6 percent bonds. Each bond has a face value of $10,000. The interest is payable semiannually on February 1 and August 1. The bonds are dated February 1, 2022, and mature 10 year

> The board of directors of CAR Corporation authorized the issuance of $1,000,000 face value, 6 percent bonds. The bonds mature 10 years from their issue date of March 1, 2022. The interest is payable semiannually on March 1 and September 1. Because the fu

> The board of directors of Bow Products, Inc., authorized the issuance of $1,000,000 face value, 5 percent bonds dated April 1, 2022. The bonds will mature on April 1, 2032. The interest is payable semiannually on April 1 and October 1. The bond transacti

> The Stockholders’ Equity section of Austin Corporation’s balance sheet on January 1, 20X1, follows, along with selected transactions for the year: INSTRUCTIONS 1. Set up general ledger accounts for the stockholders&aci

> What is a schedule of accounts payable? Why is it prepared?

> The stockholders’ equity accounts of CAH Inc. on January 1, 20X1, contained the following balances: The transactions affecting stockholders’ equity during 20X1 are given below. The worksheet at the end of 20X1 showed a

> Jackson Corp. has been authorized to issue 10,000 shares of 10 percent noncumulative, nonparticipating preferred stock with a par value of $100 per share and 10,000 shares of common stock with a stated value of $100 per share. As of December 31, 20X1, 80

> Selected transactions of Orange Corporation during 20X1 are given below. Record them in the general journal. Analyze: If the dividends declared on October 30 were to be paid on January 15, what balance would be reflected in the Dividends Payable account

> PSquared Inc. was organized on January 2, 20X1, to operate a chain of pet supply stores. The firm is authorized to issue 50,000 shares of $10 par-value common stock and 18,000 shares of $50 par value, 8 percent preferred stock. The preferred stock is non

> Travel Inc., a new corporation, took over the assets and liabilities of Worldwide Travel Agency, owned by Roma James, on June 1, 20X1. The assets and liabilities assumed, after appropriate revaluation by Worldwide Travel Agency, are as follows (amounts i

> Laura Cisneros and Kay Osborn are equal partners in Creative Toys Nook. Cisneros and Osborn have decided to form Toy Chest Corporation to take over the operation of Creative Toys Nook on December 31, 20X1. The corporation is authorized to issue 8,000 sha

> A portion of the Stockholders’ Equity section of LTB Corporation’s balance sheet as of December 31, 20X1, appears below. Dividends have not been paid for the year 20X0. There has been no change in the number of shares of stock issued and outstanding duri

> Cancell Corporation issued and has outstanding 50,000 shares of $5 par-value common stock and 10,000 shares of $100 par-value, 5 percent preferred stock. The board of directors votes to distribute $40,000 as dividends in 20X1, $90,000 in 20X2, and $120,0

> Franklin Winston and Haley Thomas are partners in Technology Applications. The balances of their capital accounts on January 2, 20X1, after revaluation of assets were Winston, $240,000, and Thomas, $320,000. Profits and losses are shared in the ratio of

> The balance sheet of The Office Equipment and Supply Shop after the revenue, expense, and partners’ drawing accounts have been closed on December 31, 20X1, is provided below. On that date, Rush, Hatten, and Booker agree to admit Rosie H

> What is a purchase return?

> Alicia Meeks and Charolette Hicks operate Uptown Apartments. Their partnership agreement provides for salaries of $120,000 a year for Meeks and $96,000 for Hicks and for an interest allowance of 10 percent on each partner’s invested capital at the beginn

> Warren Burggren and Justin Beavers operate a retail furniture store. Under the terms of the partnership agreement, Burggren is authorized to withdraw $9,000 a month and Beavers $7,500 a month. The withdrawals, which are not considered to be salaries, wer

> James Grayson operates a store that sells paintings and portraits by local artists. Grayson has agreed to enter into a partnership with Connie Chu, effective January 1, 20X1. The new firm will be called Paintings and Portraits Supply Company. Grayson is

> Teresa Ballard operates the Ballard Broadcast Company. Her postclosing trial balance on December 31, 20X1, is as follows: Ballard agrees to enter into a partnership with Helena Pittman, effective January 1, 20X2. Profits and losses will be shared equally

> Liberty National Airlines is a small commercial airline operating in the United States. Because of poor economic conditions in the airline industry in 20X1, Liberty National has eliminated some routes and reduced the frequency of flights on all other rou

> Campuzano Company acquired a mineral property and drilled an oil well in 20X1. Capitalized costs subject to depletion totaled $800,000. When the well began producing in late 20X1, it was estimated that one million barrels of oil could ultimately be produ

> Freedom Company purchased four identical machines on January 4, 20X1, paying $9,000 for each machine. The useful life of each machine is expected to be five years, with no salvage value expected. The company uses the straight-line method of depreciation.

> The following transactions occurred at Wilson Company during 20X1: INSTRUCTIONS Note: In each case, assume that straight-line depreciation is used and that depreciation was last recorded on December 31, 20X0. Compute depreciation to the nearest whole dol

> On January 3, 20X1, Richardson Company purchased a computer (cost, $20,000; expected life, four years; estimated salvage value, $4,000) and an eight-passenger van (cost, $78,000; estimated life, eight years; estimated salvage value, $14,000). For financi

> What is a purchase allowance?

> Havana Company purchased a carton fabrication unit for $247,500 on January 8, 20X1. The machine’s useful life is estimated as 3,000,000 units of product or eight years, and its salvage value is estimated at $22,500. The number of carton

> On January 5, 20X1, Terrell Company purchased a new $400,000 machine with a five-year useful life and an estimated salvage value of $30,000. INSTRUCTIONS Prepare a schedule showing the annual depreciation and accumulated depreciation for each of the firs

> On July 5, 20X1, Piney Woods Company purchased a site for its new headquarters for $320,000. At a cost of $25,000, it razed two existing houses, with a total appraised value of $52,700, and received $13,100 from salvage. The firm also paid $7,500 in atto

> Beasley Realty Group had two completed unsold buildings on hand on January 1, 20X1. Unit 06-92: Cost, $395,000; retail price, $482,000 Unit 06-94: Cost, $436,500; retail price, $504,000 During the period January 1 through March 31, the company completed

> The April 1 inventory of Henderson Stores had a cost of $231,000 and a retail value of $335,000. During April, merchandise was purchased for $267,250 and marked to sell for $419,000. Freight in was $9,000. April sales totaled $537,500. INSTRUCTIONS 1. Co

> Over the last two years, Allison Company has averaged 35 percent gross profit. At the end of 20X1, the auditor found the following data in the records of the company: Inquiry by the auditor revealed that employees of Allison Company had estimated the inv

> The following data concerns inventory at Eddy’s Boat & Bike Shop: INSTRUCTIONS Determine the amount that the company should report as the inventory valuation at cost or net realizable value, whichever is lower. Use each of the follo

> The following data pertains to Model Q two-wheeled trailers in the inventory of Moss Travel Trailers Equipment Company during the year 20X1: Inventory, January 1 50 units at $10,480 Purchases: February 27 38 units at $9,320 August 16 46 units at $9,300 N

> The following data relates to the inventory and purchases of item 125 for McCray Company during May: Inventory, May 1 260 units at $21.00 Purchases: May 10 190 units at $20.75 May 19 140 units at $20.35 May 25 160 units at $20.40 Inventory, May 31 230 un

> On April 2, 20X1, Wu Company received a 6-month, 8 percent interest-bearing note from Jenna Blackmon in settlement of a past-due account receivable of $15,000. On May 3, Wu discounted this note at Mercantile State Bank. The bank charged a discount rate o

> What is the purpose of a credit memorandum?

> The following notes receivable are held by the Rodriguez Company on January 1, 20X1. On January 2, 20X1, Rodriguez discounted all of these notes at First National Bank at a discount rate of 10 percent. Compute the net proceeds the firm received from disc

> Ferrier Company received the notes listed below in 20X1. Compute the interest to be paid and the maturity value of each note. Show all computations. Analyze: Assuming all notes are paid when due, what would be the balance in Notes Receivable on July 31?

> Give the general journal entry to record each of the following transactions: 1. On June 3, 20X1, Huddleston Company issued a 120-day, 9 percent note for $36,000 to purchase new office equipment. 2. Huddleston Company paid the June 3 note when it became d

> The notes listed below were issued by Louisiana Company during 20X1: 1. A $30,000 note at 10 percent for 90 days, issued on June 15. 2. A $60,000 note at 6 percent for 30 days, issued on August 21. 3. An $80,000 note at 7.5 percent for 6 months, issued o

> Interactive Planning Software uses the direct charge-off method to account for uncollectible accounts expenses as they occur. Selected transactions for 20X1 and 20X2 follow. The accounts involved are Accounts Receivable, Notes Receivable, and Uncollectib

> The balances of selected accounts of Greece Sportswear Company on December 31, 20X1, are given below. Credit sales totaled $9,620,000. The returns and allowances on these sales were $55,000. Accounts Receivable $905,0000 Allowance for Doubtful Accounts 1

> The schedule of accounts receivable by age shown below was prepared for the Custom Windows Shop at the end of the firm’s fiscal year on July 31, 20X1: INSTRUCTIONS 1. Compute the estimated uncollectible accounts at the end of the year u

> Lord Taylor Plumbing Company provides plumbing installations for both business and individual customers. The company records sales for the two types of customers in separate Sales accounts. The company’s experience has been that each ty

> For each of the unrelated situations below, identify the accounting principle or concept violated (if a violation exists) and explain the nature of the violation. If you believe that the treatment is in accordance with GAAP, state this as your position a

> Country Cooking Prepared Meals is a retail shop owned by Beatrice Wilson. She wants to expand her business and has submitted the following balance sheet to her bank as part of the business loan application. INSTRUCTIONS 1. Identify any errors in the bala

> What major safeguards should be built into a system of internal control for purchases of goods?

> The income statement shown below was prepared by Karen Carter, owner of Karen’s Beauty Supplies. The business is a sole proprietorship that sells skin and hair care products. An accountant who looked at the income statement told Carter

> The accounting treatment or statement presentation of various items is discussed below. The items pertain to unrelated businesses. INSTRUCTION Indicate in each case whether the item has been handled in accordance with generally accepted accounting princi

> Read each of the following statements carefully and indicate whether each is true or false. 1. The FASB and IASB have placed little emphasis on cash flows in their conceptual framework. 2. Providing useful information to investors is one of the major con

> The data below concerns adjustments to be made at Mendocino Creek Wine Company. INSTRUCTIONS 1. Record the adjusting entries in the general journal as of December 31, 20X1. Use 25 as the first journal page number. Include descriptions. 2. Record reversin

> Obtain all data that is necessary from the worksheet prepared for Whatnots. Then follow the instructions to complete this problem. INSTRUCTIONS 1. Record adjusting entries in the general journal as of December 31, 20X1. Use 29 as the first journal page n

> Obtain all data necessary from the worksheet prepared for Gamer’s Paradise. Then follow the instructions to complete this problem. INSTRUCTIONS 1. Prepare a classified income statement for the year ended December 31, 20X1. The company does not classify i

> Hog Wild is a retail firm that sells motorcycles, parts, and accessories. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1. INSTRUCTIONS 1. Prepare a classified income stateme

> ComputerGeeks.com is a retail store that sells computers, laptops, supplies, and other electronic devices. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 20X1. INSTRUCTIONS 1. Pr

> Gamer’s Paradise is a retail store that sells computer games, owned by Matt Huffman. On December 31, 20X1, the firm’s general ledger contained the accounts and balances below. All account balances are normal. Cash $36,465 Accounts Receivable 2,669 Prepa

> Whatnots is a retail seller of cards, novelty items, and business products. On December 31, 20X1, the firm’s general ledger contained the following accounts and balances. INSTRUCTIONS 1. Prepare the Trial Balance section of a 10-column worksheet. The wor

> A business has purchased some new equipment for use in its operations, not for resale to customers. The terms of the invoice are n/30. Should this transaction be entered in the purchases journal? If not, where should it be recorded?

> Fun Depot is a retail store that sells toys, games, and bicycles. On December 31, 20X1, the firm’s general ledger contained the following accounts and balances. INSTRUCTIONS 1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet cov

> On September 30, 20X1, after one month of operation, the general ledger of Cross Country Travels contained the accounts and balances shown below. INSTRUCTIONS 1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adj

> On June 1, 20X1, William Tsang established his own consulting firm. Selected transactions for the first few days of June follow. 1. Record the transactions on page 1 of the general journal. Omit descriptions. Assume that the firm initially records prepai

> Based on the information below, record the adjusting journal entries that must be made for D. Johnson Products, LLC, on December 31, 20X1. The company has a December 31 fiscal year-end. Use 18 as the page number for the general journal. a.–b. Merchandise

> The following information is for Union Express Delivery Service’s workers’ compensation insurance premiums. On January 15, 20X1, the company estimated its premium for workers’ compensation insurance f

> 1. Complete Form 940, the Employer’s Annual Federal Unemployment Tax Return. Assume that all wages have been paid and that all quarterly payments have been submitted to the state as required. The payroll information for 20X1 appears bel

> Certain transactions and procedures relating to federal and state unemployment taxes are given below for Latest Greatest, a retail store owned by John Marion. The firm’s address is 4560 LBJ Freeway, Dallas, TX 75232-6002. The firm&acirc

> 1. On October 15, the firm made a deposit through EFTPS for the federal income tax withheld and the FICA tax (both employees’ withholding and employer’s matching portion). Based on your computations in Problem 11.2B, record the issuance of the check in g

> A payroll summary for Today’s Teen owned by Nikki Davis, for the quarter ending September 30, 20X1, appears below. The business made the following electronic deposits of payroll taxes: a. August 15 for July taxes. b. September 15 for Au

> The payroll register of Auto Detailers showed total employee earnings of $6,000 for the week ended April 8. INSTRUCTIONS 1. Compute the employer’s payroll taxes for the period. The tax rates are as follows: Social security 6.2 percent Medicare 1.45 FUTA

> What do the following credit terms mean? a. n/30 b. 2/10, n/30 c. n/10 EOM d. n/20 e. 1/10, n/20 f. 3/5, n/30 g. n/15 EOM

> Daily Operations pays its employees monthly. Payments made by the company on November 30, 20X1, follow. Cumulative amounts paid to the persons named prior to the November 30 payroll are also given. 1. Dave Orlando, president, gross monthly salary of $18,