Question: Smith Company acquired patent rights on January

> Using the income statement for Ousel Travel Service shown in Practice Exercise 1-4A, prepare a retained earnings statement for the year ended November 30, 2016. Shane Ousel invested an additional $50,000 in the business in exchange for common stock durin

> Milo Corporation purchased land for $540,000. Later in the year, the company sold a different piece of land with a book value of $270,000 for $180,000. How are the effects of these transactions reported on the statement of cash flows?

> The following accounts, with the balances indicated, appear in the ledger of Codigo Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December: Dec. 1. Issued Ch

> On January 1, 2016, Valuation Allowance for Trading Investments had a zero balance. On December 31, 2016, the cost of the trading securities portfolio was $41,500, and the fair value was $46,300. Prepare the December 31, 2016, adjusting journal entry to

> After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.: Journalize the four entries required to close the accounts. Retained Earnings. $643,600 Div

> On June 1, 2016, Herbal Co. received $18,900 for the rent of land for 12 months. Journalize the adjusting entry required for unearned rent on December 31, 2016.

> The revenues and expenses of Sentinel Travel Service for the year ended August 31, 2016, follow: Prepare an income statement for the year ended August 31, 2016. Fees earned . $750,000 Office expense 295,000 Miscellaneous expense 12,000 Wages expens

> On January 1, 2016, Valuation Allowance for Trading Investments had a zero balance. On December 31, 2016, the cost of the trading securities portfolio was $385,000, and the fair value was $357,400. Prepare the December 31, 2016, adjusting journal entry t

> Using the bond from Practice Exercise 12-3A, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. Exercise 12-3A: On the first day of the fiscal year, a company issues a $1,200,000, 9%,

> On October 12, Belleville Co. borrowed cash from Texas Bank by issuing a 30-day note with a face amount of $70,000. a. Determine the proceeds of the note, assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note, assuming t

> The revenues and expenses of Ousel Travel Service for the year ended November 30, 2016, follow: Prepare an income statement for the year ended November 30, 2016. Fees earned. $1,475,000 ..... Office expense 320,000 ......... Miscellaneous expense 2

> Olde Wine Corporation has 250,000 shares of $40 par common stock outstanding. On February 15, Olde Wine Corporation declared a 2% stock dividend to be issued May 2 to stockholders of record on March 27. The market price of the stock was $52 per share on

> The payroll register of Konrath Co. indicates $13,200 of social security withheld and $3,300 of Medicare tax withheld on total salaries of $220,000 for the period. Federal withholding for the period totaled $43,560. Provide the journal entry for the peri

> At the end of the current year, Accounts Receivable has a balance of $1,975,000; Allowance for Doubtful Accounts has a credit balance of $19,670; and sales for the year total $28,550,000. Using the aging method, the balance of Allowance for Doubtful Acco

> Prepare journal entries for each of the following: a. Issued a check to establish a petty cash fund of $750. b. The amount of cash in the petty cash fund is $115. Issued a check to replenish the fund, based on the following summary of petty cash receipts

> After the accounts have been adjusted at October 31, the end of the fiscal year, the following balances were taken from the ledger of Smart Delivery Services Co.: Journalize the four entries required to close the accounts. Retained Earnings $3,550,

> Prepare a journal entry on December 23 for dividends of $20,000.

> Beginning inventory, purchases, and sales for 30xT are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a). the weighted average unit cost after the May 23 purchase, (b). the cost of the merchandise s

> Staley Inc. reported the following data: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Net income $280,000 Depreciation expense . 48,000 Loss on disposal of equipment 19,520 Incr

> Pettygrove Inc. reported the following data: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Net income $405,000 Depreciation expense .... 45,000 Gain on disposal of equipment 36,9

> The following three identical units of Item BZ1810 are purchased during November: Assume that one unit is sold on November 30 for $90. Determine the gross profit for November and ending inventory on November 30 using the (a). first-in, first-out (FIFO)

> The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-1B. Problem 6-1B: The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending

> The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Indicate whether each account would be reported in the (a) current asset; (b) property, plant, and equipment; (c) current liability; (d) long-term liability; or (e) stockh

> Data on the physical inventory of Ashwood Products Company as of December 31, 2016, follows: Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions: Deter

> Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued $62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of $66,747,178. Interest on the bonds is payable semiannually on Decemb

> On July 1, 2016, Merideth Industries Inc. issued $28,500,000 of 10-year, 8% bonds at a market (effective) interest rate of 9%, receiving cash of $26,646,292. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the

> PepsiCo, Inc., reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt is comprised of the following: a. How much of the long-term debt was disclosed as a current liability

> On June 30, Collins Management Company purchased land for $400,000 and a building for $560,000, paying $360,000 cash and issuing a 5% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of

> Gabriel Co. produces and distributes semiconductors for use by computer manufacturers. Gabriel Co. issued $600,000 of 10-year, 8% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the comp

> The prepaid insurance account had a beginning balance of $9,600 and was debited for $12,900 of premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future per

> The financial statements for Nike, Inc., are presented in Appendix B at the end of the text. What is the major source of financing for Nike? Appendix B: Year Ended May 31, (In millions, except per share data) Income from continuing operations: 2013

> A business had revenues of $640,000 and operating expenses of $715,000. Did the business (a) incur a net loss or (b) realize net income?

> What is a mortgage note?

> Assume the same data as in Exercise 12–19, except that the current interest rate is 12%. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%?

> Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% callable bonds on March 1, 2016 at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the en

> The total assets and total liabilities (in millions) of Green Mountain Coffee Roasters, Inc. and Starbucks Corporation follow: Determine the stockholders’ equity of each company. Green Mountain $3,616 Starbucks Assets $8,219 Liabi

> On July 31, 2016, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a furniture wholesaler, are as follows: Prepare the July 31, 2016, closing entries for Serbian Interiors Company. Accumulated Depr.-Building Admini

> Based on the data presented in Exercise 5-23, journalize the closing entries. Exercise 5-23: On October 31, 2016, the balances of the accounts appearing in the ledger of Prestige Furnishings Company, a furniture wholesaler, are as follows: $ 980,0

> For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of $34,894,000, while Staples had a net loss of $210,706,000. OfficeMax had preferred stock of $28,726,000 with preferre

> Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as follows: a. Determine the earnings per share for fiscal

> On January 2, Peyroux Company acquired 35% of the outstanding stock of Gruden Company for $625,000. For the year ended December 31, Gruden Company earned income of $110,000 and paid dividends of $26,000. Prepare the entries for Peyroux Company for the pu

> On January 1, 2016, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31, 2016. If the current i

> The estimated amount of depreciation on equipment for the current year is $10,650. Journalize the adjusting entry to record the depreciation.

> Using the data in Exercise 8-15, assume that during the second year of operations Mack’s Plumbing Supply Co. had sales of $4,100,000, wrote off $34,000 of accounts as uncollectible using the direct write-off method, and reported net income of $600,000.

> Wyoming Tours Co. is a travel agency. The nine transactions recorded by Wyoming Tours during June 2016, its first month of operations, are indicated in the following T accounts: Indicate for each debit and each credit: (a) whether an asset, liability,

> The following units of a particular item were available for sale during the calendar year: The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance

> An employee earns $32 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 55 hours during the week. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and

> On July 11, American Lift Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 5,000 shares of $5 par common stock with a current market price of $32. Journalize the entry to record the transaction.

> Beginning inventory, purchases, and sales data for portable DVD players are as follows: The business maintains a perpetual inventory system, costing by the first-in, first-out method. a. Determine the cost of the merchandise sold for each sale and the

> Lowe Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $560,000 for January. In February, a customer received warranty repairs requiring $140 of parts and $95 of labor. a. Journali

> On the first day of the fiscal year, a company issues a $1,200,000, 9%, five-year bond that pays semiannual interest of $54,000 ($1,200,000 × 9% × ½), receiving cash of $1,153,670. Journalize the bond issuance.

> The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,630. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a). the amount of insuran

> Go44 is a motivational consulting business. At the end of its accounting period, December 31, 2015, Go44 has assets of $720,000 and liabilities of $180,000. Using the accounting equation and considering each case independently, determine the following am

> Creative Solutions Company, a computer consulting firm, has decided to write off the $11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and

> Summary operating data for Custom Wire & Tubing Company during the year ended April 30, 2016, are as follows: cost of merchandise sold, $6,100,000; administrative expenses, $740,000; interest expense, $25,000; rent revenue, $60,000; sales, $9,332,500; an

> Art Imaging Company was organized on April 1 of the current year. On April 2, Art Imaging Company prepaid $54,000 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. Art Imaging Company is also required to p

> Assume that the error in Exercise 3-15 was not corrected and that the accrued salaries were included in the first salary payment in November. Indicate which items will be erroneously stated, because of failure to correct the initial error, on (a) the inc

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

> The following units of a particular item were available for sale during the calendar year: The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance

> The following units of an item were available for sale during the year: The firm uses the perpetual inventory system, and there are 5,200 units of the item on hand at the end of the year. What is the total cost of the ending inventory according to (a)

> At the end of the current year, the accounts receivable account has a debit balance of $1,400,000 and sales for the year total $15,350,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptio

> The declaration, record, and payment dates in connection with a cash dividend of $710,000 on a corporation’s common stock are June 15, August 10, and September 15. Journalize the entries required on each date.

> For a recent year, Best Buy reported sales of $50,705 million. Its gross profit was $12,573 million. What was the amount of Best Buy’s cost of merchandise sold?

> Big Sky Mining Co. acquired mineral rights for $42,000,000. The mineral deposit is estimated at 20,000,000 tons. During the current year, 1,850,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. b. Journalize

> Master Designs Decorators issued a 180-day, 6% note for $75,000, dated May 14, 2016, to Morgan Furniture Company on account. a. Determine the due date of the note. b. Determine the maturity value of the note. c. Journalize the entries to record the follo

> Using the data presented in Exercise 7-18, journalize the entry or entries that should be made by the company. Exercise 7-18: The following data were accumulated for use in reconciling the bank account of Zek’s Co. for May 2016: 1. Cash balance accordi

> Using the data in Exercise 8-11, assume that the allowance for doubtful accounts for Selby’s Bike Co. had a debit balance of $7,200 as of December 31, 2016. Journalize the adjusting entry for uncollectible accounts as of December 31, 20

> The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 29, 2016, the end of the fiscal year: Prepare an income statement. Depreciation Expense

> The debits and credits from four related transactions are presented in the following T accounts. Describe each transaction. Cash Accounts Payable (2) 300 (3) 3,920 (1) 20,580 (4) 16,660 (4) 16,660 Merchandise Inventory (1) 20,580 (3) 3,920 (2) 300

> In a recent balance sheet, Microsoft Corporation reported Property, Plant, and Equipment of $19,231 million and Accumulated Depreciation of $10,962 million. a. What was the book value of the fixed assets? b. Would the book value of Microsoft Corporation’

> Based on the data in Exercise 6-15 and assuming that cost was determined by the FIFO method, show how the merchandise inventory would appear on the balance sheet. Exercise 6-15: On the basis of the following data, determine the value of the inventory a

> The actual cash received from cash sales was $33,854 and the amount indicated by the cash register total was $33,866. Journalize the entry to record the cash receipts and cash sales.

> Lily Flower’s weekly gross earnings for the week ended October 20 were $2,500, and her federal income tax withholding was $517.24. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Flower’s net pay?

> At the end of the current year, $22,650 of fees have been earned but have not been billed to clients. a. Journalize the adjusting entry to record the accrued fees. b. If the cash basis rather than the accrual basis had been used, would an adjusting entry

> Paragon Tire Co.’s perpetual inventory records indicate that $2,780,000 of merchandise should be on hand on March 31, 2016. The physical inventory indicates that $2,734,800 of merchandise is actually on hand. Journalize the adjusting entry for the invent

> An accountant prepared the following post-closing trial balance: Prepare a corrected post-closing trial balance. Assume that all accounts have normal balances and that the amounts shown are correct. La Casa Services Co. Post-Closing Trial Balance M

> The units of an item available for sale during the year were as follows: There are 104 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by t

> The total assets and total liabilities (in millions) of Dollar Tree Inc. and Target Corporation follow: Determine the stockholders’ equity of each company. Dollar Tree Target Corporation $2,329 Assets $46,630 Liabilities 984 30,80

> Zell Company had sales of $1,800,000 and related cost of merchandise sold of $1,150,000 for its first year of operations ending December 31, 2016. Zell Company provides customers a refund for any returned or damaged merchandise. At the end of the year, Z

> Apex Systems Co. offers its services to residents in the Seattle area. Selected accounts from the ledger of Apex Systems Co. for the fiscal year ended December 31, 2016, are as follows: Prepare a retained earnings statement for the year. Retained E

> The prepaid insurance account had a balance of $7,000 at the beginning of the year. The account was debited for $24,000 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives f

> The balance in the supplies account, before adjustment at the end of the year, is $5,330. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $1,875.

> After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $798,400 and a credit of $955,300. At the same date, Retained Earnings has a credit balance of $1,439,000, and Dividends has a balance of

> At the end of the current year, Accounts Receivable has a balance of $1,975,000; Allowance for Doubtful Accounts has a credit balance of $19,670; and sales for the year total $28,550,000. Bad debt expense is estimated at ¾ of 1% of sales. Determine (a).

> Ocular Realty Co. pays weekly salaries of $16,600 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday.

> Selected accounts from the ledger of Restoration Arts for the fiscal year ended April 30, 2016, are as follows: Prepare a retained earnings statement for the year. Retained Earnings 31,200 | May 1 (2015) 475,500 Dividends Apr. 30 Sept. 30 1,250 Ap

> The following account balances were taken from the adjusted trial balance for Laser Messenger Service, a delivery service firm, for the fiscal year ended April 30, 2016: Prepare an income statement. $ 8,650 674,000 Depreciation Expense $ 60,000 Ren

> Determine the missing amount for each of the following: Liabilities + Stockholders' Equity $376,000 + Assets а. X $895,000 b. $1,375,000 $855,000 $863,500 $211,000 + с. =

> The balance in the unearned fees account, before adjustment at the end of the year, is $36,950. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is $14,440.

> The unadjusted and adjusted trial balances for American Leaf Company on October 31, 2016, follow: Journalize the five entries that adjusted the accounts at October 31, 2016. None of the Accounts were affected by more than one adjusting entry. Ameri

> The balance in the equipment account is $28,650,000, and the balance in the accumulated depreciation—equipment account is $16,430,000. a. What is the book value of the equipment? b. Does the balance in the accumulated depreciation account mean that the e

> For a recent year, the balance sheet for The Campbell Soup Company includes accrued expenses of $598 million. The income before taxes for The Campbell Soup Company for the year was $1,106 million. a. Assume the adjusting entry for $598 million of accrued

> Classify the following items as (a) prepaid expense, (b) unearned revenue, (c) accrued revenue, or (d) accrued expense: 1. A two-year premium paid on a fire insurance policy. 2. Fees earned but not yet received. 3. Fees received but not yet earned. 4. Sa

> On December 31, 2015, Valur Co. had the following available-for-sale investment disclosure within the Current Assets section of the balance sheet: There were no purchases or sales of available-for-sale investments during 2016. On December 31, 2016, the

> The following data were gathered to use in reconciling the bank account of Eves Company: a. What is the adjusted balance on the bank reconciliation? b. Journalize any necessary entries for Eves Company based on the bank reconciliation. Balance per

> On May 12, 2016, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On December 31, 2016, the fair value of Jedi Inc. was $124 per s

> For a recent period, the balance sheet for Costco Wholesale Corporation reported accrued expenses of $2,890 million. For the same period, Costco reported income before income taxes of $2,767 million. Assume that the adjusting entry for $2,890 million of

> During 2016, El Dorado Inc. has monthly cash expenses of $168,500. On December 31, 2016, the cash balance is $1,415,400. a. Compute the ratio of cash to monthly cash expenses. b. Based on (a), what are the implications for El Dorado Inc.?

> At the market close on March 28 of a recent year, McDonald’s Corporation had a closing stock price of $99.69. In addition, McDonald’s Corporation had a dividend per share of $2.87 during the previous year. Determine McDonald’s Corporation’s dividend yiel

> During 2016, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $185,000. There were no purchases or sales of investments during the year. The market values at the beginning and end of the year were $225,000 and $16