Question: Target Corporation operates general merchandise and

> Assume that at the beginning of 2011, Fast Delivery, a UPS competitor, purchased a used Jumbo 747 aircraft at a cost of $44,400,000. Fast Delivery expects the plane to remain useful for five years (6.5 million miles) and to have a residual value of $5,40

> Suppose you are considering investing in two businesses, La Petite France Bakery and Burgers Ahoy. The two companies are virtually identical, and both began operations at the beginning of the current year. During the year, each company purchased inventor

> Advanced Automotive pays $210,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $66,000, the building’s current market value is $22,000, and the equipment’s current market value

> Miller, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Miller completed the following transactions: Jan 4 Traded in equipment with accumulated

> Examine Riverside’s assets shown below. 1. What is Riverside’s largest category of assets? List all 2013 assets in the largest category and their amounts as reported by Riverside. 2. What was Riversideâ€&#

> This case is based on the consolidated financial statements of RadioShack Corporation given in Appendix B at the end of this book. 1. Read Note 4: Acquisitions. Does RadioShack Corporation own any foreign subsidiaries? How much of the subsidiary does it

> At the end of 2011, Creative Accounting Associates (CAA) had total assets of $17 billion and total liabilities of $9.2 billion. Included among the assets were property, plant, and equipment with a cost of $4.8 billion and accumulated depreciation of $2.8

> The consolidated financial statements of Amazon.com, Inc. , are given in Appendix A at the end of this book. 1. Refer to Note 1—Description of Business and Accounting Policies, under Investments. Describe the method of accounting used for investments ove

> Media One owns 18% of the voting stock of Web Talk, Inc. The remainder of the Web Talk stock is held by numerous investors with small holdings. Austin Cohen, president of Media One and a member of Web Talk’s board of directors, heavily influences Web Tal

> Use the data given in Short Exercise 8-1. On May 21, 2013, Mail 4 You sold its investment in Tycon stock for $23 per share. 1. Journalize the sale. No explanation is required. 2. How does the gain or loss that you recorded here differ from the gain or lo

> During fiscal year 2012, Sprinkle Doughnuts reported a net income of $134.9 million. Sprinkle received $1.3 million from the sale of other businesses. Sprinkle made capital expenditures of $10.1 million and sold property, plant, and equipment for $7.0 mi

> Translate into dollars the balance sheet of Alaska Leather Goods’ German subsidiary. When Alaska Leather Goods acquired the foreign subsidiary, a euro was worth $1.03. The current exchange rate is $1.36. During the period when retained earnings were earn

> Assume that on September 30, 2012, Protex, Inc., paid 99 for 5.5% bonds of McPhee Corporation as a long-term held-to-maturity investment. The maturity value of the bonds will be $15,000 on September 30, 2017. The bonds pay interest on March 31 and Septem

> Zeta, Inc., owns Juliet Corp. The two companies’ individual balance sheets follow: Requirements 1. Prepare a consolidated balance sheet of Zeta, Inc. It is sufficient to complete the consolidation work sheet. Use Exhibit 8-7 as a mode

> Bruno Lake Resort reported the following on its balance sheet at December 31, 2012: Property, plant, and equipment, at cost: Land............................................................... $ 147,000 Buildings……........................................

> Conroy Financial paid $510,000 for a 35% investment in the common stock of Timberwolf, Inc. For the first year, Timberwolf reported net income of $210,000 and at year-end declared and paid cash dividends of $135,000. On the balance-sheet date, the fair v

> Without making journal entries, record the transactions of Exercise 8-15A directly in the McCloud account, Long-Term Investment in Simpson Software. Assume that after all the noted transactions took place, McCloud sold its entire investment in Simpson So

> McCloud Corporation owns equity-method investments in several companies. Suppose McCloud paid $1,800,000 to acquire a 40% investment in Simpson Software Company. Simpson Software reported net income of $660,000 for the first year and declared and paid ca

> Central Energy Company’s balance sheet includes the asset Iron Ore. Central Energy paid $2.8 million cash for the right to work a mine that contained an estimated 215,000 tons of ore. The company paid $67,000 to remove unwanted buildings from the land an

> Cathy Talbert is the general manager of Barham Company, which provides data-management services for physicians in the Columbus, Ohio, area. Barham Company is having a rough year. Net income trails projections for the year by almost $75,000. This shortfal

> Mail 4 You completed these long-term available-for-sale investment transactions during 2012: 2012 Apr 10 Purchased 600 shares of Tycon stock, paying $17 per share. Mail 4 You intends to hold the investment for the indefinite future. Jul 22 Received a cas

> Which option is better: receive $100,000 now or $20,000, $25,000, $30,000, $25,000, and $20,000, respectively, over the next five years? Requirements 1. Assuming a 5% interest rate, which investment opportunity would you choose? 2. If you could earn 10%

> Brown-Box Retail Corporation reported stockholder’s equity on its balance sheet at December 31 as follows: Requirements 1. Identify the two components that typically make up accumulated other comprehensive income. 2. For each componen

> Suppose MyPlace owns the following investments at December 31, 2012: a. 100% of the common stock of MyPlace United Kingdom, which holds assets of £600,000 and owes a total of £400,000. At December 31, 2012, the current exchange rate of the pound (£) is £

> Assume that Mattson has a subsidiary company based in Japan. Requirements 1. Translate into dollars the foreign-currency balance sheet of the Japanese subsidiary of Mattson. ___________________________Yen Assets..........................................

> Assume Monroe Sales, Inc., opened an office in Jacksonville, Florida. Further assume that Monroe Sales incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: a. Purchase price of

> Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the same initial investment. Requirement Assuming a 10% interest rate, which investment opportunity would you choose? Investment Year

> Folgate Co. bought 4,000 shares of German common stock at $40; 680 shares of Chile stock at $47.75; and 1,600 shares of Sweden stock at $78—all as available-for-sale investments. At December 31, Hoover’s Online reports German stock at $30.125, Chile at $

> Lily, Inc., sells electronics and appliances. The excerpts that follow are adapted from Lily’s financial statements for 2012 and 2011. Requirements 1. How much was Lily’s cost of plant assets at February 28, 2012? Ho

> On January 4, 2012, G.L. Brown Co. paid $235,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $1,100, $6,200 sales tax, and $37,200 for a special platform on which to place the computer. G.L. Brown manag

> Carney, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Carney completed the following transactions: Jan 3 Traded in equipment with accumulated

> Greco Lake Resort reported the following on its balance sheet at December 31, 2012: Property, plant, and equipment, at cost: Land............................................................ $ 143,000 Buildings…............................................

> Assume Coffee House, Inc., opened an office in Cocoa Beach, Florida. Further assume that Coffee House incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building: a. Purchase price of l

> Insurance companies and pension plans hold large quantities of bond investments. Brighton Insurance Corp. purchased $2,300,000 of 10.0% bonds of Scanlon, Inc., for 114 on January 1, 2012. These bonds pay interest on January 1 and July 1 each year. They m

> Assume Jackson, Inc., paid $351,000 to acquire all the common stock of Aiello Corporation, and Aiello owes Jackson $168,000 on a note payable. Immediately after the purchase on September 30, 2012, the two companies’ balance sheets follo

> This problem demonstrates the dramatic effect that consolidation accounting can have on a company’s ratios. Roto Motor Company (Roto) owns 100% of Roto Motor Credit Corporation (RMCC), its financing subsidiary. Roto’s

> Inc., owns Tempest Corp. These two companies’ individual balance sheets follow: Requirements 1. Prepare a consolidated balance sheet of Alfa, Inc. It is sufficient to complete the consolidation work sheet. Use Exhibit 8-7 as a model.

> The beginning balance sheet of Moret Corporation included the following: Long-Term Investment in LPC Software (equity-method investment)............. $615,000 Moret completed the following investment transactions during the year: Mar 16 Purchased 1,800 s

> Assume that on September 30, 2012, Rentex, Inc., paid 95 for 7% bonds of Clarkson Corporation as a long-term held-to-maturity investment. The maturity value of the bonds will be $10,000 on September 30, 2017. The bonds pay interest on March 31 and Septem

> Georgia Exchange Company completed the following long-term investment transactions during 2012: 2012 May 12 Purchased 21,000 shares, which make up 45% of the common stock of Portland Corporation at total cost of $340,000. Jul 9 Received annual cash divid

> Assume that Goss has a subsidiary company based in Japan. Requirements 1. Translate into dollars the foreign-currency balance sheet of the Japanese subsidiary of Goss. ____________________________Yen Assets...............................................

> Return to Short Exercise 8-7, the North Mark (NM) investment in CitiSide bonds. Journalize the following on NM’s books: a. Purchase of the bond investment on June 30, 2012. NM expects to hold the investment to maturity. b. Receipt of semiannual cash inte

> Annual cash flows from two competing investment opportunities are given. Each investment opportunity will require the same initial investment. Requirement Assuming a 12% interest rate, which investment opportunity would you choose? Investment Year

> Insurance companies and pension plans hold large quantities of bond investments. Discount Insurance Corp. purchased $2,100,000 of 6.0% bonds of Soucy, Inc., for 116 on January 1, 2012. These bonds pay interest on January 1 and July 1 each year. They matu

> Assume Abbey, Inc., paid $479,000 to acquire all the common stock of Bookstore Corporation, and Bookstore owes Abbey $164,000 on a note payable. Immediately after the purchase on September 30, 2012, the two companies’ balance sheets fol

> FedEx Corporation provides a broad portfolio of transportation, e-commerce, and business services. FedEx reported the following information in its 2009 annual report. Note 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Proper

> This problem demonstrates the dramatic effect that consolidation accounting can have on a company’s ratios. Spindler Motor Company (Spindler) owns 100% of Spindler Motor Credit Corporation (SMCC), its financing subsidiary. Spindler&acir

> The beginning balance sheet of Evita Corporation included the following: Long-Term Investment in Reading Software (equity-method investment)....... $611,000 Evita completed the following investment transactions during the year: Mar 16 Purchased 1,600 sha

> Delaware Exchange Company completed the following long-term investment transactions during 2012: 2012 May 12 Purchased 28,000 shares, which make up 35% of the common stock of Brentwood Corporation at total cost of $390,000. Jul 9 Received annual cash div

> At the end of the year, Providence Properties’ statement of cash flows reported the following for investing activities: Requirement For each item listed, make the journal entry that placed the item on Providence’s st

> Journalize the following long-term available-for-sale security transactions of Roya Brothers Department Stores: a. Purchased 410 shares of Fordham Foods common stock at $35 per share, with the intent of holding the stock for the indefinite future b. Rece

> Infografix Corporation’s consolidated sales for 2012 were $26.6 billion, and expenses totaled $24.8 billion. Infografix operates worldwide and conducts 37% of its business outside the United States. During 2012, Infografix reported the following items in

> At the end of the year, Blue City Properties’ statement of cash flows reported the following for investment activities: Requirement For each item listed, make the journal entry that placed the item on Blue City’s sta

> Refer to Exercise 3-30A. In Exercise 3-30A The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Anderson Production Company follow. Requirements 1. Use the data in the partial worksheet to prepare An

> The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Anderson Production Company follow. Requirement Journalize the adjusting and closing entries of Anderson Production Company at December 31. There w

> Suppose Cambridge Corporation’s inventory records for a particular computer chip indicate the following at October 31: The physical count of inventory at October 31 indicates that seven units of inventory are on hand. Requirements Co

> Prepare the closing entries from the following selected accounts from the records of North Shore Corporation at December 31, 2012: How much net income did North Shore earn during 2012? Prepare a T-account for Retained Earnings to show the December 31,

> The accounting records of Fairmount Publishing Company include the following unadjusted balances at August 31: Accounts Receivable, $1,500; Supplies, $500; Salary Payable, $0; Unearned Service Revenue, $600; Service Revenue, $4,200; Salary Expense, $1,90

> Morton Motor Company faced the following situations. Journalize the adjusting entry needed at December 31, 2012, for each situation. Consider each fact separately. a. The business has interest expense of $9,600 that it must pay early in January 2013. b.

> Suppose Sparrow Sporting Goods Company reported the following data at March 31, 2012, with amounts in thousands: Use these data to prepare Sparrow Sporting Goods Company’s income statement for the year ended March 31, 2012; statement

> Bird-Watcher, Inc., experienced four situations for its supplies. Compute the amounts that have been left blank for each situation. For situations 1 and 2, journalize the needed transaction. Consider each situation separately. Situation 1 2 $ 500 $

> This exercise should be used in conjunction with Short Exercise 6-4. Jonah is a corporation subject to a 40% income tax. Compute Jonah’s income tax expense under the average, FIFO, and LIFO inventory costing methods. Which method would you select to (a)

> An accountant made the following adjustments at December 31, the end of the accounting period: a. Prepaid insurance, beginning, $400. Payments for insurance during the period, $1,200. Prepaid insurance, ending, $700. b. Interest revenue accrued, $1,600.

> Use the data in Short Exercise 6A-1 to do the following for Flexon Technologies: In Short Exercise 6A-1 Flexon Technologies began the year with inventory of $580. During the year, Flexon purchased inventory costing $1,190 and sold goods for $2,900, with

> Bantley, Inc., collects cash from customers two ways: a. Accrued revenue. Some customers pay Bantley after Bantley has performed service for the customer. During 2012, Bantley made sales of $55,000 on account and later received cash of $35,000 on account

> During 2012, Barron Network, Inc., which designs network servers, earned revenues of $840 million. Expenses totaled $500 million. Barron collected all but $26 million of the revenues and paid $580 million on its expenses. Barron’s top managers are evalua

> During 2012, Tundra Sales, Inc., earned revenues of $530,000 on account. Tundra collected $540,000 from customers during the year. Expenses totaled $440,000, and the related cash payments were $420,000. Show what Tundra would report on its 2012 income st

> During 2012, Consolidated Corporation made sales of $4,300 (assume all on account) and collected cash of $4,500 from customers. Operating expenses totaled $1,200, all paid in cash. At year end, 2012, Consolidated customers owed the company $900. Consolid

> Refer to the Sparrow Sporting Goods Company data in Short Exercise 3-17. In Short Exercise 3-17 Sparrow Sporting Goods reported the following data at March 31, 2012, with amounts adapted in thousands: Sparrow Sporting Goods Company Income Statement For

> Championship Sporting Goods started March with an inventory of 9 sets of golf clubs that cost a total of $1,350. During March, Championship purchased 27 sets of clubs for $4,320. At the end of the month, Championship had 8 sets of golf clubs on hand. The

> Bennett, the British wireless phone service provider, collects cash in advance from customers. All amounts are in millions of pounds sterling (£), the British monetary unit. Assume Bennett collected £430 in advance during 2012 and at year end still owed

> A large auto manufacturer sells large fleets of vehicles to auto rental companies, such as Budget and Hertz. Suppose Budget is negotiating with the auto manufacturer to purchase 827 vehicles. Write a short paragraph to explain to the auto manufacturer wh

> Sparrow Sporting Goods reported the following data at March 31, 2012, with amounts adapted in thousands: Sparrow Sporting Goods Company Income Statement For the Year Ended March 31, 2012 (Amounts in thousands) Net revenues …â&#1

> As the controller of Emblem Consulting, you have hired a new employee, whom you must train. She objects to making an adjusting entry for accrued salaries at the end of the period. She reasons, “We will pay the salaries soon. Why not wait until payment to

> Assume a Whitewater outlet store began May 2012 with 48 units of inventory that cost $18 each. The sale price of these units was $73. During May, the store completed these inventory transactions: Requirements 1. Determine the store’s

> Stanley Williams has owned and operated SW Advertising, Inc., since it began 10 years ago. Recently, Williams mentioned that he would consider selling the company for the right price. Assume that you are interested in buying this business. You obtain its

> On October 1, 2012, Lou Marks opened Eagle Restaurant, Inc. Marks is now at a crossroads. The October financial statements paint a glowing picture of the business, and Marks has asked you whether he should expand the business. To expand the business, Mar

> Refer to Exercise 2-36 of Chapter 2. Start from the trial balance and the posted T-accounts that Steve Ruiz, Certified Public Accountant, Professional Corporation (P.C.), prepared for his accounting practice at January 18. A professional corporation is n

> Bart Morris Company reported these ratios at December 31, 2012 (dollar amounts in millions): Current ratio = $60 / $50 = 1.20 Debt ratio = $70 / $90 = 0.78 Bart Morris Company completed these transactions during 2013: a. Purchased equipment on account,

> Duneside Corporation began 2012 owing notes payable of $4.1 million. During 2012 Duneside borrowed $1.7 million on notes payable and paid off $1.6 million of notes payable from prior years. Interest expense for the year was $0.8 million, including $0.3 m

> Fun Toys prepares budgets to help manage the company. Fun Toys is budgeting for the fiscal year ended January 31, 2012. During the preceding year ended January 31, 2011, sales totaled $9,600 million and cost of goods sold was $6,700 million. At January 3

> The adjusted trial balances of Verne Corporation at March 31, 2012, and March 31, 2011, include these amounts (in millions): Verne completed these transactions during the year ended March 31, 2012. Collections from customers ...........................

> Refer to Exercise 3-44B. In Exercise 3-44B The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Durkin Production Company follow. Requirements 1. Use the data in the partial worksheet to prepare Durk

> The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Durkin Production Company follow. Requirement Journalize the adjusting and closing entries of Durkin Production Company at December 31. There was o

> Use the Sparrow Sporting Goods Company data in Short Exercise 3-15 to make the company’s closing entries at March 31, 2012. Then set up a T-account for Retained Earnings and post to that account. Compare Retained Earningsâ€&#

> Prepare the closing entries from the following selected accounts from the records of North Pole Corporation at December 31, 2012: How much net income did North Pole earn during 2012? Prepare a T-account for Retained Earnings to show the December 31, 20

> Terra, the British wireless phone service provider, collects cash in advance from customers. All amounts are in millions of pounds sterling (£), the British monetary unit. Assume Terra collected £380 in advance during 2012 and at year end still owed cust

> The adjusted trial balances of King Corporation at March 31, 2012, and March 31, 2011, include these amounts (in millions): King completed these transactions during the year ended March 31, 2012. Collections from customers .............................

> The notes are part of the financial statements. They give details that would clutter the statements. This case will help you learn to use a company’s inventory notes. Refer to Amazon.com, Inc.’s consolidated financial statements and related notes in Appe

> The adjusted trial balance of Honeybee Hams, Inc., follows. Requirement Prepare Honeybee Hams, Inc.’s income statement and statement of retained earnings for the year ended December 31, 2012, and its balance sheet on that date. Draw t

> The accounting records of Belmont Publishing Company include the following unadjusted balances at August 31: Accounts Receivable, $1,400; Supplies, $300; Salary Payable, $0; Unearned Service Revenue, $1,000; Service Revenue, $4,600; Salary Expense, $2,40

> Forrest Company faced the following situations. Journalize the adjusting entry needed at December 31, 2012, for each situation. Consider each fact separately. a. The business has interest expense of $9,000 that it must pay early in January 2013. b. Inter

> The adjusted trial balance of Honeyglazed Hams, Inc., follows. Requirement Prepare Honeyglazed Hams, Inc.’s income statement and statement of retained earnings for the year ended December 31, 2012, and its balance sheet on that date.

> Western Corporation made sales of $850 million during 2012. Of this amount, Western collected cash for all but $27 million. The company’s cost of goods sold was $290 million, and all other expenses for the year totaled $325 million. Also during 2012, Wes

> Paradise, Inc., experienced four situations for its supplies. Compute the amounts that have been left blank for each situation. For situations 1 and 2, journalize the needed transaction. Consider each situation separately. Situation 3 4 Beginning su

> An accountant made the following adjustments at December 31, the end of the accounting period: a. Prepaid insurance, beginning, $300. Payments for insurance during the period, $900. Prepaid insurance, ending, $500. b. Interest revenue accrued, $1,300. c.

> Supply the missing amounts for each of the following companies: Requirement Prepare the income statement for Gerald Company for the year ended December 31, 2012. Use the cost-of-goods-sold model to compute cost of goods sold. Gerald’s

> Tilton & Taft, a partnership, had these inventory data: Tilton & Taft need to know the company’s gross profit percentage and rate of inventory turnover for 2012 under 1. FIFO. 2. LIFO. Which method produces a higher gross prof

> During 2012, Gibson Network, Inc., which designs network servers, earned revenues of $780 million. Expenses totaled $530 million. Gibson collected all but $25 million of the revenues and paid $560 million on its expenses. Gibson’s top managers are evalua

> During 2012, Valley Sales, Inc., earned revenues of $500,000 on account. Valley collected $510,000 from customers during the year. Expenses totaled $450,000, and the related cash payments were $410,000. Show what Valley would report on its 2012 income st