Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations link at the company’s website (www.target.com). Target leases most of its facilities. Required: 1. Refer to disclosure note 17 following Target’s financial statements. Find the schedule showing the lease payments over the next five years and beyond. What are the total lease payments for operating leases and finance leases? What are the present values of those lease payments for each type of lease? What accounts for the difference between the two amounts? 2. What are the weighted average discount rates used to calculate the present value of each type of lease? 3. Does Target report its lease liabilities for the total amount of the lease payments or the present value of those lease payments?
> If the adjusting entries prepared in BE 2–11 were not recorded, would net income be higher or lower and by how much?
> Post the journal entries prepared in BE 2–8 to T-accounts. Assume that the opening balances in each of the accounts is zero except for cash, accounts receivable, and accounts payable that had opening balances of $65,000, $43,000, and $22,000, respectivel
> Prepare journal entries for each of the transactions listed in BE 2–7.
> On September 30, 2024, Crown Corporation purchased franchise rights from a national restaurant chain. In payment, Crown has the option of paying $356,000 immediately or $400,000 in two years by signing a noninterest- bearing note. Crown chooses the optio
> Post the following transactions to the Cash T-account and calculate the ending balance. The beginning balance in the Cash T-account is $5,000. 1. Receive cash from customers, $15,000. 2. Pay cash for employee salaries, $9,000. 3. Pay cash for rent, $3,00
> Prepare journal entries for each of the following transactions: 1. Issue common stock for $21,000. 2. Obtain $9,000 loan from the bank by signing a note. 3. Purchase construction equipment for $25,000 cash. 4. Purchase advertising for the current month f
> Prepare journal entries for each of the following transactions: 1. Pay $700 for radio advertising for the current month. 2. Purchase supplies of $1,300 on account. 3. Provide services of $2,900 to customers and receive cash. 4. Pay employee salaries for
> Prepare journal entries for each of the following transactions: 1. Purchase equipment in exchange for cash of $23,400. 2. Provide services to customers and receive cash of $6,800. 3. Pay the current month’s rent of $1,300. 4. Purchase office supplies on
> Analyze each of the following transactions and show the effect on the accounting equation. 1. Issue 10,000 shares of common stock in exchange for $32,000 in cash. 2. Purchase land for $19,000. A note payable is signed for the full amount. 3. Purchase equ
> For each situation, determine the date for which the company recognizes the expense under (a) accrual-basis accounting and (b) cash-basis accounting. 1. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots’ salaries ass
> For each situation, determine the date for which the company recognizes the revenue under (a) accrual-basis accounting and (b) cash-basis accounting. 1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs
> The year-end adjusted trial balance of the Tool and Die Corporation included the following account balances: retained earnings, $220,000; dividends, $12,000; sales revenue, $850,000; cost of goods sold, $580,000; salaries expense, $180,000; rent expense,
> The following account balances were taken from the 2024 post-closing trial balance of the Bowler Corporation: cash, $5,000; accounts receivable, $10,000; inventory, $16,000; equipment, $100,000; accumulated depreciation, $40,000; accounts payable, $20,00
> The following account balances were taken from the 2024 adjusted trial balance of the Bowler Corporation: sales revenue, $325,000; cost of goods sold, $168,000; salaries expense, $45,000; rent expense, $20,000; depreciation expense, $30,000; and miscella
> Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are provided in Connect. This ma
> Prepare the necessary adjusting entries for Digital Controls at the end of its December 31, 2024, fiscal year-end for each of the following situations. No adjusting entries were recorded during the year. 1. On March 31, 2024, the company lent $50,000 to
> If the adjusting journal entries prepared in BE 2–13 were not recorded, would assets, liabilities, and shareholders’ equity on the December 31, 2024, balance sheet be higher or lower and by how much?
> Prepare the necessary adjusting entries on its year-end of December 31, 2024, for the Jingle Corporation for each of the following situations. No adjusting entries were recorded during the year. 1. On December 10, 2024, Jingle received a $4,000 payment f
> Analyze each of the following transactions and show the effect on the accounting equation. 1. Provide services to customers on account for $50,000. 2. Purchase equipment by signing a note with the bank for $35,000. 3. Repay $10,000 of the note in 2 above
> On January 1, 2024, Hodge Beanery received $8,000 from the Kennedy Company in exchange for a coffee roaster that it will deliver to Kennedy on December 31, 2024. Assuming that Hodge views the time value of money to be a significant component of this tran
> On January 1, 2024, Wooten Technology Associates sold computer equipment to the Denison Company. Delivery was made on January 1, 2024, but payment for the equipment of $10,000 is not due until December 31, 2024. Assuming that Wooten views the time value
> Finerly Corporation sells cosmetics through a network of independent distributors. Finerly shipped cosmetics to its distributors and is considering whether it should record $300,000 of revenue upon shipment of a new line of cosmetics. Finerly expects the
> In January 2024, Continental Fund Services, Inc., enters into a one-year contract with a client to provide investment advisory services. The company will receive a management fee, prepaid at the beginning of the contract, that is calculated as 1% of the
> Aria Perfume, Inc., sold 3,210 boxes of white musk soap during January of 2024 at the price of $90 per box. The company offers a full refund to unsatisfied customers for any product returned within 30 days from the date of purchase. Based on historical e
> On January 1, 2024, Lego Construction Company signed a contract to build a custom garage for a customer and received $10,000 in advance for the job. The new garage will be built on the customer’s land. To complete this project, Lego must first build a co
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This m
> Precision Equipment, Inc., specializes in designing and installing customized manufacturing equipment. On February 1, 2024, it signs a contract to design a fully automated wristwatch assembly line for $2 million, which will be settled in cash upon comple
> On May 1, 2024, Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2024, to April 30, 2025, with Shaffe
> Refer to the situation described in BE 6–33. Assume that the building was completed during the second year, and construction costs incurred during the second year were $10 million. How much revenue and gross profit or loss will the company recognize in t
> As of December 31, 2024, Cady Construction has one construction job for which the construction in progress (CIP) account has a balance of $20,000, and the billings on the construction contract account has a balance of $14,000. Cady has another constructi
> GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2024, GoodBuy sold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31, 2024, $30,000, of the remaining gift car
> Kerianne paints landscapes, and in late 2024 placed four paintings with a retail price of $250 each in the Holmstrom Gallery. Kerianne’s arrangement with Holmstrom is that Holmstrom will earn a 20% commission on paintings sold to gallery patrons. As of D
> Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2024, to Bassadrome. Because of a shipping backlog, Dowell held the inventory in Dowell’s warehouse until January 12, 2025 (having assured Bassadrome that it would deliver sooner if
> Top Chop sells hairstyling franchises. Top Chop receives $50,000 from a new franchisee for providing initial training, equipment, and furnishings that have a stand-alone selling price of $50,000. Top Chop also receives $30,000 per year for use of the Top
> Assume the same facts as in BE 6–25. How much revenue will Saar recognize in 2024 under this arrangement if Saar reports under IFRS?
> Assume the same facts as in BE 6–24 except that the trade name “Saar Associates” is not well known in the market place, and the owner provides no advertising or other benefits to a licensee of the Saar Associates trade name during the license period. How
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 20
> Saar Associates sells two licenses to Kim & Company on September 1, 2024. First, in exchange for $100,000, Saar provides Kim with a copy of its proprietary investment management software, which Saar does not anticipate updating and which Kim can use perm
> On July 1, 2024, Apache Company, a real estate developer, sold a parcel of land to a construction company for $3,000,000. The book value of the land on Apache’s books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual pay
> Assume the same facts as in BE 12–8, but that Fowler intends to hold the bonds until maturity. How much unrealized gain or loss would Fowler include in 2024 net income with respect to the bonds?
> Fowler Inc. purchased $75,000 of bonds on January 1, 2024. The bonds pay interest semiannually and mature in 20 years, at which time the $75,000 principal will be paid. The bonds do not pay any amounts other than interest and principal. Fowler’s intentio
> Assume that for several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds were acquired at a cost of $500,000. At the end of 2024, their fair value was $610,000 and their amorti
> S&L Financial buys and sells securities that it typically classifies as available-for-sale. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2025, for $880,000. At December 31, the bonds
> For the Coca-Cola bonds described in BE 12–4, prepare journal entries to record (a) any unrealized gains or losses occurring in 2024 and (b) the sale of the bonds in 2025, including recognition of any unrealized gains in 2025 prior to sale and reclassifi
> S&L Financial buys and sells securities which it classifies as available-for-sale. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2025, for $880,000. At December 31, the bonds had a fa
> For the Coca-Cola bonds described in BE 12–2, prepare journal entries to record (a) any unrealized gains or losses occurring in 2024 and (b) the sale of the bonds in 2025.
> S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. Assume that on December 27, 2024, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2025, for $880,000. At December 31,
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This m
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> Assume the same facts as in BE 12-20, except that Wickum accounts for the investment as FVOCI rather than HTM. How would Wickum record the $300,000 decrease in credit loss?
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material is also available under the Investor Relations li
> The following is the ending balances of accounts at December 31, 2024, for the Weismuller Publishing Company. Additional Information: 1. Prepaid expenses include $120,000 paid on December 31, 2024, for two years of rent on the building that houses both t
> CMOS Chips is hedging a 20-year, $10 million, 7% bond payable with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for CMOS to receive payment based on a 7% fixed interest rate on a notional amount of
> On January 1, 2024, Avalanche Corporation borrowed $100,000 from First Bank by issuing a two-year, 8% fixed rate note with annual interest payments. The principal of the note is due on December 31, 2025. ∙ Avalanche wanted to hedge agai
> On January 1, 2024, Avalanche Corporation borrowed $100,000 from First Bank by issuing a two-year, 8% fixed-rate note with annual interest payments. The principal of the note is due on December 31, 2025. ∙ Avalanche wanted to hedge agai
> Using the information from P 2–8, prepare and complete a worksheet similar to Illustration 2A–1. Use the information in the worksheet to prepare an income statement and a statement of shareholders’ equity for 2024 and a balance sheet as of December 31, 2
> Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company’s accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flows occurred du
> Selected balance sheet information for the Wolf Company at November 30, and December 31, 2024, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit. The following cash flow information also is
> McGuire Corporation began operations in 2024. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2024, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other jour
> The unadjusted trial balance as of December 31, 2024, for the Bags Consulting Company appears below. December 31 is the company’s reporting year-end. Required: 1. From the trial balance and information given, prepare adjusting entries.
> Wickum Corporation reports under IFRS, and recognized a $500,000 impairment of an HTM debt investment in Right Corporation. Subsequently, the credit loss for Wickum’s investment decreased by $300,000. How would Wickum account for that change?
> Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2024, appears below. December 31 is the company’s reporting year-end. The company uses the perpetual inventory system. Infor
> The information necessary for preparing the December 31, 2024, year-end adjusting entries for Vito’s Pizza Parlor appears below. a. On July 1, 2024, purchased $10,000 of IBM Corporation bonds at face value. The bonds pay interest twice a year on January
> The general ledger of the Karlin Company, a consulting company, at January 1, 2024, contained the following account balances: The following is a summary of the transactions for the year: a. Provided services, $100,000, of which $30,000 was on account and
> Huang Company’s reporting year-end is December 31. Below are the unadjusted and adjusted trial balances for December 31, 2024. Required: Prepare the adjusting journal entries that were recorded on December 31, 2024.
> Refer to P 2–3 and complete the following steps: 1. Enter the unadjusted balances from the trial balance into T-accounts. 2. Post the adjusting entries prepared in P 2–3 to the accounts. 3. Prepare an adjusted trial balance. 4. Prepare an income statemen
> Pastina Company sells various types of pasta to grocery chains as private label brands. The company’s reporting year-end is December 31. The unadjusted trial balance as of December 31, 2024, appears below. Information necessary to prepa
> The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2023 The following transactions occurred during January 2024: Required: 1. Set up T-accounts and enter the beginning balances as of January 1, 20
> Halogen Laminated Products Company began business on January 1, 2024. During January, the following transactions occurred: Required: 1. Prepare general journal entries to record each transaction. Omit explanations. 2. Post the entries to T-accounts. 3. P
> Refer to the facts in P 10–9 but now assume the $3 million loan is not specifically tied to construction of the building. Using the weighted-average interest method, answer the following questions: 1. Calculate the amount of interest that Mason should ca
> On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: On January 1, 2024, the company obt
> Turner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2024. Turner elects the fair value option to account for the investment. During 2024, ICA reports $750,000 of net income, and on December 30 pays a dividen
> Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000 (original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid $20,000 cash to complete the exchange
> On September 3, 2024, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows: To equalize the exchange, Phifer paid Robers $5,000 in cash. Required: Record the exchange for both Robers and Phifer. The ex
> Consider each of the transactions below. All of the expenditures were made in cash. 1. The Edison Company spent $12,000 during the year for experimental purposes in connection with the development of a new product. 2. In April, the Marshall Company lost
> The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $144,000 balance in this account at the end of 2024 is as follows: Req
> The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2023: Transactions during 2024 were as follows: a. On January 2, 2024, equipment were purchased at a total invoice cost of $260,000, whic
> On January 1, 2024, the Blackstone Corporation purchased a tract of land (site number 11) with a building for $600,000. Additionally, Blackstone paid a real estate broker’s commission of $36,000, legal fees of $6,000, and title insuranc
> Early in its fiscal year ending December 31, 2024, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building we
> In 2024, Starsearch Corporation began work on three research and development projects. One of the projects was completed and commercial production of the developed product began in December. The company’s fiscal yearend is December 31.
> Tristar Production Company began operations on September 1, 2024. Listed below are a number of transactions that occurred during its first four months of operations. 1. On September 1, the company acquired five acres of land with a building that will be
> Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data: Required: Use the retail method to approximate cost of ending inventory in each of the following ways: 1. Average co
> At the beginning of 2024, Pioneer Products’ ownership interest in the common stock of LLB Co. increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment account was $
> Grand Department Store, Inc., uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Required: 1. Using the conventional retail endi
> Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2024 operations is as follows: a. January 1, 2024, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during
> Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows: The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,000. Required: Estimate Sparr
> Southern Distributors, Inc., supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance compan
> Home Stop sells two product categories, furniture and accessories. Information pertaining to its year-end inventory is as follows: Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is app
> Forest Company has five products in its inventory. Information about ending inventory follows. The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 40 percent of the selling price. Required:
> Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end inventory is as follows: Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable v
> In November 2024, the Brunswick Company signed two purchase commitments. The first commitment requires Brunswick to purchase 10,000 units of inventory at $10 per unit by December 15, 2024. The second commitment requires the company to purchase 20,000 uni
> Capwell Corporation uses a periodic inventory system. The company’s ending inventory on December 31, 2024, its fiscal-year end, based on a physical count, was determined to be $326,000. Capwell’s unadjusted trial balance also showed the following account
