Question: The 2016 comparative balance sheet and income

> Design Incorporated experienced a downturn in December sales. To make matters worse, many of the recent sales were on account; because many customers were not paying on their accounts, the ending balance of Accounts Receivable at December 31 was higher t

> What are some of the reasons why a statement of cash flows may be important to users of financial statements?

> In this problem, we continue our accounting for Fitness Equipment Doctor, Inc., from Chapter 10. We will assume Fitness Equipment Doctor, Inc., is now in its second year of operations. Assume the comparative balance sheet for Fitness Equipment Doctor, In

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. How much cash does Dick’s have? What are the sources and uses of Dick’s cash? Return to Dick’s Annual Report and look at Dick’s financial statements (see the Continuing Financial

> This exercise continues the accounting for Sensations Salon, Inc., from the Continuing Exercise in Chapter 10. Assume Sensations Salon, Inc., had the following comparative balance sheet at the end of 2017, its second year of operations.
Requirement

> This continues the Fitness Equipment Doctor, Inc., example from the Continuing Problem in Chapter 8. Fitness Equipment Doctor, Inc., purchased some of its long-term assets during 2016 using long-term debt. The following table summarizes the nature of thi

> Haskins Supply, Inc., supplies industrial tools to local businesses. Haskins Supply’s November 30, 2016 Balance Sheet appears as:
During the month of December 2016, Haskins Supply, Inc., had the following transactions:
Requirements 1. Open four-

> You just got off the telephone with one of your clients who wants to start a new business as a corporation. His question to you was concerning the different types of stock that can be issued to the potential stockholders of this new corporation. You had

> Popovich Computers, Inc., reported the following statement of stockholders’ equity for the year ended September 30, 2016. Requirements 1. What is the par value of the company’s common stock? 2. At what price per sha

> The balance sheet of Avery Hardware, Inc., at December 31, 2015, reported 700,000 shares of $3 par common stock authorized with 95,000 shares issued and outstanding. Paid-in Capital in Excess of Par—Common had a balance of $320,000. Ret

> Ralston Sports Corporation completed the following selected transactions during 2016: Requirements 1. Record the transactions in the journal Jan 6 Declared a cash dividend on the 10,000 shares of $3.00, no-par preferred stock outstanding. Declare

> Zeranski Consulting, Inc., has 12,000 shares of $5.00, no-par preferred stock and 60,000 shares of no-par common stock outstanding for 2014–2016. Zeranski declared and paid the following dividends during a three-year period: 2014, $23,000; 2015, $115,000

> Cascade Inn, Inc., included the following stockholders’ equity on its year-end balance sheet at December 31, 2016: Requirements 1. Identify the different issues of stock Cascade Inn, Inc., has outstanding. 2. Give the two entries to

> You are the chief operating officer (COO) of a small public corporation. The company just completed its fiscal year, and the annual meeting is just a few weeks away. Your company has had a pretty good year, despite the rough economic climate your industr

> Cutter Furniture, Inc., was organized in 2015. At December 31, 2015, Cutter Furniture, Inc.’s balance sheet reported the following stockholders’ equity: Requirement Answer the following questions and make journal en

> Partners Roberto and Salina wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as R & S Enterprises, Inc. The charter from the state of Texas authorizes the corporation to issue 2

> Laferty Wholesale, Inc., reported the following statement of stockholders’ equity for the year ended September 30, 2016: Requirements 1. What is the par value of the company’s common stock? 2. At what price per shar

> The balance sheet of Johnson Supply, Inc., at December 31, 2015, reported 800,000 shares of $2 par common stock authorized with 116,000 shares issued and outstanding. Paid-in Capital in Excess of Par—Common had a balance of $300,000. Re

> Cho Sporting Goods, Inc., completed the following selected transactions during 2016: Requirements 1. Record the transactions in the journal. Jan 6 Declared a cash dividend on the 8,000 shares of $4, no-par preferred stock outstanding. Declared a

> Kommeri Consulting, Inc., has 9,000 shares of $6.00, no-par preferred stock and 60,000 shares of no-par common stock outstanding for 2014–2016. Kommeri Consulting, Inc., declared and paid the following dividends during a three-year period: 2014, $22,000;

> The Davenport Hotel, Inc., included the following stockholders’ equity on its year-end balance sheet at December 31, 2016. Requirements 1. Identify the different issues of stock that the Davenport Hotel, Inc., has outstanding. 2. Giv

> Gamma Corporation was organized in 2015. At December 31, 2015, Gamma Corporation’s balance sheet reported the following stockholders’ equity: Requirement Answer the following questions and make journal entries as ne

> Partners Vladimir and Thao wish to avoid the unlimited personal liability of the partnership form of business, so they are incorporating the company as V & T Fabrication, Inc. The charter from the state of Texas authorizes the corporation to issue 30

> Assume that Pugliese Industrial Supply, Inc., has the following data: Requirements 1. Calculate Pugliese Industrial Supply’s return on equity for 2016. 2. Comment on Pugliese Industrial Supply’s performance during 2

> Match the following terms with the correct definition. a. Common stock b. Paid-in capital c. Dividends d. Legal capital e. Outstanding stock f. Par value g. Preferred stock h. Retained earnings i. Treasury stock j. Stockholders’ equity _______ 1. Paid-

> Universal Communications, Inc., began 2016 with 340,000 shares of $1 par common stock issued and outstanding. Beginning Paid-in Capital in Excess of Par—Common was $590,000, and Retained Earnings was $750,000. In June 2016, Universal Communications, Inc.

> At December 31, 2015, Gentili Corp. reported the following stockholders’ equity. During 2016, Gentili completed these transactions and events in this order: a. Sold 1,200 shares of treasury stock for $39 per share; the cost of these

> Patterson Manufacturing Co. has the following selected account balances at September 30, 2016. Requirements 1. Prepare the stockholders’ equity section of the company’s balance sheet. Common Stock, no par with

> Backcountry Outftters, Inc., had the following stockholders’ equity on November 30: On December 10, Backcountry Outftters purchased 8,000 shares of treasury stock at $6 per share. Requirements 1. Journalize the purchase of the treas

> To prepare the statement of cash flows, accountants for Kim & Associates, Inc., summarized 2016 activity in the Cash account as: Requirement 1. Prepare the statement of cash flows of Kim & Associates, Inc., for the year ended De

> Journalize the following transactions of All Sports, Inc., a chain of sports stores: Mar 4 Issued 22,000 shares of no-par common stock at $8 per share. May 22 Purchased 900 shares of treasury stock at $10 per share. Sep 22 Sold 500 shares of treasu

> Use the Linderman Garden Supply, Inc., data from P11-39B. The cash amounts for Interest Revenue, Salaries Expense, Interest Expense, and Income Tax Expense are the same as the accrual amounts for these items. Requirements 1. Prepare the 2016 statement

> Consider each of the following transactions separately from every other transaction: a. Issuance of 60,000 shares of $5 par common at $14 b. Purchase of 1,000 shares of treasury stock (par value at $3) at $8 per share c. Issuance of a 20 percent stock d

> The accounting records for Best Way Lumber, Inc., for the year ended November 30, 2016, contain the following information: a. Purchase of fixed assets, $88,400 b. Proceeds from issuance of common stock, $12,000 c. Payment of dividends, $45,400 d. Collec

> Global Travel, Inc., had the following stockholders’ equity at August 31: On September 30, Global Travel, Inc., split its common stock 5-for-1. Requirements 1. Make any necessary entry to record the stock split. 2. Prepare the stock

> Which characteristic of a corporation is considered to be an advantage? a. Limited stockholder liability b. Indefinite life c. Ease of transferring ownership d. All of the above

> The 2016 comparative balance sheet and income statement of Linderman Garden Supply, Inc., follow: Linderman Garden Supply, Inc., had no noncash investing and financing transactions during 2016. During the year, Linderman Garden Supply, Inc., made no s

> Akaman Auto, Inc., is authorized to issue 600,000,000 shares of $10 par common stock. The company issued 70,000 shares at $12 per share, and all 70,000 shares are outstanding. When the market price of common stock was $22 per share, Akaman Auto, Inc., de

> Data from the comparative balance sheet of Gibson’s Greenhouse, Inc., at May 31, 2016, follow: Gibson’s Greenhouse, Inc.’s transactions during the year ended May 31, 2016, included: Requirements

> The stockholders’ equity for Coeur d’Alene Marina, Inc., on December 31, 2015, follows: On May 31, 2016, the market price of Coeur d’Alene Marina, Inc.’s common stock was $17 per s

> Fred’s Appliance, Inc., accountants assembled the following data for the year ended December 31, 2016: Requirement 1. Prepare Fred’s Appliance Inc.’s statement of cash flows using th

> The following elements of stockholders’ equity are adapted from the balance sheet of Sacchetti Corporation Sacchetti Corporation paid no preferred dividends in 2016 but paid the designated amount of cash dividends per share to preferr

> To prepare the statement of cash flows, accountants for Houton & Associates, Inc., summarized 2016 activity in the Cash account as: Requirement 1. Prepare the statement of cash flows of Houton & Associates, Inc., for the year en

> Tri County Communications, Inc., has the following stockholders’ equity: Requirements 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and common shareholders for 2016 and 2017 if total divide

> Use the Bone Appetit Pet Supply, Inc., data from P11-33A. The cash amounts for Interest Revenue, Salaries Expense, Interest Expense, and Income Tax Expense are the same as the accrual amounts for these items. Requirements 1. Prepare the 2016 statement o

> Vischten Co. recently organized. The company issued no-par common stock to an attorney in exchange for his patent with a market value of $64,000. In addition, Vischten Co. received cash for 5,000 shares of its $70 par preferred stock sold at par value an

> Find the Columbia Sportswear Company Annual Report located in Appendix A and go to the Financial Statements starting on page 663. Now access the 2014 Annual Report for Under Armour, Inc., from the Internet. For instructions on how to access the report on

> The accounting records for Haskins Steel, Inc., for the year ended June 30, 2016, contain the following information: a. Purchase of fixed assets for cash, $97,400 b. Proceeds from issuance of common stock, $45,000 c. Payment of dividends, $47,400 d. Col

> Bressler, Corp., issued 6,000 shares of no-par common stock for $14 per share. Requirements 1. Record issuance of the stock if the stock: a. is no-par stock b. has a stated value of $9 per share 2. Which type of stock issuance results in more total pai

> The charter for Zealax, Inc., authorizes the company to issue 250,000 shares of $3, no-par preferred stock and 950,000 shares of common stock with $8 par value. During its start-up phase, Zealax, Inc., completed the following transactions: Requirements

> Data from the comparative balance sheet of Stevenson Building Materials, Inc., at July 31, 2016, follow: Stevenson Building Materials, Inc.’s transactions during the year ended July 31, 2016, included: Requirements 1. Prepare Steve

> Tresko Systems completed the following stock issuance transactions: Requirements 1. Journalize the transactions. Explanations are not required. 2. How much paid-in capital did these transactions generate for Tresko Systems? Sep 19 Issued 1,800 sh

> Giovani Furniture Corporation accountants assembled the following data for the year ended December 31, 2016: Requirement 1. Prepare Giovani Furniture Corporation’s statement of cash flows using the indirect method to r

> Assume that Pembrook Industries, Inc., has the following data: Requirements 1. Calculate Pembrook Industries’ return on equity for 2016. 2. Comment on Pembrook Industries’ performance during 2016 assuming that the i

> Trudeau’s Marine, Inc., reported the following selected amounts in its financial statements for the year ended December 31, 2016: Requirement 1. Determine the following for Trudeau’s Marine, Inc., during 2016. a. Co

> Century Communications, Inc., began 2016 with 290,000 shares of $1 par common stock issued and outstanding. Beginning Paid-in Capital in Excess of Par—Common was $580,000, and retained earnings was $730,000. In February 2016, Century Communications, Inc.

> This case continues our examination of Columbia Sportswear. We will now study the stockholders’ equity of Columbia Sportswear, which you will see titled as Shareholders’ Equity. Refer to the Columbia Sportswear financial statements in Appendix A. Look fo

> Compute the following items for the statement of cash flows: 1. The beginning and ending Accounts Receivable balances are $40,000 and $43,000, respectively. Credit sales for the period total $192,000. How much are cash collections? 2. Cost of Goods Sold

> At December 31, 2015, Gertner Corp. reported the following stockholders’ equity: During 2016, Gertner Corp. completed these transactions and events in this order: a. Sold 1,300 shares of treasury stock for $42 per share; the cost of

> The income statement and additional data of Amalgamated Services, Inc., follow: Additional data follow: a. Collections from customers are $9,000 more than sales. b. Payments to suppliers are $3,000 more than the sum of cost of goods sold plus advertis

> Tsongas Manufacturing Co. has the following selected account balances at July 31, 2016. Requirements 1. Prepare the stockholders’ equity section of the company’s balance sheet. Common Stock, no par with $6 sta

> The accounting records of Ripken Electric, Inc., reveal the following: Requirements 1. Compute cash flows from operating activities by the direct method. 2. Evaluate the operating cash flow of Ripken Electric, Inc. Give t

> Mid America, Inc., had the following stockholders’ equity on November 30: On December 15, Mid America, Inc., purchased 10,000 shares of treasury stock at $8 per share. Requirements 1. Journalize the purchase of the treasury stock. 2

> Compute the following items for the statement of cash flows: 1. The beginning and ending Retained Earnings balances are $48,000 and $71,000, respectively. Net income for the period is $93,000. How much are cash dividends? 2. The beginning and ending net

> Journalize the following transactions of Olympic Sports, Inc., a chain of sports stores: May 4 Issued 21,000 shares of no-par common stock at $9 per share. Jul 22 Purchased 1,500 shares of treasury stock at $7 per share. Nov 22 Sold 300 shares of t

> Use the data for Amalgamated Services from E11-24B. Data from E11-24B. Additional data follows: a. Acquisition of fixed assets totaled $115,000. Of this amount, $85,000 was paid in cash and a $30,000 note payable was signed for the remainder. b. Procee

> Consider each of the following transactions separately from every other transaction: a. Issuance of 20,000 shares of $10 par common at $17 b. Purchase of 1,500 shares of treasury stock (par value $0.75) at $3 per share c. Issuance of a 15 percent stock

> Tammy was a wealthy, 20 percent stockholder of TDS Corporation. She was looking over the financial statements of the corporation and saw that TDS Corporation was in need of a large loan. Furthermore, she knew that December sales were weaker than expected

> The income statement and additional data of Amalgamated Services, Inc., follow: Additional data follows: a. Acquisition of fixed assets totaled $115,000. Of this amount, $85,000 was paid in cash and a $30,000 note payable was signed for the remainder.

> Tubbs Landing, Inc., had the following stockholders’ equity at January 31: On February 28, Tubbs Landing, Inc., split its common stock 2-for-1. Requirements 1. Make any necessary entry to record the stock split. 2. Prepare the stock

> The March accounting records of Watt’s Electrical Supply, Inc., include these accounts: Requirement 1. Compute Watt’s Electrical Supply, Inc.’s net cash provided by operating activities during Marc

> Portrait People, Inc., is authorized to issue 500,000 shares of $4 par common stock. The company issued 74,000 shares at $7 per share, and all 74,000 shares are outstanding. When the market price of common stock was $11 per share, Portrait People, Inc.,

> The accounting records of Harding & Associates, Inc. reveal: Requirements 1. Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section shown in Exhibit 11-3. 2. Evaluat

> The stockholders’ equity for Lakeside Marina, Inc., on December 31, 2015, follows: On January 31, 2016, the market price of Lakeside Marina’s common stock was $20 per share and the company distributed a 10 percent st

> Pilgrim Canopies, Inc., reported the following selected amounts in its financial statements for the year ended December 31, 2016: Requirement 1. Determine the following for Pilgrim Canopies, Inc., during 2016. a. Collections from customers b. Payments

> The following elements of stockholders’ equity are adapted from the balance sheet of Sanders Corporation. Sanders Corporation paid no preferred dividends in 2016 but paid the designated amount of cash dividends per share to preferred

> Compute the following items for the statement of cash flows: 1. The beginning and ending Accounts Receivable balances are $18,000 and $22,000, respectively. Credit sales for the period total $123,000. How much are cash collections? 2. Cost of Goods Sold

> New England Communications has the following stockholders’ equity: Requirements 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and common shareholders for 2016 and 2017 if total dividends ar

> What are the four basic rights of stockholders?

> The income statement and additional data of Consolidated Services, Inc., follow: Additional data follow: a. Collections from customers are $5,000 more than sales. b. Payments to suppliers are $3,000 more than the sum of cost of goods sold plus adverti

> Astro Co. recently organized. The company issued no-par common stock to an attorney in exchange for his patent with a market value of $53,000. In addition, Astro Co. received cash for 3,500 shares of its $40 par preferred stock sold at par value and for

> The accounting records of Bronson Plumbing, Inc., reveal: Requirements 1. Compute cash flows from operating activities by the direct method. 2. Evaluate the operating cash flow of Bronson Plumbing, Inc. Give the reason for your evaluation. Paymen

> Bainbridge Corp. issued 4,000 shares of no-par common stock for $9 per share. Requirements 1. Record issuance of the stock if the stock: a. is a no-par stock. b. has a stated value of $5 per share 2. Which type of stock issuance results in more total p

> Requirements Compute the following items for the statement of cash flows: 1. The beginning and ending Retained Earnings balances are $45,000 and $77,000, respectively. Net income for the period is $59,000. How much are cash dividends? 2. The beginning an

> The charter for Zelkin, Inc., authorizes the company to issue 200,000 shares of $3, no-par preferred stock and 900,000 shares of common stock with $1 par value. During its start-up phase, Zelkin, Inc., completed the following transactions: Requirements

> Use the data for Consolidated Services from E11-15A. Data from E11-15A Requirements 1. Calculate the cash conversion cycle for Consolidated Services. Round all calculations to two decimal places. Assume all sales are on credit. 2. Comment on Consolidat

> Skyway Systems completed the following stock issuance transactions: Requirements 1. Journalize the transactions. Explanations are not required. 2. How much paid-in capital did these transactions generate for Skyway Systems? Jun 19 Issued 1,900 sh

> The income statement and additional data of Consolidated Services, Inc., follow: Additional data follows: a. Acquisition of fixed assets totaled $117,000. Of this amount, $103,000 was paid in cash and a $14,000 note payable was signed for the remainde

> Use the statement of stockholders’ equity in Exhibit 10-8 to answer the following questions: 1. Make journal entries to record the declaration and payment of cash dividends during 2016. 2. How much cash did the issuance of common stoc

> This problem continues our accounting for Fitness Equipment Doctor, Inc., from Chapter 9. Fitness Equipment Doctor, Inc., has been authorized to sell 100,000 shares of $5 par value common stock and 40,000 shares of $10 par, 15 percent preferred stock. Du

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. What liabilities might Dick’s have in order to finance its operations? Return to Dick’s Annual Report and look at Dick’s financial statements. Now answer the following questions

> A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here: The company’s accounting records revealed the following information for the year ended December 31, 2011: Sales (all on

> Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each acco

> Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each acco

> Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each acco

> On November 1, 2010, Wenger Co. paid its landlord $25,200 in cash as an advance rent payment on its store location. The six-month lease period ends on April 30, 2011, at which time the contract may be renewed. Required: a. Use the horizontal model or wr

> Prepare a bank reconciliation as of October 31 from the following information: a. The October 31 cash balance in the general ledger is $844. b. The October 31 balance shown on the bank statement is $373. c. Checks issued but not returned with the bank s

> a. Use the horizontal model or write the journal entry to record the payment of a one-year insurance premium of $3,000 on March 1. b. Use the horizontal model or write the adjusting entry that will be made at the end of every month to show the amount of

> The 2008 annual reports of Pearson plc and The McGraw-Hill Companies, Inc. , two publishing and information services companies, included the following selected data as at December 31, 2008, and 2007: Required: a. Do you notice anything unusual about th

> Natco, Inc., uses the FIFO inventory costflow assumption. In a year of rising costs and prices, the firm reported net income of $480,000 and average assets of $3,000,000. If Natco had used the LIFO cost-flow assumption in the same year, its cost of goods