Question: The bank statement of Hibbert Supplies included

> Advanced Micro Devices, Inc. (AMD) is “a global semiconductor company with facilities around the world.” AMD began operations in 1969. Texas Instruments, Inc. is the company that invented the integrated circuit over 45

> Newell Brands, Inc. is the marketer of the well-known Rubbermaid plastic containers, but it also markets many other consumer brands, including Sharpie, Calphalon, Parker and Waterman writing instruments, and Lenox hand and power tools. The 2016 numbers a

> In the liabilities section of its 2016 balance sheet, Bank of America reported “noninterest-bearing deposits” in U.S. offices of over $438 billion. Bank of America is a very large banking company. In the liabilities section of its 2016 balance sheet, New

> The following payroll information is available for three companies for Year 1. Each company has two employees. Assume that the Social Security tax rate is 6 percent on the first $110,000 of earnings and that the Medicare tax rate is 1.5 percent on all ea

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. What was Target’s current ratio for its fiscal year ended January 28, 2017 (2016) and 2015

> This chapter discussed how companies in different industries often use different proportions of current versus long-term assets to accomplish their business objective. The technology revolution resulting from the silicon microchip has often been led by t

> Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $45,000 of cleaning services on account. 2. Collected $39,000 cash from accounts receiv

> Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations: Events Affecting Year 1: 1. Provided $84,000 of cleaning services on account. 2. Collected $76,000 cash from acc

> The following information is available for Market, Inc. and Supply, Inc. at December 31: Required: a. What is the accounts receivable turnover for each of the companies? b. What is the average days to collect the receivables? c. Assuming both companies

> The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: Transactions for Year 2 1. LGS acquired an additional $20,000 cash from the issue of common stock. 2. LGS purchased $85,000

> The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company: Required: a. One of the companies is a high-end retailer that operates in exclusive shopping malls. The other operates discount stores loc

> Luna Company accepted credit cards in payment for $6,000 of services performed during July Year 1. The credit card company charged Luna a 4 percent service fee; it paid Luna as soon as it received the invoices. Required: a. Prepare the general journal e

> Ultra Day Spa provided $120,000 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of fa

> On May 1, Year 1, Benz’s Sandwich Shop loaned $10,000 to Mark Henry for one year at 6 937 percent interest. Required: Answer the following questions: a. What is Benz’s interest income for Year 1? b. What is Benz’s total amount of receivables at December

> Rainey Enterprises loaned $20,000 to Small Co. on June 1, Year 1, for one year at 6 percent interest. Required: a. Record these general journal entries for Rainey Enterprises: (1) The loan to Small Co. (2) The adjusting entry at December 31, Year 1. (3

> Patel Service Co. does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Co. earned $35,000 of cash revenue and $4,500 of reven

> Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: 1. Provided $91,000 of services on account. 2. Collected $72,000 cash from accounts receivable. 3. Paid $36,000 of salaries expense for the year. 4. Adjus

> Leach Inc. experienced the following events for the first two years of its operations: Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $78,000 of services on account. 3. Provided $36,000 of services and received cash. 4. Collected $69,00

> The accounts receivable balance for Renue Spa at December 31, Year 1, was $61,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $3,750. During Year 2, $2,100 of accounts receivable were written off as uncollectible. In additi

> Grover Inc. uses the allowance method to account for uncollectible accounts expense. Grover Inc. experienced the following four accounting events in Year 1: 1. Recognized $92,000 of revenue on account. 2. Collected $78,000 cash from accounts receivable.

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 7, had the following normal balances: During Year 7, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 6. 2. Paid $4,800 o

> Junker’s Stash started the Year 2 accounting period with the balances given in the financial statements model shown below. During Year 2, Junker’s Stash experienced the following business events: 1. 

> The following selected financial information is available for three companies: Required: a. Divide the class into three sections and divide each section into groups of three to five students. Assign one of the companies to each of the sections. Group

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: Anyone who has shopped at Target knows that many of its customers use a credit card to pay fo

> Using the most current annual reports or Forms 10-K for Whirlpool Corporation and Papa John’s International, Inc., complete the requirements that follow. To obtain the Forms 10K, use either the EDGAR system, following the instructions in Appendix A, or t

> Alonzo Saunders owns a small training services company that is experiencing growing pains. The company has grown rapidly by offering liberal credit terms to its customers. Although his competitors require payment for services within 30 days, Saunders per

> Paul Smith is opening a plumbing supply store in University City. He plans to sell plumbing parts and materials to both wholesale and retail customers. Because contractors (wholesale customers) prefer to charge parts and materials and pay at the end of t

> AutoZone, Inc. claims to be the nation’s leading auto parts retailer. It sells replacement auto parts directly to the consumer. BorgWarner, Inc. has over 30,000 employees and produces automobile parts, such as transmissions and cooling

> The following data were taken from Hershey Foods Corporation’s 2016 annual report. All dollar amounts are in thousands. Required: a. Compute Hershey’s accounts receivable turnover ratios for 2016 and 2015. b. Compute

> Presented here are the average days to collect accounts receivable for four companies in different industries. The data are for 2016. Required: Write a brief memorandum that provides possible answers to each of the following questions: a. Why would a c

> What three basic types of auditors’ opinions can be issued on audited financial statements? Describe each.

> What are several features of an effective internal control system?

> Powell Company began the Year 2 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $58,000 for $99,500 on acco

> Determine whether the following items in China Imports’ bank reconciliation require adjusting or correcting entries on China Imports’ books. When an entry is required, record it in general journal format. a. The bank statement indicated that China Import

> The following data apply to Woods Sports Inc. for April Year 1: 1. Balance per the bank on April 30: $13,750. 2. Deposits in transit not recorded by the bank: $3,600. 3. Bank error; check written by Glen Woods on his personal checking account was drawn o

> Bill Lewis owns a construction business, Lewis Supply Co. The following cash information is available for the month of October Year 1. As of October 31, the bank statement shows a balance of $21,400. The October 31 unadjusted balance in the Cash account

> Connie Stevens is a partner in a regional accounting firm. Stevens was hired by a client to audit the company’s books. After extensive work, Stevens determined that she was unable to perform the appropriate audit procedures. Required: a. Name the type o

> The following data pertain to the petty cash fund of Marsh Company: 1. The petty cash fund was established on an imprest basis at $250 on March 1. 2. On March 31, a physical count of the fund disclosed $13 in currency and coins, vouchers authorizing meal

> The following is a bank reconciliation for BBQ Express for May 31, Year 1: Because of limited funds, BBQ Express employed only one accountant who was responsible for receiving cash, recording receipts and disbursements, preparing deposits, and preparin

> After reconciling its bank account, Addy Equipment Company made the following adjusting entries: Required: Identify the event depicted in each journal entry as an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also exp

> The following information is available for Pyle Garage for March Year 1: The following is a list of checks and deposits recorded on the books of Pyle Garage for March Year 1: Other Information 1. Check no. 1462 was outstanding from February. 2. A cre

> Austin Co. established a petty cash fund by issuing a check for $300 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month: There was $21 of currency in the petty cash box at the tim

> Following is a bank reconciliation for Zocar Enterprises for June 30, Year 1: When reviewing the bank reconciliation, Zocar’s auditor was unable to locate any reference to the NSF check on the bank statement. Furthermore, the clerk wh

> The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: 1. Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30. 2. Customers returned merchandise to Ozark five days after the purchase. The

> After reconciling its bank account, Watson Company made the following adjusting entries: Required: Identify the event depicted in each journal entry as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how ea

> The following information is available for Park Valley Spa for July Year 1: The following is a list of checks and deposits recorded on the books of the Park Valley Spa for July Year 1: Other Information 1. Check no. 2350 was outstanding from June. 2.

> Determine whether the following items included in Wong Company’s January Year 1 bank reconciliation will require adjusting or correcting entries on Wong’s books. When an entry is required, record it in general journal format. a. Service charges of $50 fo

> The following data apply to Pro Beauty Supply Inc. for May Year 1: 1. Balance per the bank on May 31: $9,150. 2. Deposits in transit not recorded by the bank: $1,510. 3. Bank error; check written by Best Beauty Supply was charged to Pro Beauty Supply&aci

> Rick Hall owns a card shop: Hall’s Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $16,140. The August 31 unadjusted balance in the Cash account of Hall’s Cards is

> a. Name and describe the two categories of internal controls. b. What is the purpose of internal controls?

> a. Explain what the acronym SOX refers to. b. Define the acronym COSO and explain how it relates to SOX. c. Name and briefly define the five components of COSO’s internal control framework. d. Define the acronym ERM and explain how it relates to COSO’s i

> Payton Inc. established a petty cash fund of $150 on January 2. On January 31, the fund contained cash of $8.20 and vouchers for the following cash payments: The three distinct accounting events affecting the petty cash fund for the period were (1) est

> Mountain Timber Company established a $180 petty cash fund on January 1, Year 1. Required: a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? b. Show the establishment of the petty cash fund in a horizontal sta

> The following information was taken from the accounts of Green Market, a small grocery store, at December 31, Year 1. The accounts are listed in alphabetical order, and all have normal balances. Dollar amounts are given in thousands. First, prepare an

> Burson Company had an unadjusted cash balance of $8,120 as of April 30. The company’s bank statement, also dated April 30, included a $200 NSF check written by one of Burson’s customers. There were $1,525 in outstanding checks and $900 in deposits in tra

> The following information is available for Jenkins Company for the month of August: 1. The unadjusted balance per the bank statement on August 31 was $35,200. 2. Deposits in transit on August 31 were $3,750. 3. A debit memo was included with the bank sta

> As of May 31, Year 1, the bank statement showed an ending balance of $26,100. The unadjusted Cash account balance was $27,350. The following information is available: 1. Deposit in transit: $6,981. 2. Credit memo in bank statement for interest earned in

> Fresh Foods established a petty cash fund of $100 on January 2. On January 31, the fund contained cash of $9.20 and vouchers for the following cash payments: The three distinct accounting events affecting the petty cash fund for the period were (1) est

> Chen Company established a $200 petty cash fund on January 1, Year 1. Required: a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? b. Show the establishment of the petty cash fund in a horizontal statements mod

> The following information is available for Trinkle Company for the month of June: 1. The unadjusted balance per the bank statement on June 30 was $81,500. 2. Deposits in transit on June 30 were $3,150. 3. A debit memo was included with the bank statement

> As of June 30, Year 1, the bank statement showed an ending balance of $19,500. The unadjusted Cash account balance was $15,200. The following information is available: 1. Deposit in transit: $2,400. 2. Credit memo in bank statement for interest earned in

> a. Why are special controls needed for cash? b. What is included in the definition of cash?

> Assume you are the owner of a small business that has only two employees. a. Which of the internal control procedures are most important to you? b. How can you overcome the limited opportunity to use the segregation-of-duties control procedure?

> List and describe nine features of a strong internal control system discussed in this chapter.

> In Year 1, Kim Company sold land for $80,000 cash. The land had originally cost $60,000. Also, Kim sold inventory that had cost $110,000 for $198,000 cash. Operating expenses amounted to $36,000. Required: a. Prepare a Year 1 multistep income statement

> a. Discuss the requirements of Section 404 of the Sarbanes– Oxley Act and how it relates to COSO. b. What type of companies do these rules apply to?

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the following normal balances: During Year 6, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 5. 2. On March 1, Y

> The following cash and bank information is available for three companies at June 30, Year 1: Required: a. Organize the class into three sections and divide each section into groups of three to five students. Assign Peach Co. to section 1, Apple Co. to

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. Who are the independent auditors for Target? b. What type of opinion did the independent a

> Using the most current annual report available on the company’s website, answer the following questions about the J. M. Smucker Company. Required: a. Instead of “Cash,” the company’s balance sheet uses the account name “Cash and cash equivalents.” How d

> The statement of financial position (balance sheet) of Omni-Pave Company reports assets of $7,800,000. Ellen Martin advises you that a major accounting firm has audited the statements and attested that they were prepared in accordance with generally acce

> The accounting firm of Eckert & Bell, CPAs, recently completed the audits of three separate companies. During these audits, the following events were discovered, and Eckert & Bell is trying to decide if each event is material. If an item is material, the

> The following excerpt was taken from Alphabet, Inc.’s 10-K report for its 2016 fiscal year. Alphabet, Inc. is the parent company of Google, Inc. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participati

> What is a situation in which estimates of the amount of inventory may be useful or even necessary?

> Assume that inventory is overstated by $1,500 at the end of Year 1 but is corrected in Year 2. What effect will this have on the Year 1 income statement? The Year 1 balance sheet? The Year 2 income statement? The Year 2 balance sheet?

> The trial balance for Terry’s Auto Shop as of January 1, Year 2, follows: The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $15,000. 2. The goods in Event 1 we

> If the amount of goods available for sale is $123,000, the amount of sales is $130,000, and the gross margin is 25 percent of sales, what is the amount of ending inventory?

> How can management manipulate net income using inventory fraud?

> The following accounting information pertains to Mobile and Casper companies. The only difference between the two companies is that Mobile uses FIFO, while Casper uses LIFO. Required: a. Compute the gross margin percentage for each company and identify

> The following income statement was prepared for Rice Company for Year 1: During the year-end audit, the following errors were discovered: 1. An $1,800 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpe

> Sam Todd, owner of Todd Company, is reviewing the quarterly financial statements and thinks the cost of goods sold is out of line with past years. The following historical data are available for Year 1 and Year 2: At the end of the first quarter of Yea

> A hurricane destroyed the inventory of Coleman Feed Store on September 21 of the current year. Although some of the accounting information was destroyed, the following information was discovered for the period of January 1 through September 21: The gro

> At the end of the year, Ronaldo Jewelers had the following items in inventory: Required: a. Determine the amount of ending inventory using the lower-of-cost-or market rule applied to each individual inventory item. b. Provide the general journal entry

> Donovan, Inc. had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 120 items at $80 each. Donovan uses the FIFO cost flow assumption and keeps perpetual inventory records. Required: a. Record the inventory t

> The accounting records of Allen Insulation, Inc. reflected the following balances as of January 1, Year 2: The following five transactions occurred in Year 2: 1. First purchase (cash)    â&#12

> Pam’s Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 60 items at $350 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records. Required: a

> Ho Designs experienced the following events during Year 1, its first year of operation: 1. Started the business when it acquired $70,000 cash from the issue of common stock. 2. Paid $41,000 cash to purchase inventory. 3. Sold inventory costing $37,500 fo

> The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 2: The following five transactions occurred in Year 2: 1. First purchase (cash): 150 units @ $155 2. Second purchase (cash): 160 units

> The following accounting information pertains to Boardwalk Taffy and Beach Sweets. The only difference between the two companies is that Boardwalk Taffy uses FIFO, while Beach Sweets uses LIFO. Required: a. Compute the gross margin percentage for each

> The following income statement was prepared for Frame Supplies for Year 1: During the year-end audit, the following errors were discovered: 1. A $2,500 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perp

> Toyland wishes to produce quarterly financial statements, but it takes a physical count of inventory only at year-end. The following historical data were taken from the Year 1 and Year 2 accounting records: At the end of the first quarter of Year 3, To

> The inventory of Don’s Grocery was destroyed by a tornado on October 6 of the current year. Fortunately, some of the accounting records were at the home of one of the owners and were not damaged. The following information was available

> At the end of the year, Randy’s Parts Co. had the following items in inventory: Required: a. Determine the amount of ending inventory using the lower-of-cost-or-market rule applied to each individual inventory item. b. Provide the gen

> Marley Company sells coffee makers used in business offices. Its beginning inventory of coffee makers was 400 units at $50 per unit. During the year, Marley made two batch purchases of coffee makers. The first was a 500-unit purchase at $55 per unit; the

> Harris Co. started the year with no inventory. During the year, it purchased two identical inventory items. The inventory was purchased at different times. The first purchase cost $3,600 and the other, $4,200. One of the items was sold during the year.

> Po River Winery Inc. has inventory that cost $500,000. The aging process for the inventory requires several years. At the company’s closing date (December 31, Year 1), the inventory had a market value of $400,000. During Year 2, the market value recovere

> The following note related to accounting for inventory was taken from the 2016 annual report of Wal-Mart Stores, Inc.: Inventories The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of acc

> The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $60,000 cash from the issue of common stock. 2. Purchased $65,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cos

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. What was Target’s gross margin percentage for the fiscal year ended January 28, 2017 (2016

> 1. What is motivation? 2. Why is understanding motivation important?