The December 31, 2024, inventory of Tog Company, based on a physical count, was determined to be $450,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $50,000. The purchase was recorded and paid for in 2025. Another supplier shipment costing $20,000 was correctly recorded as a purchase in 2024. However, the merchandise, shipped FOB shipping point, was not received until 2025 and was incorrectly omitted from the physical count. A third purchase, shipped from a supplier FOB shipping point on December 28, 2024, did not arrive until January 3, 2025. The merchandise, which cost $80,000, was not included in the physical count and the purchase has not yet been recorded. The company uses a periodic inventory system. Required: 1. Determine the correct December 31, 2024, inventory balance and, assuming that the errors were discovered after the 2024 financial statements were issued, analyze the effect of the errors on 2024 cost of goods sold, net income, and retained earnings. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.
> 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
> Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2024. Kim paid $10 million for the shares. Thirty percent of the book value of Phelps’s net assets is $8 million, and the difference of $2 million is due to land that Phelps owns that
> You have been hired as the new controller for the Radiance Company. Shortly after joining the company in 2024, you discover the following errors related to the 2022 and 2023 financial statements: a. Inventory at December 31, 2022, was understated by $6,0
> Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2024, the company decided to switch to the average cost method. Data for 2024 are as follows: Additional Information: a. Th
> On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows: Required: 1. Estimate the 2024 and 2025 ending inventory and cost of goods so
> Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail me
> On January 1, 2024, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows: Required: Estimate the 2024 and 2025 ending inventory and cost
> Smith Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data: Required: Assuming the price level increased from 1.00 at January 1 to 1.10 at December 31, 2024, use the dollar-val
> Decker Company has five products in its inventory. Information about ending inventory follows. The cost to sell for each product consists of a 15 percent sales commission. Required: 1. Determine the carrying value of ending inventory, assuming the lower
> Inverness Steel Corporation is a producer of flat-rolled carbon, stainless and electrical steels, and tubular products. The company’s income statement for the 2024 fiscal year reported the following information ($ in millions): The comp
> Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. Cast Iron’s December 31, 2024, fiscal year-end inventory
> Cansela Corporation reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company began 2024 with inventory of 4,500 units of its only product. The beginning inventory balance of $64,000 consisted of th
> The fair value of Wallis, Inc.’s depreciable assets exceeds their book value by $50 million. The assets have an average remaining useful life of 15 years and are being depreciated by the straight-line method. Park Industries buys 30% of Wallis’s common s
> A company reports inventory and cost of goods sold based on calculations from a LIFO periodic inventory system. The company’s records under this system reveal the following inventory layers at the beginning of 2024 (listed in chronologi
> Caterpillar, Inc., is one of the world’s largest manufacturers of construction, mining, and forestry machinery. The following disclosure note is included in the company’s 2019 financial statements: Required: 1. The co
> Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2024, Auto Dealers had three cars in inventory, as follows: During 2024, ea
> Topanga Group began operations early in 2024. Inventory purchase information for the quarter ended March 31, 2024, for Topanga’s only product is provided below. The unit costs include the cost of freight. The company uses a periodic inv
> A company began January with 6,000 units of its principal product. The cost of each unit is $8. Inventory transactions for the month of January are as follows: 8,000 units were on hand at the end of the month. Required: Calculate Januaryâ€
> At the beginning of 2024, a company adopted the dollar-value LIFO (DVL) inventory method. On that date the value of its one inventory pool was $84,000. The company uses an internally generated cost index to convert ending inventory to base year. Inventor
> On January 1, 2024, a company adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $260,000. An internally generated cost index is used to convert ending inventory to base year. Year-end inventor
> A company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to base year. The company began operations on January 1, 2024, with an inventory of $150,000. Year-end inventories at year-end
> On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $400,000. Inventory data for 2024 through 2026 are as follows: Required: Calculate the company’s ending
> Jillet Corporation began the year with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: a. Purchased 50,000
> Turner Company owns 40% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on its common shares. What effect did this dividend have on Turner’s 2024 financial statements? Explain the reasoning for this e
> The following facts apply to Walken Company during December 2024: a. Walken began December with an accounts receivable balance (net of bad debts) of €25,000. b. Walken had credit sales of €85,000. c. Walken had cash collections of €30,000. d. Walken fact
> Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2024, the company transferred $800,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits
> Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2024, the company had accounts receivable of $780,000. Lonergan needs approximately $500,000 to capitalize on a unique investment opportunity. On July
> Cypress Oil Company’s December 31, 2024, balance sheet listed $645,000 of notes receivable and $16,000 of interest receivable included in current assets. The following notes make up the notes receivable balance: The company records adju
> Avon Products, Inc., located in New York City, is one of the world’s largest producers of beauty and related products. The company’s consolidated balance sheets for the 2016 and 2015 fiscal years included the following
> Rain tree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2023 balance sheet disclosed the following: Curren
> Nike, Inc., is a leading manufacturer of sports apparel, shoes, and equipment. The company’s 2020 financial statements contain the following information ($ in millions): Assume that all sales are made on a credit basis. Required: 1. Wh
> Dell Technologies is a leading global end-to-end technology provider, with a portfolio of hardware, software and service solutions. In a recent annual report, the balance sheet included the following information ($ in millions): In addition, the income s
> Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024, Rothsc
> El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2024, reconciliation of the bank balance is as follows: The company’s general ledger checkin
> Turner Company owns 10% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on its common shares. What effect did this dividend have on Turner’s 2024 financial statements? Explain the reasoning for this e
> The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2024, balance of $14,632.12. Information that might be useful in preparing a bank reconciliation is as follows: a. Outstanding checks were $1,320.25. b. Th
> Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2024, year end balance sheet: Additional Information: 1. The notes receivable account consists of two notes, a $60,000 note and a $200,000 note. The $60,000 note is dated
> Descriptors are provided below for six situations involving notes receivable being discounted at a bank. In each case, the maturity date of the note is December 31, 2024, and the principal and interest are due at maturity. Required: For each situation,
> Evergreen Company sells lawn and garden products to wholesalers. The company’s fiscal year end is December 31. During 2024, the following transactions related to receivables occurred: Required: 1. Prepare the necessary journal entries
> Swath more Clothing Corporation grants its customers 30 days’ credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 3% times the amoun
> Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10–20 homes and are typically so
> Complete the requirements of P 6–10, assuming that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time. Curtiss Construction Company, Inc., entered into a fixed-p
> In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows: Westgate recognizes revenue over time accord
> Tran Technologies licenses its functional intellectual property to Lyon Industries. Terms of the arrangement require Lyon to pay Tran $500,000 on April 1, 2024, when Lyon first obtains access to Tran’s intellectual property, and then in the future to pay
> Assume the same facts as P 6–6. Required: 1. Assume that Super Rise anticipates it will earn the performance bonus, but is highly uncertain about its estimate given unfamiliarity with the building and uncertainty about its access to the elevators and re
> Assume that Adams Industries holds 40,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2024, and December 31, 2025, the market value of the stock
> Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2024, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $80,000. The co
> Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem thos
> Assume the same facts as in P 6–2, except that customers must pay $75 to purchase the extended warranty if they don’t purchase it with the $50 coupon that was included in the Protab Package. Creative estimates that 40% of customers will use the $50 coupo
> Fit & Slim (F&S) is a health club that offers members various gym services. Required: 1. Assume F&S offers a deal whereby enrolling in a new membership for $700 provides a year of unlimited access to facilities and also entitles the member to receive a v
> Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s i
> American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2024, gains from selling trading securities totaled $8 million, losses from selling trading securities were $1
