Question: The Eldorado Corporation’s controller prepares

> On January 1, 2024, the Merit Group issued to its bank a $41 million, five-year installment note to be paid in five equal payments at the end of each year. Installment payments of $10 million annually include interest at the rate of 7%. What would be the

> The preliminary 2024 income statement of Alexia Systems, Inc., is presented below: Additional Information: 1. Selling and administrative expense includes $26 million in restructuring costs. 2. Included in other income is $120 million in income from a dis

> For the year ending December 31, 2024, Olive Corporation had income from continuing operations before taxes of $1,200,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should b

> The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2024 and 2023: On October 15, 2024, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The div

> Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industry—Johnson and Johnson (J&J) and Pfizer, Inc. ($ in millions, except per share amounts). Required:

> Financial statements for Askew Industries for 2024 are shown below (in thousands): Required: Calculate the following ratios for 2024. 1. Inventory turnover ratio 2. Average days in inventory 3. Receivables turnover ratio 4. Average collection period 5. A

> Presented below are the 2024 income statement and comparative balance sheets for Santana Industries. Additional information for the 2024 fiscal year ($ in thousands): 1. Cash dividends of $1,000 were declared and paid. 2. Equipment costing $4,000 was pur

> The chief accountant for Grandview Corporation provides you with the company’s 2024 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company’s compar

> Selected information about income statement accounts for the Reed Company is presented below (the company’s fiscal year ends on December 31). On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a comp

> Presented below are condensed financial statements adapted from those of two actual companies competing as the primary players in a specialty area of the food manufacturing and distribution industry ($ in millions, except per share amounts). Required: E

> Caudex Candy Company’s income statement for the year ended December 31, 2024, reported interest expense of $2 million and income tax expense of $12 million. Current assets listed in its balance sheet include cash, accounts receivable, and inventory. Prop

> Refer to the situation described in BE 21–5. What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2024, if it uses the indirect method?

> The following is a December 31, 2024, post-closing trial balance for Almay Corporation. Additional Information: 1. The investment in equity securities account includes an investment in common stock of another corporation of $30,000 which management inten

> The data listed below are taken from a balance sheet of Trident Corporation at December 31, 2024. Some amounts, indicated by question marks, have been intentionally omitted. Required: 1. Determine the missing amounts. 2. Prepare Tridentâ€&#153

> Presented below is a list of balance sheet accounts. Required: Prepare a classified balance sheet ignoring monetary amounts. Include headings for each classification, as well as titles for each classification’s subtotal. An example of

> Melody Lane Music Company was started by John Ross early in 2024. Initial capital was acquired by issuing shares of common stock to various investors and obtaining a bank loan. The company operates a retail store that sells records, tapes, and compact di

> Presented below is the balance sheet for HHD, Inc., at December 31, 2024. The captions shown in the summarized statement above include the following: a. Current assets: cash, $150,000; accounts receivable (net), $200,000; inventory, $225,000; and prepaid

> The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company’s controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet. Additional Inf

> The following balance sheet for the Hubbard Corporation was prepared by the company: Additional Information: 1. The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land or

> The following is the ending balances of accounts at December 31, 2024, for the Vosburgh Electronics Corporation. Additional Information: 1. The receivables from employees are due on June 30, 2025. 2. The notes receivable are due in installments of $50,00

> The following is the ending balances of accounts at June 30, 2024, for Excel Company Additional Information: 1. The short-term investments account includes $18,000 in U.S. treasury bills purchased in May. The bills mature in July, 2024. 2. The accounts r

> Define the CECL model for accounts receivable. On what does it base the estimate of the allowance for uncollectible accounts?

> Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July 1, 2024, at a price of $380 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and Decembe

> 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

> Is restricted cash included in the reconciliation of cash balances on a statement of cash flows? Explain.

> It is discovered in 2024 that ending inventory in 2022 was understated. What is the effect of the understatement on the following:

> Define the ECL model for accounts receivable. How does it differ from the CECL model?

> How did the CARES Act affect adoption of the CECL model?

> On January 1, 2024, Oriole Company purchased $500,000 of Nest Corporation’s five-year, 4% notes at par, with interest receivable semiannually. The company classified the investment as available-for-sale. To hedge the risk that general i

> On January 1, 2024, LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. LLB entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value h

> On January 1, 2024, LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. ∙ LLB entered into a two-year interest rate swap agreement on January 1, 2024, and designated the swa

> LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. ∙ LLB entered into a two-year interest rate swap agreement on January 1, 2024, and designated the swap as a fair value he

> On January 1, 2024, LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. ∙ LLB entered into a two-year interest rate swap agreement on January 1, 2024, and designated the swa

> The accounting system of a company consists of a general journal (GJ), a cash receipts journal (CR), a cash disbursements journal (CD), a sales journal (SJ), and a purchases journal (PJ). For each of the following, indicate which journal should be used t

> When Desoto Water Works purchased equipment at the end of 2023 at a cost of $65,000, the company debited Buildings and credited Cash $65,000. The error was discovered in 2024. What journal entry will Desoto use to correct the error? What other step(s) wo

> A company’s accounting system consists of a general journal (GJ), a cash receipts journal (CR), a cash disbursements journal (CD), a sales journal (SJ), and a purchases journal (PJ). For each of the following, indicate which journal sho

> Refer to E 2–9 and respond to the following requirements. Required: 1. If Microchip’s accountant employed reversing entries for accruals, which adjusting entries would she likely reverse at the beginning of the following year? 2. Prepare the adjusting e

> The employees of Xitrex, Inc., are paid each Friday. The company’s fiscal year-end is June 30, which falls on a Wednesday for the current year. Salaries are earned evenly throughout the five-day work week, and $10,000 will be paid on Friday, July 2. Req

> The December 31, 2024, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the company’s year-end reporting date. The following year-end adjusting entries are required: a. Depreciation expense for

> Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2024, the law firm collected $545,000 for services rendered to its clients and paid out $412,000 in expenses. You are able to determine the following information about accou

> S&J Lawn Service Company maintains its books on a cash basis. However, the company recently borrowed $100,000 from a local bank, and the bank requires S&J to provide annual financial statements prepared on an accrual basis. During 2024, the follo

> During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2024, you discover net income in 2024 is $30,000 but no adjusting entries have been prepared. To prepare adjusting entries, you dis

> The following transactions occurred during 2024 for the Beehive Honey Corporation: Required: 1. Record each transaction in general journal form. Omit explanations. 2. Prepare any necessary adjusting entries at the year-end on December 31, 2024. No adjust

> The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2024, trial balances contained the following account information: The following information also is known: a. The December income statemen

> Presented below is income statement information of the Schefter Corporation for the year ended December 31, 2024. Required: Prepare the necessary closing entries on December 31, 2024.

> Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the $18 million cost of the patent on a straight-line basis since it was acquired at the beginning of 2020. Due to rapid technological advances in the

> American Chip Corporation’s reporting year-end is December 31. The following is a partial adjusted trial balance as of December 31, 2024. Required: Prepare the necessary closing entries on December 31, 2024.

> The December 31, 2024, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Required: 1. Prepare an income statement for the year ended December 31, 2024, and a classified balance sheet as of December 31, 2024. 2. Prepare the nec

> The Mazzanti Wholesale Food Company’s fiscal year-end is June 30. Prepare the necessary year-end adjusting entries at the end of June 30, 2024, for the following situations. 1. On December 1, 2023, the company paid its annual fire insurance premium of $6

> Prepare the necessary adjusting entries on December 31, 2024, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. 1. On October 1, 2024,

> Prepare the necessary adjusting entries on December 31, 2024, for the Fierro Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. 1. A three-year fire insu

> The following transactions occurred during the month of June 2024 for the Stridewell Corporation. The company owns and operates a retail shoe store. 1. Issued 100,000 shares of common stock in exchange for $500,000 cash. 2. Purchased office equipment at

> Post the journal entries prepared in E 2–2 to T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances.

> Prepare journal entries to record each of the transactions listed in E 2–1.

> For each of the following situations, state whether you agree or disagree with the financial reporting practice employed, and briefly explain the reason for your answer. 1. The controller of the Dumars Corporation increased the carrying value of land fro

> In 2023, Quapaw Products introduced a new line of hot water heaters that carry a one-year warranty against manufacturer’s defects. Based on industry experience, warranty costs were expected to approximate 5% of sales revenue. First-year sales of the heat

> For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the accounting concept applied (if you agree) or violated (if you disagree). 1. Wagner Corporation adjusted the valuatio

> On July 15, 2024, the Niche Car Company purchased 1,000 tires from the Treadwell Company for $50 each. The terms of the sale were 2/10, n/30. Niche uses a perpetual inventory system and the gross method of accounting for purchase discounts. Required: 1.

> The Phoenix Corporation’s fiscal year ends on December 31. Phoenix determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company’s controller has asked for your help in deciding if the followi

> The December 31, 2024, year-end inventory balance of the Almond Corporation is $210,000. You have been asked to review the following transactions to determine if they have been correctly recorded. 1. Goods shipped to Almond f.o.b. destination on December

> The Kwik Company’s inventory balance on December 31, 2024, was $165,000 (based on a 12/31/2024 physical count) before considering the following transactions: 1. Goods shipped to Kwik f.o.b. destination on December 20, 2024, were received on January 4, 20

> A company has the following information in its records. Certain data have been intentionally omitted ($ in thousands). Required: Determine the missing numbers. Show computations where appropriate.

> The following information is available for a company: Required: Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entri

> The June 30, 2024, year-end trial balance for Askew Company contained the following information: In addition, you determine that the June 30, 2024, inventory balance is $40,000. Required: Calculate the cost of goods sold for the Askew Company for the ye

> On January 1, 2024, the general ledger of Tripley Company included the following account balances: The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2024, the company had the following transactions: Requ

> On January 1, 2024, Displays Incorporated had the following account balances: From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $330,000. b. Sold inventory on account for $570,000. The cost

> Three programmers at Fee nix Computer Storage, Inc., write an operating systems control manual for Hill McGraw Publishing, Inc., for which Fee nix receives royalties equal to 12% of net sales. Royalties are payable annually on February 1 for sales the pr

> Mercury Company has only one inventory pool. On December 31, 2024, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $200,000. Inventory data are as follows: Required: Compute the i

> On January 1, 2024, a company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $660,000. The 2024 and 2025 ending inventory valued at year-end costs were $690,000 and $760,000, respectively. The appropria

> The table below contains selected information from recent financial statements of The Home Depot, Inc., and Lowe’s Companies, Inc., two companies in the home improvement retail industry ($ in millions): Required: Calculate the gross pr

> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. Determine each of the following: 1. The specific nine-digit Codification citation (XXX-XX-XXX-X) that describes the disclosure req

> The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inventory of 20,000 units consisted of the following, listed in chronological order of acquisition: During 2024, inventory quanti

> The Mega Mart Company began 2024 with inventory of 10,000 units at a cost of $7 per unit. During 2024, 50,000 units were purchased for $8.50 each. Sales for the year totaled 54,000 units leaving 6,000 units on hand at the end of 2024. Mega Mart uses a pe

> AmerisourceBergen is an American drug wholesale company. The company uses the LIFO inventory method for external reporting but maintains its internal records using FIFO. The following information was included in a recent annual report: Inventories are co

> Mogul Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: Required: 1. Determine the amount Mogul would calculate internally for e

> Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May: 1. Specialty Store purchased inventory on account for $5,000. Freight charges of $300 were paid in cash. 2. Specialty Store returned som

> To more efficiently manage its inventory, Telnex Corporation maintains its internal inventory records using first-in, first-out (FIFO) under a perpetual inventory system. The following information relates to its inventory during the year: Required: 1. D

> Refer to the situation described in BE 20–4. Suppose Irwin has been using the straight-line method and switches to the sum-of-the-years’-digits method. Ignoring income taxes, what journal entry(s) should Irwin record relating to the machine for 2024?

> A company began 2024 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During 2024, an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end of 2024 (20,000 units therefore were

> The following information is taken from the inventory records of the CNB Company for the month of September: Required: 1. Assuming that CNB uses a periodic inventory system and employs the average cost method, determine cost of goods sold for September

> Alta Ski Company’s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. Required: 1. Which method, FIFO or LIFO, will result in the highest cost of goods so

> Altira Corporation provides the following information related to its inventory during the month of August 2024: Required: Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 202

> Altira Corporation provides the following information related to its inventory during the month of August 2024: Required: Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 202

> Altira Corporation provides the following information related to its inventory during the month of August 2024: Required: Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2024

> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. Determine each of the following: 1. The specific eight-digit Codification citation (XXX-XX-XX-X) that describes the meaning of cos

> Comfort Company purchased 100 units of inventory on November 17, 2024. The units have a list price of $500 each, but Comfort was given a 30% trade discount. The terms of the sale were 2/10, n/30. Comfort uses a perpetual inventory system. Required: 1. P

> On July 15, 2024, the Niche Car Company purchased 1,000 tires from the Treadwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts. Required: 1. P

> Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May: 1. Specialty Store purchased inventory on account for $5,000. Freight charges of $300 were paid in cash. 2. Specialty Store returned so

> Irwin, Inc. constructed a machine at a total cost of $35 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 10-year life using the sum-of-the-yea

> Halifax Manufacturing allows its customers to return merchandise for any reason and receive a credit to their accounts. All of Halifax’s sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $3

> Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax’s sales are for credit (no cash is collected at the time of sale). The company began 2024

> Harwell Company manufactures automobile tires. On July 15, 2024, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepar

> Harwell Company manufactures automobile tires. On July 15, 2024, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the gross method of accounting for cash discounts. Required: 1. Prep

> Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2024. The units have a list price of $600 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Required: 1. Prepare th

> Parker Inc. has the following cash balances: Required: 1. Prepare the current assets and current liabilities section of Parker’s 2024 balance sheet, assuming Parker reports under U.S. GAAP. 2. Prepare the current assets and current lia

> On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances: During January 2024, the following transactions occur: The following information is available on January 31, 2024. 1. At the end of January, $5,000 of

> At January 1, 2024, Clayton Hoists Inc. owed Third Banc Corp $12 million, under a 10% note due December 31, 2025. Interest was paid last on December 31, 2022. Clayton was experiencing severe financial difficulties and asked Third Banc Corp to modify the

> Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2024 bank statement included the following information: The company&acirc

> Jansen Company’s general ledger showed a checking account balance of $23,820 at the end of May 2024. The May 31 cash receipts of $2,340, included in the general ledger balance, were placed in the night depository at the bank on May 31 and were processed

> In 2024, J J Dishes changed its method of valuing inventory from the FIFO method to the LIFO method. At December 31, 2023, J J’s inventories were $96 million (FIFO). J J’s records were insufficient to determine what inventories would have totaled if dete