Question: The following data (in millions) were taken

> The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $15,750. The bank statement indicated a balance of $31,095 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the record

> The following procedures were recently implemented by Wind Rivers Clothing Co.: a. Each cashier is assigned a separate cash register drawer to which no other cashier has access. b. All sales are rung up on the cash register, and a receipt is given to the

> Boston Scientific Corporation (BSX) is a competitor of Kips Bay Medical (MBA 5-3). It was organized in 1979 and also develops, produces, and sells medical devices. The following data (in thousands) were adapted from Boston Scientific&acirc

> For the year ending March 31, 20Y5, Omega Systems Inc. reported net income of $105,450 and paid dividends of $7,500. Comparative balance sheets as of March 31, 20Y5 and 20Y4, are as follows: Instructions: 1. Prepare a statement of cash flows, using the

> Selected accounts and related amounts for Prescott Inc. for the fiscal year ended September 30, 20Y8, are presented in Problem 4-4. Instructions: 1. Prepare a single-step income statement in the format shown in Exhibit 8. 2. Prepare a sta

> The following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8: Instructions: 1. Prepare a multiple-step income statement. 2. Prepare a statement of stockhold

> The following selected transactions were completed during June between Snipes Company and Beejoy Company June 8. Snipes Company sold merchandise on account to Beejoy Company, $18,250, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold w

> The following selected transactions were completed by Affordable Supplies Co., which sells supplies primarily to wholesalers and occasionally to retail customers. Jan. 6. Sold merchandise on account, $14,000, terms FOB shipping point, n/eom. The cost of

> The following selected transactions were completed by Epic Co. during August of the current year: Aug. 3. Purchased merchandise on account for $33,400, terms FOB destination, 2/10, n/30. 9. Issued debit memorandum for $2,500 ($2,450 net of 2% discount) f

> Adjustment data for Ms. Ellen’s Laundry Inc. for the year ended December 31, 20Y8, are as follows: a. Wages accrued but not paid at December 31, $2,150 b. Depreciation of equipment during the year, $12,500 c. Laundry supplies on hand at

> At the end of May, the first month of operations, the following selected data were taken from the financial statements of Julie Mortenson, Attorney at Law, P.C.: In preparing the financial statements, adjust

> Data for San Mateo Health Care for January are provided in Problems 3-1, 3-2, and 3-3. Instructions: 1. Prepare a statement of cash flows for January. 2. Reconcile the net cash flows from operating activities with the net income for January. Data fro

> Data for San Mateo Health Care for January are provided in Problems 3-1 and 3-2. Instructions: Prepare an income statement, statement of stockholders’ equity, and a classified balance sheet for January. The note payable is due in ten years. Data from P

> Kips Bay Medical Inc. is a medical device company that develops, produces, and sells products used in coronary surgery. The following data (in thousands) were adapted from recent financial statements. 1. Compute the monthly cash expenses

> Adjustment data for San Mateo Health Care Inc. for January are as follows: 1. Insurance expired, $900. 2. Supplies on hand on January 31, $1,200. 3. Depreciation on building, $2,300. 4. Unearned rent revenue earned, $3,000. 5. Wages owed employees but no

> San Mateo Health Care Inc. is owned and operated by Rachel Fields, the sole stockholder. During January 20Y6, San Mateo Health Care entered into the following transactions: Jan. 1 Received $27,000 from Hillard Company as rent for the use of a vacant of&i

> The financial statements at the end of Network Realty, Inc.’s first month of operations are shown below. By analyzing the interrelationships among the financial statements, fil

> Starwood Hotels & Resorts Worldwide Inc. (HOT) and Wyndham Worldwide Corporation (WYN) are two major owners and managers of lodging and resort properties in the United States. Financial data (in millions) for a recent year for the two companies are a

> Harley-Davidson, Inc. (HOG), is a leading motorcycle manufacturer in the United States. The company manufactures and sells a number of different types of motorcycles, a complete line of motorcycle parts, and brand-related accessories, clothing, and colle

> The condensed income statements through operating income for Apple Inc. and Best Buy Co. Inc. (BBY) are reproduced below for recent fiscal years (numbers in millions of dollars). Prepare comparative common-sized statements, rounding perc

> Thornby Inc. completed its fiscal year on December 31. The auditor, Kim Holmes, has approached the CFO, Brad Potter, regarding the year-end receivables and inventory levels of Thornby Inc. The following conversation takes place: Kim: We are beginning our

> Assume that the president of Elkhead Brewery made the following statement in the Annual Report to Shareholders: “The founding family and majority shareholders of the company do not believe in using debt to finance future growth. The founding family learn

> You hold a 30% common stock interest in the family-owned business, a vending machine company. Your sister, who is the manager, has proposed an expansion of plant facilities at an expected cost of $6,000,000. Two alternative plans have been suggested as m

> Padget Home Services began its operations on January 1, 20Y7 (see Problem 2-3). After its second year of operations, the following amounts were taken from the accounting records of Padget Home Services, Inc., as of December 31, 20Y8. Instructions: 1. P

> Living Smart Inc. has decided to expand its operations to owning and operating long-term health care facilities. The following is an excerpt from a conversation between the chief executive officer, Mark Vierra, and the vice president of finance, Jolin Kil

> Sahara Unlimited Inc. began operations on January 2, 20Y4, with the issuance of 250,000 shares of $8 par common stock. The sole stockholders of Sahara Unlimited Inc. are Karina Takemoto and Dr. Noah Grove, who organized Sahara Unlimited Inc. with the obj

> Altria Group, Inc., has a note dedicated to describing contingent liabilities in its recent financial statements. This note includes extensive descriptions of multiple contingent liabilities. Go to the Web site http://www.sec.gov/edgar/searchedgar/company

> Jas Carillo was discussing summer employment with Maria Perez, president of Valparaiso Construction Service: Maria: I’m glad that you’re thinking about joining us for the summer. We could certainly use the help. Jas: Sounds good. I enjoy outdoor work, an

> The following is an excerpt from a conversation between the chief executive officer, Kim Jenkins, and the chief financial officer, Steve Mueller, of Quatro Group Inc.: Kim: Steve, as you know, the auditors are coming in to audit our year-end financial stat

> Go to the Internet and review the procedures for applying for a patent, a copyright, and a trademark. One Internet site that is useful for this purpose is www .idresearch.com. Prepare a written summary of these procedures.

> You are planning to acquire an asset for use in your business. In groups of three or four, use the Internet to research some factors that should be considered in deciding whether to purchase or lease an asset. Summarize the considerations you have identi

> Einstein Construction Co. specializes in building replicas of historic houses. Bree Andrus, president of Einstein Construction, is considering the purchase of various items of equipment on July 1, 20Y2, for $300,000. The equipment would have a useful lif

> The following is an excerpt from a conversation between two employees of Linquest Technologies, Don Corbet and Rita Shevlin. Don is the accounts payable clerk, and Rita is the cashier. Don: Rita, could I get your opinion on something? Rita: Sure, Don. Do

> Rowel Baylon, CPA, is an assistant to the controller of Arches Consulting Co. In his spare time, Rowel also prepares tax returns and performs general accounting services for clients. Frequently, Rowel performs these services after his normal working hour

> The following amounts were taken from the accounting records of Padget Home Services, Inc., as of December 31, 20Y7. Padget Home Services began its operations on January 1, 20Y7. Instructions: 1. Prepare an income statement for the year ending December

> The following is an excerpt from a conversation between Evan Eberhard, the warehouse manager for Greenbriar Wholesale Co., and its accountant, Marty Hayes. Greenbriar operates a large regional warehouse that supplies produce and other grocery products to

> Mitchell Co. is experiencing a decrease in sales and operating income for the fiscal year ending December 31, 20Y1. Gene Lumpkin, controller of Mitchell Co., has suggested that all orders received before the end of the fiscal year be shipped by midnight, D

> The following is an excerpt from a conversation between the office manager, Terry Holland, and the president of Northern Construction Supplies Co., Janet Austel. Northern Construction Supplies sells building supplies to local contractors. Terry: Janet, we

> Sybil Crumpton, vice president of operations for Bob Marshall Wilderness Bank, has instructed the bank’s computer programmer to use a 365-day year to compute interest on depository accounts (payables). Sybil also instructed the programmer to use a 360-da

> Select a business in your community and observe its internal controls over cash receipts and cash payments. The business could be a bank or a bookstore, restaurant, department store, or other retailer. In groups of three or four, identify and discuss the

> The records of Clairemont Company indicate an August 31, 20Y1 cash balance of $6,675, which includes under posited receipts for August 30 and 31. The cash balance on the bank statement as of August 31 is $5,350. This balance includes a note of $3,000 plu

> Javier Meza and Sue Quan are both cash register clerks for Healthy Markets. Ingrid Perez is the store manager for Healthy Markets. The following is an excerpt of a conversation between Javier and Sue: Javier: Sue, how long have you been working for Heal

> The following is an excerpt from a conversation between the store manager of La Food Grocery Stores, Amy Locke, and Steve Meyer, president of La Food Grocery Stores. Steve: Amy, I’m concerned about this new scanning system. Amy: What’s the problem? Steve

> The following is an excerpt from a conversation between two sales clerks, Tracy Rawlin and Jeff Weimer. Both Tracy and Jeff are employed by Magnum Electronics, a locally owned and operated electronics retail store. Tracy: Did you hear the news? Jeff: Wha

> Your sister operates Harbor Ready Parts Company, an online boat parts distributorship that is in its third year of operation. The income statement is shown below and was recently prepared for the year ended October 31, 20Y6. Your sister is considering

> James Nesbitt established Up-Date Computer Services on August 1, 20Y4. The effect of each transaction and the balances after each transaction for August are shown below in the integrated financial statement framework. Instructions: 1. Pre

> The following is an excerpt from a conversation between Eric Jackson and Carlie Miller. Eric is debating whether to buy a stereo system from First Audio, a locally owned electronics store, or Dynamic Sound Systems, an online electronics company. Eric: Ca

> The Laurel Co. is owned and operated by Paul Laurel. The following is an excerpt from a conversation between Paul Laurel and Maria Fuller, the chief accountant for Laurel Co. Paul: Maria, I’ve got a question about this recent balance sheet. Maria: Sure,

> On July 29, 20Y1, Ever Green Company, a garden retailer, purchased $12,000 of seed, terms 2/10, n/30, from Fleck Seed Co. Even though the discount period had expired, Mary Jasper subtracted the discount of $240 when she processed the documents for paymen

> Cigna Corp. (CI) provides insurance services, and Deere & Company (DE) manufactures and sells farm and construction equipment. The following data (in millions) were adapted from recent financial statements of each company. 1. Compute

> Assume that you and two friends are debating whether to open an automotive and service retail chain that will be called Auto-Mart. Initially, Auto-Mart will open three stores locally, but the business plan anticipates going nationwide within five years. C

> Several years ago, your brother opened Ready Appliance Repairs. He made a small initial investment and added money from his personal bank account as needed. He withdrew money for living expenses at irregular intervals. As the business grew, he hired an a

> The following is an excerpt from a conversation between Monte Trask and Jamie Palk just before they boarded a flight to Berlin on American Airlines. They are going to Berlin to attend their company’s annual sales conference. Monte: Jamie, aren’t you takin

> Yahoo.com’s (YHOO) finance Internet site provides summary financial information about public companies, such as stock quotes, recent financial filings with the Securities and Exchange Commission, and recent news stories. Go to Yahoo.com’s financial Web site

> Amazon.com (AMZN), an Internet retailer, was incorporated in the early 1990s and opened its virtual doors on the Web shortly thereafter. On its statement of cash flows, would you expect Amazon.com’s net cash ï¬&#

> Les Stanley established an insurance agency on July 1, 20Y5, and completed the following transactions during July: a. Opened a business bank account in the name of Stanley Insurance Inc., with a deposit of $60,000 in exchange for common stock. b. Borrowe

> On August 1, 20Y7, Dr. Ruth Turner established SickCo, a medical practice organized as a professional corporation. The following conversation occurred the following February between Dr. Turner and a former medical school c lassmate, Dr. Shonna Rees, at a

> Enron Corporation, headquartered in Houston, Texas, provided products and services for natural gas, electricity, and communications to wholesale and retail customers. Enron’s operations were conducted through a variety of subsidiaries a

> Assume that you are considering developing a nationwide chain of women’s clothing stores. You have contacted a Seattle-based firm that specializes in financing new business ventures and enterprises. Such firms, called venture capital firms, finance new busine

> On January 9, 20--, Dr. Susan Tempkin established DocMed, a medical practice organized as a professional corporation. The below conversation took place the following September between Dr. Tempkin and a former medical school classmate, Dr. Phil Anzar, at

> Assume that you are the chief executive officer for a national poultry producer. The company’s operations include hatching chickens through the use of breeder stock and feeding, raising, and processing the mature chicks into finished products. The finished

> Loretta Smith, president and owner of Custom Enterprises, applied for a $250,000 loan from City National Bank. The bank requested financial statements from Custom Enterprises as a basis for granting the loan. Loretta has told her accountant to provide the

> The management of The Hershey Company (HSY) has asked union workers in two of its highest-cost Pennsylvania plants to accept higher health insurance premiums and take a wage cut. The workers’ portion of the insurance cost would double from 6% of the prem

> a. Why is it advantageous to have a high inventory turnover? b. Is it possible for the inventory turnover to be too high? Discuss. c. Is it possible to have a high inventory turnover and a high days’ sales in inventory? Discuss.

> A company that grants terms of n/30 on all sales has a yearly accounts receivable turnover, based on monthly averages, of 9. Is this a satisfactory turnover? Discuss.

> Why would the accounts receivable turnover ratio be different between Wal-Mart (WMT) and Procter & Gamble (PG)?

> Alpine Realty, Inc., organized July 1, 20Y8, is operated by Angela Griffin. How many errors can you find in the following financial statements for Alpine Realty, Inc., prepared after its first m

> For Belzer Corporation, the working capital at the end of the current year is $24,000 more than the working capital at the end of the preceding year, reported as follows: Has the current position improved? Explain. Preceding Year Current Year Curre

> How would you respond to a horizontal analysis that showed an expense increasing by over 70%?

> The current year’s amount of net income (after income tax) is 9% larger than that of the preceding year. Does this indicate an improved operating performance? Discuss.

> Why would the dividend yield differ significantly from the return on common stockholders’ equity?

> a. Why is the return on stockholders’ equity by a thriving business ordinarily higher than the return on total assets? b. Should the return on common stockholders’ equity normally be higher or lower than the return on total stockholders’ equity? Explain.

> a. How does the return on total assets differ from the return on stockholders’ equity? b. Which return is normally higher? Explain.

> What do the following data taken from a comparative balance sheet indicate about the company’s ability to borrow additional funds on a long-term basis in the current year as compared to the preceding year? Current Year Preceding Ye

> What is the difference between horizontal and vertical analysis of financial statements?

> Delta Air Lines (DAL)’ SkyMiles program allows frequent flyers to earn credit toward free tickets and other amenities. a. Does Delta Air Lines have a contingent liability for award redemption by its SkyMiles members? b. When should a contingent liability

> a. Does the recognition of depreciation in the accounts provide a special cash fund for the replacement of fixed assets? Explain. b. Describe the nature of depreciation as the term is used in accounting.

> Pendray Systems Corporation began operations on January 1, 20Y5 as an online retailer of computer software and hardware. The following financial statement data were taken from Pendray’s records at the end of its first year of operations, December 31, 20Y5.

> Are the amounts at which fixed assets are reported on the balance sheet their approximate market values as of the balance sheet date? Discuss.

> For some of the fixed assets of a business, the balance in Accumulated Depreciation is exactly equal to the cost of the asset. (a) Is it permissible to record additional depreciation on the assets if they are still useful to the company? Explain. (b) Whe

> a. Under what conditions is the use of an accelerated depreciation method most appropriate? b. Why is an accelerated depreciation method often used for income tax purposes? c. What is the Modified Accelerated Cost Recovery System (MACRS), and under what

> After the accounts are adjusted at the end of the fiscal year, Accounts Receivable has a balance of $475,000 and Allowance for Doubtful Accounts has a negative balance of $(46,800). Describe how Accounts Receivable and Allowance for Doubtful Accounts are

> How are manufacturing inventories different from those of a retailer?

> In an attempt to improve operating efficiency, one employee was made responsible for all purchasing, receiving, and storing of supplies. Is this organizational change wise from an internal control standpoint? Explain

> Why should the responsibility for a sequence of related operations be divided among different persons? Explain.

> Seatow Inc. has a petty cash fund of $2,500. (a) Since the petty cash fund is only $2,500, should Seatow Inc. implement controls over petty cash? (b) What controls, if any, could be used for the petty cash fund?

> (a) Why did Congress pass the Sarbanes Oxley Act? (b) What was the purpose of the Sarbanes Oxley Act?

> What are the major advantages and disadvantages of the single-step form of the income statement compared to the multiple-step form?

> The following cash data for the year ended December 31 were adapted from a recent annual report of Alphabet (GOOG), formerly known as Google. The cash balance as of January 1 was $18,347 (in millions). In millions Payments on debt ……………………………………

> Pacira Pharmaceuticals Inc. (PCRX) develops, produces, and sells products used in hospitals and surgery centers. The following data (in thousands) were adapted from recent financial statements. 1. Compute the monthly cash expenses for Years 1 and 2. Ro

> What is the nature of (a) a credit memorandum issued by the seller of merchandise and (b) a debit memorandum issued by the buyer of merchandise?

> What is the meaning of (a) 2/10, n/30; (b) n/90; (c) n/eom?

> Describe how the periodic method differs from the perpetual method of accounting for merchandise inventory.

> Is the Supplies balance before the accounts have been adjusted the amount that should normally be reported on the balance sheet? Explain.

> How are revenues and expenses reported on the income statement under (a) the cash basis of accounting and (b) the accrual basis of accounting?

> Describe the nature of the assets that compose the following sections of a balance sheet: (a) current assets, (b) property, plant, and equipment.

> (a) Explain the purpose of the accounts Depreciation Expense and Accumulated Depreciation. (b) Is it customary for the balances of the two accounts to be equal? (c) In what financial statements, if any, will each account appear?

> Would AT&T and Microsoft use the cash basis or the accrual basis of accounting? Explain.

> Assume that Larsh Realty Inc. borrowed $75,000 from Country Bank and Trust. In recording the transaction, Larsh erroneously recorded the receipt as an increase in cash, $75,000, and an increase in fees earned, $75,000. (a) How would this error affect the

> Assume that Esquire Consulting erroneously recorded the payment of $30,000 of dividends as salary expense. (a) How would this error affect the equality of the accounting equation? (b) How would this error affect the income statement, statement of stockho