The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year: Preferred 2% Stock, $100 par (100,000 shares authorized, 80,000 shares issued) …$ 8,000,000 Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000 Common Stock, $5 par (5,000,000 shares authorized, 4,000,000 shares issued) . . .20,000,000 Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,280,000 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,400,000 During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows: a. Issued 200,000 shares of common stock at $12, receiving cash. b. Issued 8,000 shares of preferred 2% stock at $115. c. Purchased 175,000 shares of treasury common for $10 per share. d. Sold 110,000 shares of treasury common for $14 per share. e. Sold 30,000 shares of treasury common for $8 per share. f. Declared cash dividends of $1.25 per share on preferred stock and $0.08 per share on common stock. g. Paid the cash dividends. Instructions: Journalize the entries to record the transactions. Identify each entry by letter.
> The following table summarizes the rules of debit and credit. For each of the items a through l, indicate whether the proper answer is a debit or a credit. Increase Decrease Normal Balance Balance sheet accounts: Asset (a) Credit (b) Liability Stock
> Classify the following items as (a) accrued revenue, (b) accrued expense, (c) unearned revenue, or (d) prepaid expense: 1. A two-year premium paid on insurance policy. 2. Fees earned but not yet received. 3. Fees received but not yet earned. 4. Salary ow
> Why is it important to periodically take a physical inventory when using a perpetual inventory system?
> What is the principal disadvantage of the direct method of reporting cash flows from operating activities?
> The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands): Accounts receivable at May 31, 2015 ………………………………………………… $ 3,358 Inventories at May 31, 2
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia
> Head Donuts Inc. is a retailer of designer headphones, earphones, and hands-free audio devices. Polly Ester, the company president, is reviewing the company’s financial statements after the close of the fiscal year and is troubled that earnings decreased
> The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). Indicate the effect of each error, considered ind
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company's financia
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia
> In teams, select a public company that interests you and is a business that requires inventory. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission
> The following is an excerpt from a conversation between Mark Loomis and Krista Huff. Mark is debating whether to buy a stereo system from Tru-Sound Systems, a locally owned electronics store, or Wholesale Stereo, an online electronics company. Mark: Kris
> Rustic Furniture Co. is owned and operated by Cam Pfeifer. The following is an excerpt from a conversation between Cam Pfeifer and Mitzi Wheeler, the chief accountant for Rustic Furniture Co.: Cam: Mitzi, I’ve got a question about this recent balance she
> Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 20Y3. Suzi is considering a proposal to increase net
> Assume that you are planning to purchase a 55-inch LED, LCD flat-screen television. In groups of three or four, determine the lowest cost for the television, considering the available alternatives and the advantages and disadvantages of each alternative.
> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia
> Each of the following items is shown on the financial statements of Exxon Mobil Corporation (XOM): 1. Accounts payable 2. Cash equivalents 3. Crude oil inventory 4. Equipment 5. Exploration expenses 6. Income taxes payable 7. Investments 8. Long-term deb
> On April 18, 20Y7, Bontanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30, from Whitetail Seed Co. Even though the discount period had expired, Shelby Davey subtracted the discount of $196 when he processed the documents for pay
> Assume that you recently accepted a position with Five Star National Bank & Trust as an assistant loan officer. As one of your first duties, you have been assigned the responsibility of evaluating a loan request for $300,000 from West Gate Auto Co.,
> In teams, access a recent annual report of Zynga (ZNGA) and Wal-Mart (WMT). The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financial statements and accompanying notes. Th
> Delta Air Lines, Inc. (DAL) is a major passenger airline headquartered in the United States. Most Delta passengers purchase their tickets several weeks prior to taking the trip and use a credit card such as VISA or American Express to pay for their ticke
> Lisa Duncan, a junior in college, has been seeking ways to earn extra spending money. As an active sports enthusiast, Lisa plays tennis regularly at the Phoenix Tennis Club, where her family has a membership. The president of the club recently approached
> On January 1, 20Y5, Dr. Marcie Cousins established Health-Wise Medical, a medical practice organized as a corporation. The following conversation occurred the following August between Dr. Cousins and a former medical school classmate, Dr. Avi Abu, at an
> State College requires students to pay tuition each term before classes begin. Students who have not paid their tuition are not allowed to enroll or to attend classes. What journal entry do you think State College would use to record the receipt of the s
> Your friend, Daniel Nat, recently began work as the lead accountant for Asheville Company. Dan prepared the following balance sheet for December 31, 20Y5: Asheville Company Balance Sheet December 31, 20Y5 Assets Land. . . . . . . . . . . . . . . . . . .
> Daryl Kirby opened Squid Realty Co. on January 1, 20Y3. At the end of the first year, the business needed additional capital. On behalf of Squid Realty Co., Daryl applied to Ocean National Bank for a loan of $375,000. Based on Squid Realty Co.’s financia
> Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equipment. The company is under pressure from investors to increase earnings, and the president of the company expects the Accounting Department to “make this happen.” Ma
> For the fiscal year, sales were $46,680,000 and the cost of goods sold was $28,000,000. a. What was the amount of gross profit? b. If total operating expenses were $5,000,000, could you determine net income? c. Is Customer Refunds Payable an asset, liabi
> On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on Decem
> On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on Decem
> Selected data on inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows: Instructions: 1. Determine the estimated cost of the inventory of Jaffe Co. on February 28 by the retail method, presenting details of the computations. 2.
> The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-1B. Problem 6-1B: The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as
> The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-1B. Problem 6-1B: The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as
> Selected transactions for Essex Company during July of the current year are listed in Problem 5-3B. Problem 5-3B: The following were selected from among the transactions completed by Essex Company during July of the current year: Instructions: Journa
> Selected transactions for Niles Co. during March of the current year are listed in Problem 5-1B. Problem 5-1B: The following selected transactions were completed by Niles Co. during March of the current year: Instructions: Journalize the entries to r
> The following selected transactions were completed during April between Swan Company and Bird Company: Instructions: Journalize the April transactions for (1) Swan Company and (2) Bird Company. Apr. 2. Swan Company sold merchandise on account to Bi
> Selected transactions during April between Swan Company and Bird Company are listed in Problem 5-4B. Problem 5-4B: The following selected transactions were completed during April between Swan Company and Bird Company: Instructions: Journalize the ent
> The Signage Company specializes in the maintenance and repair of signs, such as billboards. On March 31, 20Y6, the accountant for The Signage Company prepared the trial balances shown at the top of the following page. Instructions: Journalize the seven
> Identify the errors in the following trial balance. All accounts have normal balances. Ensemble Co. Unadjusted Trial Balance For the Year Ending December 31, 20Y8 Debit Balances Credit Balances Cash 42,900 ...... Accounts Receivable. 123,500 Prepaid
> Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 20Y8, follows: The following business transactions were completed by Valley Realty during August 20Y8: Enter the following
> The financial statements at the end of Atlas Realty’s first month of operations follow: Instructions: By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (r). Atl
> Tech Support Services has the following unadjusted trial balance as of January 31, 20Y5: The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was overstated by $8,000. b. A cash receipt
> On April 1, 20Y8, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April: a. Opened a business bank account with a deposit of $24,000 in exchange for common stock. b. Paid rent on office and equipment
> Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations: For preparing the adjusting entries, the following data were assembled: •
> The following information about the payroll for the week ended December 30 was obtained from the records of Saine Co.: Tax rates assumed: Social security, …………â€
> Ken Jones, an architect, organized Jones Architects on April 1, 20Y2. During the month, Jones Architects completed the following transactions: a. Transferred cash from a personal bank account to an account to be used for the business in exchange for comm
> Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows: Instructions: Journalize the transactions. 9. Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split
> Campbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1. Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is payable semiannually on December
> An accountant prepared the following post-closing trial balance: Prepare a corrected post-closing trial balance. Assume that all accounts have normal balances and that the amounts shown are correct. Security Services Co. Post-Closing Trlal Balance
> On July 1, 20Y1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the c
> Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is payable semiannually on December 3
> On July 1, 20Y1, Danzer Industries Inc. issued $50,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $43,768,920. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the
> The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.: Tax rates assumed: Instructions: 1. Assuming that the payroll for the last week of the year is to be paid on December 31, journaliz
> The following items were selected from among the transactions completed by Sherwood Co. during the current year: Instructions: 1. Journalize the transactions. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of th
> The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining balance method of depreciation is used. Instructions: Journalize
> Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes: Instructions: 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying
> Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales vo
> The following transactions were completed by Irvine Company during the current fiscal year ended December 31: Instructions: 1. Record the January 1 credit balance of $26,000 in a T account for Allowance for Doubtful Accounts. 2. Journalize the transact
> Selected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows: Instructions: 1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the c
> (a). What is the difference between liquidity and solvency? (b). What is the difference between working capital and the current ratio?
> The beginning inventory for Midnight Supplies and data on purchases and sales for a three month period are shown in Problem 6-1A. Problem 6-1A: The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending
> The beginning inventory for Midnight Supplies and data on purchases and sales for a three month period are shown in Problem 6-1A. Problem 6-1A: The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending
> Selected transactions during August between Summit Company and Beartooth Co. are listed in Problem 5-4A. Problem 5-4A: The following selected transactions were completed during August between Summit Company and Beartooth Co.: Instructions: Journaliz
> Selected transactions for Babcock Company during November of the current year are listed in Problem 5-3A. Problem 5-3A: The following were selected from among the transactions completed by Babcock Company during November of the current year: Instruct
> Selected transactions for Betz Company during July of the current year are listed in Problem 5-1A. Problem 5-1A.: The following selected transactions were completed by Betz Company during July of the current year: Instructions: Journalize the entries
> The following selected transactions were completed during August between Summit Company and Beartooth Co.: Instructions: Journalize the August transactions for (1) Summit Company and (2) Beartooth Co. Aug. 1. Summit Company sold merchandise on acc
> The following selected transactions were completed by Betz Company during July of the current year: Instructions: Journalize the entries to record the transactions of Betz Company for July. July 1. Purchased merchandise from Sabol Imports Co., $20,
> Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 20Y8, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of
> Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On June 30, 20Y6, the end of the current year, the accountant for Good Note prepared the following trial balances: Instructions: Journalize the sev
> Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 20Y3, follows: The following business transactions were completed by Elite Realty during April 20Y3: Enter the following tr
> The dividend yield of Suburban Propane Partners, L.P. (SPH) was 7.7% in a recent year, and the dividend yield of Alphabet Inc. (GOOG) was 0% in the same year. What might explain the difference between these ratios?
> The financial statements at the end of Wolverine Realty’s first month of operations are as follows: Instructions: By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through
> The Lexington Group has the following unadjusted trial balance as of May 31, 20Y6: The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was overstated by $7,000. b. A cash receipt of $8
> On August 1, 20Y9, Brooke Kline established Western Realty. Brooke completed the following transactions during the month of August: a. Opened a business bank account with a deposit of $35,000 in exchange for common stock. b. Purchased supplies on accoun
> Trident Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations: For preparing the adjusting entries, the following data were assembled: • Fees ear
> Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions: a. Issued common stock to Marjorie Knaus in exchange for $30,000. b. Paid January rent for office and wo
> On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April: a. Opened a business bank account with a deposit of $60,000 in exchange for common stock. b. Purchased
> Marriott International, Inc. (MAR), and Hyatt Hotels Corporation (H) are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year (i
> Deere & Company (DE) manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division loans money to customers to finance the purchase
> The following table shows the stock price, earnings per share, and dividends per share for Alphabet Inc. (GOOG), PepsiCo, Inc. (PEP), and Caterpillar Inc. (CAT) for a recent year: 1. For each company, determine the: a. Price-earnings ratio. Round to th
> The condensed income statements through operating income for Amazon.com, Inc. (AMZN), Best Buy Co., Inc. (BBY), and Wal-Mart Stores, Inc. (WMT), for a recent fiscal year follow (in millions): 1. Prepare comparative common-sized income statements for ea
> Installment notes require equal periodic payments. a. What is included in each periodic payment? b. Does the periodic interest expense on an installment note increase or decrease over the life of the note?
> The Priceline Group Inc. (PCLN) is a leading provider of online travel reservation services, including brand names Priceline, KAYAK, and Open Table. Selected cash flow information from the statement of cash flows for three recent years is as follows (in
> AT&T Inc. (T) is a leading global provider of telecommunication services. Facebook, Inc. (FB) is a major worldwide social media company. AT&T has a lengthy history and was founded by Alexander Graham Bell. Facebook has a short history and was fou
> Aeropostale, Inc. (AROPQ) is a specialty retailer of casual apparel and accessories for teens. Recently, the company declared bankruptcy to provide financial protection while attempting to reorganize its operations. Annual report information for the thre
> Financial information for Apple Inc. (AAPL), The Coca-Cola Company (KO), and Verizon Communications (VZ) follows (in millions): a. Compute the free cash flow for each company. b. Compute the ratio of free cash flow to sales for each company. Round to o
> Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Best Buy Co., Inc. (BBY) is a leading retailer of consumer electronics and media products in the United States, while Wal-Mart Stores, Inc. (WMT) is the leading retailer in th
> BB&T Corporation (BBT) and Regions Financial Corporation (RF) are large regional banking companies. The net income and average common shares outstanding for both companies were reported in recent financial reports as follows (in millions): a. Deter
> Caterpillar Inc. (CAT) is the world’s leading manufacturer of construction and mining equipment. In addition, Birinyi Associates identified Caterpillar as one of the top five companies to repurchase its own shares in a recent year.12 Th
> Pacific Gas and Electric Company (PCG) is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric are as follows (in millions): a. Determine the earnings per share
> Bank of America Corporation (BAC) and Wells Fargo & Company (WFC) are two large financial services companies. The following data (in millions) were taken from a recent year’s financial statements for both companies: a. Compute the
> Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Wal-Mart (WMT) is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and
> What is the nature of (a) a credit memo issued by the seller of merchandise, (b) a debit memo issued by the buyer of merchandise?
> Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y5, were as follows: Unemployment tax rates: State unemployment …………&a
> Hilton Worldwide Holdings, Inc. (HLT) and Marriott International, Inc. (MAR) are two of the largest hotel operators in the world. Selected financial information from recent income statements for both companies follows (in millions): a. Compute the time
> Aeropostale, Inc. (ARO) is a specialty fashion retailer targeting young adults. The income before income tax expense and interest expense for four recent years follow (in millions): a. Compute the times interest earned ratio for each year. Round to one
> The Clorox Company (CLX) and The Procter & Gamble Company (PG) produce and sell packaged consumer products around the world. Income and interest expense information from financial statements for a recent year follows (in millions): a. Compute the t
> Stores, Inc. (WMT) is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the internet, while Amazon sells only through the internet. Interest expen
