The Internet provides a wealth of information concerning long-term liabilities, bond financing, types of bonds, and unique features of bonds. Instructions Search the Internet and learn about the following types of bonds. For each type, briefly summarize what you learned. a. Convertible bonds b. Junk bonds c. Zero-coupon bond
> The following are responsibility income statements for Butterfield, Inc., for the month of March. Instructions: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $10,000 per month
> Home Team Corporation recently hired Steve Willits as its bookkeeper. Mr. Willits is somewhat inexperienced and has made numerous errors recording daily business transactions. Indicate the effects of the errors described as follows on each of the financi
> Schmaltz Industries organized in January and recorded the following transactions during its first month of operations a. Prepare journal entries for each of these transactions. b. Compute the balance of the Cost of Goods Sold account at January 31. c. D
> The Kroger Company is one of the world’s largest supermarket chains. These selected items were adapted from Kroger’s balance sheet as of February 3, 2018. (Dollar amounts are in millions.) Instructions: a. Using this
> Corner Suites began making high-quality office furniture in January. The company’s executive desks are produced in two departments: Cutting and Finishing. Component kits are produced in the Cutting Department and then transferred to the Finishing Departm
> The 2020 annual report of Software City, Inc., included the following comparative summary of earnings per share over the last three years. In 2021, Software City, Inc., declared and distributed a 2-for-1 stock split. Following this distribution of stock
> Freeze, Inc., sells air conditioners. The company has two sales territories, Northern and Southern. Two products are sold in each territory: Economy and Efficiency. During January, the following data are reported for the Northern territory Common fixed
> Frank’s Fun Company owns 30 pizza parlors and a minor league baseball team. During the current year, the company sold three of its pizza parlors and closed another when the lease on the building expired. Should any of these events be classified as discon
> The following are data regarding last year’s production of Dicer Ricer, one of the major products of Kitchen Gadget Company. During the year, 61,000 units of this product were manufactured and 62,100 units were sold. Selected informati
> Refer to the adjusted trial balance of Green Lawns, Inc., illustrated in Exercise 5.2 to respond to the following items. a. Prepare all necessary closing entries at December 31, current year. b. Prepare an after-closing trial balance dated December 31,
> On July 1, Pine Region Dairy leased equipment from Farm America for a period of three years. The lease calls for monthly payments of $2,500 payable in advance on the first day of each month, beginning July 1. Prepare the journal entry needed to record th
> The following information is taken from the current year financial statements of Cardinal Manufacturing Corporation. (Dollar figures and shares of stock are in thousands.) The first three itemsare net of applicable income tax. The loss from continuing op
> Identify three factors that may cause net income to differ from net cash flows from operating activities.
> On October 1, 2021, Jenco signed a four-year, $100,000 note payable to Vicksburg State Bank in conjunction with the purchase of equipment. The note calls for interest at an annual rate of 12Â percent (1 percent per month). The note is fully am
> Easy Writer manufactures an erasable ballpoint pen, which sells for $1.75 per unit. Management recently finished analyzing the results of the company’s operations for the current month. At a break-even point of 40,000 units, the company’s total variable
> Floyd Christianson is the chief executive officer of Morongo Pharmaceuticals. The company has been struggling in recent years to break even and its stock price has been on the decline. The company’s Jacksonville plant manufactures a prescription drug tha
> You can find a large amount of information on the Internet to evaluate the performance of companies. Many firms provide links to this information on their home pages. Access the home page of The Gap, Inc., at www.gapinc.com. Instructions: a. What link
> Explain the accounting principle of revenue recognition.
> Over what period of time the cost of various types of intangible assets should be amortized by regular charges against revenue? (Your answer should be in the form of a principle or guideline rather than a specific number of years.) What method of amortiz
> A large art gallery has in inventory more than 100 paintings. No two are alike. The least expensive is priced at more than $1,000 and the higher-priced items carry prices of $100,000 and more. Which of the four methods of inventory valuation discussed in
> Explain the immediate effects, if any, of each of the following transactions on a company’s earnings per a. Split the common stock 3-for-1. b. Realized a gain from the sale of a discontinued operation. c. Declared and paid a cash dividend on common stock
> During July, jobs no. 103 and 104 were completed, and jobs no. 101, 102, and 104 were delivered to customers. Jobs no. 105 and 106 are still in process at July 31. From this information, compute the following. a. The work in process inventory at June 30
> Wolfe Computer is a U.S. company that manufactures portable personal computers. Many of the components for the computer are purchased abroad, and the finished product is sold in foreign countries as well as in the United States. Among the recent transact
> Refer to Problem 4.4A in the previous chapter. Prepare a 10-column worksheet for Campus Theater dated August 31, current year. At the bottom of your worksheet, prepare a brief explanation keyed to each adjusting entry.
> The balances in the perpetual inventory accounts of Valleyview Manufacturing Corporation at the beginning and end of the current year are as follows. Total dollar amounts debited and credited during the year to the accounts used in recording manufacturi
> Give two examples of unusual and/or infrequent items. How are these items presented in an income statement?
> Mei Co. has a current ratio of 3 to 1. Ono Corp. has a current ratio of 2 to 1. Does this mean that Mei’s operating cycle is longer than Ono’s? Why?
> Ye Lode Bump & Grind, Inc., is an automobile body and fender repair shop. Repair work is done by hand and with the use of small tools. Customers are billed based on time (direct labor hours) and materials used in each repair job. The shopâ€
> The following is a note accompanying a recent financial statement of International Paper Company. Plants, Properties, and Equipment Plants, properties, and equipment are stated at cost, less accumulated depreciation. Expenditures for betterments are capi
> List and briefly explain the two budget philosophies described in the chapter.
> Shown as follows are the amounts from the stockholders’ equity section of the balance sheets of Wasson Corporation for the years ended December 31, 2020 and 2021. a. Calculate the amount of additional investment that the stockholders m
> Some of the accounts appearing in the year-end financial statements of Glaven, Inc., are as follows. This list includes all of the company’s current assets and current liabilities. Instructions: a. Prepare a schedule of the company&aci
> Who might a plant accountant consult with when establishing direct labor quantity or rate standards?
> E-Z Manufacturing Company is a partnership among Yolanda Gonzales, Willie Todd, and Linda Walker. The partnership contract states that partnership profits will be split equally among the three partners. During the current year Gonzales withdrew $25,000,
> Snack Happy makes chocolate brownies. The brownies pass through three production processes: mixing the batter, baking, and packaging. The company uses process costing. The following are data concerning the costs incurred in each process during August, al
> The following information was developed from the financial statements of Donelson, Inc. At the beginning of 2021, the company’s former supplier went bankrupt, and the company began buying merchandise from another supplier. Instructions
> Juan Ramirez and Jimmy Smith are considering forming a partnership to engage in the business of aerial photography. Ramirez is a licensed pilot, is currently earning $48,000 a year, and has $50,000 to invest in the partnership. Smith is a professional ph
> Briefly explain the operation of process costing, including the manner in which the unit costs of finished goods are determined.
> The Sebeka Company reports the following information pertaining to the month of January. During January, the company purchased $60,000 of direct materials and incurred $80,000 of direct labor costs. Total manufacturing overhead costs for the month amoun
> William Nelson, the chief accountant of West Texas Guitar Company, was injured in an automobile accident shortly before the end of the company’s first year of operations. At year-end, a clerk with a very limited understanding of account
> The credit manager of Montour Fuel has gathered the following information about the company’s accounts receivable and credit losses during the current year: Prepare one journal entry summarizing the recognition of uncollectible account
> This exercise stresses the relationships between the information recorded in a periodic inventory system and the basic elements of an income statement. Each of the five lines represents a separate set of information. You are to fill in the missing amount
> The following information was taken from the accounting records of Light Tool Corporation. Overhead assigned to production was $500,000. Compute the amount of the work in process inventory on hand at year-end.
> Doctors Mowtain, Lawrence, and Curley are radiologists living in Yukville, Maine. They realize that many of the state’s small rural hospitals cannot afford to purchase their own magnetic resonance imaging devices (MRIs). The doctors are
> A schedule of the cost of finished goods manufactured is a helpful tool in determining the per-unit cost of manufactured products. Explain several ways in which information about per-unit manufacturing costs is used by (a) management accountants and (b)
> At the end of the year, when closing the books, what is the treatment for immaterial standard variance account balances? What is the treatment for standard variance account balances that are material in amount?
> Canfield Appliance Company is planning to introduce a coffee grinder to its line of small home appliances. Annual sales of the grinder are estimated at 15,000 units at a price of $40 per unit. Variable manufacturing costs are estimated at $18 per unit, i
> I.C. Cream is considering two possible expansion plans. Proposal A involves opening eight stores in northern Alaska at a total cost of $4,000,000. Under another strategy, Proposal B, I.C. Cream would focus on southern Alaska and open five stores for a to
> Jackson Publishing, Inc. (JPI), publishes two newspapers and, until recently, owned a professional baseball team. The baseball team had been losing money for several years and was sold at the end of 2021 to a group of investors who plan to move it to a l
> Listed are the eight activity cost pools used by Charvez Corporation.
> Samba is a popular restaurant located in Brazilton Resort. Management feels that enlarging the facility to incorporate a large outdoor seating area will enable Samba to continue to attract existing customers as well as handle large banquet parties that n
> Early in the year, John Raymond founded Raymond Engineering Co. for the purpose of manufacturing a special flow control valve that he had designed. Shortly after year-end, the company’s accountant was injured in a skiing accident, and n
> Explain the meaning of the term double taxation as it applies to corporate profits.
> Nelson Equipment Company is evaluating two alternative investment opportunities. The controller of the company has prepared the following analysis of the two investment proposals. Items in addition to depreciation may have attributed to differences in th
> During the fiscal year ended December 31, Swanlee Corporation engaged in the following transactions involving notes payable. July 1 borrowed $20,000 from Weston Bank, signing a 90-day, 12 percent note payable. Sept. 16 purchased office equipment from M
> Visit the site at www.iasplus.com/country/useias.htm. a. Name three governments that require companies to prepare their financial reports only in accordance with IFRS in order to list their stocks on the country’s securities markets. b. Name three govern
> Using the information presented in Problem 13.4A, prepare a partial statement of cash flows for the current year, showing the computation of net cash flows from operating activities by the indirect method. Explain why the decline in accounts receivable o
> When evaluating the performance of a manager, why should fixed costs be divided into the categories of controllable costs and committed costs?
> Sea Travel sells motor boats. One of Sea Travel’s most popular models is the Wing. During the current year, Sea Travel purchased 12 Wings at the following costs. On April 28, Sea Travel sold five Wings to the Jack Sport racing team. Th
> The following information was developed from the financial statements of Free Time, Inc. At the beginning of 2021, the company’s former supplier went bankrupt, and the company began buying merchandise from another supplier. Instruction
> The International Organization of Securities Commissions (IOSCO) is a group of top securities administrators from about 50 countries. The Securities and Exchange Commission (SEC) is a member of IOSCO. IOSCO is a primary supporter of the internationalizat
> During the current year, the following credit entries (increases) were posted to the paid-in capital accounts of Crawford Shipyards. Explain the type of cash transaction that probably caused these credit changes, and illustrate the presentation of this
> Why are payments and receipts of interest classified as operating activities rather than as financing or investing activities?
> Early in the year, Jane Jackson founded Jackson Engineering Co. for the purpose of manufacturing a special plumbing device that she had designed. Shortly after year-end, the company’s accountant was injured in an auto accident, and no y
> Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company’s balance sheet as follows. During year 2,
> Gable, Inc., is a provider of home furnishings. The company uses the FIFO inventory method. The following information was taken from the company’s recent financial statements (dollar amounts are in thousands). The financial statements
> Inland Co., has a total of 40,000 shares of common stock outstanding and no preferred stock. Total stockholders’ equity at the end of the current year amounts to $2.5 million, and the market value of the stock is $33 per share. At year-end, the company d
> Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings. On the basis of past experience, the company estimated
> The Home Depot, Inc., financial statements appear in Appendix A at the end of this textbook. Using figures from the income statement and balance sheet, answer the following questions. a. What was the company’s inventory turnover for the most recent year
> The balance sheet items of The Sweet Shop (arranged in alphabetical order) were as follows at the close of the business on September 30, 2021 The transactions occurring during the first week of October were as follows. Instructions: a. Prepare a balanc
> A French furniture maker agrees to purchase wood stain from a U.S. paint manufacturer. If all payments are to be made in U.S. dollars, which company bears the risk of exchange rate gains and losses?
> Jell Stores is considering expanding its operations to include the greater Portsmouth area. Rather than build new stores in Portsmouth, management plans to acquire existing stores and convert them into Jell outlets. Jell is evaluating two similar acquisi
> Boston Bait Shop uses a periodic inventory system. At December 31, year 2, the accounting records include the following information. A complete physical inventory taken at December 31, year 2, indicates merchandise costing $3,000 remains in stock. a. H
> Rodeo Drive Jewelers makes custom jewelry for celebrities. Would you expect the company to use job order or process costing? Explain
> Osage Farm Supply had poor internal control over its cash transactions. Facts about the company’s cash position at November 30 are described as follows. The accounting records showed a cash balance of $35,400, which included a deposit i
> Ivy Blooms sells wreaths and leis. The following is selected per-unit information for these two products. Fixed costs and expenses amount to $97,500 per month. The company generates total sales of $300,000 per month, of which 80 percent result from the
> The cash transactions and cash balances of Banner, Inc., for July were as follows. 1. Banner, Inc.’s account for Cash showed a balance at July 31 of $125,568. 2. The July bank statement showed a closing balance of $114,828. 3. The cash received on July
> CPI sells computer peripherals. At December 31, year 1, CPI’s inventory amounted to $500,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows. CPI has a full
> A summary of the transactions affecting the stockholders’ equity of Riverton Corporation duringthe current year follows. Instructions:a. Prepare a statement of stockholders’ equity for the year. Use these column headi
> For each of the following scenarios, use the current exchange rates from an internet site or other source of your choice to compute the required amount. Round exchange rates to three decimal points. a. A Citroën automobile is advertised in France for 17,
> The following are data regarding last year’s production of Old Joe, one of the major products of Columbus Toy Company. During the year, 50,000 units of this product were manufactured and 51,500 units were sold. Selected information con
> How do the costs of operating service departments (organized as cost centers) appear in a responsibility income statement?
> To maintain a high level of control over production operations and final product quality, what types of globalization activities could a company engage in?
> Distinguish between traceable and common fixed costs. Give an example of each type of fixed cost for an auto dealership with a sales department and a service department.
> Important information concerning a company’s operating performance can be found in its income statement and statement of financial position (balance sheet). Using the search mechanism of your choice, locate the most recent annual report of Martin Mariett
> In a responsibility accounting system, should the recording of revenue and costs begin at the largest areas of responsibility or the smallest? Explain.
> Identify four ratios or other analytical tools used to evaluate profitability. Explain briefly how each is computed.
> Glassware Company is organized into two divisions—etched glass and clear glass. During August, sales for the etched division totaled $7,500,000, and its contribution margin ratio averaged 38 percent. Sales generated by the clear division totaled $6,000,0
> What is meant by the term mutual agency?
> Name three types of transfer prices and explain when each type of transfer price would be used.
> Distinguish among a cost center, a profit center, and an investment center, and give an example of each for a multihospital corporation.
> Assume that you have recently obtained your scuba instructor’s certification and have decided to start a scuba diving school. a. Describe the advantages and disadvantages of organizing your scuba diving school as a 1. Sole proprietorship 2. Corporatio
> Shown as follows is information from the financial reports of Klaus Supermarkets for the past few years. Instructions: a. Calculate the following statistics for Knauss Supermarkets (round your answers to one decimal place). 1. The percentage change in
> Even though transfer prices have no direct effect on a company’s overall net income, these transfer prices still matter to managers of responsibility centers. Explain why.
> You are a loan officer with Third Nebraska Bank. Joe West owns two successful restaurants, each of which has applied to your bank for a $250,000 one-year loan for the purpose of opening a second location. Condensed balance sheets for the two business ent
> Mickey Gillespie is the controller of Print Technologies, a publicly owned company. The company is experiencing financial difficulties and is aggressively looking for ways to cut costs. Suzanne Befell, the CEO, instructs Gillespie to lengthen from 5 to 1
> What amounts are debited to the Finished Goods Inventory account during the year? What amounts are credited to this account? What type of balance (debit or credit) is this account likely to have at year-end?
> Why is the combination of direct labor and manufacturing overhead referred to as a conversion cost?
> What is the purpose of arranging an income statement to show separate amounts for unusual and/or infrequent items and discontinued operations?
> Explain why using cost as a transfer price is inappropriate when the center producing the product is evaluated as a profit center.
