The partnership of Robo and Swing, CPAs, reported revenues of $215,000 and expenses of $80,000 on their year-end work sheet. Their capital balances as of January 1, 20--, were $55,000 for I. Robo and $45,000 for B. Swing. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $65,000 for Robo and $35,000 for Swing, the partners each withdrew their full 10% interest allowances on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 45–55 basis. REQUIRED 1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20--, showing the division of the partnership net income for the year. 2. Prepare a statement of partners’ equity for the year ended December 31, 20--, and the partners’ equity section of the balance sheet on that date. 3. Prepare closing entries for the partnership as of December 31, 20--. (For simplicity, use the account titles “Revenues” for all revenues and “Expenses” for all expenses.)
> The income statement for Hubbard’s Professional Edge Tennis Camp follows. Assume that all revenues and expenses were for cash and that land was sold for $500. There were no other investing or financing activities during the year. The Ca
> After adjusting net income for changes in current assets and current liabilities, Penguin Tuxedo’s cash from operating activities is $45,000. However, Penguin reports $12,500 in depreciation expense for the year. Compute cash from operating activities af
> Brady Company reported net income of $30,000 for 20-2. The December 31 balances of the current assets and current liabilities are shown below. Compute cash provided by operating activities. 20-2 20-1 Accounts Receivable Merchandise Inventory Accounts
> Olsen Company’s balance sheets as of December 31, 20-2 and 20-1, showed the following with regard to cash and cash equivalents: Compute the amount of change in cash and cash equivalents and indicate whether it represented an increase or
> Why is it necessary to distinguish between business assets and liabilities and nonbusiness assets and liabilities of a single proprietor?
> Refer to Problem 23-9A. The following additional information was obtained from Zowine’s financial statements and auxiliary records for the year ended December 31, 20-2: Acquired a new warehouse……
> The following activities took place during the current year. Indicate whether each activity is a cash inflow (+) or cash outflow (–), and whether it is an operating activity (O), an investing activity (I), or a financing activity (F). (a) Proceeds from c
> Bunkichi Corporation issued the following bonds at a premium: Date of issue and sale: ………………………………………………………………. March 1, 20-1 Principal amount: ……………………………………………………………………………. $800,000 Sale price of bonds: ………………………………………………………………………………….. 103 Denominati
> Ito Co. issued the following bonds: Date of issue and sale: ……………………………………………………………. April 1, 20-1 Principal amount: ………………………………………………………………………. $300,000 Sale price of bonds: ……………………………………………………………………………. 100 Denomination of bonds: …………………………………………………
> M. J. Adams Corporation pays $40,000 into a bond sinking fund each year for the future redemption of bonds. At the end of the first year, earnings on the sinking fund are $3,200. When the bonds mature, there is a balance in the sinking fund of $301,800,
> Mutschelknaus Manufacturing sold bonds at a discount for $290,000 (discount of $10,000) seven years ago. (a) The corporation redeems $25,000 of this issue at 97. The unamortized discount is $350. (b) The corporation redeems $30,000 of this issue at 99. T
> Brighton Unlimited sold bonds at a premium for $630,000 (premium of $30,000) eight years ago. (a) The corporation redeems $60,000 of this issue at 98. The unamortized premium is $600. (b) The corporation redeems $90,000 of this issue at 102. The unamorti
> Levesque Lumber Co. issued $800,000 in bonds at face value 10 years ago and has paid semiannual interest payments through the years. (a) Assume the bonds are redeemed at face value. (b) Assume that $80,000 of the bonds are redeemed at 104. (c) Assume tha
> Brenner’s Home Club issued the following bonds at a discount: Date of issue and sale: …………………………………………… April 1, 20-1 Principal amount: ……………………………………………………… $500,000 Sale price of bonds: ……………………………………………………………. 98 Denomination of bonds: ……………………………………
> Ramos Travel Co. issued the following bonds at a premium: Date of issue and sale: …………………………………………………. April 1, 20-1 Principal amount: …………………………………………………………….. $600,000 Sale price of bonds: …………………………………………………………………. 104 Denomination of bonds: ……………………
> What are the three basic phases of the accounting process?
> Cline & Co. issued the following bonds at a discount: Date of issue and sale: …………………………………………………... April 1, 20-1 Principal amount: …………………………………………………………... $500,000 Sale price of bonds: …………………………………………………………………... 98 Denomination of bonds: ………………………
> Plantation Company issued the following bonds at a premium: Date of issue and sale: …………………………………………………………………… March 1, 20-1 Principal amount: …………………………………………………………………………………. $700,000 Sale price of bonds: ………………………………………………………………………………………. 103 Denomina
> Emerald, Inc., issued the following bonds at a discount: Date of issue and sale: …………………………………………………… April 1, 20-1 Principal amount: …………………………………………………………… $500,000 Sale price of bonds: …………………………………………………………………… 97 Denomination of bonds: ………………………………
> D&E Stamps issued the following bonds: Date of issue and sale: ……………………………….... April 1, 20-1 Principal amount: ……………………………………….……$400,000 Sale price of bonds: ……………………………………….............. 100 Denomination of bonds: ……………………………………… $1,000 Life of bonds
> During the year ended December 31, 20--, Choi Company completed the following transactions: Apr. 15 Declared a semiannual dividend of $1.50 per share on preferred stock and $0.40 per share on common stock to shareholders of record on May 5, payable on Ma
> During the year ended December 31, 20-2, Bebeto Company completed the following selected transactions: Apr. 15 Estimated that its 20-2 income tax will be $30,000. Based on this estimate, it will make four quarterly payments of $7,500 each on April 15, Ju
> McGregor Company had the following balances and results for the current calendar year: Retained earnings, January 1 ……………………………… $60,000 Cash dividends declared …………………………………………. 5,000 Net income for the year …………………………………….…. 20,000 Prepare a statemen
> On October 2, 20-1, the board of directors of Fox worth Company appropriated $80,000 of retained earnings for the purpose of buying a new sailboat (used for entertaining clients). On July 15, 20-2, the sailboat was purchased and the board of directors de
> Goldstein Company has 100,000 shares of $10 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare a memorandum entry in the general journal indicating the new par value and the total number of outstan
> Kaufman Company currently has 200,000 shares of $1 par common stock outstanding. On March 15, a 10% stock dividend was declared to shareholders of record on April 2, distributable on April 14. Market value of the common stock was estimated at $5 per shar
> Name a source document that provides information about each of the following types of business transactions: a. Cash payment b. Cash receipt c. Sale of goods or services d. Purchase of goods or services
> Wang Company currently has 200,000 shares of $1 par common stock outstanding and 3,000 shares of $50 par preferred stock outstanding. On July 10, the board of directors declared a semiannual dividend of $0.30 per share on common stock to shareholders of
> Adriana Company had a net income of $130,000 and paid cash dividends of $26,000 for 20--. Overman Company had a net loss of $25,000 and distributed a 10% stock dividend with a market value of $15,000. 1. Prepare the journal entries for Adriana as of Dece
> Track Town Co. had the following transactions involving intangible assets: Jan. 1 Purchased a patent for leather soles for $10,000 and estimated its useful life to be 10 years. Apr. 1 Purchased a copyright for a design for $15,000 with a life left on the
> Mineral Works Co. acquired a salt mine at a cost of $1,700,000. The estimated number of units available for production from the mine is 3,400,000 tons. (a) During the first year, 200,000 tons are mined and sold. (b) During the second year, 600,000 tons a
> On January 1, 20--, Glover Company’s retained earnings accounts had the following balances: Appropriated for land acquisition ………... $ 60,000 Unappropriated retained earnings ………... 900,000
> On January 1, 20--, MacMillan Company’s retained earnings accounts had the following balances: Appropriated for warehouse ………...………... 80,000 Unappropriated retained earnings ………...... 600,000 $680,000 During the year ended December 31, 20--, MacMillan
> Stanton Company estimates that its 20-1 income tax will be $80,000. Based on this estimate, it will make four quarterly payments of $20,000 each on April 15, June 15, September 15, and December 15. 1. Prepare the journal entry for April 15. 2. Assume tha
> Nash & Roth formed a corporation and had the following organization costs and stock transactions during the year: June 30 Incurred the following costs of incorporation: Incorporation fees ………... $ 800 Attorneys’ fees ………... 9,000 Promotion fees ………... 8,
> Juneau & Associates had the following stock transactions during the year: (a) Received subscriptions for 100,000 shares of $1 par common stock for $105,000. (b) Received subscriptions for 5,000 shares of $15 par, 8% preferred stock for $80,000. (c) Recei
> Kris Kraft Stores had the following stock transactions during the year: (a) Issued 8,000 shares of no-par common stock with a stated value of $5 per share for $40,000 cash. (b) Issued 6,000 shares of no-par common stock with a stated value of $5 per shar
> Trace the flow of accounting information through the accounting system.
> Hernandez Company had the following stock transactions during its first 5 years of operations: (a) Issued 25,000 shares of $1 par common stock for $25,000 cash. (b) Issued 20,000 shares of $1 par common stock for $22,000 cash. (c) Issued 2,000 shares of
> After closing its books on December 31, Pro Parts’ stockholders’ equity accounts had the following balances: Common stock subscriptions receivable ………...………...………... $ 5,000 Common stock, $5 par, 12,000 shares ………...………...………...... 60,000 Preferred sto
> Smith & Cline had the following stock transactions during the year: (a) Issued 5,000 shares of common stock with a $5 par value in exchange for real estate (land) with a fair market value of $27,500. (b) Issued 7,500 shares of common stock with a $5 par
> The following independent stock transactions occurred during January 20-- for various corporations: (a) Issued 6,000 shares of $10 par common stock for $60,000 cash. (b) Issued 4,000 shares of $10 par common stock for $52,000 cash. (c) Issued 5,000 share
> Situation 1: Nguyen Company has the following stock outstanding: The amount available for dividends this year is $57,000. Prepare the dividend allocation between the preferred and common shares in total and per share. Situation 2: Bell Company has th
> Mitchell Parts Co. had the following plant asset transactions during the year: 1. Assets discarded or sold: Jan. 1 Motor #12, which had a cost of $2,800 and accumulated depreciation of $2,800, was discarded. 8 Motor #8, which had a cost of $4,400 and acc
> After closing its books on December 31, 20—, Jackson Corporation’s stockholders’ equity accounts had the following balances: REQUIRED Prepare the stockholders’ equity section of the
> B&B Electric decided to incorporate and has incurred the following costs of organizing: Incorporation fees $ ………... 400 Attorneys’ fees ………... 4,800 Promotion expenses ………... 5,700 Prepare the entry for the payment of these organization costs for cash o
> After several years of operations, the partnership of Baldwin, Cowan, and Stewart is to be liquidated. After making closing entries on June 30, 20--, the following accounts remain open: The noncash assets are sold for $250,000. Profits and losses are sha
> The Kelly and Kelly Wrecking Company, a partnership, operates a general demolition business. Ownership of the company is divided among the partners, Mike Kelly, Kim Kelly, Larry Dennis, and Jim Wheeles. Profits and losses are shared equally. The books ar
> Explain the five steps required when posting the journal to the ledger.
> On July 1, 20--, Susan Woodworth and Barbara Holly combined their two businesses to form a partnership under the firm name of Woodworth and Holly. The balance sheets of the two sole proprietorships are shown below and on the next page. The balance sheets
> On liquidation of the partnership of J. Hui and K. Cline, as of November 1, 20--, inventory with a book value of $180,000 is sold for $230,000. Given that Hui and Cline share profits and losses equally, prepare the entries for the sale and the allocation
> Jeff Bowman and Kristi Emery, who have ending capital balances of $100,000 and $60,000, respectively, agree to admit two new partners to their business on August 18, 20--. Dan Bridges will buy one fifth of Bowman’s capital interest for $30,000 and one-fo
> Ronica Kluge and Sam Edwards formed a partnership on May 1, 20-1. Kluge contributed $120,000 and Edwards contributed $50,000. During the year, Kluge contributed an additional $30,000. The partnership agreement states that Kluge is to receive $35,000 and
> Danny Spurlock and Tracy Wilson decided to form a partnership on July 1, 20-1. Spurlock invested $100,000 and Wilson invested $25,000. For the fiscal year ended June 30, 20-2, a net income of $80,000 was earned. Determine the amount of net income that Sp
> LOSS After several years of operations, the partnership of Nelson, Pope, and Williams is to be liquidated. After making closing entries on March 31, 20--, the following accounts remain open: The noncash assets are sold for $230,000. Profits and losses ar
> Patty McShane and Betty Lou Blixt agreed on September 1 to go into business as partners. According to the agreement, McShane is to contribute $55,000 cash and Blixt is to contribute $80,000 cash. Provide a separate journal entry for the investment of eac
> Equipment records for Johnson Machine Co. for the year follow. Johnson Machine uses the straight-line method of depreciation. In the case of assets acquired by the fifteenth day of the month, depreciation should be computed for the entire month. In the c
> A machine is purchased January 1 at a cost of $59,000. It is expected to produce 130,000 units and have a salvage value of $3,000 at the end of its useful life. Units produced are as follows: Year 1 10,000 Year 2 8,000 Year 3 12,000 Year 4 16,000 Year 5
> Identify the three types of ownership structures and discuss the advantages and disadvantages of each.
> A machine is purchased January 1 at a cost of $59,000. It is expected to serve for eight years and have a salvage value of $3,000. REQUIRED 1. Prepare a schedule showing depreciation for each year and the book value at the end of each year using the fol
> Prepare the following entries using a general journal: 1. A coal mine was acquired at a cost of $1,500,000 and estimated to contain 6,000,000 tons of ore. During the year, 100,000 tons were mined and sold. Prepare the journal entry for the year’s depleti
> Prepare the entries for the following transactions using a general journal: 1. Discarding an asset. (a) On January 4, shelving units, which had a cost of $6,400 and had accumulated depreciation of $5,900, were discarded. (b) On June 15, a hand cart, whic
> Prepare the entries for the following transactions for Stepanski’s Food Mart using a general journal: 1. Replaced the checkout computer in Checkout Stand A for $3,500 cash. The computer is part of the checkout stand. The replacement is expected to extend
> The truck purchased in Exercise 18-2A is expected to be used for 100,000 miles over its eight-year useful life. Exercise 18-2A: A light truck is purchased on January 1 at a cost of $35,000. It is expected to serve for eight years and have a salvage va
> A light truck is purchased on January 1 at a cost of $35,000. It is expected to serve for eight years and have a salvage value of $5,000. Calculate the depreciation expense for the first and third years of the truck’s life using the following methods: 1.
> On January 1, 20-1, two flight simulators were purchased by a space camp for $77,000 each with a salvage value of $5,000 each and estimated useful lives of eight years. On January 1, 20-2, the hydraulic system for Simulator A was replaced for $6,000 cash
> Consider the following list of expenditures and indicate whether each would be debited to Land, Building, or Equipment as part of the cost to purchase these assets. Place a check mark in the appropriate column.
> At the end of the year, the following interest is payable, but not yet paid. Record the adjusting entry in the general journal. Interest on $5,000, 60-day, 7% note (for 12 days) $11.67 Interest on $2,500, 30-day, 8% note (for 9 days) 5.00 $16.
> Prepare general journal entries for the following transactions: July 15 Borrowed $5,000 cash from the bank, giving a 60-day non-interest-bearing note. The note is discounted 8% by the bank. Sept. 13 paid the $5,000 note, recognizing the discount as inter
> What is a franchise? Name a franchise you have visited.
> Describe four possible types of comparisons that may be made in financial statement analysis.
> Prepare general journal entries for the following transactions: May 1 Purchased $5,000 worth of equipment from a supplier on account. June 1 Issued a $5,000, 30-day, 6% note in payment of the account payable. July 1 Paid $500 cash plus interest to the su
> At the end of the year, the following interest is earned, but not yet received. Record the adjusting entry in a general journal. Interest on $4,000, 90-day, 7% note (for 15 days) Interest on $7,000, 60-day, 6% note (for 18 days) $11.67
> Prepare general journal entries for the following transactions: Apr. 6 Received a 120-day, 6% note in payment for accounts receivable balance of $3,000. 26 Discounted the note at a rate of 7%. May 3 Received a 30-day, 7% note in payment for accounts rece
> Prepare general journal entries for the following transactions: Jan. 16 Received a 30-day, 6% note in payment for merchandise sale of $20,000. Feb. 15 Received $100 (interest) on the old (January 16) note; the old note is renewed for 30 days at 7%. Mar.
> Determine the due date for the following notes. (Assume there are 28 days in February.) Date of Note Term of Note Due Date August 12 September 1 90 days 60 January 3 March 18 120 88 June 11 May 17 200 38
> Using 360 days as the denominator, calculate interest for the following notes using the formula I = P × R × T. Principal Rate Time Interest $5,000 6.00% 30 days 1,000 7,50 60 4,500 8.00 120 950 6.80 95 1,250 7.25 102 2,900 7
> Milo Radio Shop had the following notes payable transactions: Apr. 1 Borrowed $5,000 from Builder’s Bank, signing a 90-day, 8% note. 5 Gave a $2,000, 60-day, 7% note to Breaker Parts Co. for purchase of merchandise. 10 Paid $500 cash and gave a $1,500, 3
> The following is a list of outstanding notes receivable as of December 31, 20--: REQUIRED 1. Compute the accrued interest at the end of the year. 2. Prepare the adjusting entry in the general journal. Principal $1,000 Maker Date of Note Interest Ter
> Marienau Suppliers had the following transactions: Mar. 1 Sold merchandise on account to G. Perez $5,000. 20 G. Perez gave a $5,000, 90-day, 6% note to extend time for payment. 30 G. Perez’s note is discounted at Commerce Bank at a discount rate of 8%. A
> J. K. Pratt Co. had the following transactions: 20-1 July 20 received a $750, 30-day, 5% note from J. Akita in payment for sale of merchandise. Aug. 19 J. Akita paid note issued July 20 plus interest. 25 Sold merchandise on account to L. Beene, $1,100. S
> Identify the six major steps of the accounting process and explain each step.
> Calculate total time in days for the following notes. (Assume there are 28 days in February.) Date of Note Due Date Time in Days May 4 August 17 July 5 December 11 July 17 October 1 September 5 February 5 May 16 March 24 January 6 March 18
> At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yang’s Gift Shop was $30,000. Credit sales for the year were $355,200. REQUIRED Make the necessary adjusting entry in general journal form under each
> Pyle Nurseries used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--: Feb. 9 Received 60% of the $4,000 balance owed by Wiley’s Waterworks, a bankrupt business, and
> Como’s Music Store uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form: 20-1 May 8 wrote off $1,745 owed by Vickie Lawrence, who has no assets. July 15 Wrote off $1,300 owed
> Maria Rivera, owner of Rivera Pharmacy, uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form: July 20 Wrote off $2,325 owed by Joe Balouka, who has no assets. Oct. 15 Wrote o
> At the end of the current year, the accounts receivable account of Glenn’s Nursery Supplies has a debit balance of $390,000. Credit sales are $2,800,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated
> Julia Alvarez, owner of Alvarez Rentals, uses the allowance method in accounting for uncollectible accounts. Record the following transactions in general journal form: July 7 wrote off $5,350 owed by Randy Dalzell, who has no assets. Aug. 12 wrote off $2
> Brito’s Hundai Sales and Service estimates the amount of uncollectible accounts using the percentage of receivables method. Based on aging the accounts, it is estimated that $4,500 will not be collected. Record the end-of-period adjusting entry on Decemb
> Rossin’s Racers has total credit sales for the year of $280,000 and estimates that 3% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume
> The trial balance after one month of operation for Mason’s Delivery Service as of September 30, 20--, is shown below. Data to complete the adjustments are as follows: (a) Supplies inventory as of September 30, $90. (b) Insurance expired
> Name and define the six major elements of the accounting equation.
> Prepare the entry for each of the following transactions, using the (a) cash basis, (b) modified cash basis, and (c) accrual basis of accounting. 1. Purchase supplies on account. 2. Make payment on asset previously purchased. 3. Purchase supplies for
> The partially completed work sheet from the books of Lewis Music Store, a business owned by Hugo Lewis, for the year ended December 31, 20--, is shown on page 554. REQUIRED 1. Analyze the work sheet and determine the adjusted trial balance and the adjus
> Williams & Hendricks Distributors uses the direct write-off method in accounting for uncollectible accounts. 20-1 Feb. 18 Sold merchandise on account to Merry Merchants, $17,500. Mar. 22 Sold merchandise on account to Utter Unicorns, $14,300. June 3 Rece
> An analysis of the accounts receivable of Johnson Company as of December 31, 20--, reveals the following: REQUIRED 1. Prepare an aging schedule as of December 31, 20--, by adding the following column to the three columns shown above: Estimated Amount Unc
> Updike owns a department store that has a $50,000 balance in Accounts Receivable and a $2,500 credit balance in Allowance for Doubtful Accounts. 1. Determine the net realizable value of the accounts receivable. 2. Assume that an account receivable in the
> Use the work sheet and financial statements prepared in Problem 15-8A. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $3,800. REQUIRED Prepare the following financial ratios: (a) Working capital (b) Current ratio (c)
> Paulson’s Pet Store completed the work sheet on page 602 for the year ended December 31, 20--. Owner’s equity as of January 1, 20--, was $21,900. The current portion of Mortgage Payable is $500. REQUIRED 1. Prepare a multiple-step income statement. 2. P
