Question: The trial balance before adjustment of Estefan

> As the new staff person in your company’s treasury department, you have been asked to conduct research related to a proposed transfer of receivables. Your supervisor wants the authoritative sources for the following items that are discussed in the securi

> The Flatiron Pub provides catering services to local businesses. The following information was available for The Flatiron for the years ended December 31, 2011 and 2012. Flatiron management is preparing for a meeting with its bank concerning renewal of

> Occidental Petroleum Corporation reported the following information in a recent annual report. Notes to Consolidated Financial Statements Cash and Cash Equivalents. Cash equivalents consist of highly liquid investments. Cash equivalents totaled approxi

> Microsoft is the leading developer of software in the world. To continue to be successful Microsoft must generate new products, which requires significant amounts of cash. Shown below is the current asset and current liability information from Microsoft&

> Go to the book’s companion website and use the information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) What were the cash and cash equivalents reported by Coca-Cola and PepsiCo at the end of 2009?

> The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso. Instructions Refer to P&G’s financial statements and the accompanying notes to answer the following questions.

> On September 30, 2011, Rolen Machinery Co. sold a machine and accepted the customer’s zero-interest-bearing note. Rolen normally makes sales on a cash basis. Since the machine was unique, its sales price was not determinable using Rolen’s normal pricing

> Valasquez Company sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage of the discount by paying within 10 days of t

> Part 1 On July 1, 2012, Wallace Company, a calendar-year company, sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Wallace Company will receive interest at the prevailing rate for a no

> Marvin Company is a subsidiary of Hughes Corp. The controller believes that the yearly allowance for doubtful accounts for Marvin should be 2% of net credit sales. The president, nervous that the parent company might expect the subsidiary to sustain its

> Brubaker Inc., a manufacturer of high-sugar, low-sodium, low-cholesterol frozen dinners, would like to increase its market share in the Sunbelt. In order to do so, Brubaker has decided to locate a new factory in the Panama City, Florida, area. Brubaker w

> As the manager of the accounts receivable department for Beavis Leather Goods, Ltd., you recently noticed that Kelly Collins, your accounts receivable clerk who is paid $1,200 per month, has been wearing unusually tasteful and expensive clothing. (This i

> On July 1, 2012, Moresan Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Moresan will receive interest at the prevailing rate for a note of this type. Both the principal and i

> Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2012. 1. An aging schedule of the accounts receivable as of December 31, 2012, is as follows. 2. The Accounts Receivable control account

> From inception of operations to December 31, 2012, Fortner Corporation provided for uncollectible accounts receivable under the allowance method: provisions were made monthly at 2% of credit sales; bad debts written off were charged to the allowance acco

> Presented below are a series of unrelated situations. 1. Halen Company’s unadjusted trial balance at December 31, 2012, included the following accounts. Halen Company estimates its bad debt expense to be 1½% of net sales

> On January 1, 2012, Botosan Company issued a $1,200,000, 5-year, zero-interest-bearing note to National Organization Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2013 Botosan fell into financial trouble due to increased co

> Bill Jovi is reviewing the cash accounting for Nottleman, Inc., a local mailing service. Jovi’s review will focus on the petty cash account and the bank reconciliation for the month ended May 31, 2012. He has collected the following inf

> Sandburg Company requires additional cash for its business. Sandburg has decided to use its accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following contemplated transactions. 1. On Jul

> On December 31, 2012, Oakbrook Inc. rendered services to Begin Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $20,000 receivable each December 31. An assumed interest ra

> On October 1, 2012, Arden Farm Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of a cash payment Valco Brothers Farm gave Arden a 2-year, $120,000, 8% note (a realistic rate of interest for a note of this type). The

> Consider the following independent situations. (a) Mark Yoders wishes to become a millionaire. His money market fund has a balance of $148,644 and has a guaranteed interest rate of 10%. How many years must Mark leave that balance in the fund in order to

> At the end of 2012, Sorter Company has accounts receivable of $900,000 and an allowance for doubtful accounts of $40,000. On January 16, 2013, Sorter Company determined that its receivable from Ordonez Company of $8,000 will not be collected, and managem

> Sandel Company reports the following financial information before adjustments. Instructions Prepare the journal entry to record bad debt expense assuming Sandel Company estimates bad debts at (a) 1% of net sales and (b) 5% of accounts receivable. D

> Presented below is information from Lopez Computers Incorporated. July 1 Sold $30,000 of computers to Smallwood Company with terms 3/15, n/60. Lopez uses the gross method to record cash discounts. 10 Lopez received payment from Smallwood for the full amo

> On June 3, Bolton Company sold to Arquette Company merchandise having a sale price of $2,000 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $90, terms n/30, was received by Arquette on June 8 from John Booth Transport Service for th

> Your accounts receivable clerk, Mary Herman, to whom you pay a salary of $1,500 per month, has just purchased a new Audi. You decided to test the accuracy of the accounts receivable balance of $117,000 as shown in the ledger. The following information is

> Patriot Company shows a balance of $241,140 in the Accounts Receivable account on December 31, 2012. The balance consists of the following. Installment accounts due in 2013 ……………………………………………………………….……….…… $23,00 Installment accounts due after 2013 ………………

> Presented below are a number of independent situations. Instructions For each individual situation, determine the amount that should be reported as cash. If the item(s) is not reported as cash, explain the rationale. 1. Checking account balance $925,000

> The controller for Weinstein Co. is attempting to determine the amount of cash and cash equivalents to be reported on its December 31, 2012, balance sheet. The following information is provided. 1. Commercial savings account of $600,000 and a commercial

> On December 31, 2012, Conchita Martinez Company signed a $1,000,000 note to Sauk City Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because

> On December 31, 2012, Iva Majoli Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest-bearing note. The note was issued to yield 10% interest. Unfortunately, during 2014, Majoli began to experience financial difficulty. As a

> What are the primary characteristics of an annuity? Differentiate between an “ordinary annuity” and an “annuity due.”

> Aragon Company has just received the August 31, 2012, bank statement, which is summarized below. The general ledger Cash account contained the following entries for the month of August. Deposits in transit at August 31 are $3,800, and checks outstand

> Kipling Company deposits all receipts and makes all payments by check. The following information is available from the cash records. June 30 Bank Reconciliation Balance per bank ………â€

> The petty cash fund of Teasdale’s Auto Repair Service, a sole proprietorship, contains the following. The general ledger account Petty Cash has a balance of $300. Instructions Prepare the journal entry to record the reimbursement of

> McMann, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April. 1. On April 1, it established a petty cash fund in the amount of $200. 2.

> Use the information for Grant Company as presented in E7-20. Grant is planning to factor some accounts receivable at the end of the year. Accounts totaling $10,000 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 5% o

> Presented below is information for Grant Company. 1. Beginning-of-the-year Accounts Receivable balance was $15,000. 2. Net sales (all on account) for the year were $100,000. Grant does not offer cash discounts. 3. Collections on accounts receivable durin

> On December 31, 2011, Hurly Co. performed environmental consulting services for Cascade Co. Cascade was short of cash, and Hurly Co. agreed to accept a $300,000 zero-interest-bearing note due December 31, 2013, as payment in full. Cascade is somewhat of

> On July 1, 2012, Rentoul Inc. made two sales. 1. It sold land having a fair value of $900,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,416,163. The land is carried on Rentoul’s books at a cost of $590,000. 2

> SEK Corp. factors $400,000 of accounts receivable with Mays Finance Corporation on a without recourse basis on July 1, 2012. The receivables records are transferred to Mays Finance, which will receive the collections. Mays Finance assesses a finance char

> Gringo Corporation factors $250,000 of accounts receivable with Winkler Financing, Inc. on a with recourse basis. Winkler Financing will collect the receivables. The receivables records are transferred to Winkler Financing on August 15, 2012. Winkler Fin

> Will Smith will receive $80,000 on December 31, 2017 (5 years from now), from a trust fund established by his father. Assuming the appropriate interest rate for discounting is 12% (compounded semiannually), what is the present value of this amount today?

> Bryant Inc. factors receivables with a carrying amount of $200,000 to Warren Company for $190,000 on a with recourse basis. Instructions The recourse provision has a fair value of $2,000. This transaction should be recorded as a sale. Prepare the approp

> On April 1, 2012, Prince Company assigns $500,000 of its accounts receivable to the Third National Bank as collateral for a $300,000 loan due July 1, 2012. The assignment agreement calls for Prince Company to continue to collect the receivables. Third Na

> Presented below is information related to Sanford Corp. July 1 Sanford Corp. sold to Legler Co. merchandise having a sales price of $10,000 with terms 2/10, net/60. Sanford records its sales and receivables net. 5 Accounts receivable of $12,000 (gross) a

> Puckett, Inc. includes the following account among its trade receivables. Instructions Age the balance and specify any items that apparently require particular attention at year-end. Alstott Co. Cash (#1710) Cash (#2116) Cash (1/1 Balance) Cash (#2

> The chief accountant for Dollywood Corporation provides you with the following list of accounts receivable written off in the current year. Dollywood Corporation follows the policy of debiting Bad Debt Expense as accounts are written off. The chief acc

> Wilton, Inc. had net sales in 2012 of $1,400,000. At December 31, 2012, before adjusting entries, the balances in selected accounts were: Accounts Receivable $250,000 debit, and Allowance for Doubtful Accounts $2,400 credit. If Wilton estimates that 2% o

> The financial statements of General Mills, Inc. report net sales of $12,442,000,000. Accounts receivable are $912,000,000 at the beginning of the year and $953,000,000 at the end of the year. Compute General Mills’s accounts receivable turnover ratio. Co

> Use the information presented in BE7-11 for Arness Woodcrafters but assume that the recourse liability has a fair value of $4,000, instead of $8,000. Prepare the journal entry and discuss the effects of this change in the value of the recourse liability

> On October 1, 2012, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9%. Prepare the Octo

> Presented below are three unrelated situations. (a) Ron Stein Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at

> Use the information from BE7-2, assuming Restin Co. uses the net method to account for cash discounts. Prepare the required journal entries for Restin Co. In BE7-2 Restin Co. uses the gross method to record sales made on credit. On June 1, 2012, it made

> Kraft Enterprises owns the following assets at December 31, 2012. What amount should be reported as cash? Cash in bank-savings account 68,000 Checking account balance 17,000 Cash on hand Postdated checks 9,300 31,400 750 Cash refund due from IRS Ce

> Use the information presented in BE7-15 for Horton Corporation. Prepare any entries necessary to make Horton’s accounting records correct and complete. In BE7-15 Horton Corporation is preparing a bank reconciliation and has identified the following pote

> Finman Company designated Jill Holland as petty cash custodian and established a petty cash fund of $200. The fund is reimbursed when the cash in the fund is at $15. Petty cash receipts indicate funds were disbursed for office supplies $94 and miscellane

> Springsteen Inc. reported in a recent annual report “Restricted cash for debt redemption.” What section of the balance sheet would report this item?

> On January 1, 2012, Lombard Co. sells property for which it had paid $690,000 to Sargent Company, receiving in return Sargent’s zero-interest-bearing note for $1,000,000 payable in 5 years. What entry would Lombard make to record the sale, assuming that

> Because of calamitous earthquake losses, Bernstein Company, one of your client’s oldest and largest customers, suddenly and unexpectedly became bankrupt. Approximately 30% of your client’s total sales have been made to Bernstein Company during each of th

> Indicate which of the following costs should be expensed when incurred. (a) $13,000 paid to rearrange and reinstall machinery. (b) $200,000 paid for addition to building. (c) $200 paid for tune-up and oil change on delivery truck. (d) $7,000 paid to repl

> Capriati Corporation commenced operations in early 2012. The corporation incurred $60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $60,000 expe

> Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $1,0

> Last year, Wyeth Company recorded an impairment on an asset held for use. Recent appraisals indicate that the asset has increased in value. Should Wyeth record this recovery in value?

> Where can authoritative IFRS guidance related to intangible assets be found?

> What is the theoretical justification of the allowance method as contrasted with the direct write off method of accounting for bad debts?

> Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $800,000. The recoverable amount of the division is estimated to

> Use the information in IFRS12-6. Assume that at the end of the year following the impairment (after recording amortization expense), the estimated recoverable amount for the patent is $130,000. Prepare Kenoly’s journal entry, if needed. In IFRS12-6 Keno

> Indicate whether the following items are capitalized or expensed in the current year. (a) Purchase cost of a patent from a competitor. (b) Research costs. (c) Development costs (after achieving economic viability). (d) Organizational costs. (e) Costs inc

> Tanaka Company has land that cost $15,000,000. Its fair value on December 31, 2012, is $20,000,000. Tanaka chooses the revaluation model to report its land. Explain how the land and its related valuation should be reported.

> Treasure Land Corporation incurred the following costs in 2012. Cost of laboratory research aimed at discovery of new knowledge …………………….…….. $120,000 Cost of testing in search for product alternatives ………………………………………..……………. 100,000 Cost of engineering

> Presented below is information related to equipment owned by Pujols Company at December 31, 2012. Cost (residual value $0) …………………………….. $9,000,000 Accumulated depreciation to date …………………. 1,000,000 Value-in-use ……………………………………………….. 5,500,000 Fair value

> Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2010, the company expends $325,000 on a research project, but by the end of 2010, it is impossible to determine whether any ben

> Use the information provided in IFRS12-8. Assume that the recoverable amount of the division is estimated to be $750,000. Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill. In IFRS12-8 Waters Corporation purchased Johnson

> Briefly discuss the convergence efforts that are underway in the area of intangible assets.

> Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for intangible assets.

> What are two methods of recording accounts receivable transactions when a cash discount situation is involved? Which is more theoretically correct? Which is used in practice more of the time? Why?

> The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://corporate.marksandspencer.com/documents/publications/2010/Annual_Report_2010. Instructions Refer to M&S’s financial statem

> Matt Holmes recently joined Klax Company as a staff accountant in the controller’s office. Klax Company provides warehousing services for companies in several European cities. The location in Koblenz, Germany, has not been performing well due to increase

> Companies following international accounting standards are permitted to revalue fixed assets above the assets’ historical costs. Such revaluations are allowed under various countries’ standards and the standards issued

> King Company is contemplating the purchase of a smaller company, which is a distributor of King’s products. Top management of King is convinced that the acquisition will result in significant synergies in its selling and distribution functions. The finan

> The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://corporate.marksandspencer.com/documents/publications/2010/Annual_Report_2010. Instructions Refer to M&S’s financial statem

> In this simulation, you are asked to address questions regarding the accounting for property, plant, and equipment. Prepare responses to all parts. KWW Professional Simulation Time Remaining Property, Plant, and Equipment 1 hour 40 minutes Unspilt S

> In this simulation, you are asked to address questions related to intangible assets and similar costs. Prepare responses to all parts. KWW Professional Simulation I Intangible Assets Time Remaining O hours 40 minutes Unspit Spit Hortz Spi Vertical S

> King Company is contemplating the purchase of a smaller company, which is a distributor of King’s products. Top management of King is convinced that the acquisition will result in significant synergies in its selling and distribution functions. The finan

> Matt Holmes recently joined Klax Company as a staff accountant in the controller’s office. Klax Company provides warehousing services for companies in several midwestern cities. The location in Dubuque, Iowa, has not been performing well due to increased

> In this simulation, you are asked to address questions regarding the accounting for property, plant, and equipment. Prepare responses to all parts. KWW_Professional_Simulation In Property, Plant, and Equipment Time Remaining 1 hour 20 minutes Urspli

> Define a “compensating balance.” How should a compensating balance be reported?

> Presented below are a number of values taken from compound interest tables involving the same number of periods and the same rate of interest. Indicate what each of these four values represents. (a) 6.71008. (b) 2.15892. (c) .46319. (d) 14.48656.

> Electroboy Enterprises, Inc. operates several stores throughout the western United States. As part of an operational and financial reporting review in a response to a downturn in its markets, the company’s management has decided to perform an impairment

> On January 2, 2012, Raconteur Corp. reported the following intangible assets: (1) Copyright with a carrying value of $15,000, and (2) A trade name with a carrying value of $8,500. The trade name has a remaining life of 5 years and can be renewed at nomin

> Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing

> McDonald’s is the largest and best-known global food service retailer, with more than 32,000 restaurants in 118 countries. On any day, McDonald’s serves approximately 1 percent of the world’s populati

> Merck & Co., Inc. and Johnson & Johnson are two leading producers of healthcare products. Each has considerable assets, and each expends considerable funds each year toward the development of new products. The development of a new healthcare prod

> As a new intern for the local branch office of a national brokerage firm, you are excited to get an assignment that allows you to use your accounting expertise. Your supervisor provides you the spreadsheet below, which contains data for the most recent q

> Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) What amount is reported in the balance sheets as property, plant, and equipment (net) of Coca-Cola

> Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) (1) What amounts for intangible assets were reported in their respective balance sheets by Coca-Co

> Durler Company purchased equipment on January 2, 2008, for $112,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $12,000. Durler uses straight-line depreciation on all assets. On January 2, 2012, Durler exchan

> Johnson & Johnson, the world’s leading and most diversified healthcare corporation, serves its customers through specialized worldwide franchises. Each of its franchises consists of a number of companies throughout the world that fo