Vince Ventures Company reported an opening balance of $925,000 in its allowance for uncollectible accounts. Vince Ventures determined that a $57,500 account due from Ric Associates was uncollectible. Prepare the journal entry to write off the Ric account assuming that Vince Ventures uses the allowance method.
> Circle City Transportation made the following expenditures for its fleet during the current year: oil changes, $2,000; filter changes, $5,000; tire rotations, $3,000; engine overhauls, $15,000; and retrofitting vehicles to function as party buses, $40,00
> IFRS. Repeat BE11-5 assuming that Mariah Corporation reports under IFRS. Data from BE11-5:
> Mariah Corporation is constructing a new wind power-generating facility. Construction began on January 2 and was completed on December 31 of the current year. Mariah made the following expenditures during the year: To specifically finance the project, M
> Assume that Springfield Foods, Inc. acquired a custom-made refrigeration system by issuing a $1,500,000, 10-year, noninterest-bearing note payable at a time when the market interest rate for similar debt instruments was 5%. The asset and the note do not
> Holman Enterprises acquired three different pieces of furniture and equipment for its newly renovated office. The bulk purchase from Wonder Technologies, Inc. included the following assets and corresponding retail prices: office furniture, $1,800; an int
> At the beginning of its fiscal year, Beau Co. leased office space for a 20-year period. Prior to occupying the office, Beau needed to make renovations costing $750,000 with an expected useful life of 15 years. The renovations are to be recorded as leaseh
> Use the same information in BE11-19 and assume that Dimension Pharmaceuticals is an IFRS reporter. Prepare the journal entry required to record Dimension’s research expenditures for the year. Assume that projects developed by planning and design consulta
> Determine the amount and type of financing component in the following contracts. a. Payment of $1,500,000 occurs two years after delivery when the interest rate is 8%. b. Payment of $1,500,000 occurs two years before delivery when the interest rate is 8%
> Tarpley, Inc. acquired land for $400,000. The closing costs amounted to $11,000, and the firm paid $7,250 for the current period’s property taxes at the end of the year. Tarpley plans to build a new storage facility on the land costing $2,350,000. To pre
> Dimension Pharmaceuticals paid cash for the following to fund its research activities: testing materials and supplies, $600,000; research consultants, $100,000; planning and design consultants, $135,000; and general-purpose laboratory equipment, $950,000
> Repeat the requirements of BE11-17 assuming that the acquisition cost was $7,000,000. Data from BE11-17: On January 1, Buckingham Brothers acquired 100% of Julian Systems for $12,000,000. The book value of Julian’s net assets on the date of acquisition
> On January 1, Buckingham Brothers acquired 100% of Julian Systems for $12,000,000. The book value of Julian’s net assets on the date of acquisition was $7,000,000. However, a detailed appraisal of Julian’s net assets revealed that its net assets were und
> Chalko Candy Corporation purchased the trademark for the popular Yummm Candy Bar from the YumYum Company. At the same time, Chalko also purchased YumYum’s customer list. Chalko paid the total purchase price of $750,000 in cash. Chalko’s valuation consult
> For each intangible asset listed below, identify whether it is typically a finite-life intangible asset, an indefinite-life intangible asset, or other
> Greene Corp. updated its fleet of trucks, scrapping old gas-guzzling trucks for new hybrid vehicles. It took its old trucks to the scrap yard and received $0. The fleet of trucks scrapped originally cost $190,000 and their current carrying value is $24,0
> Kobas Kookies, Inc. acquired an oven for its baking operations on June 10 of the current year at a total cost of $384,000. It estimates that the oven has a 16-year useful life with no scrap value. Assume that Kobas uses the half-month convention by which
> IFRS. Using the data from BE11-9, compute the depreciation for the first 2 years and determine the net book value at the end of the second year assuming that Hermit Associates is an IFRS reporter that identifies the casing and engine as significant compo
> Using the data from BE11-9, compute the depreciation expense for the first 2 years and determine the net book value at the end of the second year assuming that Hermit Associates uses the double-declining balance method. Data from BE11-9: Hermit Associa
> Sellet Billboard Company entered into an agreement to display billboard advertising for Wynne Incorporated for 10 months for a $60,000 fixed fee. The agreement also includes a potential bonus based on certain goals. Sellet believes the following probabil
> Using the data from BE11-9, compute the depreciation expense for the first 2 years and determine the net book value at the end of the second year (assume that Hermit Associates uses the units-of-output depreciation method). The machine’s total output is
> Haply, Inc. incurred the following expenditures when acquiring a new assembly machine: Additionally, Haply sold its old assembly machine for $500. What is the acquisition cost of the new assembly machine?
> Source Enterprises reports the following inventory information for the current year. Compute the ending inventory and the cost of goods sold under the LIFO perpetual basis.
> Best Stores is considering a change in its inventory valuation method. The company currently uses the FIFO method and may want to change to the LIFO method. Inventory information for the current year follows. Cost of goods sold under the LIFO basis is $
> Perry Manufacturing Company provided the following information regarding its inventory transactions for the current year. Determine the ending inventory and cost of goods sold that Perry should report assuming that the firm uses the moving-average cost
> Using the information provided in BE10-5, assume that Spider uses the LIFO method. Determine Spider’s ending inventory and cost of goods sold under the LIFO perpetual basis. Data from BE10-5:
> Spider Incorporated provided the following information regarding its inventory for the current year. Determine Spider’s ending inventory and cost of goods sold under the FIFO perpetual basis.
> Use the same information for BE10-3 but assume that Sueco Retailers uses the net method to account for its inventory purchases. What is its cash payment and reduction of inventory on October 25? What is the amount of accounts payable after the October 25
> On October 16, Sueco Retailers bought 80 parkas on account at $75 each. Terms of the purchase were 2/10, n/30. It paid for 60 parkas on October 25 and paid for the remaining 20 parkas on November 15. If Sueco uses the gross method to account for its inve
> Complete the following table to find the ending inventory under the Dollar Value LIFO retail inventory method. Round percentages to two decimal places.
> Sellet Billboard Company entered into an agreement to display bill board advertising for Highlife Incorporated for 10 months for a $60,000 fixed fee. The agreement also includes a potential $6,000 bonus based on certain goals. Sellet estimates that it is
> Complete the following table to find the ending inventory under the Dollar Value LIFO Retail Inventory Method. Round percentages to two decimal places.
> A tornado severely damaged one of Down Town Dig’s retail clothing stores, destroying all the inventory in the store. Down Town Dig’s ending store inventory last year was $109,500. Its net purchases were $672,600, and net sales were $1,279,800 during the
> Sammi Company needs to determine the amount of inventory in its warehouse at the time that an earthquake destroyed it. Sammi’s gross profit percentage averaged 28% over the last three years. Sammi began the current year with inventory of $657,400. Its ne
> Big B Stores uses the conventional retail method to value its ending inventory. The following information relates to Big B’s inventory at both cost and retail for the current year. Compute Big B’s ending inventory for
> BE10-18, now assume that Sarat Boot is an IFRS. reporter. Determine the ending inventory value per unit using the lower-of-cost-or-market rule assuming that Sarat Boot uses the group-by-group approach to LCM. Assume the company uses FIFO. Data From Be10
> Emmy Company uses a periodic inventory system. On December 31, 2018, Emmy counts its inventory and determines that it has $72,000 of inventory on hand. On December 31, 2017, inventory was $106,000. Emmy made inventory purchases totaling $78,000 during th
> Using the information in BE10-18, now assume that Sarat Boot uses FIFO for inventory costing purposes. Determine the ending inventory value per unit using the lower-of-cost-or-market rule assuming that Sarat Boot uses the group-by-group approach to LCM.
> Sarat Boot Company manufactures two types of boots—rain boots and snow boots. Information related to both products is presented in the following table. Determine the ending inventory value per unit using the lower-of-cost-or-market rul
> IFRS. Using the facts in BE10-15, assume that Count Clothing has 2,000 units of its Stain Resistant model in stock a year later when the net realizable value has increased to $230. What is the reversal of the inventory write-down, if any? Assume the comp
> IFRS. Using the information in BE10-15, prepare the journal entry to record the write-down to market for the Stain Resistant model under both the direct and indirect methods. Assume that Count Clothing has 3,500 units of the Stain Resistant model in stoc
> Using the information provided in BE8-5, determine the bonus using the most-likely-amount approach. Ignore any constraints on variable consideration. Data from BE8-5:
> IFRS. Using the information in BE10-13, now assume that Count Clothing is an IFRS reporter. Determine the ending inventory value per unit and the amount of any write-downs per unit using the lower-of-cost-or-market rule assuming that Count Clothing uses
> sing the information in BE10-13, prepare the journal entry to record the writedown to market for the Stain Resistant model under both the direct and indirect methods. Assume that Count Clothing has 3,500 units of the Stain Resistant model in stock. Data
> Count Clothing Company manufactures two types of raincoats—Regular and Stain Resistant. Information related to both products is presented in the following table. Determine the ending inventory value per unit and the amount of any write
> Using the information provided in BE10-11, prepare the journal entry required to adjust Todgren’s ending inventory from a FIFO to a dollar-value LIFO basis. Data from BE10-11: Todgren Incorporated adopted the dollar-value LIFO method last year. Last yea
> Todgren Incorporated adopted the dollar-value LIFO method last year. Last year’s ending inventory was $56,400 with a price index of 1.0. The ending inventory for the current year at year-end (FIFO) costs is $96,000 and the price index is 1.2. Based on th
> Using the information provided in BE10-9, determine whether there is a LIFO liquidation. Data from BE10-9:
> Complete the following inventory disclosure: At the end of 2019 and 2018, inventories were composed of:
> Ciano Landscaping Company uses the allowance method to account for its uncollectible accounts. Three years ago, it wrote off a $40,000 account due from Haber Incorporated. Haber paid this account in full on June 30 of the current year. Prepare the journa
> Grotto Products, Inc. reported an opening balance in the allowance for doubtful accounts of $560,000. During the year, the company determined that a $23,000 receivable due from Zeer Company was uncollectible. Prepare the journal entry to write off the Ze
> Gear Garage Inc. enters into a contract to provide services totaling $80,000. The contract includes a potential performance bonus based on when Gear Garage completes the services. Gear Garage estimates the following scenarios for completion. Determine th
> On July 1, Oura Corp. made a sale of $450,000 to Stratus, Inc. on account. Terms of the sale were 2/10, n/30. Stratus makes payment on July 29. Oura uses the most-likely-amount method and assumes that the customer will take the discount when accounting f
> On July 1, Oura Corp. made a sale of $450,000 to Stratus, Inc. on account. Terms of the sale were 2/10, n/30. Stratus makes payment on July 9. Oura uses the most-likely-amount method and assumes that the customer will take the discount when accounting fo
> On July 1, Gillette Corp. made a sale of $650,000 to Huck, Inc. on account. Terms of the sale were 2/5, n/30. Huck makes payment on July 29. Gillette uses the expected value method assuming that there is an 80% chance that the customer will not take the
> On July 1, Willette Corp. made a sale of $650,000 to Luc, Inc. on account. Terms of the sale were 2/10, n/30. Luc makes payment on July 29. Willette uses the most likely-amount method and assumes that the customer will not take the discount when accounti
> Identify and discuss at least four features of an effective system of internal controls over cash receipts and disbursements.
> Identify whether the following internal control procedures relate to cash receipts or cash disbursements
> Complete the following lettered items representing the disclosures of trade accounts receivables from Cheris Corp.’s notes to the financial statements. Note 7. Trade Receivables
> Foster Technologies, Inc., provides specialized network solutions for companies in the financial services industry. During the current year, Foster completed a network project for Hextel Communications. The fair value of the project is not determinable.
> What is the fundamental principle underlying the measurement of revenue?
> What is the fundamental principle underlying the timing of revenue recognition?
> Using the information provided in BE9-19, prepare the journal entries to record the sale, the accrued interest revenue, and the full collection at maturity assuming that the sale date was September 1, 2016, and the note was due on March 31, 2017. Data f
> What are the primary issues involved in revenue recognition?
> Does a firm acquiring a long-lived operating asset by issuing a note payable record the finance charges and asset value separately? Explain.
> For a long-lived operating asset acquired by issuing a note payable, do firms measure the initial carrying value of the asset by the face value of the note? Explain.
> Should firms value multiple assets acquired in a lump-sum purchase separately? Explain
> Can firms combine the cost of acquiring land and land improvements in a single “land” account on the balance sheet? Explain.
> Will the expense/capitalization choice impact asset valuation, income measurement, and total cash flows?
> Explain the accounting for exploration costs associated with natural resources
> How does a company record natural resources?
> When can an IFRS-reporting firm recognize a gain on a nonmonetary exchange?
> When can a firm recognize a gain on a nonmonetary exchange?
> On July 1, Willette Corp. made a sale of $650,000 to Luc, Inc. on account. Terms of the sale were 2/10, n/30. Luc makes payment on July 9. Willette uses the most likely-amount method and assumes that the customer will not take the discount when accountin
> Perfect Party Company contracts with a customer to provide its birthday party package, including a cake, balloons, and musical entertainment. In addition, Perfect Party will host the event. Perfect Party commonly offers the musical entertainment when it
> In a nonmonetary exchange, does a firm record the new asset acquired at the book value of the asset given up in the transaction? Explain
> Are all intangibles reported in a single line on the balance sheet? Explain.
> What is included in an asset’s acquisition cost?
> Do all intangible assets require amortization? Why or why not?
> Does legal life take precedence over the economic life when amortizing a finite-life intangible asset? Explain.
> How do companies select the method of amortization for finite-life intangible assets?
> What is acquired in-process research and development and how is it recorded?
> When can a company capitalize research and development costs?
> When can a company report goodwill?
> What is goodwill and how is it recorded?
> Welk Associates sold a piece of equipment to Convey Company on June 1, 2016, for $800,000. Welk agreed to accept a 7-month, 7% note with interest due on its maturity date, December 31, 2016. Welk prepares financial statements only at its calendar year-en
> How do firms record the gain from a bargain purchase?
> Do firms initially record internally created intangibles at cost?
> How can intangible assets pose some significant valuation problems? Does the determination of useful life for an intangible asset pose a valuation problem? Explain.
> What should the total acquisition cost of a long-lived operating asset include?
> What is the intangible-asset goodwill?
> What is a finite-life intangible asset?
> What is an indefinite-life intangible asset?
> Differentiate between a leasehold and a leasehold improvement.
> Distinguish between a tangible and an intangible asset.
> Does an intangible asset have a finite or indefinite life? Explain.
> Using the information provided in BE9-17, prepare the journal entry to record Nicks Incorporated’s sale of accounts receivable to FF assuming that the receivables are factored with recourse and can be reported as a sale. The estimated recourse liability
> Does an intangible asset have a finite or indefinite life? Explain.
> How do you calculate a gain or loss on the sale of a plant asset?
> Will a firm recognize a loss on the income statement if a plant asset is either abandoned or damaged by a casualty?
> Under IFRS, when depreciating an asset, do managers have to estimate the useful life and salvage value for all components of the asset? Explain.
