What are two common methods used when accepting deposits for credit card and debit card transactions?
> ABC Corporation’s accounting records include the following items, listed in no particular order, at December 31, 2018: The income tax rate for ABC Corporation is 39%. Prepare ABC’s income statement for the year ended
> Decor and More Imports recently reported the following stockholders’ equity: Suppose Decor and More split its common stock 2-for-1 in order to decrease the market price per share of its stock. The company’s stock was
> Nelly, Inc. had 320,000 shares of $2 par value common stock issued and outstanding as of December 15, 2018. The company is authorized to issue 1,300,000 common shares. On December 15, 2018, Nelly declared a 40% stock dividend when the market value for Ne
> Element Water Sports has 13,000 shares of $1 par value common stock outstanding. Element distributes a 5% stock dividend when the market value of its stock is $15 per share. Requirements: 1. Journalize Element’s declaration of the stock dividend on Augu
> Copperhead Trust has the following classes of stock: Requirements: 1. Copperhead declares cash dividends of $44,000 for 2018. How much of the dividends goes to preferred stockholders? How much goes to common stockholders? 2. Assume the preferred stock
> The balance sheet of Cullins Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity: During 2018, Cullins completed the following selected transactions: Requirements: 1. Record the transactions
> Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, $120,000) and a $0.25 per share cash dividend on its common stock (50,000 shar
> Discount Furniture, Inc. completed the following treasury stock transactions in 2018: Requirements: 1. Journalize these transactions. Explanations are not required. 2. How will Discount Furniture, Inc. report treasury stock on its balance sheet as of D
> Colorado Corporation has two classes of stock: common, $3 par value; and preferred, $30 par value. Requirements: 1. Journalize Colorado’s issuance of 4,500 shares of common stock for $6 per share. 2. Journalize Colorado’s issuance of 4,500 shares of pre
> Due to recent beef recalls, Southwest Steakhouse is considering incorporating. Bob, the owner, wants to protect his personal assets in the event the restaurant is sued. Requirements: 1. Which advantage of incorporating is most applicable? What are other
> Boston Cycles started October with 12 bicycles that cost $42 each. On October 16, Boston bought 40 bicycles at $68 each. On October 31, Boston sold 34 bicycles for $100 each. Requirements: 1. Prepare Boston Cycle’s perpetual inventory record assuming th
> What does the disclosure principle require?
> Taylor Corporation discovered in 2019 that it had incorrectly recorded in 2018 a cash payment of $70,000 for utilities expense. The correct amount of the utilities expense was $35,000. Requirements: 1. Determine the effect of the error on the accounting
> Wyler, Inc.’s 2018 balance sheet reported the following items—with 2017 figures given for comparison: Net income for 2018 was $3,690. Compute Wyler’s rate of return on common stockholdersâ
> Refer to the HEB data in Short Exercise S13-16. Assume the market price of HEB’s common stock is $19.50 per share. Compute HEB’s price/earnings ratio. Short Exercise S13-16: HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shares of c
> HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shares of common stock outstanding at the beginning of the year and 20,100 shares of common stock outstanding as of December 31, 2018. During the year, HEB declared and paid preferred div
> The following information was taken from the records of Arizona Motorsports, Inc. at November 30, 2018: Prepare a multi-step income statement for Arizona Motorsports for the fiscal year ended November 30, 2018. Include earnings per share. $ 95,000
> Kingston, Inc. had beginning retained earnings of $135,000 on January 1, 2018. During the year, Kingston declared and paid $85,000 of cash dividends and earned $75,000 of net income. Prepare a statement of retained earnings for Kingston, Inc. for the yea
> Return to the ABC data in Short Exercise S13-12. ABC had 8,000 shares of common stock outstanding during 2018. ABC declared and paid preferred dividends of $4,000 during 2018. Show how ABC reports EPS data on its 2018 income statement. Short Exercise S1
> Cedar Corporation issued 36,000 shares of $1 par value common stock in exchange for a building with a market value of $160,000. Record the stock issuance.
> Nelson Corporation issued 9,000 shares of $3 stated value common stock for $11 per share on July 7. Record the stock issuance.
> Wolcott Corporation issued 5,000 shares of no-par common stock for $2 per share on January 13. Record the stock issuance.
> What are the three relevant dates involving cash dividends? Describe each.
> The periodic inventory records of Flexon Prosthetics indicate the following for the month of July: At July 31, Flexon counts four units of merchandise inventory on hand. Compute ending merchandise inventory and cost of goods sold for Flexon using the
> What are the four basic rights of stockholders?
> List three characteristics of a corporation.
> What is the effect on the accounting equation when a stock dividend is declared? What is the effect on the accounting equation when a stock dividend is distributed?
> Halborn Manufacturing Co. completed the following transactions during 2018: Requirements: 1. Record the transactions in Halborn’s general journal. 2. Prepare the Halborn’s stockholders’ equity secti
> What does the rate of return on common stock show, and how is it calculated?
> What is the price/earnings ratio, and how is it calculated?
> What does earnings per share report, and how is it calculated?
> What does the statement of stockholders’ equity report? How does the statement of stockholders’ equity differ from the statement of retained earnings?
> What is a prior-period adjustment?
> What does the statement of retained earnings report?
> What is reported in the discontinued operations section of the income statement?
> Assume that a Logan Burger restaurant has the following perpetual inventory record for hamburger patties: At July 31, the accountant for the restaurant determines that the current replacement cost of the ending merchandise inventory is $435. Make any a
> What is a stock split?
> What are some reasons corporations issue stock dividends?
> C-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes C-Mobile to issue 120,000 shares of 9%, $150 par value cumulative preferred stock, and 140,000 shares of $3 par value co
> What is a stock dividend?
> How does cumulative preferred stock differ from noncumulative preferred stock?
> What is the effect on the accounting equation when cash dividends are declared? What is the effect on the accounting equation when cash dividends are paid?
> Where and how is treasury stock reported on the balance sheet?
> What is treasury stock? What type of account is Treasury Stock, and what is the account’s normal balance?
> If stock is issued for assets other than cash, describe the recording of this transaction.
> What account is used to record the premium when issuing common stock? What type of account is this?
> What are the two basic sources of stockholders’ equity? Describe each source.
> How does the Sarbanes-Oxley Act relate to internal controls?
> Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements: 1. Which inventory costing method would best meet Ward’s goal? 2. Assume Ward wanted to expense out the new
> What does the cash ratio help determine, and how is it calculated?
> Why is it necessary to record journal entries after the bank reconciliation has been prepared? Which side of the bank reconciliation requires journal entries?
> List some examples of timing differences, and for each difference, determine if it would affect the book side of the reconciliation or the bank side of the reconciliation.
> What is a bank reconciliation?
> What are some common controls used with a bank account?
> When are the only times the Petty Cash account is used in a journal entry?
> What are the controls needed to secure the petty cash fund?
> List internal control procedures related to e-commerce.
> What does the lower-of-cost-or-market (LCM) rule require?
> What is par value?
> Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018: Requirements: 1. Identify the different classes of stock that Tillman Comfort Specialists has outstanding. 2. What is
> Ward Hardware used the FIFO inventory costing method in 2018. Ward plans to continue using the FIFO method in future years. Which accounting principle is most relevant to Ward’s decision?
> Jimmy and Randy are opening a comic store. There are no competing comic stores in the area. They must decide how to organize the business. They anticipate profits of $550,000 the first year, with the ability to sell franchises in the future. Although the
> Bianchi Company reported these figures for 2018 and 2017: Requirements: 1. Compute Bianchi Company’s earnings per share for 2018. Assume the company paid the minimum preferred dividend during 2018. Round to the nearest cent. 2. Comput
> The balance sheet of Goldstein Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity: During 2018, Goldstein completed the following selected transactions: Requirements: 1. Record the transact
> The following information was taken from the records of Chua Motorsports, Inc. at November 30, 2018: Prepare a multi-step income statement for Chua Motorsports for the fiscal year ended November 30, 2018. Include earnings per share. $ 110,000 Commo
> Deerborn Manufacturing Co. completed the following transactions during 2018: Requirements: 1. Record the transactions in Deerborn’s general journal. 2. Prepare the Deerborn’s stockholders’ equity se
> D-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes D-Mobile to issue 50,000 shares of 8%, $50 par value cumulative preferred stock and 160,000 shares of $4 par value commo
> Voyage Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018: Requirements: 1. Identify the different classes of stock that Voyage Comfort Specialists has outstanding. 2. What is t
> Montel and Jeremy are opening a paint store. There are no competing paint stores in the area. They must decide how to organize the business. They anticipate profits of $350,000 the first year, with the ability to sell franchises in the future. Although t
> Use Target Corporation’s financial statements to answer the following questions. Visit http://www.pearsonhighered.com/Horngren to view a link to Target Corporation’s Fiscal 2015 Annual Report. Requirements: 1. Review the stockholders’ equity section of
> Rocket Corp. earned net income of $153,040 and paid the minimum dividend to preferred stockholders for 2018. Assume that there are no changes in common shares outstanding during 2018. Rocket’s books include the following figures: Requ
> Discuss some measures that should be taken to maintain control over merchandise inventory.
> Kelly May Bakery, Inc. reported a prior-period adjustment in 2018. An accounting error caused net income of prior years to be overstated by $1,000. Retained Earnings at December 31, 2017, as previously reported, was $48,000. Net income for 2018 was $74,0
> Faccone Academy Surplus had 60,000 shares of common stock and 9,000 shares of 20%, $15 par value preferred stock outstanding through December 31, 2018. Income from continuing operations for 2018 was $711,000, and loss on discontinued operations (net of i
> Many types of transactions may affect stockholders’ equity. Identify the effects of the following transactions on total stockholders’ equity. Each transaction is independent. a. A 10% stock dividend. Before the dividend, 540,000 shares of $1 par value c
> Complete the following chart by inserting a check mark (U ) for each statement that is true. Cash dividend Stock dividend Stock split Decreases retained earnings Has no effect on a liability Increases paid-in capital by the same amount that it decre
> Wood Golf Club Corp. had the following stockholders’ equity at December 31, 2017: On June 30, 2018, Wood Golf Club split its common stock 2-for-1. Prepare the stockholders’ equity section of the balance sheet immedia
> Self-Defense Schools, Inc. is authorized to issue 200,000 shares of $2 par common stock. The company issued 73,000 shares at $5 per share. When the market price of common stock was $7 per share, Self-Defense Schools declared and distributed a 14% stock d
> The stockholders’ equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows: On April 30, 2018, the market price of Lakeside’s common stock was $16 per share and the company declared a 13% stock div
> The following elements of stockholders’ equity are from the balance sheet of Sneed Marketing Corp. at December 31, 2017: Sneed paid no preferred dividends in 2017. Requirements: 1. Compute the dividends to the preferred and common sh
> Northern Communications has the following stockholders’ equity on December 31, 2018: Requirements: 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for
> Stock transactions for Careful Driving School, Inc. follow: Journalize the transactions. Mar. 4 Issued 27,000 shares of $1 par value common stock at $10 per share. May 22 Purchased 1,300 shares of treasury stock-common at $13 per share. Sep. 22 Sol
> What is the goal of conservatism?
> Southern Amusements Corporation had the following stockholders’ equity on November 30: On December 30, Southern purchased 200 shares of treasury stock at $15 per share. Requirements: 1. Journalize the purchase of the treasury stock.
> The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock and 1,400 shares of common stock. During a two-month period, Evergreen completed these stock-issuance transactions: Requirements: 1. Record the transactions i
> The charter for ASAP-TV, Inc. authorizes the company to issue 100,000 shares of $5, no-par preferred stock and 500,000 shares of common stock with $1 par value. During its start-up phase, ASAP-TV completed the following transactions: Requirements: 1. R
> Eates Corp. issued 8,000 shares of no-par common stock for $13 per share. Requirements: 1. Record issuance of the stock if the stock: a. is true no-par stock. b. has stated value of $3 per share. 2. Which type of stock results in more total paid-in capi
> Steller Systems completed the following stock issuance transactions: Requirements: 1. Journalize the transactions. Explanations are not required. 2. How much paid-in capital did these transactions generate for Steller Systems? May 19 Issued 1,700 s
> LaSalle Exploration Company reported these figures for 2018 and 2017: Compute rate of return on common stockholders’ equity for 2018 assuming no dividends were declared or paid to preferred stockholders. 2018 2017 Income Statement
> Clix Photographic Supplies, Inc.’s accounting records include the following for 2018: Prepare Clix’s multi-step income statement for the year ending December 31, 2018. Omit earnings per share. $ 12,000 $ 525,000
> Aruba Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $57,000. In addition, Aruba received cash for 6,000 shares of its $10 par preferred stock at par value and 6,500 shares o
> Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage. a. Ownership and management are separated. b. Entity has continuous life. c. Transfer of ownership is
> Lena Kay and Kathy Lauder have a patent on a new line of cosmetics. They need additional capital to market the products, and they plan to incorporate the business. They are considering the capital structure for the corporation. Their primary goal is to r
> Discuss the materiality concept. Is the dollar amount that is material the same for a company that has annual sales of $10,000 compared with a company that has annualsales of $1,000,000?
> After looking into debt financing through notes, mortgage, and bonds payable, Canyon Canoe Company decides to raise additional capital for the planned business expansion. The company will be able to acquire cash as well as land adjacent to its current bu
> The Tusquittee Company is a retail company that began operations on October 1, 2018, when it incorporated in the state of North Carolina. The Tusquittee Company is authorized to issue 100,000 shares of $1 par value common stock and 50,000 shares of 5%, $
> In 75 words or fewer, explain the difference between stock dividends and stock splits. Include the effect on stock values.
> The Walt Disney Company is a diversified entertainment company that is comprised of five different business segments. Walt Disney began as a cartoon studio in 1920 and today is known as a leading worldwide entertainment provider. Requirements: 1. On the
> On December 31, 2018, when the market interest rate is 8%, Biggs Realty issues $450,000 of 5.25%, 10-year bonds payable. The bonds pay interest semiannually. The present value of the bonds at issuance is $365,732. Requirements: 1. Prepare an amortizatio
> On December 31, 2018, when the market interest rate is 12%, Benson Realty issues $600,000 of 9.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance.
