Question: Which of the following accounts would not

> The following transactions are July 2011 activities of Craig’s Bowling, Inc., which operates several bowling centers (for games and equipment sales). If revenue is to be recognized in July, indicate the revenue account title and amount.

> Netherlands-based Royal Ahold ranks among the world’s three largest food retailers. In the United States it operates the Stop & Shop and Giant supermarket chains. Dutch and U.S regulators and prosecutors have brought criminal and civil charges against th

> Megan Company (not a corporation) was careless about its financial records during its first year of operations, 2010. It is December 31, 2010, the end of the annual accounting period. An outside CPA has examined the records and discovered numerous errors

> The following events occurred for Christensen Company: a. Received investment of $34,000 cash by organizers and distributed stock to them. b. Purchased $8,000 of equipment, paying $1,000 in cash and signing a note for the rest. c . Borrowed $9,000 cas

> Sony is a world leader in the manufacture of consumer and commercial electronics as well as in the entertainment and insurance industries. Its ROA has decreased over the last three years. Required: Indicate the most likely effect of each of the changes

> Refer to the financial statements of American Eagle Outfitters (Appendix B) and Urban Outfitters (Appendix C) and the Industry Ratio Report (Appendix D) at the end of this book. Required: 1. Compute return on assets for the most recent year. Which compa

> Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. At the bottom of each statement, the company warns readers that “The accompanying notes are an integral part of these financial statements.” The following

> Refer to the financial statements of American Eagle Outfitters given in Appendix B at the end of this book. At the bottom of each statement, the company warns readers to “Refer to Notes to Consolidated Financial Statements.” The following questions illus

> Avon Products, Inc., is a leading manufacturer and marketer of beauty products and related merchandise. The company sells its products in 110 countries through a combination of direct selling and use of individual sales representatives. Presented here is

> Dynamite Sales (organized as a corporation on September 1, 2010) has completed the accounting cycle for the second year, ended August 31, 2012. Dynamite also has completed a correct trial balance as follows: Required: Complete the financial statements,

> At the end of the 2011 annual reporting period, Mesa Industries’s balance sheet showed the following: MESA INDUSTRIES Balance Sheet At December 31, 2011 Stockholders’ Equity Common stock (par $15; 7,000 shares)........................$105,000 Additional

> Skidmore Music Company had the following transactions in March: a. Sold instruments to customers for $15,000; received $10,000 in cash and the rest on account. The cost of the instruments was $9,000. b. Purchased $3,000 of new instruments inventory; paid

> TangoCo is developing its annual financial statements for 2012. The following amounts were correct at December 31, 2012: cash, $48,800; investment in stock of PIL Corporation (long-term), $36,400; store equipment, $67,200; accounts receivable, $71,820; i

> Why are the income statement accounts closed but the balance sheet accounts are not?

> Differentiate among (a) permanent, (b) temporary, (c) real, and (d) nominal accounts.

> As described in a recent annual report, Verizon Wireless provides wireless voice and data services across one of the most extensive wireless networks in the United States. Verizon now serves more than 80 million customers, making it the largest wireless

> What are the purposes for closing the books?

> Contrast an unadjusted trial balance with an adjusted trial balance. What is the purpose of each?

> Explain the effect of adjusting entries on cash.

> What is the equation for each of the following statements: (a) income statement, (b) balance sheet, (c) statement of cash flows, and (d) statement of stockholders’ equity?

> Explain how the financial statements relate to each other.

> List the four types of adjusting entries, and give an example of each type.

> Match each definition with its related term by entering the appropriate letter in the space provided. There should be only one definition per term (that is, there are more definitions than terms). Term Definition (1) Losses (2) Matching principle (3

> What is a post-closing trial balance? Is it a useful part of the accounting information processing cycle? Explain.

> How is net profit margin computed and interpreted?

> How is earnings per share computed and interpreted?

> What is a contra-asset? Give an example of one.

> The following are independent situations. a. A new company is formed and sells 100 shares of stock for $12 per share to investors. b. A company purchases for $18,000 cash a new delivery truck that has a list, or sticker, price of $21,000. c. A women’s

> What is the purpose of recording adjusting entries?

> What is a trial balance? What is its purpose?

> Ellis, Inc., a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31, 2011: Data n

> Ramirez Company is completing the information processing cycle at its fiscal year-end, December 31, 2012. Following are the correct balances at December 31, 2012, for the accounts both before and after the adjusting entries for 2012. Required: 1. Compa

> Refer to P4-3. Brayden Towing Company is at the end of its accounting year, December 31, 2011. The following data that must be considered were developed from the company’s records and related documents: a. On January 1, 2011, the compa

> Frances Sabatier asked a local bank for a $50,000 loan to expand her small company. The bank asked Frances to submit a financial statement of the business to supplement the loan application. Frances prepared the following balance sheet. Required: The

> Refer to P4-2 . Zimmerman Company’s annual accounting year ends on December 31. It is December 31, 2011, and all of the 2011 entries except the following adjusting entries have been made: a. On September 1, 2011, Zimmerman collected si

> Brayden Towing Company is at the end of its accounting year, December 31, 2011. The following data that must be considered were developed from the company’s records and related documents: a. On January 1, 2011, the company purchased a new hauling van at

> Zimmerman Company’s annual accounting year ends on December 31. It is December 31, 2011, and all of the 2011 entries except the following adjusting entries have been made: a. On September 1, 2011, Zimmerman collected six months’ rent of $8,400 on storage

> Dell Inc. is the world’s largest computer systems company selling directly to customers. Products include desktop computer systems, notebook computers, workstations, network server and storage products, and peripheral hardware and softw

> If a company is successful in reducing selling and administrative costs while maintaining sales volume and the sales price of its product, what is the effect on the net profit margin ratio? a. The ratio will increase. b. The ratio will not change. c

> For the transactions in M2-5, identify each as an investing (I) activity or financing (F) activity on the statement of cash flows. M2-5 For each of the following transactions of Pitt Inc. for the month of January 2012, indicate the accounts, amounts,

> What ratio is required by GAAP to be reported on the financial statements or in the notes to the statements? a. Return on equity ratio. b. Net profit margin ratio. c. Earnings per share ratio. d. Current ratio.

> At the beginning of 2011, Donna Company had $1,000 of supplies on hand. During 2011, the company purchased supplies amounting to $6,400 (paid for in cash and debited to Supplies). At December 31, 2011, a count of supplies reflected $2,600. The adjusting

> JJ Company owns a building. Which of the following statements regarding depreciation as used by accountants is false? a. As depreciation is recorded, stockholders’ equity is reduced. b. As depreciation is recorded, the net book value of the asset is re

> An adjusted trial balance a. Shows the ending account balances in a “debit” and “credit” format before posting the adjusting journal entries. b. Is prepared after closing entries have been posted. c. Shows the ending account balances resulting from th

> You are evaluating your current portfolio of investments to determine those that are not performing to your expectations. You have all of the companies’ most recent annual reports. Required: For each of the following, indicate where you would locate t

> Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following? a. An understatement of expenses, liabilities, and stockholders’ equity. b. An understatement of expenses and liabilities and an overstatement

> On June 1, 2010, Oakcrest Company signed a three-year $100,000 note payable with 9 percent interest. Interest is due on June 1 of each year beginning in 2011. What amount of interest expense should be reported on the income statement for the year ended D

> On October 1, 2011, the $12,000 premium on a one-year insurance policy for the building was paid and recorded as Prepaid Insurance. On December 31, 2011 (end of the accounting period), what adjusting entry is needed? a. Insurance Expense (+E) Prepai

> Which account is least likely to appear in an adjusting journal entry? a. Interest Receivable b. Cash c. Property Tax Expense d. Salaries Payable

> Compute net income based on the adjusted trial balance in M4-8. Then compute Romney’s Marketing Company’s net profit margin for 2012. In M4-8. Romney’s Marketing Company has the following adjusted t

> You are considering investing the cash you inherited from your grandfather in various stocks. You have received the annual reports of several major companies. Required: For each of the following, indicate where you would locate the information in an ann

> Adamson Incorporated is a small manufacturing company that makes model trains to sell to toy stores. It has a small service department that repairs customers’ trains for a fee. The company has been in business for five years. At Decembe

> 1. Prepare a classified balance sheet in good form at December 31, 2012 from the information in M4-8. Romney’s Marketing Company has the following adjusted trial balance at December 31, 2012. No dividends were declared. However, 500 sh

> Refer to M4-8. Prepare a statement of stockholders’ equity in good form for 2012. Romney’s Marketing Company has the following adjusted trial balance at December 31, 2012. No dividends were declared. However, 500 shar

> A recent annual report of The New York Times Company, a diversified media company that currently includes newspapers (including The New York Times ), Internet businesses, and television and radio stations, included the following accounts. Dollars are in

> Romney’s Marketing Company has the following adjusted trial balance at December 31, 2012. No dividends were declared. However, 500 shares issued at the end of the year for $3,000 are included below: Prepare a multi-step income stateme

> For each of the transactions in M4-6, indicate the amounts and direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the following format, indicate + for increase, − for decrease, a

> In each of the following transactions ( a ) through ( c ) for Romney’s Marketing Company, use the threestep process illustrated in the chapter to record the adjusting entry at year-end December 31, 2012. The process includes (1) determining if revenue wa

> For each of the transactions in M4-4, indicate the amounts and direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the following format, indicate + for increase, − for decrease, a

> In each of the following transactions ( a ) through ( c ) for Romney’s Marketing Company, use the threestep process illustrated in the chapter to record the adjusting entry at year-end December 31, 2012. The process includes (1) determining if revenue wa

> Match each definition with its related term by entering the appropriate letter in the space provided. Delinition Term (1) A revenue not yet earned; collected in advance. (2) Rent not yet collected; already earned. (3) Property taxes incurred; not ye

> Hagadorn Company has the following adjusted accounts and balances at year-end (June 30, 2011): Prepare an adjusted trial balance in good form for the Hagadorn Company at June 30, 2011. Accounts Payable $ 250 Interest Expense $ 70 Accounts Receivabl

> Refer to the adjusted trial balance in M4-8. Prepare the closing entry on December 31, 2012. Romney’s Marketing Company has the following adjusted trial balance at December 31, 2012. No dividends were declared. However, 500 shares issu

> Starwood Hotels & Resorts Worldwide, Inc., is one of the world’s largest hotel and leisure companies. It conducts business both directly and through its subsidiaries, including the following hotel brands: Sheraton, Four Points, W, Aloft, The Luxury Colle

> Match each definition with its related term by entering the appropriate letter in the space provided. Delinition Term (1) At year-end, service revenue of S1,000 was collected in cash but was not yet earned. A. Accrued expense B. Deferred expense C.

> Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team’s effectiveness at managing its

> According to a recent Form 10-K report of Mattel, Inc., the company “designs, manufactures, and markets a broad variety of toy products worldwide.” Mattel’s brands include Barbie, Hot Wheels, FisherPr

> You are considering lending a car to a friend so she can drive to Aspen. What costswould you ask her to reimburse? How would your answer change, if at all, if youdecided to go along? Identify the possible options and explain your choices.

> A manager once asked, “How would you calculate the cost of a checking account?” What will be your first question to the manager?

> Does the passage of Sarbanes-Oxley mean that codes of ethics are no longer necessary?

> Identify three key financial managers in an organization and their major responsibilities.

> How can cost accounting information together with a classification of activities intothose that are value-added and those that are nonvalue-added help managers improvean organization’s performance?

> The following story is true except that all names have been changed and the time period has been compressed: Charles Austin graduated from a prestigious business school and took a job in a public accounting firm in Atlanta. A client hired him after five

> Before Miller Cereals can introduce the new cereal, the board of directors has to give their approval. The marketing manager really wants to introduce the new product and believes (honestly) that it will be profitable and an important next step in the fi

> Miller Cereals is a small milling company that makes a single brand of cereal. Recently, a business school intern recommended that the company introduce a second cereal in order to “diversify the product portfolio.” Cu

> The managers of Quince Products (Problem 1-39) decide they will hire a management accountant to help them analyze the decision to expand their product line. They solicit bids from various accountants in the city and receive three proposals. In describing

> Who are the customers of cost accounting?

> Quince Products is a small company in southern California that makes jams and preserves. Recently, a sales rep from one of the company’s suppliers suggested that Quince could increase its profitability by 50 percent if it introduced a s

> Refer to Exhibit 1.5, which shows budgeted versus actual costs. Assume that Carmen’s Cookies is preparing a budget for the month ending November 30. Management prepares the budget for the month ending November 30 by starting with the ac

> Refer to Exhibit 1.5. Assume that Carmen’s Cookies is preparing a budget for the month ending September 30. Management prepares the budget by starting with the actual results for April that appear in Exhibit 1.5. Then, management consid

> Tom’s Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and

> KC Services provides landscaping services in Edison. Kate Chen, the owner, is concerned about the recent losses the company has incurred and is considering dropping its lawn services, which she feels are marginal to the company’s busine

> Dewi Hartono is an assistant controller at Giant Engineering, which contracts with the Defense Department to build and maintain roads on military bases. Dewi recently determined that the company was including the direct costs of work for private clients

> Distinguish between the value chain, the supply chain, and the distribution chain.

> Refer to the information in Exercise 1-24. Jon Blake, the cost analyst working in the CFO’s office at the Business School, learns that the building to be rented for the evening program is owned by a company in which the dean is a principal investor. Afte

> Continental Condiments is a large food products firm in Pennsylvania. Its sales staff has a strong incentive plan tied to meeting quarterly budgets. On June 25, Maria Tuzzi, a divisional controller, learns that some of the sales staff asked customers to

> The chapter identified five financial management titles with responsibilities. Required Match the financial management title in the first column with the major responsibility in the second column of the following table: Title ___ CFO ___ Treasurer ___ C

> For each cost accounting development listed below, identify one value chain component where it might be used and described how it could be used in that component. a. Activity-based costing b. Benchmarking c. Cost of quality d. Customer relationship manag

> Refer to Exhibit 1.5, which shows budgeted versus actual costs. Assume that Carmen’s Cookies is preparing a budget for the month ending June 30. Management prepares the budget by starting with the actual results for April 30 that appear

> Refer to the information in Exercise 1-23. The dean of the Business School is considering expanding the BBA program by offering an evening program in a nearby city. The program would be the same size (in terms of students). The school’s CFO estimates tha

> State University Business School (SUBS) offers several degrees, including Bachelor of BusinessAdministration (BBA). The new dean believes in using cost accounting information tomake decisions and is reviewing a staff-developed income statement broken dow

> Betty’s Fashions operates retail stores in both downtown and suburban locations. The companyhas two responsibility centers: the City Division, which contains stores in downtown locations, and the Mall Division, which contains stores in suburban locations

> As an analyst at Delta Airlines, you are asked to help the operations staff. Operations has identified a new method of loading baggage that is expected to result in a 30 percent reductionin labor time but no changes in any other costs. The current labor

> Coastal Cabinets produces cabinets for new home builders. You have been called in to settle adispute between Coastal Cabinets and Executive Homes, a builder of custom homes. Executive Homes buys 20,000 units of a particular cabinet from Coastal Cabinets

> Place the letter of the appropriate accounting cost in Column 2 in the blank next toeach decision category in Column 1. Column 1 ___ Providingcost information for financial reporting ___ Identifying the best store in a chain ___ Determining which plant t

> Apple, Inc. incurs many types of costs in its operations. Required For each cost in the following table, identify the stage in the value chain where this cost is incurred: Cost ___ Programmer costs for a new operating system ___ Costs to ship computers

> Will studying cost accounting increase the chances that Carmen’s Cookies will succeed? How? Will it guarantee success? Explain.

> Why does a cost accountant need to be familiar with new developments in informationtechnology?

> Refer to the Business Application discussion of options backdating. If stock optionsand other forms of performance-based compensation result in some managers engagingin unethical or illegal behavior, why do firms still use them?

> Refer to the Business Application discussion of supply chain costs. A colleague says, “We don’t have to worry about other firms in the supply chain. If every firm in the chain minimizes its own cost, we can minimize the total cost and give the customer t