Which two short-term liquidity ratios measure how frequently a company collects its accounts?
> What effects does declaring a share dividend have on the corporation’s assets, liabilities, and total equity? What effects does the distribution of the shares have?
> What is the difference between a share dividend and a share split?
> Refer to the financial statements for WestJet, specifically Note 12. What was the amount during 2017 of the dividends per share?
> Refer again to the financial statements for WestJet, looking at the consolidated statements of cash flows. Notice the same cash dividends paid during the year ended December 31, 2016 and December 31, 2017 as on the consolidated statements of changes in e
> Refer to the financial statements for WestJet, looking at the consolidated statements of changes in equity. What were the total cash dividends declared and paid during the year ended December 31, 2016 and December 31, 2017?
> Why would an investor find convertible preferred shares attractive?
> What is the meaning of the call price of a share?
> Heritage Architect Company of Manitoba purchased some modular office furniture on March 10, 2020 that had a cost of $290,000 (ignore GST/PST). Show the journal entries that would record this purchase and payment under these three separate situations: a.
> What is the preemptive right of common shareholder?
> List the general rights of common shareholders.
> What are organization costs? List examples of these costs.
> Poppy Barley in the opening vignette is a private corporation that was formed by two sisters in Edmonton. Bombardier Inc. is an example of a Canadian public corporation. What is the main difference between a private corporation and a public corporation?
> Who is responsible for directing the affairs of a corporation?
> If the partners in Bloom Partnership, a floral design shop, want the financial statements to show the procedures used to allocate the partnership profit among the partners, on what financial statement should the allocation appear?
> The partnership agreement of lawyers Jenny Nelmida and Fei Abella provides for a two thirds/one-third sharing of profit but says nothing about losses. The first year of partnership operations resulted in a loss and Nelmida argues that the loss should be
> Leung, Lidder, and Lang have shared an equal stake as partners in a sports bar for the past three years. The partnership is being dissolved, as Leung is moving to England and leaving the firm. Lidder and Lang plan to carry on the business. In the final s
> How does a general partnership differ from a limited partnership?
> What does the term unlimited liability mean when it is applied to members of a partnership?
> Home-style Wool Company knits clothing from merino wool and sells online and at craft fairs. Gina takes deposits for custom orders. The person preparing the adjusting entries at year-end left for a vacation prior to completing the adjustments. You have b
> Can partners limit the right of a partner to commit their partnership to contracts? Would the agreement be binding (a) on the partners, and (b) on outsiders?
> As applied to a partnership, what does the term mutual agency mean?
> If a partnership contract does not state the period of time over which the partnership is to exist, when does the partnership end?
> In the chapter-opening vignette featuring Kicking Horse Coffee, Elana Rosenfeld advises that partners avoid a 50/50 partnership split and she strongly suggests obtaining legal counsel in drafting partnership agreements. What are the advantages and disadv
> A partner withdraws from a partnership and receives assets of greater value than the book value of his equity. Should the remaining partners share the resulting reduction in their equities in the ratio of their relative capital balances or in their profi
> Kay, Kat, and Kim are triplets who own a dance studio. In a liquidation, Kay’s share of partnership losses exceeds her capital account balance. She is unable to meet the deficit from her personal assets, and the excess losses are shared by her partners.
> After all partnership assets are converted to cash and all liabilities have been paid, the remaining cash should equal the sum of the balances of the partners’ capital accounts. Why?
> Amie and Lacey are partners. Lacey dies, and her son claims the right to take his mother’s place in the partnership. Does he have this right? Why?
> What is the benefit of a company like Pebble Technology Corp. raising funds through a crowdfunding program such as Kickstarter as opposed to through finding equity investors or obtaining a loan from a bank?
> Why are warranty liabilities usually recognized on the balance sheet as liabilities even when they are uncertain?
> On January 2, 2018, Redbook Manufacturing acquired machinery by issuing a 5%, $350,000 note due in six years on January 2, 2023. Annual payments are $68,956 each January 2. The payment schedule is: Required: Using the information provided, complete the f
> Suppose that a company has a facility located in an area where disastrous weather conditions often occur. Should it report a probable loss from a future disaster as a liability on its balance sheet? Explain.
> Refer to the balance sheet for Telus. What percentage is accounts payable and accrued liabilities at December 31, 2017, of the total current liabilities? of total liabilities?
> Refer to the Indigo balance sheet. Does Indigo show any un-redeemed gift card liability tax? If so, what is the balance in the account and what does the liability represent?
> What amount does WestJet, in Appendix II, report as the current portion of long-term debt as at December 31, 2017? In what accounting period will this amount be paid?
> What are the three important questions concerning the certainty of liabilities?
> What is the difference between a current and a non- current liability?
> In the chapter-opening vignette, YVR refers to several capital initiatives that are underway. What types of construction costs can YVR capitalize for self-constructed assets such as the development of a new runway for the international terminal?
> Refer to the balance sheet for WestJet. What amount did it report as goodwill at December 31, 2017?
> When is the only time a business can record goodwill?
> Refer to the balance sheet for WestJet. What amount did it report as intangible assets at December 31, 2017?
> On August 26, 2015, Race World International purchased a piece of equipment for a total of $426,000. The PPE subledger shows the following information regarding the equipment: Early in 2020, it was determined that the useful life of the metal frame shoul
> What are two types of intangible assets?
> What are the characteristics of an intangible asset?
> What are some of the events that might lead to disposal of PPE?
> Refer to the statements of cash flows for Spin Master. What was the amount of depreciation and amortization for 2016 and 2017? Where will you look to find the explanation of the increase?
> What accounting principle justifies charging the $75 cost of PPE immediately to an expense account?
> What is the difference in profit between a repairs and maintenance expense and a betterment, and how is each recorded?
> Does the balance of the Accumulated Depreciation, Machinery account represent funds accumulated to replace the machinery when it wears out?
> Which two terms are used to describe the difference between current assets and current liabilities?
> Which assets are included in calculating the quick ratio?
> RangeStar Telecommunications recently acquired a patent regarding a new telecommunications application. Additional equipment and a computer were purchased to begin making the application available to consumers. Details of the assets follow: The company&a
> Suggest several reasons why a 2 to 1 current ratio may not be adequate for a particular company.
> What are three factors that would influence your decision as to whether a company’s current ratio is good or bad?
> Why is working capital given special attention in the process of analyzing balance sheets?
> Which items are usually assigned a value of 100% on a common-size comparative balance sheet and a common size comparative income statement?
> In the chapter-opening vignette, it was mentioned that Roots Canada had a significant increase in year over year EPS for 2017. Why should investors be evaluating profitability ratios such as EPS and gross profit margin? What information does EPS and gros
> Interior Design Company specializes in home staging consulting services and sells furniture built by European craftsmen. The following six-column table contains the company’s unadjusted trial balance as of December 31, 2020. The followi
> The following adjusted trial balance information (with accounts in alphabetical order) for Willis Tour Co. Inc. as at December 31, 2020, was made available after its second year of operations: Required: The dividends declared by Willis in the amount of $
> Fargo Inc. showed the following profit statement information for its first three years of operations: Partial information regarding Fargo’s equity for the past three years follo Required 1. Calculate Gross Profit, Operating Profit, Prof
> Jake, Sacha, and Brianne own a tour company called Adventure Sports. The partners share profit and losses in a 1:3:4 ratio. After lengthy disagreements among the partners and several unprofitable periods, the friends decided to liquidate the partnership.
> Keith Scott and David Dawson agreed to share the annual profit or losses of their corporate law partnership as follows: If the partnership earned a profit, the first $60,000 would be allocated 40% to Scott and 60% to Dawson to reflect the time devoted to
> On February 3, 2020, Secure Software Group purchased the patent for a new software for cash of $220,800. The company expects the software to be sold over the next five years and uses the straight-line method to amortize intangibles. Required 1. Prepare e
> At April 30, 2020, Hackney Building Products’ year-end, the balance sheet showed PPE information as detailed in the schedule below. The company calculates depreciation for partial periods using the half-year convention. Required: Comple
> Perform the following accounting for the receivables of Andrews and Johnson, a law firm, at December 31, 2018. Requirements: 1. Set up T-accounts and start with the beginning balances for these T-accounts: Accounts Receivable, $100,000 Allowance for U
> Antique Interiors reported the following transactions in October: Requirements 1. Record the foregoing transactions in the journal of Antique Interiors using the gross method. (You do not need to make the cost of sales journal entries; assume that thes
> Main Street Tours provides historical guided tours of several U.S. cities. The company charges $250 per person for the eight-hour tour. For groups of four or more, a group discount of $50 per person is offered. Here is a selection of transactions during
> Use the data from Exercise 4-27B to make the journal entries that McCall should record on February 28 to update his Cash account. Include an explanation for each entry. Data from 4-27b: Harry McCall operates a roller skating center, McCall Rinks. He has
> Harry McCall operates a roller skating center, McCall Rinks. He has just received the company’s monthly bank statement at February 28 from Ridgeway National Bank, and the statement shows an ending balance of $755. Listed on the statement are an EFT rent
> Suppose Easton, Inc., reported net receivables of $2,582 million and $2,260 million at January 31, 2019, and 2018, respectively, after subtracting allowances of $72 million and $67 million at these respective dates. Easton earned total revenue of $43,333
> Patterson Shirt Company sells on credit and manages its own receivables. Average experience for the past three years has been the following: The owner of Patterson is considering whether to accept credit cards (VISA and MasterCard) instead of granting cr
> Crystal Detailing Company provides mobile auto detailing to its customers. The Income Statement for the month ended January 31, 2019, the Balance Sheet for December 31, 2018, and details of postings to the Cash account in the general ledger for the month
> The accounts of Huntley Digital Services Company prior to the year-end adjustments follow: Adjusting data at the end of the year include the following: a. Unearned service revenue that has been earned, $1,620 b. Accrued service revenue, $31,600 c. Sup
> Saginaw Corporation reported the following current accounts at December 31, 2018 (amounts in thousands): During January 2019, Saginaw completed these selected transactions: Sold services on account, $9,400 Depreciation expense, $200 Paid for expenses,
> Orman Consulting performed services for a client who could not pay immediately. Orman expected to collect the $4,600 the following month. A month later, Orman received $2,100 cash from the client. 1. Record the two transactions on the books of Orman Con
> The balance sheet of Aqua, Inc., a world leader in the design and sale of telescopic equipment, reported the following information on its balance sheets for 2018 and 2017 (figures are in thousands): In 2018, Aqua recorded $15,700 (gross) in sales (all on
> Two businesses, Queens Service Corp. and Insley Sales Co., have sought business loans from you. To decide whether to make the loans, you have requested their balance sheets. Requirement : 1. Using only these balance sheets, to which entity would you be
> Analyze basic financial statement information (Learning Objectives 3, 4) Note: This mini-case is the first part of The Cheesecake Factory serial case contained in every chapter in this textbook. The Cheesecake Factory Incorporated (NASDAQ: CAKE) was star
> This and similar cases in each chapter are based on the 2016 consolidated financial statements of Under Armour, Inc. You can retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for “Under Armour” u
> The net income of Summit Photography Company decreased sharply during 2018. Anette Summit, the owner of the company, anticipates the need for a bank loan in 2019. Late in 2018, Summit instructed Tim Loftus, the company’s controller, to record a $15,000 s
> This and similar cases in succeeding chapters are based on the consolidated financial statements of Apple Inc. shown in Appendix A and online in the filings section of www.sec.gov. Requirements: 1. Go online and do some research on Apple Inc. and its
> Blue Vistas Energy Co. is in its third year of operations, and the company has grown. To expand the business, Blue Vistas borrowed $15 million from Bank of Forest Lake. As a condition for making this loan, the bank required that Blue Vistas maintain a cu
> A year out of college, you have $10,000 to invest. A friend has started Flowers Unlimited, Inc., and he asks you to invest in his company. You obtain the company’s financial statements, which are summarized at the end of the first year
> Teresa Gardner has owned and operated Gardner Advertising, Inc., since it began ten years ago. Recently, Gardner mentioned that she would consider selling the company for the right price. Assume that you are interested in buying this business. You obtain
> The Cheesecake Factory Incorporated (NASDAQ: CAKE) is publicly held and uses U.S. Generally Accepted Accounting Principles (GAAP) to prepare its financial statements. Its fiscal year-end is the 52- or 53-week period ending on the Tuesday closest to Decem
> Consultant Mary Gervais purchased supplies on account for $4,300. Later Gervais paid $3,450 on account. 1. Journalize the two transactions on the books of Mary Gervais, Consultant. Include an explanation for each transaction. 2. Open a T-account for Ac
> On October 1, 2018, Elise Pulito opened Tree City Cafe, Inc. Pulito is now at a crossroads. The October financial statements paint a glowing picture of the business, and Pulito has asked you whether she should expand the business. To expand the business,
> The Cheesecake Factory Incorporated (NASDAQ: CAKE) operates two bakeries in the United States where it makes over 70 desserts for its own restaurants. In addition, the Cheesecake Factory bakeries sell selected desserts to a variety of foodservice operato
> The unadjusted trial balance of Stone Park Services, Inc., at January 31, 2019, does not balance. The list of accounts and their balances follows. The trial balance needs to be prepared and adjusted before the financial statements at January 31, 2019, ca
> Shabby Fitch is the president and principal stockholder of Shabby’s Bar & Grill, Inc. To expand, the business is applying for a $350,000 bank loan. To get the loan, Fitch is considering two options for beefing up the stockholders’ equity of the business:
> Strasburg Loan Company is in the consumer loan business. Strasburg borrows from banks and loans out the money at higher interest rates. Strasburg’s bank requires Strasburg to submit quarterly financial statements to keep its line of credit. Strasburg’s m
> Suppose you work in the loan department of Third National Bank. Byron Blakely, the owner of Byron’s Beauty Solutions, has come to you seeking a loan for $500,000 to expand operations. He proposes to use accounts receivable as collateral
> A fire during 2018 destroyed most of the accounting records of Lyons Entertainment, Inc. The only accounting data for 2018 that Lyons can come up with are the following balances at December 31, 2018. The general manager also knows that uncollectible-acco
> Joe Ferritto opened an Italian restaurant. Business has been good, and Ferritto is considering expanding the restaurant. Ferritto, who knows little accounting, produced the following financial statements for Romano Castle, Inc., at December 31, 2018, the
> A friend named Lance Barton has asked what effect certain transactions will have on his company, Blast Networks, Inc. Time is short, so you cannot apply the detailed procedures of journalizing and posting. Instead, you must analyze the transactions witho
> Note: This mini-case is part of The Cheesecake Factory serial case contained in every chapter in this textbook. The Cheesecake Factory Incorporated (NASDAQ: CAKE) owns and operates over 200 restaurants, including The Cheesecake Factory, the Grad Lux Cafe
> Suppose you are analyzing the financial statements of Corley, Inc. Identify each item with its appropriate financial statement, using the following abbreviations: Income statement (I), Statement of retained earnings (R), Balance sheet (B), and Statement
> Backline Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Backline had to replace an inexperienced office worker in charge of bookkeeping because of some serious mistakes that had been uncovered in the accoun
> This question concerns the items and the amounts that two entities, Marion Co. and Ashland Hospital, should report in their financial statements. During November, Ashland provided Marion with medical exams for Marion employees and sent a bill for $48,000
> The trial balance of Jubilee, Inc., at October 31, 2018, does not balance. Requirements: 1. Prepare a trial balance for the ledger accounts of Jubilee, Inc., as of October 31, 2018. 2. Determine the out-of-balance amount. The error lies in the Account
> The manager of West Industries Furniture needs to compute the following amounts: a. Total cash paid during December. b. Cash collections from credit customers during December. Analyze Accounts Receivable. c. Cash paid on a note payable during December
