Question: Your client took accounting a number of

> Presented below are the captions of Nikos Company’s balance sheet. (a) Current assets. (b) Investments. (c) Property, plant, and equipment. (d) Intangible assets. (e) Other assets. (f) Current liabilities. (g) Non-current liabilities. (h) Capital stock.

> Presented below are a number of balance sheet accounts of Cunningham, Inc. (a) Investment in Preferred Stock. (b) Treasury Stock. (c) Common Stock. (d) Dividends Payable. (e) Accumulated Depreciation—Equipment. (f) Construction in Process. (g) Petty Cash

> The comparative balance sheets of Menachem Corporation at the beginning and end of the year 2012 appear below. Net income of $34,000 was reported, and dividends of $23,000 were paid in 2012. New equipment was purchased and none was sold. Instructions

> Chekov Corporation’s balance sheet at the end of 2011 included the following items. The following information is available for 2012. 1. Net income was $55,000. 2. Equipment (cost $20,000 and accumulated depreciation $8,000) was sold f

> Standard-setting bodies have issued a number of authoritative pronouncements. A list is provided on the left, below, with a description of these pronouncements on the right. Instructions Match the description to the pronouncements. 1. _____ Staff Positi

> A comparative balance sheet for Orozco Corporation is presented below. Additional information: 1. Net income for 2012 was $105,000. 2. Cash dividends of $40,000 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance

> Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31. Additional information: Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; ca

> Patrick Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2012: Prepaid Rent $12,000; Goodwill $50,000; Franchise Fees Receivable $2,000; Franchises $47,000; Patents $33,000; Trademarks $10,000. Prepare the intan

> Crane Corporation has the following accounts included in its December 31, 2012, trial balance: Equity Investments (trading) $21,000; Goodwill $150,000; Prepaid Insurance $12,000; Patents $220,000; Franchises $130,000. Prepare the intangible assets sectio

> Lowell Company’s December 31, 2012, trial balance includes the following accounts: Inventory $120,000; Buildings $207,000; Accumulated Depreciation—Equipment $19,000; Equipment $190,000; Land (held for investment) $46,000; Accumulated Depreciation—Buildi

> Included in Outkast Company’s December 31, 2012, trial balance are the following accounts: Prepaid Rent $5,200; Debt Investments $56,000; Unearned Fees $17,000; Land (held for investment) $39,000; Notes Receivable (long-term) $42,000. Prepare the long-te

> Koch Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2012: Cash $7,000; Land $40,000; Patents $12,500; Accounts Receivable $90,000; Prepaid Insurance $5,200; Inventory $30,000; Allowance for Doubtful Accounts $

> Harding Corporation has the following accounts included in its December 31, 2012, trial balance: Accounts Receivable $110,000; Inventory $290,000; Allowance for Doubtful Accounts $8,000; Patents $72,000; Prepaid Insurance $9,500; Accounts Payable $77,000

> Using the information in BE5-14, determine Martinez’s free cash flow, assuming that it reported net cash provided by operating activities of $400,000. In BE5-14 Martinez Corporation engaged in the following cash transactions during 2012. Sale of land an

> Use the information presented in BE5-14 for Martinez Corporation to compute the net cash used (provided) by financing activities. In BE5-14 Martinez Corporation engaged in the following cash transactions during 2012. Sale of land and building …………………………

> Presented below are a number of accounting organizations and types of documents they have issued. Instructions Match the appropriate document to the organization involved. Note that more than one document may be issued by the same organization. If no do

> Martinez Corporation engaged in the following cash transactions during 2012. Sale of land and building ………………………………. $191,000 Purchase of treasury stock ……………………………….. 40,000 Purchase of land …………………………………………….. 37,000 Payment of cash dividend …………………………

> Ames Company reported 2012 net income of $151,000. During 2012, accounts receivable increased by $13,000 and accounts payable increased by $9,500. Depreciation expense was $44,000. Prepare the cash flows from operating activities section of the statement

> Stowe Company’s December 31, 2012, trial balance includes the following accounts: Investment in Common Stock $70,000; Retained Earnings $114,000; Trademarks $31,000; Preferred Stock $152,000; Common Stock $55,000; Deferred Income Taxes $88,000; Paid-in C

> Hawthorn Corporation’s adjusted trial balance contained the following accounts at December 31, 2012: Retained Earnings $120,000; Common Stock $750,000; Bonds Payable $100,000; Paid-in Capital in Excess of Par—Common Stock $200,000; Goodwill $55,000; Accu

> Use the information presented in BE5-8 for Adams Company to prepare the long-term liabilities section of the balance sheet. In BE5-8 Included in Adams Company’s December 31, 2012, trial balance are the following accounts: Accounts Payable $220,000; Pens

> Included in Adams Company’s December 31, 2012, trial balance are the following accounts: Accounts Payable $220,000; Pension Asset/Liability $375,000; Discount on Bonds Payable $29,000; Unearned Revenue $41,000; Bonds Payable $400,000; Salaries and Wages

> Thomas Corporation’s adjusted trial balance contained the following liability accounts at December 31, 2012: Bonds Payable (due in 3 years) $100,000; Accounts Payable $72,000; Notes Payable (due in 90 days) $22,500; Salaries and Wages Payable $4,000; Inc

> What is the relationship between current assets and current liabilities?

> What are some of the techniques of disclosure for the balance sheet?

> Net income for the year for Tanizaki, Inc. was $750,000, but the statement of cash flows reports that cash provided by operating activities was $860,000. Tanizaki also reported capital expenditures of $75,000 and paid dividends in the amount of $30,000.

> Wayne Rogers, an administrator at a major university, recently said, “I’ve got some CDs in my IRA, which I set up to beat the IRS.” As elsewhere, in the world of accounting and finance, it often helps to be fluent in abbreviations and acronyms. Instruct

> Kathleen Battle says, “Retained earnings should be reported as an asset, since it is earnings which are reinvested in the business.” How would you respond to Battle?

> Refer to the definition of assets. Discuss how a leased building might qualify as an asset of the lessee (tenant) under this definition.

> State the generally accepted accounting principle applicable to the balance sheet valuation of each of the following assets. (a) Trade accounts receivable. (b) Land. (c) Inventories. (d) Trading securities (common stock of other companies). (e) Prepaid e

> What is working capital? How does working capital relate to the operating cycle?

> The New York Knicks, Inc. sold 10,000 season tickets at $2,000 each. By December 31, 2012, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2012?

> Should available-for-sale securities always be reported as a current asset? Explain.

> In its December 31, 2012, balance sheet Oakley Corporation reported as an asset, “Net notes and accounts receivable, $7,100,000.” What other disclosures are necessary?

> Perez Company reported an increase in inventories in the past year. Discuss the effect of this change on the current ratio (current assets ÷ current liabilities). What does this tell a statement user about Perez Company’s liquidity?

> What is meant by solvency? What information in the balance sheet can be used to assess a company’s solvency?

> What is the profession’s recommendation in regard to the use of the term “surplus”? Explain.

> 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 are the primary lines of business of these two companies as shown in their notes to the fina

> The net income for the year for Genesis, Inc. is $750,000, but the statement of cash flows reports that the cash provided by operating activities is $640,000. What might account for the difference?

> What guidance does the Codification provide on the classification of current liabilities?

> Access the Codification glossary (“Master Glossary”) to answer the following. (a) What is the definition provided for current assets? (b) What is the definition of an intangible asset? In what section of the Codification are intangible assets addressed?

> What are the objectives related to the statement of cash flows?

> What guidance does the Codification provide concerning the format of accounting disclosures?

> Bradshaw Company experienced a loss that was deemed to be both unusual in nature and infrequent in occurrence. How should Bradshaw report this item in accordance with IFRS?

> Explain the difference between the “nature-of-expense” and “function-of-expense” classifications.

> 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 state

> On the next page is the income statement for a British company, Avon Rubber plc. Avon prepares its financial statements in accordance with IFRS. Instructions (a) Review the Avon Rubber income statement and identify at least three differences between th

> In this simulation, you are asked to compute various income amounts. Assume a tax rate of 30% and 100,000 shares of common stock outstanding during the year. Prepare responses to all parts. KWW_Professional_Simulation Time Remaining 3 hours 30 minut

> 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.

> Counting Crows Inc. provided the following information for the year 2012. Retained earnings, January 1, 2012 …………………………………………………………………… $ 600,000 Administrative expenses …………………………………………………………………………………….. 240,000 Selling expenses ………………………………………………………………

> The Z-score bankruptcy prediction model uses balance sheet and income information to arrive at a Z-Score, which can be used to predict financial distress: EBIT is earnings before interest and taxes. MV Equity is the market value of common equity, which

> One of the more closely watched ratios by investors is the price/earnings or P/E ratio. By dividing price per share by earnings per share, analysts get insight into the value the market attaches to a company’s earnings. More specifically, a high P/E rati

> Dresser Industries provides products and services to oil and natural gas exploration, production, transmission and processing companies. A recent income statement is reproduced below. Dollar amounts are in millions. Sales ………………………………………………………………………………….

> 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 type of income format(s) is used by these two companies? Identify any differences in income s

> Derek Lee, vice president of finance for Atlanta Company, has recently been asked to discuss with the company’s division controllers the proper accounting for extraordinary items. Derek Lee prepared the factual situations presented below as a basis for d

> The following represents a recent income statement for Boeing Company. ________________________($ in millions) Sales …………………………………………………….. $21,924 Costs and expenses …………………………………. 20,773 Income from operations …………………………….. 1,151 Other income ………………………

> O’Malley Corporation was incorporated and began business on January 1, 2012. It has been successful and now requires a bank loan for additional working capital to finance expansion. The bank has requested an audited income statement for

> How is the constraint of industry practices reflected in the FASB Codification?

> Willie Nelson, Jr., controller for Jenkins Corporation, is preparing the company’s financial statements at year-end. Currently, he is focusing on the income statement and determining the format for reporting comprehensive income. During the year, the com

> The following financial statement was prepared by employees of Walters Corporation. Note 1: New styles and rapidly changing consumer preferences resulted in a $71,500 loss on the disposal of discontinued styles and related accessories. Note 2: The corp

> Simpson Corp. is an entertainment firm that derives approximately 30% of its income from the Casino Knights Division, which manages gambling facilities. As auditor for Simpson Corp., you have recently overheard the following discussion between the contro

> Charlie Brown, controller for the Kelly Corporation, is preparing the company’s income statement at year-end. He notes that the company lost a considerable sum on the sale of some equipment it had decided to replace. Since the company has sold equipment

> Bobek Inc. has recently reported steadily increasing income. The company reported income of $20,000 in 2009, $25,000 in 2010, and $30,000 in 2011. A number of market analysts have recommended that investors buy the stock because they expect the steady gr

> Maher Inc. reported income from continuing operations before taxes during 2012 of $790,000. Additional transactions occurring in 2012 but not considered in the $790,000 are as follows. 1. The corporation experienced an uninsured flood loss (extraordinary

> Presented below is the trial balance of Thompson Corporation at December 31, 2012. A physical count of inventory on December 31 resulted in an inventory amount of $64,000; thus, cost of goods sold for 2012 is $645,000. Instructions Prepare a single-st

> Presented below is information related to Dickinson Company for 2012. Retained earnings balance, January 1, 2012 ………………………………………… $ 980,000 Sales revenue ………………………………………………………………………………….. 25,000,000 Cost of goods sold …………………………………………………………………………… 16,000

> Wade Corp. has 150,000 shares of common stock outstanding. In 2012, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in the $1,210,000 are as follows. 1. In 2012, Wade Corp. sol

> Below is the Retained Earnings account for the year 2012 for Acadian Corp. Instructions (a) Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2012 to comput

> One of the major groups involved in the standard-setting process is the American Institute of Certified Public Accountants. Initially, it was the primary organization that established accounting principles in the United States. Subsequently, it relinquis

> Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2012. Additional facts are as follows. 1. “Selling, general, and administrative expenses” for 2012 included a ch

> The following account balances were included in the trial balance of Twain Corporation at June 30, 2012. The Retained Earnings account had a balance of $337,000 at July 1, 2011. There are 80,000 shares of common stock outstanding. Instructions (a) Usi

> Presented below is information related to Brokaw Corp. for the year 2012. Instructions (a) Prepare a multiple-step income statement for 2012. Assume that 60,000 shares of common stock are outstanding. (b) Prepare a retained earnings statement for 2012.

> Presented below are selected amounts from the records of McGraw Corporation as of December 31, 2012. Cash ……………………………………………………………………………… $ 50,000 Administrative expenses ………………………………………………….. 100,000 Selling expenses ……………………………………………………………….. 80,000 Net

> The accountant of Weatherspoon Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2012. Rent revenue ……………………………………………………………………………………. $ 29,000 Interest expense …

> The following balances were taken from the books of Parnevik Corp. on December 31, 2012. Assume the total effective tax rate on all items is 34%. Instructions Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding du

> Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitte

> The financial records of Dunbar Inc. were destroyed by fire at the end of 2012. Fortunately, the controller had kept certain statistical data related to the income statement as presented below. 1. The beginning merchandise inventory was $92,000 and decre

> Presented below are certain account balances of Wade Products Co. Instructions From the foregoing, compute the following: (a) Total net revenue, (b) Net income, (c) Dividends declared during the current year. $ 6,500 12,700 114,400 134,000 71,000 1

> Presented below are changes in all the account balances of Jackson Furniture Co. during the current year, except for retained earnings. Instructions Compute the net income for the current year, assuming that there were no entries in the Retained Earnin

> 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

> On June 5, 2011, Argot Corporation signed a contract with Lopez Associates under which Lopez agreed (1) To construct an office building on land owned by Argot, (2) To accept responsibility for procuring financing for the project and finding tenants, and

> Regression analysis can be used to test whether the market efficiently uses information in valuing stocks. For concreteness, let return be the total return from holding a firm’s stock over the four-year period from the end of 1990 to the end of 1994. The

> As the estimated equation is given below, sleep 5= 3,638.25 - .148 totwrk - 11.13 educ + 2.20 age (112.28) (.017) (5.88) (1.45) n = 706, R2 = .113, where we now report standard errors along with the estimates. (i) Is either educ or age i

> Consider the multiple regression model with three independent variables, under the classical linear model assumptions MLR.1 through MLR.6: y = β0 + β1x1 + β2x2 + β3x3 + µ. You would like to test the null hypothesis H0: β1 - 3β2 = 1. (i) Let β 1 and β 2

> (i) The population model estimated in Example 4.7 can be written as Log(scrap) = β0 + β1hrsemp + β2log(sales) + β3log(employ) + u. Using the 43 observations available for 1987, the estimated equation is Log(scrap) = 11.74 - .042 hrsemp - .951 log(sales)

> (i) In the simple regression model price = B0 + B1assess + u, the assessment is rational if B1 = 1 and B0 = 0. The estimated equation is price = - 14.47 + .976 assess (16.27) (.049) n = 88, SSR = 165,644.51, R2 = .820. First, test t

> Are rent rates influenced by the student population in a college town? Let rent be the average monthly rent paid on rental units in a college town in the United States. Let pop denote the total city population, avginc the average city income, and pctstu

> The variable rdintens is expenditures on research and development (R&D) as a percentage of sales. Sales are measured in millions of dollars. The variable profmarg is profits as a percentage of sales. Using the data in RDCHEM for 32 firms in the chemical

> Consider an equation to explain salaries of CEOs in terms of annual firm sales, return on equity (roe, inpercentage form), and return on the firm’s stock (ros, in percentage form): Log(salary) = B0 + B1log(sales) + B2roe + B3ros + u. (i) In terms of the

> Which of the following can cause the usual OLS t statistics to be invalid (that is, not to have t distributions under H0)? (i) Heteroskedasticity. (ii) A sample correlation coefficient of .95 between two independent variables that are in the model. (iii)

> 6 Consider the multiple regression model containing three independent variables, under Assumptions MLR.1 through MLR.4: y = 0 +  1x1 +  2x2 +  3x3 + u. You are interested in estimating the sum of the parameters on x1 and x2; call this u1 5 b0 1 b1.

> Use the data in ECONMATH to answer the following questions. (i) Estimate a model explaining colgpa to hsgpa, actmth, and acteng. Report the results in the usual form. Are all explanatory variables statistically significant? (ii) Consider an increase in h

> (i) Estimate the regression model educ = β0 + β1motheduc + β2fatheduc + β3abil + β4abil2 + µ by OLS and report the results in the usual form. Test the null hypothesis that educ is linearly related to abil against the alternative that the relationship is

> Use the data in ELEM94_95 to answer this question. The findings can be compared with those in Table 4.1. The dependent variable lavgsal is the log of average teacher salary and bs is the ratio of average benefits to average salary (by school). (i) Run

> (i) Use OLS to estimate the model Log(psoda) = β0 + β1prpblck + β2log(income) + β3prppov + µ, and report the results in the usual form. Is

> The data set 401KSUBS contains information on net financial wealth (nettfa), age of the survey respondent (age), annual family income (inc), family size (fsize), and participation in certain pension plans for people in the United States. The wealth and i

> (i) The variable phsrank is the person’s high school percentile. (A higher number is better. For example, 90 means you are ranked better than 90 percent of your graduating class.) Find the smallest, largest, and average phsrank in the sample. (ii) Add ph

> Use the data in WAGE2 for this exercise. (i) Consider the standard wage equation Log(wage) =

> Use the data in MLB1 for this exercise. Use the model estimated in given equation Log(salary) = 11.19 + .0689 years + .0126 gamesyr (0.29) (.0121) (.0026) 1 .00098 bavg + .0144 hrunsyr + .0108 rbisyr (.00110) (.0161) (.0072)

> The restricted version of the model can be estimated using all 1,388 observations in the sample. Compute the R-squared from the regression of bwght on cigs, parity, and faminc using all observations. Compare this to the R-squared reported for the restric