All Related Questions of Amortization

Q: Presented below are selected accounts of Yasunari Kawabata Company at December 31

Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014. The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market...

Q: The major classifications of activities reported in the statement of cash flows

The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1. Operating activity&mda...

Q: Each of the following items must be considered in preparing a statement

Each of the following items must be considered in preparing a statement of cash flows. Indicate where each item is to be reported in the statement, if at all. Assume that net income is reported as $...

Q: The financial statements of Marks and Spencer plc (M&S

The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/Marksand...

Q: Wade Corp. has 150,000 shares of common stock outstanding

Wade Corp. has 150,000 shares of common stock outstanding. In 2014, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in t...

Q: The financial statements of Marks and Spencer plc (M&S

The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/Marks-an...

Q: Izzy Inc. purchased a patent for $350,000 which

Izzy Inc. purchased a patent for $350,000 which has an estimated useful life of 10 years. Its pattern of use or consumption cannot be reliably determined. Prepare the entry to record the amortizatio...

Q: An intangible asset with an estimated useful life of 30 years was

An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2004, for $540,000. On January 1, 2014, a review was made of intangible assets and their expected service liv...

Q: Nieland Industries had one patent recorded on its books as of January

Nieland Industries had one patent recorded on its books as of January 1, 2014. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2014, Nieland incurred research...

Q: Rolanda Marshall Company, organized in 2013, has set up a

Rolanda Marshall Company, organized in 2013, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2014. Instru...

Q: In early January 2013, Outkast Corporation applied for a trade name

In early January 2013, Outkast Corporation applied for a trade name, incurring legal costs of $16,000. In January 2014, Outkast incurred $7,800 of legal fees in a successful defense of its trade nam...

Q: On December 31, 2014, Oakbrook Inc. rendered services to

On December 31, 2014, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $2...

Q: Braddock Inc. had the following long-term receivable account balances

Braddock Inc. had the following long-term receivable account balances at December 31, 2013. Transactions during 2014 and other information relating to Braddock’s long-term receivables w...

Q: On December 31, 2014, Conchita Martinez Company signed a $

On December 31, 2014, Conchita Martinez Company signed a $1,000,000 note to Sauk City Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annua...

Q: On January 1, 2014, Botosan Company issued a $1

On January 1, 2014, Botosan Company issued a $1,200,000, 5-year, zero interest-bearing note to National Organization Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2015...

Q: On July 1, 2014, Brigham Corporation purchased Young Company by

On July 1, 2014, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2014, the balance sheet of Young Company was as fo...

Q: The following amortization and interest schedule reflects the issuance of 10-

The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2008, and the subsequent interest payments and charges. The company&rsquo...

Q: Will the amortization of Discount on Bonds Payable increase or decrease Bond

Will the amortization of Discount on Bonds Payable increase or decrease Bond Interest Expense? Explain.

Q: Venezuela Co. is building a new hockey arena at a cost

Venezuela Co. is building a new hockey arena at a cost of $2,500,000. It received a down payment of $500,000 from local businesses to support the project, and now needs to borrow $2,000,000 to compl...

Q: Good-Deal Inc. developed a new sales gimmick to help

Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for...

Q: In each of the following independent cases the company closes its books

In each of the following independent cases the company closes its books on December 31. 1. Sanford Co. sells $500,000 of 10% bonds on March 1, 2014. The bonds pay interest on September 1 and March...

Q: Presented below are selected transactions on the books of Simonson Corporation.

Presented below are selected transactions on the books of Simonson Corporation. May 1, 2014 Bonds payable with a par value of $900,000, which are dated January 1, 2014, are sold at 106 plus accrued...

Q: On December 31, 2014, Faital Company acquired a computer from

On December 31, 2014, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2018. Faital Company’s credit...

Q: Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing

Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requ...

Q: What is the “call” feature of a bond issue?

What is the “call” feature of a bond issue? How does the call feature affect the amortization of bond premium or discount?  

Q: On June 30, 2014, Mischa Auer Company issued $4

On June 30, 2014, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses the effective-interest method to amortize bond premium or discount....

Q: Celine Dion Company issued $600,000 of 10%, 20

Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortiza...

Q: Assume the same information as in E14-4, except that

Assume the same information as in E14-4, except that Celine Dion Company uses the effective-interest method of amortization for bond premium or discount. In E14-4 Celine Dion Company issued $600,0...

Q: Devon Harris Company sells 10% bonds having a maturity value of

Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2014, and mature January 1, 2019. Interest is payable annually on January 1....

Q: Assume the same information as E14-6.In E14

Assume the same information as E14-6. In E14-6 Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2014, and mature January 1,...

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2014, at 119.792 to yield 8%. Interest is payable semiannually on July 1 and January 1. Prepare the journal entries to record (a) T...

Q: Assume the same information as in IFRS14-5, except that

Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. Prepare the journal entries to record (a) The issuance of the bonds, (b) The payment of interest...

Q: On January 1, 2014, Aumont Company sold 12% bonds

On January 1, 2014, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907.37, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2014, and matur...

Q: On June 30, 2006, County Company issued 12% bonds

On June 30, 2006, County Company issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2014. Because of lower inte...

Q: Assume the bonds in BE14-2 were issued at 98%.

Assume the bonds in BE14-2 were issued at 98%. Prepare the journal entries for (a) January 1, (b) July1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannua...

Q: Assume the bonds in BE14-2 were issued at 103%.

Assume the bonds in BE14-2 were issued at 103%. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiann...

Q: Aubrey Inc. issued $4,000,000 of 10

Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2014, at 98 plus accrued interest. The bonds were dated April 1, 2014, with interest payable April 1 and October 1. Bond di...

Q: The net income for Letterman Company for 2014 was $320,

The net income for Letterman Company for 2014 was $320,000. During 2014, depreciation on plant assets was$124,000, amortization of patent was $40,000, and the company incurred a loss on sale of plan...

Q: On January 2, 2014, $100,000 of 11

On January 2, 2014, $100,000 of 11%, 10-year bonds were issued for $97,000. The $3,000 discount was charged to Interest Expense. The bookkeeper, Mark Landis, records interest only on the interest paym...

Q: Mancuso Corporation amended its pension plan on January 1, 2014,

Mancuso Corporation amended its pension plan on January 1, 2014, and granted $160,000 of prior service costs to its employees. The employees are expected to provide 2,000 service years in the future,...

Q: Red Hot Chili Peppers Co. had the following activity in its

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations. (a) Purchase of equipment. (b) Redemption of bonds payable. (c) Sale of building. (d) Depreciation. (e) Exch...

Q: Shin Corporation had a projected benefit obligation of $3,100

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2014. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2014...

Q: Each of the following items must be considered in preparing a statement

Each of the following items must be considered in preparing a statement of cash flows (indirect method) for Turbulent Indigo Inc. for the year ended December 31, 2014. (a) Plant assets that had cost $...

Q: Mike Macinski Leasing Company leases a new machine that has a cost

Mike Macinski Leasing Company leases a new machine that has a cost and fair value of $95,000 to Sharrer Corporation on a 3-year noncancelable contract. Sharrer Corporation agrees to assume all risks o...

Q: Garfield Company purchased, as a held-to-maturity investment

Garfield Company purchased, as a held-to-maturity investment, $80,000 of the 9%, 5-year bonds of Chester Corporation for $74,086, which provides an 11% return. Prepare Garfield’s journal entries for...

Q: Norton Co. had the following amounts related to its pension plan

Norton Co. had the following amounts related to its pension plan in 2014. Determine for 2014: (a) Norton’s other comprehensive income (loss), and (b) Comprehensive income. Net inco...

Q: Carow Corporation purchased, as a held-to-maturity investment

Carow Corporation purchased, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare C...

Q: The following facts pertain to a noncancelable lease agreement between Mooney Leasing

The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee. The collectibility of the lease payments is reasonably predictable, and there...

Q: A lease agreement between Mooney Leasing Company and Rode Company is described

A lease agreement between Mooney Leasing Company and Rode Company is described in E21-8. In E21-8 Instructions Refer to the data in E21-8 and do the following for the lessor. (a) Compute the amount of...

Q: Listed below are various types of accounting changes and errors.

Listed below are various types of accounting changes and errors. ______ 1. Change in a plant asset’s salvage value. ______ 2. Change due to overstatement of inventory. ______ 3. Change from sum-of-the...

Q: Veldre Company provides the following information about its defined benefit pension plan

Veldre Company provides the following information about its defined benefit pension plan for the year 2014. Instructions Compute the pension expense for the year 2014.

Q: Morgan Leasing Company signs an agreement on January 1, 2014,

Morgan Leasing Company signs an agreement on January 1, 2014, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 6 years...

Q: The following information is available for the pension plan of Radcliffe Company

The following information is available for the pension plan of Radcliffe Company for the year 2014. Instructions (a) Compute pension expense for the year 2014. (b) Prepare the journal entry to record...

Q: Laura Leasing Company signs an agreement on January 1, 2014,

Laura Leasing Company signs an agreement on January 1, 2014, to lease equipment to Plote Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 5 years...

Q: Using the information in E20-2, In E20-

Using the information in E20-2, In E20-2 Prepare a pension worksheet inserting January 1, 2014, balances, showing December 31, 2014, balances, and the journal entry recording pension expense.

Q: Aubrey Inc. issued $4,000,000 of 10

Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2014, at 98 plus accrued interest. The bonds were dated April 1, 2014, with interest payable April 1 and October 1. Bond disc...

Q: Andrews Company has five employees participating in its defined benefit pension plan

Andrews Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2014 are as follows. On January 1, 2014,...

Q: The following defined pension data of Rydell Corp. apply to the

The following defined pension data of Rydell Corp. apply to the year 2014. Instructions For 2014, prepare a pension worksheet for Rydell Corp. that shows the journal entry for pension expense and the...

Q: On January 1, 2013, Hi and Lois Company purchased 12

On January 1, 2013, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2013, and...

Q: Taveras Enterprises provides the following information relative to its defined benefit pension

Taveras Enterprises provides the following information relative to its defined benefit pension plan. Instructions (a) Prepare the note disclosing the components of pension expense for the year 2014. (...

Q: Webb Corp. sponsors a defined benefit pension plan for its employees

Webb Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2014, the following balances relate to this plan. As a result of the operation of the plan during 2014, the followin...

Q: Winston Industries and Ewing Inc. enter into an agreement that requires

Winston Industries and Ewing Inc. enter into an agreement that requires Ewing Inc. to build three diesel-electric engines to Winston’s specifications. Upon completion of the engines, Winston has agree...

Q: On January 1, 2013, Phantom Company acquires $200,

On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9% bonds at a price of $185,589. The interest is payable each December 31, and the bonds mature December 31, 2015. Th...

Q: Henning Company sponsors a defined benefit pension plan for its employees.

Henning Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2014 in which no benefits were paid. 1. The actuarial pre...

Q: The following facts pertain to a noncancelable lease agreement between Alschuler Leasing

The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. The collectibility of the lease payments is rea...

Q: Ferreri Company received the following selected information from its pension plan trustee

Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended De...

Q: Assume the same information as in P21-4. In

Assume the same information as in P21-4. In P21-4 The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred...

Q: You are compiling the consolidated financial statements for Winsor Corporation International.

You are compiling the consolidated financial statements for Winsor Corporation International. The corporation’s accountant, Anthony Reese, has provided you with the segment informati...

Q: Erickson Company sponsors a defined benefit pension plan. The corporation’s actuary

Erickson Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. Instructions (a) Compute the actual return on t...

Q: Roosevelt Company purchased 12% bonds, having a maturity value of

Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2014, and mature January 1, 2...

Q: Cardinal Paz Corp. carries an account in its general ledger called

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Instructions (a) Prepa...

Q: Using the information in E20-22, In E20-

Using the information in E20-22, In E20-22 Prepare a worksheet inserting January 1, 2014, balances, showing December 31, 2014, balances, and the journal entry recording postretirement benefit expense...

Q: George Company manufactures a check-in kiosk with an estimated economic

George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $278,...

Q: Mortonson Company has not yet prepared a formal statement of cash flows

Mortonson Company has not yet prepared a formal statement of cash flows for the 2014 fiscal year. Comparative balance sheets as of December 31, 2013 and 2014, and a statement of income and retained ea...

Q: The accounting staff of Usher Inc. has prepared the following pension

The accounting staff of Usher Inc. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completi...

Q: Assume the same data as in P21-10 with National Airlines

Assume the same data as in P21-10 with National Airlines Co. having an incremental borrowing rate of 10%. In P21-10 The normal selling price of the equipment is $278,072, and its unguaranteed residual...

Q: In 2013, Grishell Trucking Company negotiated and closed a long-

In 2013, Grishell Trucking Company negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company&rs...

Q: You have completed the field work in connection with your audit of

You have completed the field work in connection with your audit of Alexander Corporation for the year ended December 31, 2014. The balance sheet accounts at the beginning and end of the year are shown...

Q: Amirante Inc. manufactures an X-ray machine with an estimated

Amirante Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Chambers Medical Center for a period of 10 years. The normal selling price of the machine is $411,324, a...

Q: Garner Inc. provides the following information related to its postretirement benefits

Garner Inc. provides the following information related to its postretirement benefits for the year 2014. Instructions Compute postretirement benefit expense for 2014.

Q: Assume the same data as in P21-13 and that Chambers

Assume the same data as in P21-13 and that Chambers Medical Center has an incremental borrowing rate of 10%. In P21-13 The normal selling price of the machine is $411,324, and its guaranteed residual...

Q: Presented below is an amortization schedule related to Spangler Company’s 5-

Presented below is an amortization schedule related to Spangler Company’s 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2012, for $108,660....

Q: When the records of Debra Hanson Corporation were reviewed at the close

When the records of Debra Hanson Corporation were reviewed at the close of 2015, the errors listed below were discovered. For each item, indicate by a check mark in the appropriate column whether the...

Q: Englehart Co. provides the following information about its postretirement benefit plan

Englehart Co. provides the following information about its postretirement benefit plan for the year 2014. Instructions Compute the postretirement benefit expense for 2014.

Q: Following are selected statement of financial position accounts of Sander Bros.

Following are selected statement of financial position accounts of Sander Bros. Corp. at December 31, 2014 and 2013, and the increases or decreases in each account from 2013 to 2014. Also presented is...

Q: Gordon Company sponsors a defined benefit pension plan. The following information

Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2014 and 2015. Instructions (a) Compute pension expense for 2014 and 2015...

Q: Each of the following items must be considered in preparing a statement

Each of the following items must be considered in preparing a statement of cash flows for Cruz Fashions Inc. for the year ended December 31, 2014. 1. Fixed assets that had cost $20,000 61⁄2 years befo...

Q: On March 5, 2015, you were hired by Hemingway Inc

On March 5, 2015, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records...

Q: The accounting staff of Holder Inc. has prepared the following postretirement

The accounting staff of Holder Inc. has prepared the following postretirement benefit worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assist...

Q: Ludwick Steel Company as lessee signed a lease agreement for equipment for

Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2014. Annual rental payments of $40,000 are to be made at the beginning of each lease year (D...

Q: Presented below is information taken from a bond investment amortization schedule with

Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Instructions (a) Indicate whethe...

Q: The following facts pertain to a non-cancelable lease agreement between

The following facts pertain to a non-cancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. (Round all numbers to the nearest cent.) Inception date: May 1, 2014 Annual l...

Q: A lease agreement between Lennox Leasing Company and Gill Company is described

A lease agreement between Lennox Leasing Company and Gill Company is described in IFRS21-10. Refer to the data in IFRS21-10 and do the following for the lessor. (Round all numbers to the nearest cent....

Q: You have been assigned to examine the financial statements of Zarle Company

You have been assigned to examine the financial statements of Zarle Company for the year ended December 31, 2014. You discover the following situations. 1. Depreciation of $3,200 for 2014 on delivery...

Q: Springsteen Co. had the following activity in its most recent year

Springsteen Co. had the following activity in its most recent year of operations. (a) Pension expense exceeds amount funded. (b) Redemption of bonds payable. (c) Sale of building at book value....

Q: Vickie Plato, accounting clerk in the personnel office of Streisand Corp

Vickie Plato, accounting clerk in the personnel office of Streisand Corp., has begun to compute pension expense for 2016 but is not sure whether or not she should include the amortization of unrecogni...

Q: On January 1, 2014, Novotna Company purchased $400,

On January 1, 2014, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1....

Q: Examine the financial statements for Oak Valley Hospital for the years ended

Examine the financial statements for Oak Valley Hospital for the years ended December 31, 2010, and 2011. Required Prepare a short answer to address each of the following questions. a. Discuss the re...

Q: One amount is missing in the following trial balance of proprietary accounts

One amount is missing in the following trial balance of proprietary accounts, and another is missing from the trial balance of budgetary accounts of a certain agency of the federal government. This tr...

Q: Using the data from Problem 11–2, In Problem

Using the data from Problem 11–2, In Problem 11-2 Prepare the following: a. In general journal form, entries to close the budgetary accounts as needed and to close the operating...

Q: Tesla Corporation needs to raise funds to finance a plant expansion,

Tesla Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds to raise the money. The required return on the bonds will be 7 percent. a. W...

Q: Suppose your company needs to raise $45 million and you want

Suppose your company needs to raise $45 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you’re evaluating two issue a...

Q: Selected accounts follow of Aramis Limited at December 31, 2014:

Selected accounts follow of Aramis Limited at December 31, 2014: The following additional information is available: 1. Inventory is valued at lower of cost and net realizable value using FIFO. 2. Equi...

Q: Zezulka Corporation's statement of financial position at the end of 2013 included

Zezulka Corporation's statement of financial position at the end of 2013 included the following items: The following information is available for 2014: 1. Net income was $391,000. 2. Equipment (cost...

Q: The major classifications of activities reported in the statement of cash flows

The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. For this question, assume the following: 1. The direct method is used. 2. The i...

Q: The statement of financial position of Sargent Corporation follows for the current

The statement of financial position of Sargent Corporation follows for the current year, 2014: The following additional information is available: 1. The current assets section includes the following:...

Q: Faldo Corp. is a public company and has 100,000

Faldo Corp. is a public company and has 100,000 common shares outstanding. In 2014, the company reported income from continuing operations before income tax of $2,710,000. Additional transactions not...

Q: An excerpt from the annual report of BCE Inc. is shown

An excerpt from the annual report of BCE Inc. is shown below. The excerpt shows summarized financial information, including calculations of earnings before interest, tax, depreciation, and amortizatio...

Q: As a reviewer for the Ontario Securities Commission, you are in

As a reviewer for the Ontario Securities Commission, you are in the process of reviewing the financial statements of public companies. The following items have come to your attention: 1. A merchandisi...

Q: On July 1, 2014, Agincourt Inc. made two sales

On July 1, 2014, Agincourt Inc. made two sales: 1. It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,101,460. The land's carrying value is...

Q: Desrosiers Ltd. had the following long-term receivable account balances

Desrosiers Ltd. had the following long-term receivable account balances at December 31, 2013: Notes receivable $1,800,000 Notes receivable-Employees 400,000 Transactions during 2014 and oth...

Q: Gamma Corp. invested in a three-year, $ 100

Gamma Corp. invested in a three-year, $ 100 face value 6% bond, paying $ 105.55. At this price, the bond will yield a 4% return. Interest is payable annually. (a) Prepare a bond premiun1 amortization...

Q: Rotterdam Corporation's pre-tax accounting income of $725,000

Rotterdam Corporation's pre-tax accounting income of $725,000 for the year 2014 included the following items: Amortization of identifiable intangibles $147,000 Depreciation of building 115...

Q: Selected information follows for Mount Olympus Corporation for three independent situations:

Selected information follows for Mount Olympus Corporation for three independent situations: 1. Mount Olympus purchased a patent from Bakhshi Co. for $1.8 million on January 1, 2012. The patent expir...

Q: Instructions Go to the SEDAR website (www.sedar.

Instructions Go to the SEDAR website (www.sedar.com) and choose two companies from each of four different industry classifications. Choose from a variety of industries such as real estate and construc...

Q: Institute Limited organized late in 2013 and set up a single account

Institute Limited organized late in 2013 and set up a single account for all intangible assets. The following summary shows the entries in 2014 (all debits) that have been recorded in intangible Asset...

Q: Meridan Golf and Sports was formed on July 1, 2014,

Meridan Golf and Sports was formed on July 1, 2014, when Steve Powerdriver purchased Old Master Golf Corporation. Old Master provides video golf instruction at kiosks in shopping malls. Powerdriver's...

Q: Carras Corporation purchased $60,000 of five-year,

Carras Corporation purchased $60,000 of five-year, 6% bonds of Hu Inc. for $55,133 to yield an 8% return, and classified the purchase as an amortized cost method investment. The bonds pay interest sem...

Q: Gelato Corporation, a private entity reporting under ASPE, was incorporated

Gelato Corporation, a private entity reporting under ASPE, was incorporated on January 3, 2013. The corporation's financial statements for its first year of operations were not examined by a public ac...

Q: Monsecours Corp., a public company incorporated on June 28, 2013

Monsecours Corp., a public company incorporated on June 28, 2013, setup a single account for all of its intangible assets. The following summary discloses the debit entries that were recorded during 2...

Q: On January 1, 2014, Mustafa Limited paid $537,

On January 1, 2014, Mustafa Limited paid $537,907.40 for 12% bonds with a maturity value of $500,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2014, and mature on...

Q: On January 1, 2014, Phantom Corp. acquires $300

On January 1, 2014, Phantom Corp. acquires $300,000 of Spider Products, Inc. 9% bonds at a price of 5278,384. The interest is payable each December 31, and the bonds mature on December 31, 2016. The i...

Q: In early January 2014, Chi Inc., a private enterprise that

In early January 2014, Chi Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for $410,000. Chi was now able to exercise considerable influence in decision...

Q: On December 31, 2013, Nodd Corp. acquired an investment

On December 31, 2013, Nodd Corp. acquired an investment in GT Ltd. bonds with a nominal interest rate of I 0% (received each December 31) and the controller produced the following bond amortization sc...

Q: Octavia Corp. prepares financial statements annually on December 31, its

Octavia Corp. prepares financial statements annually on December 31, its fiscal year end. At December 31, 2014, the company has the account Investments in its general ledger that contains the followin...

Q: Minute Corp., a Canadian public corporation, reported the following on

Minute Corp., a Canadian public corporation, reported the following on its December 31, 2013 statement of financial position: $ Investment in Hysenaj Ltd. shares, at fai...

Q: The following amortization schedule is for Flagg Ltd.'s investment in

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Compare and contrast amortization of intangible assets with depreciation and depletion.

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Q: On January 1, 2018, National Insulation Corporation (NIC)

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Q: On January 1, 2018, Bradley Recreational Products issued $100

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Q: On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds

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Q: Southeast Technology provides postretirement health care benefits to employees. On January

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Q: Indicate by letter whether each of the events listed below increases (

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Q: Herring Wholesale Company has a defined benefit pension plan. On January

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Q: LGD Consulting is a medium-sized provider of environmental engineering services

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Q: Target Corporation prepares its financial statements according to U.S.

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Q: Refer to the data provided in the P 21–5 for

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Q: Refer to the data provided in the P 21–11 for

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Q: Van Frank Telecommunications has a patent on a cellular transmission process.

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Apple Inc. designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (iPod) and mobile phones (iPhone) along with related access...

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Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $3,400,000 of goodwill w...

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Ripley Corporation’s accumulated depreciation—furniture account increased by $11,575, while $2,500 of patent amortization was recognized between balance sheet dates. There were no purchases or sales o...

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Ya Wen Corporation’s accumulated depreciation—equipment account increased by $8,750, while $3,250 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of...

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Q: Using the bond from Practice Exercise 14-5B, journalize the

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Q: On January 1, Year 1, Bryson Company obtained a $

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On the first day of its fiscal year, Ebert Company issued $50,000,000 of 10-year, 7% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) in...

Q: Shunda Corporation wholesales parts to appliance manufacturers. On January 1,

Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Year 1, Shunda Corporation issued $22,000,000 of five-year, 9% bonds at a market (effective) interest rate of 7%, receivin...

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On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannual...

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Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley Corporation issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%,...

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year

The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market...

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On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannua...

Q: Campbell, Inc. produces and sells outdoor equipment. On July

Campbell, Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell, Inc. issued $25,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $26,625,9...

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On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannua...

Q: Campbell Inc. produces and sells outdoor equipment. On July 1

Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $25,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $26,625,925...

Q: The following transactions were completed by Montague Inc., whose fiscal year

The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, Year 1, at a market (e...

Q: On July 1, Year 1, Livingston Corporation, a wholesaler

On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236...

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Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers Corporation issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash...

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On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236...

Q: Rodgers Corporation produces and sells football equipment. On July 1,

Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers Corporation issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash...

Q: The comparative balance sheet of Harris Industries Inc. at December 31

The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows: An examination of the income statement and the accounting records revealed the following additio...

Q: Selected transactions completed by Equinox Products Inc. during the fiscal year

Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows: a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. b. I...

Q: FedEx Corporation provides a broad portfolio of transportation, e-commerce

FedEx Corporation provides a broad portfolio of transportation, e-commerce, and business services. FedEx reported the following information in its 2009 annual report. Note 1: DESCRIPTION OF BUSINESS...

Q: Insurance companies and pension plans hold large quantities of bond investments.

Insurance companies and pension plans hold large quantities of bond investments. Discount Insurance Corp. purchased $2,100,000 of 6.0% bonds of Soucy, Inc., for 116 on January 1, 2012. These bonds pay...

Q: Return to Short Exercise 8-7, the North Mark (

Return to Short Exercise 8-7, the North Mark (NM) investment in CitiSide bonds. Journalize the following on NM’s books: a. Purchase of the bond investment on June 30, 2012. NM expects to hold the inve...

Q: Insurance companies and pension plans hold large quantities of bond investments.

Insurance companies and pension plans hold large quantities of bond investments. Brighton Insurance Corp. purchased $2,300,000 of 10.0% bonds of Scanlon, Inc., for 114 on January 1, 2012. These bonds...

Q: 1. Makon Printers incurred costs of $1,500,

1. Makon Printers incurred costs of $1,500,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it is expected to provide Makon Printers with a competitiv...

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1. Mayflower Printers incurred costs of $1,200,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it is expected to provide Mayflower Printers with a co...

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An auditor’s analytical procedures indicate a lower than expected return on an equity method investment. This situation most likely could have been caused by a. An error in recording amortization of t...

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Mattel Inc., a manufacturer of toys, failed to write off obsolete inventory, thereby overstating inventory and improperly deferred tooling costs, both of which understated cost of goods sold and over...

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Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: a. Increase in merchandise inventory...

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Sunny Day Company uses the straight-line amortization method. The amount of interest expense for each year will be a. $60,000. b. $53,200. c. $54,000. d. $52,000. e. none of these. Sunny Day Company...

Q: McPherson Corporation issued $400,000 of 10%, 20-

McPherson Corporation issued $400,000 of 10%, 20-year bonds payable on January 1, 2012, for $295,000. The market interest rate when the bonds were issued was 14%. Interest is paid semiannually on Janu...

Q: EKU, Inc., issued $560,000 of 6%,

EKU, Inc., issued $560,000 of 6%, 10-year bonds payable at a price of 80.5 on March 31, 2012. The market interest rate at the date of issuance was 9%, and the EKU bonds pay interest semiannually. 1. P...

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Q: Starlight Drive-Ins Ltd. borrowed money by issuing $3

Starlight Drive-Ins Ltd. borrowed money by issuing $3,000,000 of 8% bonds payable at 97.5 on July 1, 2012. The bonds are 10-year bonds and pay interest each January 1 and July 1. 1. How much cash did...

Q: On January 31, Doherty Logistics, Inc., issued five-

On January 31, Doherty Logistics, Inc., issued five-year, 7% bonds payable with a face value of $8,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Doherty Logistics, I...

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Q: Team Sports Ltd. is authorized to issue $5,000

Team Sports Ltd. is authorized to issue $5,000,000 of 5%, 10-year bonds payable. On December 31, 2012, when the market interest rate is 6%, the company issues $4,000,000 of the bonds and receives cash...

Q: On June 30, 2012, the market interest rate is 8

On June 30, 2012, the market interest rate is 8%. First Place Sports Ltd. issues $4,000,000 of 9%, 20-year bonds payable at a price of 109.895. The bonds pay interest on June 30 and December 31. First...

Q: On January 31, Dogwood Logistics, Inc., issued 10-

On January 31, Dogwood Logistics, Inc., issued 10-year, 9% bonds payable with a face value of $9,000,000. The bonds were issued at 93 and pay interest on January 31 and July 31. Dogwood Logistics, Inc...

Q: Municipal Bank has $300,000 of 6% debenture bonds

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Q: Winner Sports Ltd. is authorized to issue $4,000

Winner Sports Ltd. is authorized to issue $4,000,000 of 12%, 10-year bonds payable. On December 31, 2012, when the market interest rate is 14%, the company issues $3,200,000 of the bonds and receives...

Q: On June 30, 2012, the market interest rate is 7

On June 30, 2012, the market interest rate is 7%. Victory Sports Ltd. issues $1,600,000 of 8%, 25-year bonds payable at a price of 111.75. The bonds pay interest on June 30 and December 31. Victory Sp...

Q: On February 28, 2012, Dolphin Corp. issues 6%,

On February 28, 2012, Dolphin Corp. issues 6%, 10-year bonds payable with a face value of $900,000. The bonds pay interest on February 28 and August 31. Dolphin Corp. amortizes bonds by the straight-l...

Q: The notes to the Giving Charities’ financial statements reported the following data

The notes to the Giving Charities’ financial statements reported the following data on December 31, Year 1 (end of the fiscal year): Giving Charities’ amortizes b...

Q: On December 31, 2012, Laraboo Corp. issues 11%,

On December 31, 2012, Laraboo Corp. issues 11%, 10-year convertible bonds payable with a maturity value of $4,000,000. The semiannual interest dates are June 30 and December 31. The market interest ra...

Q: On February 28, 2012, Starfish Corp. issues 10%,

On February 28, 2012, Starfish Corp. issues 10%, fi ve-year bonds payable with a face value of $1,200,000. The bonds pay interest on February 28 and August 31. Starfish Corp. amortizes bonds by the st...

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The notes to the Thankful Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year): Thankful Charities amortizes bonds by the effective-interest met...

Q: On December 31, 2012, Zugaboo Corp. issues 5%,

On December 31, 2012, Zugaboo Corp. issues 5%, 10-year convertible bonds payable with a maturity value of $5,000,000. The semiannual interest dates are June 30 and December 31. The market interest rat...

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Examine the statement of cash flows of Mirror, Inc. Suppose Mirror’s operating activities provided, rather than used, cash. Identify three things under the indirect method that cou...

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McTaggart-Hicks Investments specializes in low-risk government bonds. Identify each of McTaggart-Hicks transactions as operating (O), investing (I), financing (F), non-cash investing and financing (NI...

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Q: Consider three independent cases for the cash flows of Texas Tires Corp

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The 2012 income statement and the 2012 comparative balance sheet of T-Bar-M Camp, Inc., have just been distributed at a meeting of the camp’s board of directors. The directors raise...

Q: Use Amazon.com, Inc.’s consolidated statement of cash

Use Amazon.com, Inc.’s consolidated statement of cash flows along with the company’s other consolidated financial statements, all in Appendix A at the end of the book, to answer the following question...

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Q: Galvin Software Corp. has assembled the following data for the year

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Q: Fashion Furniture Gallery, Inc., provided the following data from the

Fashion Furniture Gallery, Inc., provided the following data from the company’s records for the year ended December 31, 2012: a. Credit sales, $522,000 b. Loan to another company, $8,900 c. Cash payme...

Q: Study the 2012 income statement of Original Imports, Inc., and

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Q: Matthew, Inc. owns 30 percent of the outstanding stock of

Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance...

Q: On January 1, 2018, Pine Company owns 40 percent (

On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it purchased several years ago for $182,000. Since the date of acquisition, the equity method has been properl...

Q: On July 1, 2016, Killearn Company acquired 88,000

On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to s...

Q: On January 1, 2017, Stream Company acquired 30 percent of

On January 1, 2017, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Vid...

Q: On January 1, 2018, Acme Co. is considering purchasing

On January 1, 2018, Acme Co. is considering purchasing a 40 percent ownership interest in PHC Co., a privately held enterprise, for $700,000. PHC predicts its profit will be $185,000 in 2018, projects...

Q: Create the amortization schedule for a loan of $15,000

Create the amortization schedule for a loan of $15,000, paid monthly over three years using a 9 percent APR.

Q: Create the amortization schedule for a loan of $5,000

Create the amortization schedule for a loan of $5,000, paid monthly over two years using an 8 percent APR.

Q: When paying off a home mortgage, extra principle payments can have

When paying off a home mortgage, extra principle payments can have a dramatic impact on the time needed to pay off the mortgage. (a) Create an amortization schedule for a $200,000, 3-year mortgage wit...

Q: Listed below are the 2018 financial statements for Garners’ Platoon Mental Health

Listed below are the 2018 financial statements for Garners’ Platoon Mental Health Care, Inc. Spread the balance sheet and income statement. Calculate the financial ratios for the fir...

Q: What is the “call” feature of a bond issue?

What is the “call” feature of a bond issue? How does the call feature affect the amortization of bond premium or discount?

Q: Described below are certain transactions of Edwardson Corporation. The company uses

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $70,000 sub...

Q: Assume the bonds in BE14-2 were issued at 98.

Assume the bonds in BE14-2 were issued at 98. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannually....

Q: Assume the bonds in BE14-2 were issued at 103.

Assume the bonds in BE14-2 were issued at 103. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannually...

Q: In this simulation, you are asked to address questions related to

In this simulation, you are asked to address questions related to the accounting for long-term liabilities. Prepare responses to all parts.

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2012, at 119.792 to yield 8%. Interest is payable semiannually on July 1 and January 1. Instructions Prepare the journal entries to...

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2013, at 102. Interest is payable semiannually on July 1 and January 1. Foreman Company uses the straight-line method of amortizatio...

Q: Assume the same information as in E14-4, except that

Assume the same information as in E14-4, except that Foreman Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. In E14-4 Fo...

Q: Spencer Company sells 10% bonds having a maturity value of $

Spencer Company sells 10% bonds having a maturity value of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and mature January 1, 2017. Interest is payable annually on January 1. Instr...

Q: Assume the same information as E14-6. In

Assume the same information as E14-6. In E14-6 Spencer Company sells 10% bonds having a maturity value of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and mature January 1, 2017. I...

Q: On June 30, 2012, Mackes Company issued $5,

On June 30, 2012, Mackes Company issued $5,000,000 face value of 13%, 20-year bonds at $5,376,150, a yield of 12%. Mackes uses the effective-interest method to amortize bond premium or discount. The b...

Q: On January 1, 2012, Osborn Company sold 12% bonds

On January 1, 2012, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2012, and mature...

Q: Assume the same information as in IFRS14-5, except that

Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. In IFRS14-5 Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2012, at 119.792 t...

Q: On June 30, 2004, Mendenhal Company issued 12% bonds

On June 30, 2004, Mendenhal Company issued 12% bonds with a par value of $600,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2012. Because of lower int...

Q: The following amortization and interest schedule reflects the issuance of 10-

The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2006, and the subsequent interest payments and charges. The companyâ&...

Q: Venezuela Co. is building a new hockey arena at a cost

Venezuela Co. is building a new hockey arena at a cost of $2,500,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,000,000 to complete...

Q: Good-Deal Inc. developed a new sales gimmick to help

Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for th...

Q: In each of the following independent cases the company closes its books

In each of the following independent cases the company closes its books on December 31. 1. Sanford Co. sells $500,000 of 10% bonds on March 1, 2012. The bonds pay interest on September 1 and March 1....

Q: Presented below are selected transactions on the books of Simonson Corporation.

Presented below are selected transactions on the books of Simonson Corporation. May 1, 2012 Bonds payable with a par value of $900,000, which are dated January 1, 2012, are sold at 106 plus accrued in...

Q: On December 31, 2012, Faital Company acquired a computer from

On December 31, 2012, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2016. Faital Company’s credit rating p...

Q: Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing

Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requ...

Q: On March 1, 2013, Sealy Company sold its 5-

On March 1, 2013, Sealy Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2013, at an effective annual interest rate (yield) of 11%. Interest is payable semiannually, and the first i...

Q: Part I. The appropriate method of amortizing a premium or discount

Part I. The appropriate method of amortizing a premium or discount on issuance of bonds is the effective-interest method. Instructions (a) What is the effective-interest method of amortization and ho...

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2012, at 119.792 to yield 8%. Interest is payable semiannually on July 1 and January 1. Instructions Prepare the journal entries to...

Q: In this simulation, you are asked to address questions related to

In this simulation, you are asked to address questions related to the accounting for long-term liabilities. Prepare responses to all parts.

Q: Assume the same information as in IFRS14-5, except that

Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. In IFRS14-5 Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2012, at 119.792 t...

Q: What is the “call” feature of a bond issue?

What is the “call” feature of a bond issue? How does the call feature affect the amortization of bond premium or discount?

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2013, at 102. Interest is payable semiannually on July 1 and January 1. Foreman Company uses the straight-line method of amortizatio...

Q: Assume the same information as in E14-4, except that

Assume the same information as in E14-4, except that Foreman Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. In E14-4 Fo...

Q: Spencer Company sells 10% bonds having a maturity value of $

Spencer Company sells 10% bonds having a maturity value of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and mature January 1, 2017. Interest is payable annually on January 1. Instr...

Q: Assume the same information as E14-6. In

Assume the same information as E14-6. In E14-6 Spencer Company sells 10% bonds having a maturity value of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and mature January 1, 2017. I...

Q: On June 30, 2012, Mackes Company issued $5,

On June 30, 2012, Mackes Company issued $5,000,000 face value of 13%, 20-year bonds at $5,376,150, a yield of 12%. Mackes uses the effective-interest method to amortize bond premium or discount. The b...

Q: On January 1, 2012, Osborn Company sold 12% bonds

On January 1, 2012, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2012, and mature...

Q: On June 30, 2004, Mendenhal Company issued 12% bonds

On June 30, 2004, Mendenhal Company issued 12% bonds with a par value of $600,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2012. Because of lower int...

Q: The following amortization and interest schedule reflects the issuance of 10-

The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2006, and the subsequent interest payments and charges. The companyâ&...

Q: Venezuela Co. is building a new hockey arena at a cost

Venezuela Co. is building a new hockey arena at a cost of $2,500,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,000,000 to complete...

Q: Good-Deal Inc. developed a new sales gimmick to help

Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for th...

Q: In each of the following independent cases the company closes its books

In each of the following independent cases the company closes its books on December 31. 1. Sanford Co. sells $500,000 of 10% bonds on March 1, 2012. The bonds pay interest on September 1 and March 1....

Q: Presented below are selected transactions on the books of Simonson Corporation.

Presented below are selected transactions on the books of Simonson Corporation. May 1, 2012 Bonds payable with a par value of $900,000, which are dated January 1, 2012, are sold at 106 plus accrued in...

Q: On December 31, 2012, Faital Company acquired a computer from

On December 31, 2012, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2016. Faital Company’s credit rating p...

Q: Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing

Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requ...

Q: On March 1, 2013, Sealy Company sold its 5-

On March 1, 2013, Sealy Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2013, at an effective annual interest rate (yield) of 11%. Interest is payable semiannually, and the first i...

Q: Part I. The appropriate method of amortizing a premium or discount

Part I. The appropriate method of amortizing a premium or discount on issuance of bonds is the effective-interest method. Instructions (a) What is the effective-interest method of amortization and ho...

Q: Assume the bonds in BE14-2 were issued at 98.

Assume the bonds in BE14-2 were issued at 98. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannually....

Q: Described below are certain transactions of Edwardson Corporation. The company uses

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $70,000 sub...

Q: Assume the bonds in BE14-2 were issued at 103.

Assume the bonds in BE14-2 were issued at 103. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannually...

Q: On January 1, 2012, Novotna Company purchased $400,

On January 1, 2012, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1....

Q: On January 1, 2011, Roosevelt Company purchased 12% bonds

On January 1, 2011, Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2011, and...

Q: Cardinal Paz Corp. carries an account in its general ledger called

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Instructions (Round...

Q: Presented below is information taken from a bond investment amortization schedule with

Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Instructions (a) Indicate wheth...

Q: On January 1, 2012, Morgan Company acquires $300,

On January 1, 2012, Morgan Company acquires $300,000 of Nicklaus, Inc., 9% bonds at a price of $278,384. The interest is payable each December 31, and the bonds mature December 31, 2014. The investmen...

Q: On January 1, 2012, Roosevelt Company purchased 12% bonds

On January 1, 2012, Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a10% yield. They are dated January 1, 2012, and...

Q: Schuss Inc. issued $3,000,000 of 10

Schuss Inc. issued $3,000,000 of 10%, 10-year convertible bonds on June 1, 2012, at 98 plus accrued interest. The bonds were dated April 1, 2012, with interest payable April 1 and October 1. Bond disc...

Q: Georgia Pacific, a manufacturer, incurs the following costs.

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory...

Q: Exhibit 5-1 presents the business-segment and geographic-

Exhibit 5-1 presents the business-segment and geographic-segment information of Lafarge, a French company that uses International Financial Reporting Standards (IFRS) in it consolidated financial stat...

Q: Inc. In 1993 Icelandic Enterprises was incorporated in Reykjavik to manufacture

Inc. In 1993 Icelandic Enterprises was incorporated in Reykjavik to manufacture and distribute women’s cosmetics in Iceland. All of its outstanding stock was acquired at the beginnin...

Q: Read Appendix 9-1. Referring to Exhibit 9-14

Read Appendix 9-1. Referring to Exhibit 9-14 and related notes, assume instead that Toyoza’s inventories were costed using the FIFO method and that Lincoln Enterprises employed the L...

Q: Corcoran Heavy Industries Company (CHIC) is organized into four divisions

Corcoran Heavy Industries Company (CHIC) is organized into four divisions, each of which operates in a different industry. The types of customer served and the method used to distribute products diffe...

Q: The Coca-Cola Company is organized geographically and defines reportable operating

The Coca-Cola Company is organized geographically and defines reportable operating segments as regions of the world. The following information was extracted from Note 19 Operating Segments in the Coca...

Q: Which of the following items is remeasured using the current exchange rate

Which of the following items is remeasured using the current exchange rate under the temporal method? a. Bonds payable. b. Dividends declared. c. Additional paid-in capital. d. Amortization of intangi...

Q: The following accounts are denominated in rubles as of December 31,

The following accounts are denominated in rubles as of December 31, 2017. For reporting purposes, these accounts need to be stated in U.S. dollars. For each account, indicate the exchange rate that wo...

Q: Place Company owns a majority voting interest in Sassano, Inc.

Place Company owns a majority voting interest in Sassano, Inc. On January 1, 2016, Place issued $1,000,000 of 11 percent 10-year bonds at $943,497.77 to yield 12 percent. On January 1, 2018, Sassano p...

Q: The following information has been taken from the consolidation worksheet of Peak

The following information has been taken from the consolidation worksheet of Peak and its 90 percent–owned subsidiary, Valley: ∙ Peak reports a $12,000 gain on the sale of a building. The building had...

Q: Plume Company has a paper products operating segment. Which of the

Plume Company has a paper products operating segment. Which of the following items does it not have to report for this segment? a. Interest expense. b. Research and development expense. c. Depreciatio...

Q: Alford Company and its 80 percent–owned subsidiary, Knight,

Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2018: Additional Information for 2018 ∙ Intra-entity inventor...

Q: Porter Corporation owns all 30,000 shares of the common stock

Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 60,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without an...

Q: The following separate income statements are for Burks Company and its 80

The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company: Additional Information ∙ Amortization expense...

Q: Bolero Company holds 80 percent of the common stock of Rivera,

Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 40 percent of this subsidiary’s convertible bonds. The following consolidated financial statements are for 20...

Q: During the 2012 annual accounting period, Nguyen Corporation completed the following

During the 2012 annual accounting period, Nguyen Corporation completed the following transactions: a. On January 1, 2012, purchased a license for $7,200 cash (estimated useful life, four years). b....

Q: Carey Corporation has five different intangible assets to be accounted for and

Carey Corporation has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these int...

Q: Refer to the financial statements of American Eagle Outfitters in Appendix B

Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of this book. Required: For each question, answer it and indicate where you located the information to answer...

Q: Refer to the financial statements of Urban Outfitters given in Appendix C

Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. Required: For each question, answer it and indicate where you located the information to answer the...

Q: Cain Company operates in both the beverage and entertainment industries. In

Cain Company operates in both the beverage and entertainment industries. In June 2006, Cain purchased Good Time, Inc., which produces and distributes motion picture, television, and home video product...

Q: Complete the requirements for each of the following independent cases:

Complete the requirements for each of the following independent cases: Case A. Dr Pepper Snapple Group, Inc., is a leading integrated brand owner, bottler, and distributor of nonalcoholic beverages i...

Q: A recent annual report for FedEx includes the following information:

A recent annual report for FedEx includes the following information: Required: Explain why FedEx uses different methods of depreciation for financial reporting and tax purposes.

Q: Trotman Company had three intangible assets at the end of 2012 (

Trotman Company had three intangible assets at the end of 2012 (end of the accounting year): a. Computer software and Web development technology purchased on January 1, 2011, for $70,000. The technol...

Q: Cheshire Company had three intangible assets at the end of 2011 (

Cheshire Company had three intangible assets at the end of 2011 (end of the accounting year): a. A copyright purchased on January 1, 2011, for a cash cost of $12,300. The copyright is expected to hav...

Q: The following is a list of account titles and amounts (dollars

The following is a list of account titles and amounts (dollars in millions) from a recent annual report of Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software f...

Q: For each of the following long-lived assets, indicate its

For each of the following long-lived assets, indicate its nature and the related cost allocation concept. Use the following symbols:

Q: During the 2011 annual accounting period, BSP Company completed the following

During the 2011 annual accounting period, BSP Company completed the following transactions: a. On January 1, 2011, purchased a patent for $28,000 cash (estimated useful life, seven years). b. On Jan...

Q: Starn Tool Company has five different intangible assets to be accounted for

Starn Tool Company has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these in...

Q: Fitzpatrick Company’s calendar-year 2013 income statement shows the following:

Fitzpatrick Company’s calendar-year 2013 income statement shows the following: Net Income, $374,000; Depreciation Expense, $44,000; Amortization Expense, $7,200; Gain on Sale of Plant Assets, $6,000....

Q: Information: The following income statement and information about changes in noncash

Information: The following income statement and information about changes in noncash current assets and current liabilities are reported. Changes in current asset and current liability accounts for...

Q: Refer to the information about Sonad Company in Exercise 12-6

Refer to the information about Sonad Company in Exercise 12-6. Use the direct method to prepare only the cash provided or used by operating activities section of the statement of cash flows for this c...

Q: ‘‘They don’t just sell coffee; they sell the Starbucks

‘‘They don’t just sell coffee; they sell the Starbucks Experience,’’ remarked Deb Mills while sitting down to...

Q: Components of the deferred tax asset of Biosante Pharmaceuticals, Inc.,

Components of the deferred tax asset of Biosante Pharmaceuticals, Inc., are shown in Exhibit 2.14. The company had no deferred tax liabilities. REQUIRED a. At the end of 2008, the largest deferred ta...

Q: Exhibit 8.29 presents the separate financial statements at December 31

Exhibit 8.29 presents the separate financial statements at December 31, 2015, of Prestige Resorts and its 80%-owned subsidiary Booking, Inc. Two years earlier on January 1, 2014, Prestige acquired 80%...

Q: On January 1, 2014, assume that Turner Construction Company agreed

On January 1, 2014, assume that Turner Construction Company agreed to construct an observatory for Dartmouth College for $120 million. Dartmouth College must pay $30 million upon signing and $30 milli...

Q: Using the following key, identify the effects of the following transactions

Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I ¼ increases; D ¼ decreases; NE &...

Q: Pension expense typically consists of five components. Answer the following questions

Pension expense typically consists of five components. Answer the following questions related to each component. a. Service cost: Is it possible for the service cost component to reduce pension expens...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of man...

Q: Walmart Stores, Inc. (Walmart) is the largest retailing

Walmart Stores, Inc. (Walmart) is the largest retailing firm in the world. Building on a base of discount stores, Walmart has expanded into warehouse clubs and Supercenters, which sell traditional dis...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of man...

Q: Hasbro is a leading firm in the toy, game, and

Hasbro is a leading firm in the toy, game, and amusement industry. Its promoted brands group includes products from Playskool, Tonka, Milton Bradley, Parker Brothers, Tiger, and Wizards of the Coast....

Q: Abercrombie & Fitch sells casual apparel and personal care products for men

Abercrombie & Fitch sells casual apparel and personal care products for men, women, and children through retail stores located primarily in shopping malls. Its fiscal year ends January 31 of each...

Q: Sirius XM Radio Inc. is a satellite radio company, formed

Sirius XM Radio Inc. is a satellite radio company, formed from the merger of Sirius and XM in 2008. Exhibit 3.22 presents a statement of cash flows for Sirius XM Radio for 2006, 2007, and 2008. Sirius...

Q: Sunbeam Corporation manufactures and sells a variety of small household appliances,

Sunbeam Corporation manufactures and sells a variety of small household appliances, including toasters, food processors, and waffle grills. Exhibit 3.23 presents a statement of cash flows for Sunbeam...

Q: The Apollo Group is one of the largest providers of private education

The Apollo Group is one of the largest providers of private education, and runs numerous programs and services, including the University of Phoenix. Exhibit 3.25 provides the statement of cash flows f...

Q: Exhibit 5.25 presents balance sheets for 2007 and 2008 for

Exhibit 5.25 presents balance sheets for 2007 and 2008 for Whole Foods Market, Inc.; Exhibit 5.26 presents income statements for 2006–2008. REQUIRED a. Prepare the standard decompo...

Q: Refer to the financial statement data for Hasbro in Problem 4.

Refer to the financial statement data for Hasbro in Problem 4.24 in Chapter 4. Exhibit 5.15 presents risk ratios for Hasbro for Year 2 and Year 3. Financial statement data for Hasbro from Problem 4.2...

Q: Exhibit 1.25 presents common-size income statements and balance

Exhibit 1.25 presents common-size income statements and balance sheets for seven firms that operate at various stages in the value chain for the pharmaceutical industry. These common- size statements...

Q: Prior to Year 8, Cooper Corporation engaged in a wide variety

Prior to Year 8, Cooper Corporation engaged in a wide variety of industries, including weapons manufacturing under government contracts, information technologies, commercial aircraft manufacturing, mi...

Q: Dick’s Sporting Goods is a chain of full-line sporting goods

Dick’s Sporting Goods is a chain of full-line sporting goods retail stores offering a broad assortment of brand name sporting goods equipment, apparel, and footwear. Dickâ€...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of man...

Q: Sunbeam Corporation manufactures and sells a variety of small household appliances,

Sunbeam Corporation manufactures and sells a variety of small household appliances, including toasters, food processors, and waffle grills. Exhibit 6.21 presents a statement of cash flows for Sunbeam...

Q: BTB Electronics Inc. manufactures parts, components, and processing equipment

BTB Electronics Inc. manufactures parts, components, and processing equipment for electronics and semiconductor applications in the communications, computer, automotive, and appliance industries. Its...

Q: The Coca-Cola Company (Coca-Cola), like PepsiCo

The Coca-Cola Company (Coca-Cola), like PepsiCo, manufactures and markets a variety of beverages. Exhibit 3.18 presents a statement of cash flows for Coca-Cola for three years. REQUIRED Discuss the...

Q: Texas Instruments primarily develops and manufactures semiconductors for use in technology-

Texas Instruments primarily develops and manufactures semiconductors for use in technology-based products for various industries. The manufacturing process is capital-intensive and subject to cyclical...

Q: Tesla Motors manufactures high performance electric vehicles that are extremely slick looking

Tesla Motors manufactures high performance electric vehicles that are extremely slick looking. Exhibit 3.20 presents the statement of cash flows for Tesla Motors for 2010–2012. REQU...

Q: Top Quality Appliance—Long Beach has just purchased a franchise from

Top Quality Appliance—Long Beach has just purchased a franchise from Top Quality Appliance (TQA). TQA is a manufacturer of kitchen appliances. TQA markets its products via retail sto...

Q: Melbourn Printers (MP) manufactures printers. Assume that MP recently

Melbourn Printers (MP) manufactures printers. Assume that MP recently paid $200,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to prov...

Q: View a link toTarget Corporation’s Fiscal 2015 annual report at http://

View a link toTarget Corporation’s Fiscal 2015 annual report at http://www.pearsonhighered.com/Horngren. Refer to the Target Corporation financial statements, including Notes 14 and 15. Answer the fol...

Q: On October 1, 2018, Modern Company purchased a patent for

On October 1, 2018, Modern Company purchased a patent for $153,600 cash. Although the patent gives legal protection for 20 years, the patent is expected to be used for only eight years. Requirements:...

Q: Kellerman Company purchased a building and land with a fair market value

Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425,000, and land, $125,000) on January 1, 2018. Kellerman signed a 20-year, 6% mortgage payable. Kelle...

Q: On June 30, Daughtry Limited issues 8%, 20-year

On June 30, Daughtry Limited issues 8%, 20-year bonds payable with a face value of $130,000. The bonds are issued at 86 and pay interest on June 30 and December 31. Requirements: 1. Journalize the is...

Q: Anderson Company issued $70,000 of 10-year,

Anderson Company issued $70,000 of 10-year, 9% bonds payable on January 1, 2018. Anderson Company pays interest each January 1 and July 1 and amortizes discount or premium by the straight-line amortiz...

Q: On January 1, 2018, Roberts Unlimited issues 8%, 20

On January 1, 2018, Roberts Unlimited issues 8%, 20-year bonds payable with a face value of $240,000. The bonds are issued at 104 and pay interest on June 30 and December 31. Requirements: 1. Journal...

Q: CoastalView Magazine issued $600,000 of 15-year,

CoastalView Magazine issued $600,000 of 15-year, 5% callable bonds payable on July 31, 2018, at 94. On July 31, 2021, CoastalView called the bonds at 101. Assume annual interest payments. Requirement...

Q: Journalize issuance of the bond and the first semiannual interest payment under

Journalize issuance of the bond and the first semiannual interest payment under each of the following three assumptions. The company amortizes bond premium and discount by the effective-interest amort...

Q: Danny’s Hamburgers issued 6%, 10-year bonds payable at 90

Danny’s Hamburgers issued 6%, 10-year bonds payable at 90 on December 31, 2018. At December 31, 2020, Danny reported the bonds payable as follows: Danny’s pays se...

Q: On January 1, 2018, Nurses Credit Union (NCU)

On January 1, 2018, Nurses Credit Union (NCU) issued 8%, 20-year bonds payable with face value of $600,000. The bonds pay interest on June 30 and December 31. Requirements: 1. If the market interest...

Q: On January 1, 2018, Educators Credit Union (ECU)

On January 1, 2018, Educators Credit Union (ECU) issued 8%, 20-year bonds payable with face value of $1,000,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 10...

Q: Brad Nelson, Inc. issued $600,000 of 7

Brad Nelson, Inc. issued $600,000 of 7%, six-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually. Requirements: 1....

Q: Relaxation, Inc. is authorized to issue 7%, 10-

Relaxation, Inc. is authorized to issue 7%, 10-year bonds payable. On January 1, 2018, when the market interest rate is 12%, the company issues $300,000 of the bonds. The bonds pay interest semiannual...

Q: Johnny’s Hamburgers issued 8%, 10-year bonds payable at 85

Johnny’s Hamburgers issued 8%, 10-year bonds payable at 85 on December 31, 2018. At December 31, 2020, Johnny reported the bonds payable as follows: Johnny pays semiannual interest...

Q: On January 1, 2018, Doctors Credit Union (DCU)

On January 1, 2018, Doctors Credit Union (DCU) issued 7%, 20-year bonds payable with face value of $200,000. The bonds pay interest on June 30 and December 31. Requirements: 1. If the market interest...

Q: On January 1, 2018, Electricians Credit Union (ECU)

On January 1, 2018, Electricians Credit Union (ECU) issued 8%, 20-year bonds payable with face value of $400,000. The bonds pay interest on June 30 and December 31. The issue price of the bonds is 104...

Q: Ari Goldstein issued $300,000 of 11%, five-

Ari Goldstein issued $300,000 of 11%, five-year bonds payable on January 1, 2018. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Requirements: 1. H...

Q: Sleep Well, Inc. is authorized to issue 9%, 10

Sleep Well, Inc. is authorized to issue 9%, 10-year bonds payable. On January 1, 2018, when the market interest rate is 10%, the company issues $500,000 of the bonds. The bonds pay interest semiannual...

Q: What is an amortization schedule?

What is an amortization schedule?

Q: In regard to a bond discount or premium, what is the

In regard to a bond discount or premium, what is the straight-line amortization method?

Q: In regard to a bond discount or premium, what is the

In regard to a bond discount or premium, what is the effective-interest amortization method?

Q: On December 31, 2018, when the market interest rate is

On December 31, 2018, when the market interest rate is 6%, Benson Realty issues $700,000 of 6.25%, 10-year bonds payable. The bonds pay interest semiannually. Benson Realty received $713,234 in cash a...

Q: Owen Company issued a $110,000, 11%, 10

Owen Company issued a $110,000, 11%, 10-year bond payable at 94 on January 1, 2018. Interest is paid semiannually on January 1 and July 1. Requirements: 1. Journalize the issuance of the bond payabl...

Q: Wilkes Mutual Insurance Company issued a $100,000, 5

Wilkes Mutual Insurance Company issued a $100,000, 5%, 10-year bond payable at 111 on January 1, 2018. Interest is paid semiannually on January 1 and July 1. Requirements: 1. Journalize the issuance...

Q: On December 31, 2018, when the market interest rate is

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...

Q: The Tusquittee Company is a retail company that began operations on October

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 o...

Q: Canyon Canoe Company is considering raising additional capital for further expansion.

Canyon Canoe Company is considering raising additional capital for further expansion. The company wants to finance a new business venture into guided trips down the Amazon River in South America. Addi...

Q: Canyon Canoe Company’s comparative balance sheet is shown below. 2019 amounts

Canyon Canoe Company’s comparative balance sheet is shown below. 2019 amounts are assumed, but include several transactions from prior chapters. Additional data follow: 1. The inco...

Q: Explain why depreciation expense, depletion expense, and amortization expense are

Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows when using the indirect method....

Q: On January 1, 2016, Sean purchased an 8%, $

On January 1, 2016, Sean purchased an 8%, $100,000 corporate bond for $92,277. The bond was issued on January 1, 2016, and matures on January 1, 2021. Interest is paid semiannually, and the effective...

Q: Diageo is a major international company located in London, best known

Diageo is a major international company located in London, best known for its Smirnoff, JohnnieWalker, and Bailey’s brands of spirits. Its financial statements are accounted for under IFRS. A recentan...

Q: Houston Company issued a $10,000, three-year

Houston Company issued a $10,000, three-year, 5 percent bond on January 1, 2011. The bond interest ispaid each December 31. The bond was sold to yield 4 percent. Required: 1. Complete a bond amortiza...

Q: On January 1, 2011, Bidden Corporation sold and issued $

On January 1, 2011, Bidden Corporation sold and issued $100,000, five-year, 10 percent bonds. The bond interest is payable each June 30 and December 31. Assume three separate and independent selling s...

Q: Match the following. Answers may be used more than once:

Match the following. Answers may be used more than once:

Q: Rocky Mountain Chocolate Factory manufactures an extensive line of premium chocolate candies

Rocky Mountain Chocolate Factory manufactures an extensive line of premium chocolate candies for saleat its franchised and company-owned stores in malls throughout the United States. Its balance sheet...

Q: A recent annual report for PepsiCo contained the following information for the

A recent annual report for PepsiCo contained the following information for the period (dollars in millions): Net income .........................................................$5,142 Depreciation an...

Q: Gibraltar Industries is a Buffalo, New York–based manufacturer of

Gibraltar Industries is a Buffalo, New York–based manufacturer of high-value-added steel products. In a recent year, it reported the following activities: Acquisitions (investments in other companies...

Q: Refer to the information for Capaz Company in Exercise 13-7

Refer to the information for Capaz Company in Exercise 13-7. Information fromExercise 13-7 Capaz Company completed its income statement and balance sheet for 2012 and provided the following informat...

Q: Refer to the following summarized income statement and additional selected information forHuanca

Refer to the following summarized income statement and additional selected information forHuanca, Inc.: Income Statement Revenues ...........................................$146,500 Cost of sales ......

Q: Capaz Company completed its income statement and balance sheet for 2012 and

Capaz Company completed its income statement and balance sheet for 2012 and provided the following information: In addition, Capaz bought a small service machine for $5,000. Required: 1. Present th...

Q: Santa Corporation sold a $1,000 bond on January 1

Santa Corporation sold a $1,000 bond on January 1, 2011. The bond specified an interest rate of 6 percent payable at the end of each year. The bond matures at the end of 2013. It was sold at a market...

Q: On January 1, 2011, Kennedy Corporation issued $1,

On January 1, 2011, Kennedy Corporation issued $1,000,000 in bonds that mature in five years. The bonds have a stated interest rate of 7 percent and pay interest on December 31 each year. When the bon...

Q: On January 1, 2011, Avaya Corporation issued $2,

On January 1, 2011, Avaya Corporation issued $2,000,000 in bonds that mature in five years. The bonds have a stated interest rate of 6 percent and pay interest on December 31 each year. When the bonds...

Q: On January 1, 2011, Grand Isle Corporation issued $900

On January 1, 2011, Grand Isle Corporation issued $900,000 in bonds that mature in five years. The bonds have a stated interest rate of 10 percent and pay interest on December 31 each year. When the b...

Q: On January 1, 2011, Thomas Insurance Corporation issued $4

On January 1, 2011, Thomas Insurance Corporation issued $4,000,000 in bonds that mature in five years. The bonds have a stated interest rate of 9 percent and pay interest on December 31 each year. Whe...

Q: On January 1, 2011, TCU Utilities issued $1,

On January 1, 2011, TCU Utilities issued $1,000,000 in bonds that mature in 10 years. The bonds have a stated interest rate of 10 percent and pay interest on June 30 and December 31 each year. When th...

Q: Electrolux Corporation manufactures electrical test equipment. The company’s board of directors

Electrolux Corporation manufactures electrical test equipment. The company’s board of directors authorizeda bond issue on January 1, 2011, with the following terms: Maturity (par) value: $800,000 Inte...

Q: On January 1, 2011, Vigeland Corporation issued $2,

On January 1, 2011, Vigeland Corporation issued $2,000,000 in bonds that mature in 10 years. The bonds havea stated interest rate of 10 percent and pay interest on June 30 and December 31 each year. W...

Q: MBTA Corporation issued bonds and received cash in full for the issue

MBTA Corporation issued bonds and received cash in full for the issue price. The bonds were dated and issued on January 1, 2011. The stated interest rate was payable at the end of each year. The bonds...

Q: Barnett Corporation sold a $500,000, 7 percent bond

Barnett Corporation sold a $500,000, 7 percent bond issue on January 1, 2011. The bonds pay interest each June 30 and December 31 and mature 10 years from January 1, 2011. For comparative study and an...

Q: Akron Corporation, whose annual accounting period ends on December 31,

Akron Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2011 Maturity amount and date: $100,000 due in 10 years Interest: 10 percen...

Q: Determine whether each of the following would be reported in the financing

Determine whether each of the following would be reported in the financing activities section of the statement of cash flows and, if so, specify whether it is a cash inflow or outflow. 1. Sale of bond...

Q: Singh Inc., a calendar year taxpayer, reported the following transactions

Singh Inc., a calendar year taxpayer, reported the following transactions. Singh is not a small corporation for AMT purposes. Taxable income………………………………………………………………………………………$2,600,000 Depreciatio...

Q: In 2017, your client, Clear Corporation, changed from the

In 2017, your client, Clear Corporation, changed from the cash to the accrual method of accounting for its radio station. The company had a positive § 481 adjustment of $2.4 million as a result of the...

Q: In the current year, Woodpecker, Inc., a C corporation

In the current year, Woodpecker, Inc., a C corporation with $8.5 million in assets, reported amortization of $40,000 on its financial statements and deducted amortization of $55,000 on its Federal tax...

Q: On December 1, 2015, Lavender Manufacturing Company (a corporation

On December 1, 2015, Lavender Manufacturing Company (a corporation) purchased another company’s assets, including a patent. The patent was used in Lavender’s manufacturing operations; $49,500 was allo...

Q: On July 1, 2017, Katrina purchased tax-exempt bonds

On July 1, 2017, Katrina purchased tax-exempt bonds (face value of $75,000) for $82,000. The bonds mature in five years, and the annual interest rate is 6%. The market rate of interest is 2%. a. How m...

Q: 1. Which of the following is not a characteristic of a

1. Which of the following is not a characteristic of a constructive retirement of bonds from an intercompany bond transaction? a Bonds are retired for consolidated statement purposes only. b The recip...

Q: Pam Corporation’s long-term debt on January 1, 2016,

Pam Corporation’s long-term debt on January 1, 2016, consists of $400,000 par value of 10 percent bonds payable due on January 1, 2020, with an unamortized discount of $8,000. On January 2, 2016, Sun...

Q: The consolidated balance sheet of Pop Corporation and Son (an 80

The consolidated balance sheet of Pop Corporation and Son (an 80 percent–owned subsidiary) at December 31, 2016, includes the following items related to an 8 percent, $500,000 outstanding bond issue:...

Q: Pop Corporation acquired an 80 percent interest in Son Corporation at book

Pop Corporation acquired an 80 percent interest in Son Corporation at book value equal to fair value on January 1, 2017, at which time Son’s capital stock and retained earnings were $200,000 and $80,0...

Q: Intercompany transactions between Pop Corporation and Son Corporation, its 80 percent

Intercompany transactions between Pop Corporation and Son Corporation, its 80 percent–owned subsidiary, from January 2016, when Pop acquired its controlling interest, to December 31,...

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1. Under GAAP, a parent company should exclude a subsidiary from consolidation if: a It measures income from the subsidiary under the equity method b The subsidiary is in a regulated industry c The su...

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Comparative consolidated financial statements for Pam Corporation and its 80 percent–owned subsidiary at and for the years ended December 31 are summarized as follows: REQUIRED: P...

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Pop Corporation paid $1,680,000 for a 30 percent interest in Son Corporation’s outstanding voting stock on January 1, 2016. The book values and fair values of Son’s...

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Pam Corporation paid $170,000 for an 80 percent interest in Sun Corporation on December 31, 2016, when Sun’s stockholders’ equity consisted of $100,000 capital stoc...

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Pam Corporation acquired a 90 percent interest in Sun Corporation on January 1, 2016, for $2,700,000, at which time Sun’s capital stock and retained earnings were $1,500,000 and $900...

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The individual and consolidated balance sheets and income statements of P and S Companies for the current year are presented in the accompanying table. The entity theory is used. ADDITIONAL INFO R MA...

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Pam Corporation paid $960,000 cash for a 100 percent interest in Sun Corporation on January 1, 2017, when Sun’s stockholders’ equity consisted of $400,000 capital s...

Q: Pam Corporation paid $180,000 cash for a 90 percent

Pam Corporation paid $180,000 cash for a 90 percent interest in Sun Corporation on January 1, 2017, when Sun’s stockholders’ equity consisted of $100,000 capital st...

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The adjusted trial balances of Pop Corporation and its 80 percent–owned subsidiary, Son Corporation, at December 31, 2017, are as follows (in thousands): Pop acquired its interest...

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Pel, a U.S. firm, paid $308,000 for all the common stock of Sar of Israel on January 1, 2016, when the exchange rate for sheqels was $0.35. Sar’s equity on this date consisted of 500...

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PWA Corporation paid $1,710,000 for 100 percent of the stock of SAA Corporation on January 1, 2016, when the stockholders’ equity of SAA consisted of 5,000,000 LCU capital stock and...

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The income statements of Pop Corporation and its 80 percent–owned subsidiary, Son Corporation, for 2016 are as follows: Note: Income from Son is computed as [($26,400 reported inco...

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Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net...

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Q: Motley Company issued $300,000, 8%, 15-

Motley Company issued $300,000, 8%, 15-year bonds on December 31, 2016, for $288,000. Interest is payable annually on December 31. Motley uses the straight-line method to amortize bond premium or disc...

Q: Woode Corporation issued $400,000, 7%, 20-

Woode Corporation issued $400,000, 7%, 20-year bonds on January 1, 2017, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1....

Q: Hernandez Company issued $380,000, 7%, 10-

Hernandez Company issued $380,000, 7%, 10-year bonds on January 1, 2017, for $407,968. This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annually on January 1....

Q: Honore Draper is discussing the advantages of the effective interest method of

Honore Draper is discussing the advantages of the effective interest method of bond amortization with her accounting staff. What do you think Honore is saying?

Q: The following situations are independent of one another. 1.

The following situations are independent of one another. 1. An accounting student recently employed by a small company doesn’t understand why the company is only depreciating its buildings and equipme...

Q: Suppose Nike, Inc. reported the following plant assets and intangible

Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2017 (in millions): other plant assets $965.8, land $221.6, patents and trademarks (at cost) $51...

Q: Abner Company purchases a patent for $156,000 on January

Abner Company purchases a patent for $156,000 on January 2, 2017. Its estimated useful life is 6 years. (a) Prepare the journal entry to record amortization expense for the first year. (b) Show how th...

Q: These are selected 2017 transactions for Wyle Corporation: Jan.

These are selected 2017 transactions for Wyle Corporation: Jan. 1 Purchased a copyright for $120,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. Mar. 1 Purchase...

Q: Hunt Company reported net income of $157,000. It

Hunt Company reported net income of $157,000. It reported depreciation expense of $12,000 and accumulated depreciation of $47,000. Amortization expense was $8,000. Hunt purchased new equipment during...

Q: Due to rapid employee turnover in the accounting department, the following

Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Inland Corporation. 1. Inland developed a new manufactur...

Q: Consider a ten-year, fixed-rate mortgage of $

Consider a ten-year, fixed-rate mortgage of $500,000 that has an interest rate of 12 percent. For simplification, assume that payments are made annually. a. Determine the amortization schedule. b. U...

Q: Kruse Corporation holds 60 percent of the voting common shares of Gary’s

Kruse Corporation holds 60 percent of the voting common shares of Gary’s Ice Cream Parlors. On January 1, 20X6, Gary’s purchased $50,000 par value, 10 percent first mortgage bonds of Kruse from Cane f...

Q: Assume the same facts as in E8-1 and prepare entries

Assume the same facts as in E8-1 and prepare entries using straight-line amortization of bond discount or premium. Data from E8-1: Lamar Corporation owns 60 percent of Humbolt Corporation’s voting s...

Q: Assume the same facts as in E8-7 but prepare entries

Assume the same facts as in E8-7 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-7: Able Company issued $600,000 of 9 percent first mortgage bonds on J...

Q: Assume the same facts as in E8-8 but prepare entries

Assume the same facts as in E8-8 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-8: Able Company issued $600,000 of 9 percent first mortgage bonds on J...

Q: Assume the same facts as in E8-9 but prepare entries

Assume the same facts as in E8-9 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-9: Farley Corporation owns 70 percent of Snowball Enterprises’ stock....

Q: Assume the same facts as in E8-12 but prepare entries

Assume the same facts as in E8-12 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-12: Bundle Company issued $500,000 par value, 10-year bonds at 104 on...

Q: Assume the same facts as in E8-13 but prepare entries

Assume the same facts as in E8-13 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-13: Stang Corporation issued to Bradley Company $400,000 par value, 1...

Q: Assume the same facts as in E8-14 except for the

Assume the same facts as in E8-14 except for the changes in the trial balances and assuming the bonds were sold for $82,000, but prepare entries using straight-line amortization of bond discount or pr...

Q: Assume the same facts as in E8-15 except for the

Assume the same facts as in E8-15 except for the changes in the trial balances, but prepare entries using straight-line amortization of bond discount or premium. Required: Record the journal e...

Q: Assume the same facts as in E8-3 but prepare entries

Assume the same facts as in E8-3 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-3: Wood Corporation owns 70 percent of Carter Company’s voting shares....

Q: Brown Company owns 90 percent of the common stock and 60 percent

Brown Company owns 90 percent of the common stock and 60 percent of the preferred stock of White Corporation, both acquired at underlying book value on January 1, 20X1. At that date, the fair value of...

Q: Panther Enterprises owns 80 percent of Grange Corporation’s voting stock. Panther

Panther Enterprises owns 80 percent of Grange Corporation’s voting stock. Panther acquired the shares on January 1, 20X4, for $234,500. On that date, the fair value of the noncontrol...

Q: Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock

Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the noncontroll...

Q: Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock

Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the noncontroll...

Q: Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock

Topp Manufacturing Company acquired 90 percent of Bussman Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the noncontroll...

Q: Partial trial balance data for Mound Corporation, Shadow Company, and

Partial trial balance data for Mound Corporation, Shadow Company, and the consolidated entity at December 31, 20X7, are as follows: Additional Information: Mound Corporation acquired 60 percent own...

Q: Rossman Corporation holds 75 percent of the common stock of Schmid Distributors

Rossman Corporation holds 75 percent of the common stock of Schmid Distributors Inc., purchased on December 31, 20X1, for $2,340,000. At the date of acquisition, Schmid reported common stock with a pa...

Q: On January 1 of this year, Thomas Insurance Corporation issued bonds

On January 1 of this year, Thomas Insurance Corporation issued bonds with a face value of $4,000,000 and a coupon rate of 9 percent. The bonds mature in five years and pay interest annually every Dece...

Q: During the current year ending on December 31, BSP Company completed

During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years). b. On Januar...

Q: Starn Tool Company has five different intangible assets to be accounted for

Starn Tool Company has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these in...

Q: On January 1 of this year, Olive Corporation issued bonds.

On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization met...

Q: Serotta Corporation is planning to issue bonds with a face value of

Serotta Corporation is planning to issue bonds with a face value of $300,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, Septembe...

Q: Serotta Corporation is planning to issue bonds with a face value of

Serotta Corporation is planning to issue bonds with a face value of $300,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, Septembe...

Q: Electrolux Corporation manufactures electrical test equipment. The company’s board of directors

Electrolux Corporation manufactures electrical test equipment. The company’s board of directors authorized a bond issue on January 1 of this year with the following terms: Face (par) value: $800,000 C...

Q: On January 1 of this year, Barnett Corporation sold bonds with

On January 1 of this year, Barnett Corporation sold bonds with a face value of $500,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest annually on December 31. Barnett u...

Q: On January 1 of this year, Cunningham Corporation issued bonds with

On January 1 of this year, Cunningham Corporation issued bonds with a face value of $200,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest annually every December 31. W...

Q: PowerTap Utilities is planning to issue bonds with a face value of

PowerTap Utilities is planning to issue bonds with a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31....

Q: Claire Corporation is planning to issue bonds with a face value of

Claire Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September...

Q: Claire Corporation is planning to issue bonds with a face value of

Claire Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September...

Q: Cron Corporation is planning to issue bonds with a face value of

Cron Corporation is planning to issue bonds with a face value of $700,000 and a coupon rate of 13 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. A...

Q: Lemond Corporation is planning to issue bonds with a face value of

Lemond Corporation is planning to issue bonds with a face value of $200,000 and a coupon rate of 10 percent. The bonds mature in three years and pay interest semiannually every June 30 and December 31...

Q: During the current year ending December 31, Nguyen Corporation completed the

During the current year ending December 31, Nguyen Corporation completed the following transactions: a. On January 1, purchased a license for $7,200 cash (estimated useful life, four years). b. On Jan...

Q: Carey Corporation has five different intangible assets to be accounted for and

Carey Corporation has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these int...

Q: On January 1 of this year, Bidden Corporation sold bonds with

On January 1 of this year, Bidden Corporation sold bonds with a face value of $100,000 and a coupon rate of 10 percent. The bonds mature in five years and pay interest semiannually every June 30 and D...

Q: On January 1 of this year, Avaya Corporation issued bonds with

On January 1 of this year, Avaya Corporation issued bonds with a face value of $2,000,000 and a coupon rate of 6 percent. The bonds mature in five years and pay interest annually on December 31. When...

Q: On January 1 of this year, Ikuta Company issued a bond

On January 1 of this year, Ikuta Company issued a bond with a face value of $100,000 and a coupon rate of 5 percent. The bond matures in three years and pays interest every December 31. When the bond...

Q: Santa Corporation issued a bond on January 1 of this year with

Santa Corporation issued a bond on January 1 of this year with a face value of $1,000. The bond’s coupon rate is 6 percent and interest is paid once a year on December 31. The bond m...

Q: Park Corporation is planning to issue bonds with a face value of

Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. A...

Q: Park Corporation is planning to issue bonds with a face value of

Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. A...

Q: On January 1 of this year, Houston Company issued a bond

On January 1 of this year, Houston Company issued a bond with a face value of $10,000 and a coupon rate of 5 percent. The bond matures in three years and pays interest every December 31. When the bond...

Q: Lemond Corporation is planning to issue bonds with a face value of

Lemond Corporation is planning to issue bonds with a face value of $200,000 and a coupon rate of 10 percent. The bonds mature in three years and pay interest semiannually every June 30 and December 31...

Q: On January 1 of this year, Clearwater Corporation sold bonds with

On January 1 of this year, Clearwater Corporation sold bonds with a face value of $750,000 and a coupon rate of 8 percent. The bonds mature in 10 years and pay interest annually every December 31. Cle...

Q: On January 1 of this year, Clearwater Corporation sold bonds with

On January 1 of this year, Clearwater Corporation sold bonds with a face value of $750,000 and a coupon rate of 8 percent. The bonds mature in 10 years and pay interest annually every December 31. Cle...

Q: On January 1 of this year, Victor Corporation sold bonds with

On January 1 of this year, Victor Corporation sold bonds with a face value of $1,400,000 and a coupon rate of 8 percent. The bonds mature in four years and pay interest semiannually every June 30 and...

Q: On January 1 of this year, Victor Corporation sold bonds with

On January 1 of this year, Victor Corporation sold bonds with a face value of $1,400,000 and a coupon rate of 8 percent. The bonds mature in four years and pay interest semiannually every June 30 and...

Q: On January 1 of this year, Denver Corporation sold bonds with

On January 1 of this year, Denver Corporation sold bonds with a face value of $300,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest annually every December 31. At the...

Q: Park Corporation is planning to issue bonds with a face value of

Park Corporation is planning to issue bonds with a face value of $600,000 and a coupon rate of 7.5 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31....

Q: Refer to the financial statements of American Eagle Outfitters in Appendix B

Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of this book. Financial Statement of American Eagle Outfitters: Required: For each question, answer it and in...

Q: Park Corporation is planning to issue bonds with a face value of

Park Corporation is planning to issue bonds with a face value of $600,000 and a coupon rate of 7.5 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31....

Q: The following is a list of account titles and amounts (dollars

The following is a list of account titles and amounts (dollars in millions) from a recent annual report of Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software f...

Q: Refer to the financial statements of Urban Outfitters in Appendix C at

Refer to the financial statements of Urban Outfitters in Appendix C at the end of this book Financial statements of Urban Outfitters: Required: For each question, answer it and indicate where you l...

Q: A recent annual report for FedEx includes the following information:

A recent annual report for FedEx includes the following information: For financial reporting purposes, we record depreciation and amortization of property and equipment on a straight-line basis over t...

Q: Trotman Company had three intangible assets at the end of 2016 (

Trotman Company had three intangible assets at the end of 2016 (end of the accounting year): a. Computer software and Web development technology purchased on January 1, 2015, for $70,000. The technolo...

Q: Springer Company had three intangible assets at the end of 2017 (

Springer Company had three intangible assets at the end of 2017 (end of the accounting year): a. A copyright purchased on January 1, 2017, for a cash cost of $14,500. The copyright is expected to have...

Q: Karl Company operates in both the beverage and entertainment industries. In

Karl Company operates in both the beverage and entertainment industries. In June 2013, Karl purchased Good Time, Inc., which produces and distributes motion picture, television, and home video product...

Q: For each of the following long-lived assets, indicate its

For each of the following long-lived assets, indicate its nature and the related cost allocation concept. Use the following symbols:

Q: RKO Company sold bonds with a face value of $850,

RKO Company sold bonds with a face value of $850,000 for $910,000. The bonds have a coupon rate of 8 percent, mature in 10 years, and pay interest annually every December 31. All of the bonds were sol...

Q: Wefald Company sold bonds with a face value of $600,

Wefald Company sold bonds with a face value of $600,000 for $580,000. The bonds have a coupon rate of 10 percent, mature in 10 years, and pay interest semiannually every June 30 and December 31. All o...

Q: Wefald Company sold bonds with a face value of $600,

Wefald Company sold bonds with a face value of $600,000 for $580,000. The bonds have a coupon rate of 10 percent, mature in 10 years, and pay interest semiannually every June 30 and December 31. All o...

Q: Coffman Company sold bonds with a face value of $1,

Coffman Company sold bonds with a face value of $1,000,000 for $940,000. The bonds have a coupon rate of 10 percent, mature in 10 years, and pay interest semiannually every June 30 and December 31. Al...

Q: Coffman Company sold bonds with a face value of $1,

Coffman Company sold bonds with a face value of $1,000,000 for $940,000. The bonds have a coupon rate of 10 percent, mature in 10 years, and pay interest semiannually every June 30 and December 31. Al...

Q: RKO Company sold bonds with a face value of $850,

RKO Company sold bonds with a face value of $850,000 for $910,000. The bonds have a coupon rate of 8 percent, mature in 10 years, and pay interest annually every December 31. All of the bonds were sol...

Q: Suppose a company will issue new 20-year debt with a

Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9%, paid annually. The tax rate is 40%. If the flotation cost is 2% of the issue proceeds, then what is th...

Q: Wade Corp. has 150,000 shares of common stock outstanding

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...

Q: On the next page is the income statement for a British company

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 statem...

Q: Chekov Corporation’s balance sheet at the end of 2011 included the following

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 $...

Q: Presented below are selected accounts of Aramis Company at December 31,

Presented below are selected accounts of Aramis Company at December 31, 2012. The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market using LIFO. 2. E...

Q: The major classifications of activities reported in the statement of cash flows

The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1. Operating activity—add to...

Q: The partner in charge of the Kappeler Corporation audit comes by your

The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the cash flow statement for the year ended December 31, 2012. Bec...

Q: The financial statements of P&G are presented in Appendix 5B

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 these financial statements and the...

Q: Go to the book’s companion website and use information found there to

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) Which company had the greater percentage inc...

Q: The financial statements of Marks and Spencer plc (M&S

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_Repo...

Q: What should be the pattern of amortization for a limited-life

What should be the pattern of amortization for a limited-life intangible?

Q: Karen Austin Corporation has capitalized software costs of $800,000

Karen Austin Corporation has capitalized software costs of $800,000, and sales of this product the first year totaled $420,000. Karen Austin anticipates earning $980,000 in additional future revenues...

Q: On July 1, 2012, Gissel Corporation purchased Mills Company by

On July 1, 2012, Gissel Corporation purchased Mills Company by paying $250,000 cash and issuing a $150,000 note payable. At July 1, 2012, the balance sheet of Mills Company was as follows. The recor...

Q: Presented below is information related to copyrights owned by Botticelli Company at

Presented below is information related to copyrights owned by Botticelli Company at December 31, 2012. Cost ……………………………………………………… $8,600,000 Carrying amount …………………………………….. 4,300,000 Expected future...

Q: Margaret Avery Company from time to time embarks on a research program

Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2011, the company expends $325,000 on a research project, but by the end...

Q: Majoli Inc. has capitalized computer software costs of $3,

Majoli Inc. has capitalized computer software costs of $3,900,000 on its new “Trenton” software package. Revenues from 2012 (first year) sales are $2,000,000. Additional future revenues from “Trenton”...

Q: During 2012, Botosan Enterprises Inc. spent $5,000

During 2012, Botosan Enterprises Inc. spent $5,000,000 developing its new “Dover” software package. Of this amount, $2,600,000 was spent before technological feasibility was established for the produc...

Q: In this simulation, you are asked to address questions concerning the

In this simulation, you are asked to address questions concerning the application of time value of money concepts to accounting problems. Prepare responses to all parts.

Q: Powerglide Company, organized in 2011, has set up a single

Powerglide Company, organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012. Instructions Prep...

Q: In early January 2011, Reymont Corporation applied for a trade name

In early January 2011, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In January 2012, Reymont incurred $7,800 of legal fees in a successful defense of its trade name....

Q: Devon Harris Company has provided information on intangible assets as follows.

Devon Harris Company has provided information on intangible assets as follows. A patent was purchased from Bradtke Company for $2,500,000 on January 1, 2011. Harris estimated the remaining useful life...

Q: Fields Laboratories holds a valuable patent (No. 758-6002

Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops...

Q: Montana Matt’s Golf Inc. was formed on July 1, 2011

Montana Matt’s Golf Inc. was formed on July 1, 2011, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to i...

Q: Reichenbach Co., organized in 2011, has set up a single

Reichenbach Co., organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012 and 2013. Instruction...

Q: The financial statements of P&G are presented in Appendix 5B

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...

Q: Johnson & Johnson, the world’s leading and most diversified healthcare corporation

Johnson & Johnson, the world’s leading and most diversified healthcare corporation, serves its customers through specialized worldwide franchises. Each of its franchises consists...

Q: Go to the book’s companion website and use information found there to

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) (1) What amounts for intangible assets were...

Q: McDonald’s is the largest and best-known global food service retailer

McDonald’s is the largest and best-known global food service retailer, with more than 32,000 restaurants in 118 countries. On any day, McDonald’s serves approximate...

Q: The financial statements of Marks and Spencer plc (M&S

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_Repo...

Q: Margaret Avery Company from time to time embarks on a research program

Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2010, the company expends $325,000 on a research project, but by the end...

Q: Use the information in IFRS12-6. Assume that at the

Use the information in IFRS12-6. Assume that at the end of the year following the impairment (after recording amortization expense), the estimated recoverable amount for the patent is $130,000. Prepar...

Q: On December 31, 2012, Conchita Martinez Company signed a $

On December 31, 2012, Conchita Martinez Company signed a $1,000,000 note to Sauk City Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annuall...

Q: On December 31, 2012, Oakbrook Inc. rendered services to

On December 31, 2012, Oakbrook Inc. rendered services to Begin Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $20,0...

Q: On January 1, 2012, Botosan Company issued a $1

On January 1, 2012, Botosan Company issued a $1,200,000, 5-year, zero-interest-bearing note to National Organization Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2013 B...

Q: Find the enterprise valuation cash flow expected for the current year given

Find the enterprise valuation cash flow expected for the current year given the following information: Capital expenditures (CAPEX) = $150,000 Depreciation and amortization expenses = $40,000 Earnings...

Q: Using the information in E20-2, prepare a pension worksheet

Using the information in E20-2, prepare a pension worksheet inserting January 1, 2012, balances, showing December 31, 2012, balances, and the journal entry recording pension expense. In E20-2 Veldre...

Q: The following information is available for the pension plan of Radcliffe Company

The following information is available for the pension plan of Radcliffe Company for the year 2012. Actual and expected return on plan assets ………………………….……………………. $ 15,000 Benefits paid to retirees ……...

Q: Mortonson Company has not yet prepared a formal statement of cash flows

Mortonson Company has not yet prepared a formal statement of cash flows for the 2012 fiscal year. Comparative balance sheets as of December 31, 2011 and 2012, and a statement of income and retained ea...

Q: The following facts pertain to a noncancelable lease agreement between Alschuler Leasing

The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Inception date …â...

Q: Gordon Company sponsors a defined benefit pension plan. The following information

Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2012 and 2013. Instructions (a) Compute pension expense for 2012 and 20...

Q: Andrews Company has five employees participating in its defined benefit pension plan

Andrews Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2012 are as follows. Employee _________Fu...

Q: Jacobsen Leasing Company leases a new machine that has a cost and

Jacobsen Leasing Company leases a new machine that has a cost and fair value of $75,000 to Stadler Corporation on a 3-year noncancelable contract. Stadler Corporation agrees to assume all risks of nor...

Q: Assume the same information as in P21-4.

Assume the same information as in P21-4. In P21-4 The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer syst...

Q: You have completed the field work in connection with your audit of

You have completed the field work in connection with your audit of Alexander Corporation for the year ended December 31, 2012. The balance sheet accounts at the beginning and end of the year are shown...

Q: You are compiling the consolidated financial statements for Winsor Corporation International.

You are compiling the consolidated financial statements for Winsor Corporation International. The corporation’s accountant, Anthony Reese, has provided you with the segment informati...

Q: Vickie Plato, accounting clerk in the personnel office of Streisand Corp

Vickie Plato, accounting clerk in the personnel office of Streisand Corp., has begun to compute pension expense for 2014 but is not sure whether or not she should include the amortization of unrecogni...

Q: Villa Company has experienced tough competition, leading it to seek concessions

Villa Company has experienced tough competition, leading it to seek concessions from its employees in the company’s pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees...

Q: On January 1, 2012, Harrington Company has the following defined

On January 1, 2012, Harrington Company has the following defined benefit pension plan balances. Projected benefit obligation ………â€...

Q: The following defined pension data of Rydell Corp. apply to the

The following defined pension data of Rydell Corp. apply to the year 2012. Projected benefit obligation, 1/1/12 (before amendment) ……………………… $560,000 Plan assets, 1/1/12 ……………………………………………………………………………...

Q: Ludwick Steel Company as lessee signed a lease agreement for equipment for

Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2012. Annual rental payments of $40,000 are to be made at the beginning of each lease year (D...

Q: You have been assigned to examine the financial statements of Zarle Company

You have been assigned to examine the financial statements of Zarle Company for the year ended December 31, 2012. You discover the following situations. 1. Depreciation of $3,200 for 2012 on delivery...

Q: Indicate the effect—Understate, Overstate, No Effect—that

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2012 net income and 2013 net income.

Q: The following facts pertain to a noncancelable lease agreement between Lennox Leasing

The following facts pertain to a noncancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. Inception date: ………………………………………………………………………………. May 1, 2012 Annual lease payme...

Q: Listed below are various types of accounting changes and errors.

Listed below are various types of accounting changes and errors. ______ 1. Change from FIFO to average cost inventory method. ______ 2. Change due to overstatement of inventory. ______ 3. Change from...

Q: On March 5, 2013, you were hired by Hemingway Inc

On March 5, 2013, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records...

Q: Lemke Company sponsors a defined benefit pension plan for its employees.

Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2012 and 2013. Instructions (a) Prepare a pension worksh...

Q: The following defined pension data of Doreen Corp. apply to the

The following defined pension data of Doreen Corp. apply to the year 2012. Defined benefit obligation, 1/1/12 (before amendment) ……………………………… $560,000 Plan assets, 1/1/12 ……………………………………………………………………………...

Q: Norton Co. had the following amounts related to its pension plan

Norton Co. had the following amounts related to its pension plan in 2012. Actuarial liability loss for 2012 ………………………………………………………………….. $28,000 Unexpected asset gain for 2012 ………………………………………………………………....

Q: A lease agreement between Lennox Leasing Company and Gill Company is described

A lease agreement between Lennox Leasing Company and Gill Company is described in E21-8. In E21-8 The following facts pertain to a noncancelable lease agreement between Lennox Leasing Company and Gil...

Q: Hobbs Co. has the following defined benefit pension plan balances on

Hobbs Co. has the following defined benefit pension plan balances on January 1, 2012. Projected benefit obligation …………&...

Q: Following are selected balance sheet accounts of Sander Bros. Corp.

Following are selected balance sheet accounts of Sander Bros. Corp. at December 31, 2012 and 2011, and the increases or decreases in each account from 2011 to 2012. Also presented is selected income s...

Q: Fieval Leasing Company signs an agreement on January 1, 2012,

Fieval Leasing Company signs an agreement on January 1, 2012, to lease equipment to Reid Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 6 years...

Q: George Company manufactures a check-in kiosk with an estimated economic

George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $278,...

Q: Kramer Co. has prepared the following pension worksheet. Unfortunately,

Kramer Co. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and com...

Q: The following facts pertain to a non-cancelable lease agreement between

The following facts pertain to a non-cancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. (Round all numbers to the nearest cent.) Inception date: May 1, 2012 Annual l...

Q: Henning Company sponsors a defined benefit pension plan for its employees.

Henning Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2012 in which no benefits were paid. 1. The actuarial pre...

Q: Grady Leasing Company signs an agreement on January 1, 2012,

Grady Leasing Company signs an agreement on January 1, 2012, to lease equipment to Azure Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 5 years...

Q: Assume the same data as in P21-10 with National Airlines

Assume the same data as in P21-10 with National Airlines Co. having an incremental borrowing rate of 10%. In P21-10 George Company manufactures a check-in kiosk with an estimated economic life of 12...

Q: The following data relate to the operation of Kramer Co.’s

The following data relate to the operation of Kramer Co.’s pension plan in 2013. The pension worksheet for 2012 is provided in P20-10. Service cost …â€...

Q: A lease agreement between Lennox Leasing Company and Gill Company is described

A lease agreement between Lennox Leasing Company and Gill Company is described in IFRS21-10. Refer to the data in IFRS21-10 and do the following for the lessor. (Round all numbers to the nearest cent....

Q: In 2011, Grishell Trucking Company negotiated and closed a long-

In 2011, Grishell Trucking Company negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company&acir...

Q: Andrews Inc., a greeting card company, had the following statements

Andrews Inc., a greeting card company, had the following statements prepared as of December 31, 2012. ANDREWS INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2012 Sales …&...

Q: Data for Andrews Inc. are presented in E23-13.

Data for Andrews Inc. are presented in E23-13. In E23-13 Andrews Inc., a greeting card company, had the following statements prepared as of December 31, 2012. ANDREWS INC. INCOME STATEMENT FOR THE...

Q: Elton Co. has the following postretirement benefit plan balances on January

Elton Co. has the following postretirement benefit plan balances on January 1, 2012. Accumulated postretirement benefit obligation ………â...

Q: The net income for Letterman Company for 2012 was $320,

The net income for Letterman Company for 2012 was $320,000. During 2012, depreciation on plant assets was $124,000, amortization of patent was $40,000, and the company incurred a loss on sale of plant...

Q: The accounting staff of Usher Inc. has prepared the following pension

The accounting staff of Usher Inc. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completi...

Q: On January 2, 2012, $100,000 of 11

On January 2, 2012, $100,000 of 11%, 10-year bonds were issued for $97,000. The $3,000 discount was charged to Interest Expense. The bookkeeper, Mark Landis, records interest only on the interest paym...

Q: When the records of Archibald Corporation were reviewed at the close of

When the records of Archibald Corporation were reviewed at the close of 2013, the errors listed below were discovered. For each item, indicate by a check mark in the appropriate column whether the err...

Q: Using the information in E20-22, prepare a worksheet inserting

Using the information in E20-22, prepare a worksheet inserting January 1, 2012, balances, showing December 31, 2012, balances, and the journal entry recording postretirement benefit expense. In E20-2...

Q: The accounting staff of Holder Inc. has prepared the postretirement benefit

The accounting staff of Holder Inc. has prepared the postretirement benefit worksheet on page 1262. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your ass...

Q: Founded in the early 1980s, the Vermont Teddy Bear Co.

Founded in the early 1980s, the Vermont Teddy Bear Co. designs and manufactures American-made teddy bears and markets them primarily as gifts called Bear-Grams or Teddy Bear-Grams. Bear-Grams are pers...

Q: RNA Inc. manufactures a variety of consumer products. The company’s

RNA Inc. manufactures a variety of consumer products. The company’s founders have run the company for 30 years and are now interested in retiring. Consequently, they are seeking a pu...

Q: In this simulation, you are asked to address questions regarding accounting

In this simulation, you are asked to address questions regarding accounting for pensions. Prepare responses to all parts.

Q: In this simulation, you are asked to address questions related to

In this simulation, you are asked to address questions related to the accounting for leases. Prepare responses to all parts.

Q: Each of the following items must be considered in preparing a statement

Each of the following items must be considered in preparing a statement of cash flows (indirect method) for Granderson Inc. for the year ended December 31, 2012. (a) Plant assets that had cost $25,000...

Q: Jackson Company adopts acceptable accounting for its defined benefit pension plan on

Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2011, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000...

Q: Mancuso Corporation amended its pension plan on January 1, 2012,

Mancuso Corporation amended its pension plan on January 1, 2012, and granted $160,000 of prior service costs to its employees. The employees are expected to provide 2,000 service years in the future,...

Q: Shin Corporation had a projected benefit obligation of $3,100

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2012. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2012...

Q: Garner Inc. provides the following information related to its postretirement benefits

Garner Inc. provides the following information related to its postretirement benefits for the year 2012. Accumulated postretirement benefit obligation at January 1, 2012 …………………. $710,000 Actual and e...

Q: Veldre Company provides the following information about its defined benefit pension plan

Veldre Company provides the following information about its defined benefit pension plan for the year 2012. Service cost ……………………………………………………………………………….. $ 90,000 Contribution to the plan ………………………………...

Q: This case is a continuation of Case 2.4.

This case is a continuation of Case 2.4. (a) Open the financial statement analysis template that you saved from the Chapter 2 hydrogenics Case. Click on the “Coverâ...

Q: Avnet is one of the world’s largest value-added distributors of

Avnet is one of the world’s largest value-added distributors of electronic componenets, enterprise computer and storage products, IT services and embedded subsystems. Avnet creates a...

Q: This case is a continuation of Cases 2.4 and 3

This case is a continuation of Cases 2.4 and 3.4. (a) Open the financial statement analysis template that you saved from the Chapter 3 hydrogenics Case. Click on the “Cov...

Q: The following excerpts are from the 2013 Form 10-K of

The following excerpts are from the 2013 Form 10-K of Facebook, Inc11. See Accompanying Notes to Consolidated Financial Statements. See Accompanying Notes to Consolidated Financial Statement...

Q: The following cash flows were reported by Techno Inc. in 2015

The following cash flows were reported by Techno Inc. in 2015 and 2014. (a) Explain the difference between net income and cash flow from operating activities for Techno in 2015. (b) Analyze Techno I...

Q: The following excerpts are from the 2013 Walgreen Co. Form 10

The following excerpts are from the 2013 Walgreen Co. Form 10-K: The accompanying Notes to Consolidated Financial Statements are integral parts of these statements. Notes to Consolidated Financial S...

Q: Dynamo Manufacturing paid cash to acquire the assets of an existing company

Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life…â...

Q: A partial amortization schedule for a 10-year note payable that

A partial amortization schedule for a 10-year note payable that Mabry Company issued on January 1, 2018, is shown as follows. Required a. What rate of interest is Mabry Company paying on the note? b...

Q: Diaz Company issued $180,000 face value of bonds on

Diaz Company issued $180,000 face value of bonds on January 1, 2018. The bonds had a 7 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning December 31, 2...

Q: The Square Foot Grill, Inc. issued $200,000

The Square Foot Grill, Inc. issued $200,000 of 10-year, 6 percent bonds on January 1, 2018, at 102. Interest is payable in cash annually on December 31. The straight-line method is used for amortizati...

Q: On January 1, 2018, Parker Company issued bonds with a

On January 1, 2018, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of ea...

Q: Use the Target Corporation’s Form 10-K to answer the following

Use the Target Corporation’s Form 10-K to answer the following questions related to Target’s 2015 fiscal year (year ended January 30, 2016). Target’s Form 10-K is available on the company’s website or...

Q: Pine Land Co. was formed when it acquired cash from the

Pine Land Co. was formed when it acquired cash from the issue of common stock. The company then issued bonds at a premium on January 1, 2018. Interest is payable annually on December 31 of each year,...

Q: During 2018 and 2019, Kale Co. completed the following transactions

During 2018 and 2019, Kale Co. completed the following transactions relating to its bond issue. The company’s fiscal year ends on December 31. 2018 Mar. 1 Issued $200,000 of 8 year, 6 percent bonds fo...

Q: On January 1, 2018, Reese Incorporated issued bonds with a

On January 1, 2018, Reese Incorporated issued bonds with a face value of $120,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31...

Q: On January 1, 2018, Brown Co. borrowed cash from

On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual...

Q: Metal Corporation acquired 75 percent ownership of Ocean Company on January 1

Metal Corporation acquired 75 percent ownership of Ocean Company on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of th...

Q: Using the data presented in P10-18: Prepare a

Using the data presented in P10-18: Prepare a worksheet to develop a consolidated statement of cash flows for 20X3 using the direct method of computing cash flows from operations. Prepare a...

Q: Detecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January

Detecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January 1, 20X1, for $24,000 more than book value. At that date, the fair value of the noncontrolli...

Q: Hardtack Bread Company holds 70 percent of the common shares of Custom

Hardtack Bread Company holds 70 percent of the common shares of Custom Pizza Corporation. Trial balances for the two companies on December 31, 20X7, are as follows: At the beginning of 20X7, Hard...

Q: Becon Corporation’s controller has just finished preparing a consolidated balance sheet,

Becon Corporation’s controller has just finished preparing a consolidated balance sheet, income statement, and statement of changes in retained earnings for the year ended December 31, 20X4. Becon own...

Q: The following 20X2 consolidated statement of cash flows is presented for Acme

The following 20X2 consolidated statement of cash flows is presented for Acme Printing Company and its subsidiary, Jones Delivery: Acme Printing acquired 60 percent of the voting shares of Jones in...

Q: The Boston Celtics are the most successful team in professional basketball history

The Boston Celtics are the most successful team in professional basketball history. Teams led by Bill Russell, Larry Bird, and Kevin Garnett have won a total of 17 NBA championships. The Celtics are a...

Q: The following data relate to an $8,000,000

The following data relate to an $8,000,000, 7% bond issue for a selected semiannual interest period: a. Were the bonds issued at a discount or at a premium? b. What expense account is affected by th...

Q: Dovetail Technologies Company acquired patent rights on January 6, 20Y5,

Dovetail Technologies Company acquired patent rights on January 6, 20Y5, for $1,500,000. The patent has a useful life of 8 years. On January 7, 20Y6, Dovetail Technologies successfully defended the pa...

Q: Apple, Inc., designs, manufactures, and markets personal computers

Apple, Inc., designs, manufactures, and markets personal computers (iPadâ„¢) and related software. Apple also manufactures and distributes music players (iPodâ„¢) along...

Q: Data related to the acquisition of timber rights and intangible assets of

Data related to the acquisition of timber rights and intangible assets of Gemini Company during the current year ended December 31 are as follows: a. On December 31, Gemini Company determined that $3,...

Q: Using the data from P7-5, indicate the effects on

Using the data from P7-5, indicate the effects on the liquidity metric free cash flow and profitability metric asset turnover for each of the following: ▪ Impaired goodwill ▪ Patent amortization ▪ Natur...

Q: Dunder-Mifflin, Inc., is analyzing the potential profitability of

Dunder-Mifflin, Inc., is analyzing the potential profitability of three printing jobs put up for bid by the State Department of Revenue:
Assume that (1) the company’s marginal city-plus-state-plus-f...

Q: Obtain the income statements for Target Corporation for the fiscal years ending

Obtain the income statements for Target Corporation for the fiscal years ending in 2011, 2012, 2013, 2014, and 2015. Target’s fiscal year ends near the end of January or the beginnin...

Q: On January 1, 20X1, Par Company purchased all the outstanding

On January 1, 20X1, Par Company purchased all the outstanding stock of North Bay Company, located in Canada, for $120,000. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was...

Q: On January 1, 20X4, Alum Corporation acquired DaSilva Company,

On January 1, 20X4, Alum Corporation acquired DaSilva Company, a Brazilian subsidiary, by purchasing all its common stock at book value. DaSilva’s trial balances on January 1, 20X4,...

Q: Refer to the information in Problem P12-21. Assume that

Refer to the information in Problem P12-21. Assume that the dollar is the functional currency. Required: Prepare a schedule remeasuring DaSilva Company’s December 31, 20X4,...

Q: Thames Company is located in London, England. The local currency

Thames Company is located in London, England. The local currency is the British pound (£). On January 1, 20X8, Dek Company purchased an 80 percent interest in Thames for $400,000, which r...

Q: Selected pre-adjustment account balances and adjusting information of Sunset Cosmetics

Selected pre-adjustment account balances and adjusting information of Sunset Cosmetics Inc. for the year ended December 31, 2013, are as follows: Retained Earnings, January 1, 2013. . . . . . . . . ....

Q: Locate the 2009 financial statements for The Walt Disney Company on the

Locate the 2009 financial statements for The Walt Disney Company on the Internet and consider the following questions: 1. Does Disney use the direct method or the indirect method? Explain. 2. Analyze...

Q: Lockheed Martin Corporation is a well-known producer of advanced aircraft

Lockheed Martin Corporation is a well-known producer of advanced aircraft, missiles, and space hardware. Lockheed Martin is most famous for its super-secret research and development division, nickname...

Q: Locate the 2009 financial statements for The Walt Disney Company on the

Locate the 2009 financial statements for The Walt Disney Company on the Internet. Use those financial statements and consider the following questions. 1. As illustrated in Exhibit 10-10, Interbrand es...

Q: Zobell Corporation sells equipment with a book value of $8,

Zobell Corporation sells equipment with a book value of $8,000, receiving a non-interest bearing note due in three years with a face amount of $10,000. There is no established market value for the equ...

Q: Transactions during 2013 of the newly organized Menlove Corporation included the following

Transactions during 2013 of the newly organized Menlove Corporation included the following: Jan. 2 Paid legal fees of $15,000 and stock certificate costs of $8,300 to complete organization of the corp...

Q: Bridges Wholesale Company incurred the following costs in 2013 for a warehouse

Bridges Wholesale Company incurred the following costs in 2013 for a warehouse acquired on July 1, 2013, the beginning of its fiscal year: Cost of land . . . . . . . . . . . . . . . . . . . . . . . ....

Q: On January 1, 2013, Rapid River Realty sold a tract

On January 1, 2013, Rapid River Realty sold a tract of land to three doctors as an investment. The land, purchased 10 years ago, was carried on Rapid River’s books at a value of $210,000. Rapid River...

Q: Dean Lang Enterprises Inc. developed a new machine that reduces the

Dean Lang Enterprises Inc. developed a new machine that reduces the time required to insert the fortunes into its fortune cookies. Because the process is considered very valuable to the fortune cookie...

Q: Following is information for Goulding Manufacturing Company: (a)

Following is information for Goulding Manufacturing Company: (a) Long-term debt of $500,000 was retired at face value. (b) New machinery was purchased for $62,000. (c) Common stock with a par value of...

Q: The following information was taken from the records of Glassett Produce Company

The following information was taken from the records of Glassett Produce Company for the year ended June 30, 2013. Borrowed on long-term notes . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Q: The following information was obtained from analysis of selected accounts of Orlando

The following information was obtained from analysis of selected accounts of Orlando Company for the year ended December 31, 2013. Increase in long-term debt . . . . . . . . . . . . . . . . . . . . ....

Q: Based on an analysis of the cash and other accounts, the

Based on an analysis of the cash and other accounts, the following information was provided by the controller of Black Iron, Inc., a manufacturer of wood-burning stoves, for the year 2013. (a) Cash sa...

Q: Choose the best answer. 1. Which of the following

Choose the best answer. 1. Which of the following would not be considered a general long-term liability? a. T he estimated liability to clean up the hazardous waste storage sites of the cityâ
...

Q: Brown County operates a solid waste landfill for the citizens of the

Brown County operates a solid waste landfill for the citizens of the county. The following events occurred during the county’s fiscal year ended September 30, 2017. 1. The county paid interest costs o...

Q: Which of the following items are properly classified as part of factory

Which of the following items are properly classified as part of factory overhead for Caterpillar? a. Amortization of patents on new assembly process b. Consultant fees for a study of production line em...

Q: The Charles Schwab Corporation (SCHW) is one of the more

The Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company provided information about its major busi...

Q: On January 1, 201X, Lonny Corporation sold $400,

On January 1, 201X, Lonny Corporation sold $400,000 of 10%, 10-year bonds at 97. Interest is to be paid on June 30 and December 31. The straightline method of amortizing the discount is used. Prepare...

Q: On May 1, 201X, Lance Corporation issued $1,

On May 1, 201X, Lance Corporation issued $1,000,000 of 9%, 20-year bonds at 103. The interest is payable on November 1 and May 1. The premium is amortized by the straight-line method. Prepare an amort...

Q: On January 1, 201X, Fish Corporation issued $300,

On January 1, 201X, Fish Corporation issued $300,200 of 11%, 10-year bonds for $267,192, yielding a market rate of 13%. Interest is paid on July 1 and December 31. Fish uses the interest method to amo...

Q: On May 1, 201X, Lexington Corporation issued $180,

On May 1, 201X, Lexington Corporation issued $180,000 of 10%, 5-year bonds for $194,679, yielding a market rate of 8%. Interest is paid on November 1 and May 1. Lexington Corporation uses the interest...

Q: On January 1, 201X, Langston Corporation sold $450,

On January 1, 201X, Langston Corporation sold $450,000 of 9%, 10-year bonds at 97. Interest is to be paid on June 30 and December 31. The straightline method of amortizing the discount is used. Prepar...

Q: On May 1, 201X, Lance Corporation issued $900,

On May 1, 201X, Lance Corporation issued $900,000 of 15%, 20-year bonds at 102. The interest is payable on November 1 and May 1. The premium is amortized by the straight-line method. Prepare an amorti...

Q: On January 1, 201X, Austin Corporation issued $300,

On January 1, 201X, Austin Corporation issued $300,900 of 11%, 10-year bonds for $252,958, yielding a market rate of 14%. Interest is paid on July 1 and December 31. Austin uses the interest method to...

Q: On April 1, 201X, Plimpton Corporation issued $210,

On April 1, 201X, Plimpton Corporation issued $210,000 of 10%, 5-year bonds for $227,126, yielding a market rate of 8%. Interest is paid on October 1 and April 1. Plimpton Corporation uses the interes...

Q: Hathaway Corporation issued $320,000 of 12%, 25-

Hathaway Corporation issued $320,000 of 12%, 25-year bonds at 93 on May 1, 201X, with semiannual interest payable on May 1 and November 1. Amortization of discount is by the straight-line method. Reco...

Q: Redo the journal entries for Exercise 20A-3, assuming that

Redo the journal entries for Exercise 20A-3, assuming that bonds sold at 102. Exercise 20A-3: Hathaway Corporation issued $320,000 of 12%, 25-year bonds at 93 on May 1, 201X, with semiannual interes...

Q: On July 1, Henry Corporation issued 10%, 10-year

On July 1, Henry Corporation issued 10%, 10-year bonds with a face value of $109,000 for $96,520 because the current market rate is 12%. Record the following entries, assuming that the interest method...

Q: Smith Corporation issued $320,000 of 4%, 25-

Smith Corporation issued $320,000 of 4%, 25-year bonds at 91 on November 1, 201X, with semiannual interest payable on November 1 and May 1. Amortization of discount is by the straight-line method. Rec...

Q: Redo the journal entries for Exercise 20B-3, assuming that

Redo the journal entries for Exercise 20B-3, assuming that bonds sold at 107. Exercise 20B-3: Smith Corporation issued $320,000 of 4%, 25-year bonds at 91 on November 1, 201X, with semiannual intere...

Q: On July 1 April Corporation issued 10%, 10-year bonds

On July 1 April Corporation issued 10%, 10-year bonds with a face value of $107,000 for $94,749 because the current market rate is 12%. Record the following entries, assuming the interest method is us...

Q: On May 1, 2014, Falcon Company bought a patent at

On May 1, 2014, Falcon Company bought a patent at a cost of $5,400. It is estimated that the patent will give Falcon a competitive advantage for 9 years. Record in general journal form amortization fo...

Q: On May 1, 2014, Apricot Company bought a patent at

On May 1, 2014, Apricot Company bought a patent at a cost of $5,100. It is estimated that the patent will give Apricot a competitive advantage for 5 years. Record in general journal form amortization...

Q: From Concept Check 2, record the March 31 semiannual payment and

From Concept Check 2, record the March 31 semiannual payment and amortization of the discount. Use the straight-line method. Concept Check 2: On October 1, Morris Co. issued 15, $3,000, 7%, 10-year...

Q: From Concept Check 4, record the March 31 semiannual payment and

From Concept Check 4, record the March 31 semiannual payment and amortization of Premium on Bonds Payable. Concept Check 4: Redo Concept Check 2 with the straight-line method, assuming that the bond...

Q: The financial statements of Zetar plc are presented in Appendix C.

The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available in the Investors section at www.z...

Q: Cookie Creations is gearing up for the winter holiday season. During

Cookie Creations is gearing up for the winter holiday season. During the month of December 2014, the following transactions occur. Dec. 1 Natalie hires an assistant at an hourly wage of $8 to help w...

Q: Calculate the cash flow coverage ratio based on the following information:

Calculate the cash flow coverage ratio based on the following information: EBIT = $540,000; depreciation and amortization = $65,000; interest payments = $180,000; principal repayment = $75,000; and ta...

Q: Number One Retail, Inc. has a gross profit of $

Number One Retail, Inc. has a gross profit of $55 million, operating expenses of $22 million (which includes $6 million in depreciation and amortization), and interest expenses of $8 million. Its corp...

Q: Why do we refer to depreciation and amortization as “noncash items

Why do we refer to depreciation and amortization as “noncash items”?

Q: Extra Value Inc. is expected to generate EBIT of $20

Extra Value Inc. is expected to generate EBIT of $20 million next year, with anticipated depreciation and amortization of $3 million. Extra Value has debt of $40 million. Comparable firms are trading...

Q: Fixem Co. has revenue of $125 million, property and

Fixem Co. has revenue of $125 million, property and equipment of $42 million, and accumulated depreciation and amortization of $6 million. Estimate the fixed asset turnover ratio.

Q: IOU Inc. has EBIT of $58,000, depreciation

IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments of $17,000, and a tax rate of 35 percent. Calculate IOU Inc.’s interest cover...

Q: Tesla Corporation needs to raise funds to finance a plant expansion,

Tesla Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds to raise the money. The required return on the bonds will be 5.4 percent. a....

Q: Suppose your company needs to raise $50 million and you want

Suppose your company needs to raise $50 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you’re evaluating two issue a...

Q: Da Vinci Inc. has a workforce of 400 employees. A

Da Vinci Inc. has a workforce of 400 employees. A new pension plan is negotiated on January 1, 2013, with the labor union. Based on the provisions of the pension agreement, prior service cost related...

Q: Osvaldo Awning Co. has prior service cost of $1,

Osvaldo Awning Co. has prior service cost of $1,262,000 arising from a pension plan amendment. The board of directors decided to amortize this cost over the average remaining service period for its 45...

Q: Melba Enterprises has a deferred gain of $425,000 relating

Melba Enterprises has a deferred gain of $425,000 relating to its pension plan as of January 1, 2013. Management has chosen to amortize this deferral on a straight-line basis over the 10-year average...

Q: The computation of pension expense includes (1) A deferral

The computation of pension expense includes (1) A deferral of the difference between actual and expected return on the pension fund and (2) Amortization of deferred pension gains and losses. Determine...

Q: Staybrite Electronics Co. amended its pension plan effective January 1,

Staybrite Electronics Co. amended its pension plan effective January 1, 2013. The increase in the PBO occurring as a result of the plan amendment is $6,290,000. Staybrite arranged to fund the prior se...

Q: McGrath Financial Corp. has a defined benefit pension plan. As

McGrath Financial Corp. has a defined benefit pension plan. As of January 1, 2013, the following balances were computed for the pension plan: Deferred pension gain . . . . . . . . . . . . . . . . . ....

Q: Averon Industrial, Inc., computed the following components of pension expense

Averon Industrial, Inc., computed the following components of pension expense for the years 2013–2015: Instructions: 1. Compute the net periodic pension expense for the years 2013&...

Q: The following data relate to the defined benefit pension plan of Haan

The following data relate to the defined benefit pension plan of Haan Company: Balances at January 1, 2013: PBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Q: The actuaries for Interconnect Cable Company provided its accountants with the following

The actuaries for Interconnect Cable Company provided its accountants with the following information (in thousands of $) related to the company’s pension plan: December 31, 2012: Increase in PBO arisi...

Q: Northrop Grumman is a leading aerospace/defense company. The company

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On January 1, 2014, Jade Company issued $2,000,000 face value, 7%, 10-year bonds at $2,147,202. This price resulted in a 6% effective-interest rate on the bonds. Jade uses the effective-interest metho...

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Q: On January 1, 2014, Murphy Company issued $1,

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Q: Glenda Hope is discussing the advantages of the effective-interest method

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Q: Prophet Company issued $500,000, 6%, 30-

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Q: Cole Corporation issued $400,000, 7%, 20-

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Q: Gomez Company issued $380,000, 7%, 10-

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Peugeot S.A. reports the following financial information for the year ended December 31, 2011 (euros in millions). Prepare its statement of cash flows under the indirect method. (Hint: Each line item...

Q: Georgia Pacific, a manufacturer, incurs the following costs.

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory o...

Q: Romero issues $3,400,000 of 10%, 10

Romero issues $3,400,000 of 10%, 10-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000. Required 1. Prepare the...

Q: Ripkin Company issues 9%, five-year bonds dated January 1

Ripkin Company issues 9%, five-year bonds dated January 1, 2015, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market...

Q: On October 1, 2015, Gordon Enterprises borrows $150,

On October 1, 2015, Gordon Enterprises borrows $150,000 cash from a bank by signing a three-year installment note bearing 10% interest. The note requires equal total payments each year on September 30...

Q: Refer to the bond details in Problem 14-5B.

Refer to the bond details in Problem 14-5B. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be...

Q: Refer to the bond details in Problem 14-4B.

Refer to the bond details in Problem 14-4B. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the on...

Q: On January 1, 2015, Eagle borrows $100,000

On January 1, 2015, Eagle borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal total payments of accrued interest and principal on December 31 of each year f...

Q: Use the information in Exercise 14-10 to prepare the journal

Use the information in Exercise 14-10 to prepare the journal entries for Eagle to record the loan on January 1, 2015, and the four payments from December 31, 2015, through December 31, 2018. Informat...

Q: Stanford issues bonds dated January 1, 2015, with a par

Stanford issues bonds dated January 1, 2015, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bo...

Q: Quatro Co. issues bonds dated January 1, 2015, with

Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The...

Q: Duval Co. issues four-year bonds with a $100

Duval Co. issues four-year bonds with a $100,000 par value on June 1, 2015, at a price of $95,948. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31. 1. Prepa...

Q: Tano issues bonds with a par value of $180,000

Tano issues bonds with a par value of $180,000 on January 1, 2015. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds matu...

Q: Paulson Company issues 6%, four-year bonds, on December

Paulson Company issues 6%, four-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries t...

Q: Dobbs Company issues 5%, two-year bonds, on December

Dobbs Company issues 5%, two-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to r...

Q: Woodwick Company issues 10%, five-year bonds, on December

Woodwick Company issues 10%, five-year bonds, on December 31, 2014, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries...

Q: Quatro Co. issues bonds dated January 1, 2015, with

Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The...

Q: On January 1, 2015, Shay issues $700,000

On January 1, 2015, Shay issues $700,000 of 10%, 15-year bonds at a price of 973⁄4. Six years later, on January 1, 2021, Shay retires 20% of these bonds by buying them on the open market at 1041⁄2. Al...

Q: Ike issues $180,000 of 11%, three-year

Ike issues $180,000 of 11%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $184,566. Their market rate is 10% at the issue date....

Q: Hillside issues $4,000,000 of 6%, 15

Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required 1. Prepare th...

Q: Refer to the bond details in Problem 14-2A, except

Refer to the bond details in Problem 14-2A, except assume that the bonds are issued at a price of $4,895,980. Required 1. Prepare the January 1, 2015, journal entry to record the bondsâ€&#...

Q: Ellis issues 6.5%, five-year bonds dated January

Ellis issues 6.5%, five-year bonds dated January 1, 2015, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is...

Q: Legacy issues $325,000 of 5%, four-year

Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 and their market rate is 8% at the issue dat...

Q: On November 1, 2015, Norwood borrows $200,000

On November 1, 2015, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal total payments each year on October 31. Required 1....

Q: Refer to the bond details in Problem 14-5A.

Refer to the bond details in Problem 14-5A. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be...

Q: Refer to the bond details in Problem 14-4A.

Refer to the bond details in Problem 14-4A. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the on...

Q: Valdez issues $450,000 of 13%, four-year

Valdez issues $450,000 of 13%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $493,608, and their market rate is 10% at the issue...

Q: The ledger of Tyler Lambert and Jayla Yost, attorneys-at

The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yostâ€...

Q: The ledger of Tyler Lambert and Jayla Yost, attorneys-at

The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yostâ€...

Q: Use the amortization table that you prepared for GITs bonds in Short

Use the amortization table that you prepared for GITs bonds in Short Exercise 8-9 to answer the following questions: 1. How much cash did GIT borrow on March 31, 2010? How much cash will GIT pay back...

Q: On February 28, 2010, Marlin Corp. issues 8%,

On February 28, 2010, Marlin Corp. issues 8%, 10-year bonds payable with a face value of $900,000. The bonds pay interest on February 28 and August 31. Marlin Corp. amortizes bonds by the straight-lin...

Q: Sunset Drive-Ins Ltd. issued a $500,000

Sunset Drive-Ins Ltd. issued a $500,000, 8%, 10-year bond payable on July 1, 2010, at a price of 94. Also assume that Sunsets accounting year ends on December 31. Journalize the following transactions...

Q: On January 31, Driftwood Logistics, Inc., issued 10-

On January 31, Driftwood Logistics, Inc., issued 10-year, 6% bonds payable with a face value of $13,000,000. The bonds were issued at 94 and pay interest on January 31 and July 31. Driftwood Logistics...

Q: Federal Bank has $500,000 of 7% debenture bonds

Federal Bank has $500,000 of 7% debenture bonds outstanding. The bonds were issued at 103 in 2010 and mature in 2030. Requirements 1. How much cash did Federal Bank receive when it issued these bond...

Q: Coastalview Imaging Ltd. issued $3,300,000 of

Coastalview Imaging Ltd. issued $3,300,000 of 6% notes payable on December 31, 2010, at a price of 95. The notes term to maturity is 20 years. After four years, the notes may be converted into Coastal...

Q: On January 31, Daughtry Logistics, Inc., issued five-

On January 31, Daughtry Logistics, Inc., issued five-year, 5% bonds payable with a face value of $11,000,000. The bonds were issued at 95 and pay interest on January 31 and July 31. Daughtry Logistics...

Q: Commonwealth Bank has $400,000 of 9% debenture bonds

Commonwealth Bank has $400,000 of 9% debenture bonds outstanding. The bonds were issued at 104 in 2010 and mature in 2030. Requirements 1. How much cash did Commonwealth Bank receive when it issued...

Q: Worldview Imaging Ltd. issued $3,600,000 of

Worldview Imaging Ltd. issued $3,600,000 of 9% notes payable on December 31, 2010, at a price of 94. The notes term maturity is 10 years. After four years, the notes may be converted into Worldview co...

Q: This (adapted) advertisement appeared in the Wall Street Chronicle.

This (adapted) advertisement appeared in the Wall Street Chronicle. (Note: A subordinated debenture is an unsecured bond payable whose rights are less than the rights of other bondholders.) Require...

Q: On February 28, 2010, Mackerel Corp. issues 6%,

On February 28, 2010, Mackerel Corp. issues 6%, 20-year bonds payable with a face value of $1,800,000. The bonds pay interest on February 28 and August 31. Mackerel Corp. amortizes bonds by the straig...

Q: GIT, Inc., issued $600,000 of 5%,

GIT, Inc., issued $600,000 of 5%, 12-year bonds payable at a price of 77 on March 31, 2010. The market interest rate at the date of issuance was 8%, and the GIT bonds pay interest semiannually. 1. Pr...

Q: Sunset Drive-Ins Ltd. borrowed money by issuing $5

Sunset Drive-Ins Ltd. borrowed money by issuing $5,000,000 of 3% bonds payable at 36.5 on July 1, 2010. The bonds are 10-year bonds and pay interest each January 1 and July 1. 1. How much cash did Su...

Q: The 2011 income statement and the 2011 comparative balance sheet of T

The 2011 income statement and the 2011 comparative balance sheet of T-Bar-M Camp, Inc., have just been distributed at a meeting of the camps board of directors. The directors raise a fundamental quest...

Q: Tucker-Breen Investments specializes in low-risk government bonds.

Tucker-Breen Investments specializes in low-risk government bonds. Identify each of Tucker-Breens transactions as operating (O), investing (I), financing (F), noncash investing and financing (NIF), or...

Q: Burke-Cassidy Investments specializes in low-risk government bonds.

Burke-Cassidy Investments specializes in low-risk government bonds. Identify each of Burke-Cassidys transactions as operating (O), investing (I), financing (F), noncash investing and financing (NIF),...

Q: Con-sider three independent cases for the cash flows of 424

Con-sider three independent cases for the cash flows of 424 Promenade Shoes. For each case, identify from the statement of cash flows how 424 Promenade Shoes generated the cash to acquire new plant as...

Q: Morgensen Software Corp. has assembled the following data for the years

Morgensen Software Corp. has assembled the following data for the years ending December 31, 2010 and 2009. Requirement 1. Prepare Morgensen Software Corp.s statement of cash flows using the indirec...

Q: Ramirez Furniture Gallery, Inc., provided the following data from the

Ramirez Furniture Gallery, Inc., provided the following data from the company’s records for the year ended May 31, 2010: a. Credit sales, $584,500 b. Loan to another company, $12,300 c. Cash payment...

Q: Neighbor Software Corp. has assembled the following data for the year

Neighbor Software Corp. has assembled the following data for the year ended December 31, 2010: Requirement 1. Prepare Neighbor Software Corp.s statement of cash flows using the indirect method to re...

Q: Dunleavy Furniture Gallery, Inc., provided the following data from the

Dunleavy Furniture Gallery, Inc., provided the following data from the companys records for the year ended December 31, 2010: a. Credit sales, $567,000 b. Loan to another company, $12,800 c. Cash pa...

Q: Examine the statement of cash flows of Clock, Inc.

Examine the statement of cash flows of Clock, Inc. Suppose Clocks operating activities provided, rather than used, cash. Identify three things under the indirect method that could cause operating cas...

Q: The financial statements of Apple Inc. are presented in Appendix A

The financial statements of Apple Inc. are presented in Appendix A at the end of this textbook. Instructions (a) Using the consolidated income statement and balance sheet, identify items that may res...

Q: On January 1, 2015, Pruitt Company issued 30,

On January 1, 2015, Pruitt Company issued 30,000 shares of its $2 par value common stock for the net assets of Shah Company in a statutory merger accounted for as a purchase. Pruitt’...

Q: On January 1, 2015, Pruitt Company issued 25,500

On January 1, 2015, Pruitt Company issued 25,500 shares of its common stock in exchange for 85% of the outstanding common stock of Shah Company. Pruitt’s common stock had a fair valu...

Q: On January 1, 2015, Pruitt Company issued 25,500

On January 1, 2015, Pruitt Company issued 25,500 shares of its common stock ($2 par) in exchange for 85% of the outstanding common stock of Shah Company. Pruitt’s common stock had a...

Q: The Mcquire Company is considering acquiring 100% of the Sosa Company

The Mcquire Company is considering acquiring 100% of the Sosa Company. The management of Mcquire fears that the acquisition price may be too high. Condensed financial statements for Sosa Company for t...

Q: On November 19, 2009, eBay sold all the capital shares

On November 19, 2009, eBay sold all the capital shares of Skype to Springboard Group. eBay received cash proceeds of approximately $1.9 billion, a subordinated note issued by a subsidiary of the Buyer...

Q: On February 23, 2005, eBay acquired Viva Group, Inc

On February 23, 2005, eBay acquired Viva Group, Inc., which does business under the name Rent.com, for a cash purchase price of approximately $435.365 million including net cash and investments of app...

Q: LoJack is a leading global provider of technology products and services for

LoJack is a leading global provider of technology products and services for the tracking and recovery of valuable mobile assets and people at risk of wandering. According to a recent Federal Bureau of...

Q: On January 1, 2017, Chamberlain Corporation pays $388,

On January 1, 2017, Chamberlain Corporation pays $388,000 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $15,000 results from the acquisition. On December 31, 2018, Ne...

Q: Herbert, Inc., acquired all of Rambis Company’s outstanding stock on

Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $574,000 in cash. Annual excess amortization of $12,000 results from this transaction. On the date of the take...

Q: BuyCo, Inc. holds 25 percent of the outstanding shares of

BuyCo, Inc. holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with thi...

Q: Matthew, Inc. owns 30 percent of the outstanding stock of

Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance...

Q: On January 1, 2018, Pine Company owns 40 percent (

On January 1, 2018, Pine Company owns 40 percent (40,000 shares) of Seacrest, Inc., which it purchased several years ago for $182,000. Since the date of acquisition, the equity method has been properl...

Q: On July 1, 2016, Killearn Company acquired 88,000

On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to s...

Q: On January 1, 2017, Stream Company acquired 30 percent of

On January 1, 2017, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Vid...

Q: When a parent company uses the equity method to account for investment

When a parent company uses the equity method to account for investment in a subsidiary, the amortization expense entry recorded during the year is eliminated on a consolidation worksheet as a componen...

Q: Angela Corporation (a private company) acquired all of the outstanding

Angela Corporation (a private company) acquired all of the outstanding voting stock of Eddy Tech, Inc., on January 1, 2018, in exchange for $9,000,000 in cash. At the acquisition date, Eddy Techâ...

Q: Allison Corporation acquired all of the outstanding voting stock of Mathias,

Allison Corporation acquired all of the outstanding voting stock of Mathias, Inc., on January 1, 2017, in exchange for $5,875,000 in cash. Allison intends to maintain Mathias as a wholly owned subsidi...

Q: On January 3, 2016, Persoff Corporation acquired all of the

On January 3, 2016, Persoff Corporation acquired all of the outstanding voting stock of Sea Cliff, Inc., in exchange for $6,000,000 in cash. Persoff elected to exercise control over Sea Cliff as a who...

Q: On January 1, 2017, Prestige Corporation acquired 100 percent of

On January 1, 2017, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,030,000 in cash and securities. On the acquisition date, Stylene had the fol...

Q: On January 1, 2017, Pinnacle Corporation exchanged $3,

On January 1, 2017, Pinnacle Corporation exchanged $3,200,000 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance shee...

Q: On January 1, 2017, Harrison, Inc., acquired 90

On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison...

Q: Plaza, Inc., acquires 80 percent of the outstanding common stock

Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $900,000 cash. At the acquisition date, Stanford’s total...

Q: On January 1, 2017, Holland Corporation paid $8 per

On January 1, 2017, Holland Corporation paid $8 per share to a group of Zeeland Corporation shareholders to acquire 60,000 shares of Zeeland’s outstanding voting stock, representing...

Q: Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation

Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2015. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before a...

Q: Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft

Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $612,000 in cash and other consideration. At the acquisition date, Protrade assesse...

Q: Akron, Inc., owns all outstanding stock of Toledo Corporation.

Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the...

Q: Pitino acquired 90 percent of Brey’s outstanding shares on January 1,

Pitino acquired 90 percent of Brey’s outstanding shares on January 1, 2016, in exchange for $342,000 in cash. The subsidiary’s stockholders’ equit...

Q: The following separate income statements are for Burks Company and its 80

The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company: Additional Information ∙ Amortization expense...

Q: Bolero Company holds 80 percent of the common stock of Rivera,

Bolero Company holds 80 percent of the common stock of Rivera, Inc., and 40 percent of this subsidiary’s convertible bonds. The following consolidated financial statements are for 20...

Q: Alford Company and its 80 percent–owned subsidiary, Knight,

Alford Company and its 80 percent–owned subsidiary, Knight, have the following income statements for 2018: Additional Information for 2018 ∙ Intra-entity inventory...

Q: The following accounts are denominated in rubles as of December 31,

The following accounts are denominated in rubles as of December 31, 2017. For reporting purposes, these accounts need to be stated in U.S. dollars. For each account, indicate the exchange rate that wo...

Q: King Company owns a 90 percent interest in the outstanding voting shares

King Company owns a 90 percent interest in the outstanding voting shares of Pawn Company. No excess fair-value amortization resulted from the acquisition. Pawn reports a net income of $110,000 for the...

Q: Pacman Company issued 5-year, 8% bonds with a

Pacman Company issued 5-year, 8% bonds with a par value of $100,000 on December 31, 2012, for $92,278 (sold to yield 10%). Interest is paid semiannually on June 30th and December 31st. On December 31,...

Q: On January 1, 2009, Pace Corporation issued $500,

On January 1, 2009, Pace Corporation issued $500,000 par value, 10-year, 15% bonds. Interest is payable each June 30 and December 31. On January 1, 2012, Supra Corporation, a 90%-owned subsidiary, pur...

Q: Bar Company, which is in financial difficulty and in the process

Bar Company, which is in financial difficulty and in the process of a voluntary reorganization, has agreed to transfer to a creditor a copyright it owns in full settlement of a $150,000 note payable a...

Q: The first case at the end of this chapter and numerous subsequent

The first case at the end of this chapter and numerous subsequent chapters is a series of integrative cases involving Wal-Mart Stores, Inc. (Walmart). The series of cases applies the concepts and anal...

Q: The Apollo Group is one of the largest providers of private education

The Apollo Group is one of the largest providers of private education and runs numerous programs and services, including the University of Phoenix. Exhibit 3.23 provides statements of cash flows for 2...

Q: New lease standards become effective January 1, 2019. These standards

New lease standards become effective January 1, 2019. These standards affect the accounting for operating leases. Assume Swift Company acquires a machine with a fair value of $100,000 on January 1 of...

Q: The first decade of the 21st century witnessed a flurry of losses

The first decade of the 21st century witnessed a flurry of losses, bankruptcies, acquisitions, and strategic partnerships in the airline industry. The heavily levered firms in the industry are particu...

Q: Exhibits 1.26–1.28 of Integrative Case 1

Exhibits 1.26–1.28 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 2012–2015. In addition, the website for this text contains W...

Q: Walmart Stores, Inc. (Walmart) is the largest retailing

Walmart Stores, Inc. (Walmart) is the largest retailing firm in the world. Building on a base of discount stores, Walmart has expanded into warehouse clubs and Supercenters, which sell traditional dis...

Q: Exhibit 5.24 presents balance sheets for Year 2 and Year

Exhibit 5.24 presents balance sheets for Year 2 and Year 3 for Whole Foods Market, Inc.; Exhibit 5.25 presents income statements for Year 1 through Year 3. Exhibit 5.24: Exhibit 5.25: REQUIRED: a...

Q: Exhibits 1.19–1.21 of Integrative Case 1

Exhibits 1.19–1.21 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 2012–2015. In addition, the website for this text contains W...

Q: Sunbeam Corporation manufactures and sells a variety of small household appliances,

Sunbeam Corporation manufactures and sells a variety of small household appliances, including toasters, food processors, and waffle grills. Exhibit 6.17 presents a statement of cash flows for Sunbeam...

Q: Exhibit 3.32 presents a statement of cash flows for Walmart

Exhibit 3.32 presents a statement of cash flows for Walmart for fiscal 2015, 2014, and 2013. This statement matches the Walmart statement of cash flows in Appendix A, and is an expanded version of the...

Q: Exhibit 8.26 presents the separate financial statements at December 31

Exhibit 8.26 presents the separate financial statements at December 31, 2018, of Prestige Resorts and its 80%-owned subsidiary Booking, Inc. Two years earlier on January 1, 2017, Prestige acquired 80%...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of man...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of man...

Q: Exhibit 1.18 represents common-size income statements and balance

Exhibit 1.18 represents common-size income statements and balance sheets for seven firms that operate at various stages in the value chain for the pharmaceutical industry. These common-size statements...

Q: BTB Electronics Inc. manufactures parts, components, and processing equipment

BTB Electronics Inc. manufactures parts, components, and processing equipment for electronics and semiconductor applications in the communications, computer, automotive, and appliance industries. Its...

Q: The Coca-Cola Company (Coca-Cola) manufactures and

The Coca-Cola Company (Coca-Cola) manufactures and markets a variety of beverages. Exhibit 3.16 presents a statement of cash flows for Coca-Cola for three years. Exhibit 3.16: REQUIRED: Discuss the...

Q: Texas Instruments primarily develops and manufactures semiconductors for use in technology-

Texas Instruments primarily develops and manufactures semiconductors for use in technology-based products for various industries. The manufacturing process is capital-intensive and subject to cyclical...

Q: Tesla Motors manufactures high-performance electric vehicles that are extremely slick

Tesla Motors manufactures high-performance electric vehicles that are extremely slick looking. Exhibit 3.18 presents the statement of cash flows for Tesla Motors for 2010 through 2012. Exhibit 3.18:...

Q: Sirius XM Radio Inc. is a satellite radio company, formed

Sirius XM Radio Inc. is a satellite radio company, formed from the merger of Sirius and XM in 2008. Exhibit 3.20 presents a statement of cash flows for Sirius XM Radio for 2006, 2007, and 2008. Sirius...

Q: Sunbeam Corporation manufactures and sells a variety of small household appliances,

Sunbeam Corporation manufactures and sells a variety of small household appliances, including toasters, food processors, and waffle grills. Exhibit 3.21 presents a statement of cash flows for Sunbeam...

Q: RCL Corporation is negotiating with Royal Corporation to acquire a patent that

RCL Corporation is negotiating with Royal Corporation to acquire a patent that has nine years remaining on its legal life. RCL can either purchase the patent for $50,000 or purchase all of the assets...

Q: Indicate whether a taxpayer can claim deductions for depreciation or amortization for

Indicate whether a taxpayer can claim deductions for depreciation or amortization for the following: a. Land used in the taxpayer’s ranching business. b. An automobile used in business. The taxpayer...

Q: Orange Corporation acquired all of the assets of Lemon Company for $

Orange Corporation acquired all of the assets of Lemon Company for $10,000,000. The fair market value of the tangible assets totaled $8,000,000. The $2,000,000 difference is considered goodwill. Orang...

Q: Zenon Corporation (a calendar-year corporation) began work on

Zenon Corporation (a calendar-year corporation) began work on a new experimental project in year 1. It incurred $8,000 in qualifying research expenses in year 1 and $11,000 in year 2. The benefits fro...

Q: Go to the IRS Web site at www.irs.gov

Go to the IRS Web site at www.irs.gov and locate Publication 946: How to Depreciate Property. Locate the section on where amortization is reported. On what form is amortization reported? On which part...

Q: Shelby Corporation purchases 90% of the outstanding stock of Borner Company

Shelby Corporation purchases 90% of the outstanding stock of Borner Company on January 1, 2015, for $603,000 cash. At that time, Borner Company has the following stockholders’ equity...

Q: On July 1, 2015, Faber Enterprises acquired Ann’s Tool Company

On July 1, 2015, Faber Enterprises acquired Ann’s Tool Company. Prior to the merger of the two companies, each company calculated its income for the entire year ended December 31, 20...

Q: Garman International wants to expand its operations and decides to acquire the

Garman International wants to expand its operations and decides to acquire the net assets of Iris Company as of January 1, 2016. Garman issues 10,000 shares of its $5 par value common stock for the ne...

Q: On January 1, 2015, Port Company acquires 8,000

On January 1, 2015, Port Company acquires 8,000 shares of Solvo Company by issuing 10,000 of its common stock shares with a par value of $10 per share and a fair value of $70 per share. The price paid...

Q: Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock

Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $480,000 for 100% of Switzer common stock. Paul...

Q: Refer to the preceding common information for Paulcraft’s acquisition of Switzer’s common

Refer to the preceding common information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $440,000 for 80% of Switzer common stock...

Q: Whitney Company acquires an 80% interest in Masters Company common stock

Whitney Company acquires an 80% interest in Masters Company common stock on January 1, 2015. Appraisals of Masters’ assets and liabilities are performed, and Whitney ends up paying a...

Q: On January 1, 2014, Dunbar Corporation, an 85%-

On January 1, 2014, Dunbar Corporation, an 85%-owned subsidiary of Garfield Industries, received $48,055 for $50,000 of 8%, 5-year bonds it issued when the market rate was 9%. When Garfield Industries...

Q: Linco Industries is a 90%- owned subsidiary of Sharp Incorporated.

Linco Industries is a 90%- owned subsidiary of Sharp Incorporated. On January 1, 2015, Linco issued $100,000 of 10- year, 6% bonds for $86,580, to yield 8% interest. Interest is paid annually on Janua...

Q: On January 1, 2015, Traylor Company, an 80%-

On January 1, 2015, Traylor Company, an 80%-owned subsidiary of Parker Electronics, Inc., signed a 4-year direct financing lease with its parent for the rental of electronic equipment. The lease agree...

Q: The Auto Clinic is a wholly owned subsidiary of Fast-Check

The Auto Clinic is a wholly owned subsidiary of Fast-Check Equipment Company. Fast-Check Equipment sells and leases 4-wheel alignment machines. The usual selling price of each machine is $35,000; it h...

Q: On May 1, 2016, Tole Company acquires a 80%

On May 1, 2016, Tole Company acquires a 80% interest in Marco Company for $400,000. The fair value of the NCI is $100,000. The following determination and distribution of excess schedule is prepared:...

Q: Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock

Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $420,000 for 100% of Switzer common stock. Paul...

Q: Center, Inc., purchases 24,000 shares of Bruce Corporation

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Refer to the preceding facts for Packard’s acquisition of Stude common stock. On January 1, 2016, Packard held merchandise acquired from Stude for $10,000. This beginning inventory had an applicable g...

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Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $420,000 for 70% of Switzer common stock. Paulc...

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Refer to the preceding facts for Panther’s acquisition of Sandin common stock. On January 1, 2016, Panther held merchandise sold to it from Sandin for $12,000. This beginning inventory had an applicab...

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Refer to the preceding facts for Panther’s acquisition of Sandin common stock. On January 1, 2016, Sandin held merchandise sold to it from Panther for $20,000. During 2016, Panther sold merchandise to...

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Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2016, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2017, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2016, Press held...

Q: Refer to the preceding facts for Press’s acquisition of Simon common stock

Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2017, Press held...

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On January 1, 2015, Parker Company acquired 90% of the common stock of Stride Company for $351,000. On this date, Stride had common stock, other paid-in capital in excess of par, and retained earnings...

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On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236....

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Refer to the income statement for Vail Resorts shown in the chapter opener. Using the account titles reported there, prepare the journal entry for each of the following hypothetical transactions. Assu...

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Refer to the financial statements for Chipotle reproduced in the chapter and answer the following questions. Chipotle reproduced: 1. What was the company’s net income for 2015? 2....

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Q: Refer to the financial information for Chipotle and Panera Bread reproduced at

Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book for the information needed to answer the following questions. Chipotle reproduced: Panera Bread:...

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Refer to the income statements for Chipotle and Panera Bread reproduced at the back of the book. Chipotle reproduced: Panera Bread: Required: 1. Which is the largest expense for each company in t...

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Refer to Panera Bread’s statement of cash flows for the year ended December 29, 2015, as reproduced at the end of the book. Panera Bread’s statement of cash flows:...

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Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book for the information needed to answer the following questions. Chipotle reproduced: Panera Bread:...

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Lake Company sold some machinery to View Company on January 1, 2017, for which the cash selling price was $758,200. View entered into an installment sales contract with Lake at a 10% interest rate. Th...

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Refer to the statement of cash flows for both Chipotle and Panera Bread for the most recent year and any other pertinent information reprinted at the back of this book. Cash flows for Chipotle: Cas...

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The following account balances are taken from the records of Martin Corp. for the past two years. Other information available for 2017 is as follows: a. Net income for the year was $200,000. b. Depr...

Q: The following events occurred at Handsome Hounds Grooming Company during its first

The following events occurred at Handsome Hounds Grooming Company during its first year of business: a. To establish the company, the two owners contributed a total of $50,000 in exchange for common...

Q: Erin Company incurred the following costs during 2017 and 2018:

Erin Company incurred the following costs during 2017 and 2018: a. Research and development costing $20,000 was conducted on a new product to sell in future years. A product was successfully developed...

Q: During 2012, Maciel Inc.’s research and development department developed

During 2012, Maciel Inc.’s research and development department developed a new manufacturing process. Research and development costs were $350,000. The process was patented on October 1, 2012. Legal c...

Q: Refer to Walgreens Boots Alliance’s statement of cash flows shown in the

Refer to Walgreens Boots Alliance’s statement of cash flows shown in the chapter opener on page 555 and answer the following questions for the most recent year. Walgreens Boots Alli...

Q: Quickster Inc. acquired a patent a number of years ago.

Quickster Inc. acquired a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance sheet...

Q: Refer to the financial statement information of Chipotle reprinted at the back

Refer to the financial statement information of Chipotle reprinted at the back of the book. Financial statement of Chipotle: Required: 1. Prepare a work sheet with the following headings: 2. Comp...

Q: Shepard Company has not yet prepared a formal statement of cash flows

Shepard Company has not yet prepared a formal statement of cash flows for 2017. Comparative balance sheets as of December 31, 2017 and 2016, and a statement of income and retained earnings for the yea...

Q: The following events took place at Tasty-Toppins Inc., a

The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2017: a. January 1, purchased a truck for $16,000 and added a cab and an oven at a cost of...

Q: Refer to the financial statement information of Chipotle reprinted at the back

Refer to the financial statement information of Chipotle reprinted at the back of the book. Financial statement of Chipotle: Required: 1. Using the format in Example 13-5, prepare common-size compa...

Q: On January 1, 2017, Kiger Manufacturing Company leased a factory

On January 1, 2017, Kiger Manufacturing Company leased a factory machine for six years. Annual payments of $21,980 are to be made every December 31 beginning December 31, 2017. Interest expense is bas...

Q: This case should be completed after responding to the requirements in Decision

This case should be completed after responding to the requirements in Decision Case 13-2. Refer to the financial statement information of Chipotle and Panera Bread reprinted at the back of the book....

Q: E-Gen Enterprises Inc. had property, plant, and

E-Gen Enterprises Inc. had property, plant, and equipment, net of accumulated depreciation, of $1,555,000 and intangible assets, net of accumulated amortization, of $34,000 at December 31, 2017. The c...

Q: Investors and lenders who read financial statements must determine the age,

Investors and lenders who read financial statements must determine the age, composition, and productivity of operating assets. Refer to the financial information at the back of the book for Chipotle a...

Q: During 2012, Reynosa Inc.’s research and development department developed

During 2012, Reynosa Inc.’s research and development department developed a new manufacturing process. Research and development costs were $85,000. The process was patented on October 1, 2012. Legal c...

Q: Table leaf Inc. purchased a patent a number of years ago

Table leaf Inc. purchased a patent a number of years ago. The patent is being amortized on a straight-line basis over its estimated useful life. The company’s comparative balance she...

Q: Lang Company has not yet prepared a formal statement of cash flows

Lang Company has not yet prepared a formal statement of cash flows for 2017. Following are comparative balance sheets as of December 31, 2017 and 2016, and a statement of income and retained earnings...

Q: Stacy Company issued five-year, 10% bonds with a

Stacy Company issued five-year, 10% bonds with a face value of $10,000 on January 1, 2017. Interest is paid annually on December 31. The market rate of interest on this date is 12%, and Stacy Company...

Q: Assume the same set of facts for Stacy Company as in Problem

Assume the same set of facts for Stacy Company as in Problem 10-2 except that the market rate of interest of January 1, 2017, is 8% and the proceeds from the bond issuance equal $10,799. Required: 1....

Q: On January 1, 2017, Muske Trucking Company leased a semitractor

On January 1, 2017, Muske Trucking Company leased a semitractor and trailer for five years. Annual payments of $28,300 are to be made every December 31 beginning December 31, 2017. Interest expense is...

Q: Centralia Stores Inc. had property, plant, and equipment,

Centralia Stores Inc. had property, plant, and equipment, net of accumulated depreciation, of $4,459,000 and intangible assets, net of accumulated amortization, of $673,000 at December 31, 2017. The c...

Q: From the following list, identify each item as operating (O

From the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N). ________ Cost incurred to acquire copyright _...

Q: Mega Enterprises is in the process of negotiating an extension of its

Mega Enterprises is in the process of negotiating an extension of its existing loan agreements with a major bank. The bank is particularly concerned with Mega’s ability to generate s...

Q: Bailey Corp. just completed the most profitable year in its 25

Bailey Corp. just completed the most profitable year in its 25-year history. Reported earnings of $1,020,000 on sales of $8,000,000 resulted in a very healthy profit margin of 12.75%. Each year before...

Q: Refer to the financial information at the back of the book for

Refer to the financial information at the back of the book for Panera Bread and Chipotle. Financial information Panera Bread: Financial information Chipotle Required: Part A. The Ratio Analysis M...

Q: For each of the following intangible assets, indicate the amount of

For each of the following intangible assets, indicate the amount of amortization expense that should be recorded for the year 2017 and the amount of accumulated amortization on the balance sheet as of...

Q: The following components are computed annually when a bond is issued for

The following components are computed annually when a bond is issued for other than its face value: • Cash interest payment • Interest expense • Amortization of discount/premium • Carrying value of bo...

Q: Assume that a company uses the indirect method to prepare the Operating

Assume that a company uses the indirect method to prepare the Operating Activities section of the statement of cash flows. For each of the following items, indicate whether it would be added to net in...

Q: Carnival Corporation & plc is one of the largest cruise companies in

Carnival Corporation & plc is one of the largest cruise companies in the world with such well-known brands as Carnival Cruise Lines, Holland America Line, and Princess Cruises. Classify each of th...

Q: Consider the following independent events: a. Gain on sale

Consider the following independent events: a. Gain on sale of an asset b. Increase in accounts receivable c. Decrease in prepaid insurance d. Amortization expense e. Increase in accounts payable f. U...

Q: The income statement for Mendelin Corporation is as follows:

The income statement for Mendelin Corporation is as follows: Additional information is as follows: a. Interest expense includes $1,800 of discount amortization. b. The prepaid insurance expense acco...

Q: You plan to purchase a $220,000 house using a

You plan to purchase a $220,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 4.75 percent. You will make a down payment of 20 percent of the purchase pri...

Q: You plan to purchase a $300,000 house using a

You plan to purchase a $300,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 4.50 percent. You will make a down payment of 20 percent of the purchase pri...

Q: You plan to purchase a $150,000 house using a

You plan to purchase a $150,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 5.25 percent. You will make a down payment of 20 percent of th...

Q: You plan to purchase a $200,000 house using a

You plan to purchase a $200,000 house using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.50 percent. You will make a down payment of 20 percent of th...

Q: British Petroleum’s income statement was prepared using IFRS is presented below (

British Petroleum’s income statement was prepared using IFRS is presented below (in $ millions). ExxonMobil Corporation’s income statement prepared using U.S. GA...

Q: The following information is available about items that differ between the governmental

The following information is available about items that differ between the governmental funds and the government wide statements. Assume that there are no internal service funds. The schedule of capit...

Q: The following information was available about items that differed between the governmental

The following information was available about items that differed between the governmental funds and the government-wide statements. Assume that there are no internal service funds. The schedule of ca...

Q: Branson Industries conducts operations in five major industries, A, B

Branson Industries conducts operations in five major industries, A, B, C, D, and E. Financial data relevant to each industry for the year ending December 31, 2014, are as follows: Included in the sa...

Q: Selected data from the statement of cash flows for Jackson Corporation for

Selected data from the statement of cash flows for Jackson Corporation for the years ended October 31, 2013, 2012, and 2011 appear as follows (amounts in millions of US$): Prepare a statement of cas...

Q: The income statement of GrandRider, a U.K. automotive

The income statement of GrandRider, a U.K. automotive manufacturer, reported revenues of £7,435, cost of sales of £6,003, other operating expenses of £918, a los...

Q: The following table lists the 2015 and 2016 financial statements for Otago

The following table lists the 2015 and 2016 financial statements for Otago Bay Marine Motors, a major manufacturer of top-of-the-line outboard motors. a. On the basis of the information provided,...

Q: Consider $200 million of 30-year mortgages with a coupon

Consider $200 million of 30-year mortgages with a coupon of 10 percent paid quarterly. a. What is the quarterly mortgage payment? b. What are the interest repayments over the first year of life of the...

Q: Consider $100 million of 30-year mortgages with a coupon

Consider $100 million of 30-year mortgages with a coupon of 5 percent per year paid quarterly. a. What is the quarterly mortgage payment? b. What are the interest and principal repayments over the fir...

Q: Information from GoodLuck Brands’s income statements for the years ended December 31

Information from GoodLuck Brands’s income statements for the years ended December 31, Years 6, 7, and 8, is shown next. GoodLuck Brands is a U.S.-based manufacturer and distributor....

Q: Dragonfly Limited (Dragonfly), a diversified electronics firm headquartered in Singapore

Dragonfly Limited (Dragonfly), a diversified electronics firm headquartered in Singapore, reported the following income statement information for its year ended December 31, Year 7. Dragonfly applies...

Q: Exhibit 6.32 presents a statement of cash flows for Swoosh

Exhibit 6.32 presents a statement of cash flows for Swoosh Shoes, Inc., for three years. a. Why did Swoosh experience increasing net income but decreasing cash flow from operations during this three-y...

Q: Exhibit 6.33 presents statements of cash flows for Spokane Paper

Exhibit 6.33 presents statements of cash flows for Spokane Paper Group, a forest products company, for three recent years. During this period, it faced financial difficulty, which you can see by notin...

Q: Market Star is a marketing services firm that creates advertising copy for

Market Star is a marketing services firm that creates advertising copy for clients and places the advertising in television, magazines, and other media. Accounts receivable represent amounts owed by c...

Q: Exhibit 6.12 shows a simplified statement of cash flows for

Exhibit 6.12 shows a simplified statement of cash flows for a period. Numbers appear on 11 of the lines in the statement. Other lines are various subtotals and grand totals; ignore these in the remain...

Q: Analysis of transactions and preparation of income statement and balance sheet.

Analysis of transactions and preparation of income statement and balance sheet. Refer to the information for Patterson Corporation for January, Year 13, in Chapter 2, above. The following transactions...

Q: Refer to the information for Regaldo Department Stores as of January 31

Refer to the information for Regaldo Department Stores as of January 31, Year 8, in Chapter 2, Regaldo Department Stores opened for business on February 1, Year 8. Transactions and events during Febru...

Q: The management of Warren Corporation, concerned over a decrease in cash

The management of Warren Corporation, concerned over a decrease in cash, provides you with the comparative analysis of changes in account balances between June 30, 2013, and June 30, 2014, appearing i...

Q: Exhibit 16.11 presents a comparative statement of financial position for

Exhibit 16.11 presents a comparative statement of financial position for Biddle Corporation as of December 31, 2013 and 2014. Exhibit 16.12 presents an income statement for 2014. Additional informatio...

Q: Exhibit 16.21 presents a statement of cash flows for Cypress

Exhibit 16.21 presents a statement of cash flows for Cypress Corporation. a. What are the likely reasons that net income increased between 2011 and 2013, but cash flow from operations decreased? b. Wh...

Q: Exhibits 17.11 and 17.12 present a partial set

Exhibits 17.11 and 17.12 present a partial set of financial statements of Chicago Corporation for 2013, including a consolidated statement of income and retained earnings for 2013 and consolidated com...

Q: Exhibit 17.13 presents a consolidated statement of income and retained

Exhibit 17.13 presents a consolidated statement of income and retained earnings for 2013, and Exhibit 17.14 presents a consolidated balance sheet for Tuck Corporation as of December 31, 2012 and 2013....

Q: Present journal entries for each of the following transactions of Moon Macro

Present journal entries for each of the following transactions of Moon Macro systems: a. Acquired computers costing $400,000 and computer software costing $40,000 on January 1, 2011. Moon expects the...

Q: Exhibit 10.3 presents a partial balance sheet for Hargon,

Exhibit 10.3 presents a partial balance sheet for Hargon, Inc., a creator and manufacturer of biotechnology pharmaceutical products, for December 31, 2012 and 2013. a. Does Hargon likely recognize dep...

Q: Exhibit 10.4 presents a partial balance sheet for HP3,

Exhibit 10.4 presents a partial balance sheet for HP3, a creator and manufacturer of computer hardware and software and related services, for its fiscal years ending October 31, 2012 and 2013. a. HP3...

Q: The notes to the financial statements of Aggarwal Corporation for 2013 reveal

The notes to the financial statements of Aggarwal Corporation for 2013 reveal the following information with respect to long-term debt. All interest rates in this problem assume semiannual compounding...

Q: Carom Sports Collectibles Shop plans to acquire, as of January 1

Carom Sports Collectibles Shop plans to acquire, as of January 1, 2013, a computerized cash register system that costs $100,000 and has a five-year life and no salvage value. The company considers two...

Q: The first two columns of Exhibit 14.14 present information from

The first two columns of Exhibit 14.14 present information from the accounting records of Peak Company and Valley Company on December 31 of the current year. Peak Company acquired 100% of the common s...

Q: Contrast the terms finite life and indefinite life as they apply to

Contrast the terms finite life and indefinite life as they apply to depreciation of tangible long-lived assets and amortization of intangible assets.

Q: Berman Company purchased a plot of land for possible future development.

Berman Company purchased a plot of land for possible future development. The land had fair value of $86,000. Berman Company gave a 3-year interest-bearing note. The note had face value of $100,000 and...

Q: Hager Company acquires a computer from Volusia Computer Company. The cash

Hager Company acquires a computer from Volusia Computer Company. The cash price (fair value) of the computer is $37,938. Hager Company gives a three-year, interest-bearing note with a maturity value o...

Q: On January 1 of the current year, Womack Company issues 10

On January 1 of the current year, Womack Company issues 10% semiannual coupon bonds maturing five years from the date of issue. The firm issues the bonds to yield 8% compounded semiannually. The bonds...

Q: On January 1, 2012, Seward Corporation issues $100,

On January 1, 2012, Seward Corporation issues $100,000 face value, 8% semiannual coupon bonds maturing three years from the date of issue. The coupons, dated for June 30 and December 31 of each year,...

Q: Kelly Company acquired $500,000 face value of the outstanding

Kelly Company acquired $500,000 face value of the outstanding bonds of Steedly Company on January 1, 2013. The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 7% and ma...

Q: Kelly Company acquired $500,000 face value of the outstanding

Kelly Company acquired $500,000 face value of the outstanding bonds of Steedly Company on January 1, 2013. The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 7% and ma...

Q: Dealco Corporation published a consolidated income statement for the year, shown

Dealco Corporation published a consolidated income statement for the year, shown in Exhibit 14.10. The unconsolidated affiliate retained 25% of its earnings of $140 million during the year, having pai...

Q: Obtain the Target Corporation’s annual report at http://investors.target

Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. What method of depreciation does Tar...

Q: Garth Manufacturing paid cash to acquire the assets of an existing company

Garth Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Garth’s financial condition just prior to the purcha...

Q: Doug’s Diner acquired a fast food restaurant for $1,500

Doug’s Diner acquired a fast food restaurant for $1,500,000. The fair market values of the assets acquired were as follows. No liabilities were assumed. Required: a. Calculate the...

Q: How does the amortization of a discount affect the income statement,

How does the amortization of a discount affect the income statement, balance sheet, and statement of cash flows?

Q: Bell Farm and Garden Equipment Co. reported the following information for

Bell Farm and Garden Equipment Co. reported the following information for Year 1: Selected information from the balance sheet as of December 31, Year 1, follows: Assume that a major customer retur...

Q: The financial statements of Pouchie Co. included the following information

The financial statements of Pouchie Co. included the following information for the year endedDecember 31, 2010 (amounts in millions):Depreciation and amortization expense . . . . . . . . . . . . . . ....

Q: On January 1, Year 1, Monroe Co. borrowed $

On January 1, Year 1, Monroe Co. borrowed $80,000 cash from First Bank by issuing a four-year, 6 percent note. The principal and interest are to be paid by making annual payments in the amount of $23,...

Q: On January 1, Year 1, Brown Co. borrowed cash

On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $100,000 face-value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annua...

Q: Tesla, Inc. began operations in 2003 but did not begin

Tesla, Inc. began operations in 2003 but did not begin selling its stock to the public until June 28, 2010. It has lost money every year it has been in existence, and by December 31, 2016, it had tota...

Q: Pine Land Co. was formed when it acquired cash from the

Pine Land Co. was formed when it acquired cash from the issue of common stock. The company then issued bonds at a premium on January 1, Year 1. Interest is payable annually on December 31 of each year...

Q: During Year 1 and Year 2, Agatha Corp. completed the

During Year 1 and Year 2, Agatha Corp. completed the following transactions relating to its bond issue. The corporation’s fiscal year is the calendar year. Year 1 Jan.  1 Issued $300,000 of 10year, 6...

Q: The three typical accounting events associated with borrowing money through a bond

The three typical accounting events associated with borrowing money through a bond issue are: 1. Exchanging the bonds for cash on the day of issue. 2. Making cash payments for interest expense and rec...

Q: On January 1, Year 1, Twain Corp. sold $

On January 1, Year 1, Twain Corp. sold $500,000 of its own 7 percent, 10-year bonds. Interest is payable annually on December 31. The bonds were sold to yield an effective interest rate of 8 percent....

Q: On January 1, Year 1, Kramer Co. borrowed cash

On January 1, Year 1, Kramer Co. borrowed cash from First City Bank by issuing a $90,000 face-value, three-year term note that had a 7 percent annual interest rate. The note is to be repaid by making...

Q: White Co. was formed when it acquired cash from the issue

White Co. was formed when it acquired cash from the issue of common stock. The company then issued bonds at a discount on January 1, Year 1. Interest is payable on December 31 with the first payment m...

Q: During Year 1 and Year 2, Kale Co. completed the

During Year 1 and Year 2, Kale Co. completed the following transactions relating to its bond issue. The company’s fiscal year ends on December 31. Year 1 Mar.  1 Issued $200,000 of eight-year, 6 perc...

Q: On January 1, Year 1, Mason Corp. sold $

On January 1, Year 1, Mason Corp. sold $100,000 of its own 6 percent, 10-year bonds. Interest is payable annually on December 31. The bonds were sold to yield an effective interest rate of 5 percent....

Q: Bluffton Company’s stock is quoted at $16 per share at December

Bluffton Company’s stock is quoted at $16 per share at December 31, Year 4 and Year 3. Bluffton’s financial statements follow: Required: Prepare a horizontal ana...

Q: Use the financial statements for Bluffton Company from Problem 13-17B

Use the financial statements for Bluffton Company from Problem 13-17B to perform a vertical analysis (based on total assets, total equities, and sales) of both the balance sheets and income statements...

Q: Use the financial statements for Bluffton Company from Problem 13-17B

Use the financial statements for Bluffton Company from Problem 13-17B to compute the following for Year 4. Round percentages to two decimal points. a. Current ratio. b. Quick (acid-test) ratio. c. Ave...

Q: On January 1, Year 1, Beatie Co. borrowed $

On January 1, Year 1, Beatie Co. borrowed $200,000 cash from Central Bank by issuing a five year, 6 percent note. The principal and interest are to be paid by making annual payments in the amount of $...

Q: A partial amortization schedule for a 10-year note payable issued

A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next: Required: a. Using a financial statements model like the one shown next, record the appropriate...

Q: Diaz Company issued bonds with a $180,000 face value

Diaz Company issued bonds with a $180,000 face value on January 1, Year 1. The bonds had a 7 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning December...

Q: Stuart Company issued bonds with a $150,000 face value

Stuart Company issued bonds with a $150,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning Decemb...

Q: On January 1, Year 1, Parker Company issued bonds with

On January 1, Year 1, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of...

Q: On January 1, Year 1, Hart Company issued bonds with

On January 1, Year 1, Hart Company issued bonds with a face value of $150,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of e...

Q: A partial amortization schedule for a five-year note payable that

A partial amortization schedule for a five-year note payable that Mercury Co. issued on January 1, Year 1, is shown next: Required: a. What rate of interest is Mercury Co. paying on the note? b. Usi...

Q: Frey Company issued bonds of $300,000 face value on

Frey Company issued bonds of $300,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Y...

Q: Ramsey Company issued bonds of $300,000 face value on

Ramsey Company issued bonds of $300,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31,...

Q: On January 1, Year 1, Valley Enterprises issued bonds with

On January 1, Year 1, Valley Enterprises issued bonds with a face value of $60,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31...

Q: On January 1, Year 1, Reese Incorporated issued bonds with

On January 1, Year 1, Reese Incorporated issued bonds with a face value of $120,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 3...

Q: On January 1, Year 1, Bainbridge Company borrowed $100,000 cash

On January 1, Year 1, Bainbridge Company borrowed $100,000 cash from a bank by issuing a 10-year, 9 percent note. The principal and interest are to be paid by making annual payments in the amount of $...

Q: 1. Ewing Computers makes 5,000 units of a circuit

1. Ewing Computers makes 5,000 units of a circuit board, CB76, at a cost of $230 each. Variable cost per unit is $180 and fixed cost per unit is $50. HT Electronics offers to supply 5,000 units of CB7...

Q: The Manes Company has two products. Product 1 is manufactured entirely

The Manes Company has two products. Product 1 is manufactured entirely in Division X. Product 2 is manufactured entirely in Division Y. To produce these two products, the Manes Company has two support...

Q: Forber Bakery makes baked goods for grocery stores, and has three

Forber Bakery makes baked goods for grocery stores, and has three divisions: bread, cake, and doughnuts. Each division is run and evaluated separately, but the main headquarters incurs costs that are...

Q: Grant Wood Corporation’s balance sheet at the end of 2016 included the

Grant Wood Corporation’s balance sheet at the end of 2016 included the following items. The following information is available for 2017. 1. Net income was $55,000. 2. Equipment (...

Q: The financial statements of (M&S) are presented in

The financial statements of (M&S) are presented in Appendix E. The company's complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s...

Q: Your client took accounting a number of years ago and was unaware

Your client took accounting a number of years ago and was unaware of comprehensive income reporting. He is not convinced that any accounting standards exist for comprehensive income. Access the IFR...

Q: Wade Corp. has 150,000 shares of common stock outstanding

Wade Corp. has 150,000 shares of common stock outstanding. In 2017, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in the...

Q: On January 1, 2017, Botosan Company issued a $1

On January 1, 2017, Botosan Company issued a $1,200,000, 5-year, zero-interestbearing note to National Organization Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2018 Bo...

Q: On December 31, 2017, Oakbrook Inc. rendered services to

On December 31, 2017, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $20,...

Q: Braddock Inc. had the following long-term receivable account balances

Braddock Inc. had the following long-term receivable account balances at December 31, 2016. Note receivable from sale of division…………$1,500,000 Note receivable from officer…………………………. 400,000 Trans...

Q: The financial statements of Coca-Cola and PepsiCo are presented in

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are availa...

Q: The financial statements of P&G are presented in Appendix B

The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to these...

Q: The partner in charge of the Kappeler Corporation audit comes by your

The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the cash flow statement for the year ended December 31, 2017. Bec...

Q: On December 31, 2017, Conchita Martinez Company signed a $

On December 31, 2017, Conchita Martinez Company signed a $1,000,000 note to Sauk City Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annuall...

Q: Assume the same information as in IFRS14-5, except that

Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. Prepare the journal entries to record a. the issuance of the bonds, b. the payment of interest an...

Q: Margaret Avery Company from time to time embarks on a research program

Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2015, the company expends $325,000 on a research project, but by the end...

Q: Reichenbach Co., organized in 2016, has set up a single

Reichenbach Co., organized in 2016, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2017 and 2018. Instruction...

Q: Montana Matt’s Golf Inc. was formed on July 1, 2016

Montana Matt’s Golf Inc. was formed on July 1, 2016, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls....

Q: On March 1, 2017, Sealy Company sold its 5-

On March 1, 2017, Sealy Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2017, at an effective annual interest rate (yield) of 11%. Interest is payable semiannually, and the first i...

Q: The following amortization and interest schedule reflects the issuance of 10-

The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2011, and the subsequent interest payments and charges. The companyâ&...

Q: Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing

Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requ...

Q: Good-Deal Inc. developed a new sales gimmick to help

Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low downpayment and low car payments for the...

Q: Presented below are selected transactions on the books of Simonson Corporation.

Presented below are selected transactions on the books of Simonson Corporation. May 1, 2017……………..Bonds payable with a par value of $900,000, which are dated January 1, 2017, are sold at 106 plus acc...

Q: On December 31, 2017, Faital Company acquired a computer from

On December 31, 2017, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2021. Faital Company’s credit rating p...

Q: An intangible asset with an estimated useful life of 30 years was

An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2007, for $540,000. On January 1, 2017, a review was made of intangible assets and their expected service lives...

Q: Nieland Industries had one patent recorded on its books as of January

Nieland Industries had one patent recorded on its books as of January 1, 2017. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2017, Nieland incurred research a...

Q: Foreman Company issued $800,000 of 10%, 20-

Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2017, at 119.792 to yield 8%. Interest is payable semiannually on July 1 and January 1. Prepare the journal entries to record a. th...

Q: Assume the bonds in BE14-2 were issued at 98.

Assume the bonds in BE14-2 were issued at 98. Prepare the journal entries for a. January 1, b. July 1, and c. December 31. Assume The Colson Company records straight-line amortization semiannually...

Q: The financial statements of Coca-Cola and PepsiCo are presented in

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are availa...

Q: The financial statements of Coca-Cola and PepsiCo are presented in

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are availa...

Q: The financial statements of P&G are presented in Appendix B

The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s f...

Q: McDonald’s is the largest and best-known global food-service

McDonald’s is the largest and best-known global food-service retailer, with more than 32,000 restaurants in 118 countries. On any day, McDonald’s serves...

Q: Johnson & Johnson, the world’s leading and most diversified healthcare corporation

Johnson & Johnson, the world’s leading and most diversified healthcare corporation, serves its customers through specialized worldwide franchises. Each of its franchises consists...

Q: Assume the bonds in BE14-2 were issued at 103.

Assume the bonds in BE14-2 were issued at 103. Prepare the journal entries for a. January 1, b. July 1, and c. December 31. Assume The Colson Company records straight-line amortization semiannually...

Q: On July 1, 2017, Brigham Corporation purchased Young Company by

On July 1, 2017, Brigham Corporation purchased Young Company by paying $250,000 cash and issuing a $100,000 note payable to Steve Young. At July 1, 2017, the balance sheet of Young Company was as foll...

Q: Presented below is information related to copyrights owned by Mare Company at

Presented below is information related to copyrights owned by Mare Company at December 31, 2017. Cost ……………………………………………... $8,600,000 Carrying amount ……………………………. 4,300,000 Expected future net cash fl...

Q: Price Company from time to time embarks on a research program when

Price Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2016, the company expends $325,000 on a research project, but by the end of 2016 i...

Q: In early January 2016, Outkast Corporation applied for a trade name

In early January 2016, Outkast Corporation applied for a trade name, incurring legal costs of $16,000. In January 2017, Outkast incurred $7,800 of legal fees in a successful defense of its trade name....

Q: Carter Company has provided information on intangible assets as follows. A

Carter Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,000,000 on January 1, 2016. Carter estimated the remaining useful life of the p...

Q: On January 1, 2017, Aumont Company sold 12% bonds

On January 1, 2017, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907.37, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017, and mature...

Q: On June 30, 2009, County Company issued 12% bonds

On June 30, 2009, County Company issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2017. Because of lower intere...

Q: Devon Harris Company sells 10% bonds having a maturity value of

Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1....

Q: Assume the same information as E14-6. Instructions

Assume the same information as E14-6. Instructions Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be com...

Q: On June 30, 2017, Mischa Auer Company issued $4

On June 30, 2017, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses the effective-interest method to amortize bond premium or discount. Th...

Q: Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a

Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops...

Q: Marshall Company, organized in 2016, has set up a single

Marshall Company, organized in 2016, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2017. Instructio...

Q: Andrews Company has five employees participating in its defined benefit pension plan

Andrews Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows....

Q: Aubrey Inc. issued $4,000,000 of 10

Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2017, at 98 plus accrued interest. The bonds were dated April 1, 2017, with interest payable April 1 and October 1. Bond disc...

Q: On January 1, 2017, Hi and Lois Company purchased 12

On January 1, 2017, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and...

Q: On January 1, 2017, Roosevelt Company purchased 12% bonds

On January 1, 2017, Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and...

Q: Presented below is information taken from a bond investment amortization schedule with

Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Instructions a. Indicate wheth...

Q: The following data relate to the operation of Kramer Co.’s

The following data relate to the operation of Kramer Co.’s pension plan in 2018. The pension worksheet for 2017 is provided in P20-10. Service cost…………………………………………..$59,000 Actual return on plan asset...

Q: Elton Co. has the following postretirement benefit plan balances on January

Elton Co. has the following postretirement benefit plan balances on January 1, 2017. Accumulated postretirement benefit obligation………$2,250,...

Q: Jackson Company adopts acceptable accounting for its defined benefit pension plan on

Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2016, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000...

Q: Lemke Company sponsors a defined benefit pension plan for its employees.

Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018. Instructions a. Prepare a pension worksh...

Q: Hobbs Co. has the following defined benefit pension plan balances on

Hobbs Co. has the following defined benefit pension plan balances on January 1, 2017. Projected benefit obligation………….$...

Q: Presented below is an amortization schedule related to Spangler Company’s 5-

Presented below is an amortization schedule related to Spangler Company’s 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $108,660....

Q: On January 1, 2017, Novotna Company purchased $400,

On January 1, 2017, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1....

Q: Cardinal Paz Corp. carries an account in its general ledger called

Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Instructions (Round...

Q: PENCOMP’s balance sheet at December 31, 2017, is as follows

PENCOMP’s balance sheet at December 31, 2017, is as follows. Accounting Prepare an income statement for 2018 and a balance sheet as of December 31, 2018. Also, prepare the pension...

Q: Vickie Plato, accounting clerk in the personnel office of Streisand Corp

Vickie Plato, accounting clerk in the personnel office of Streisand Corp., has begun to compute pension expense for 2019 but is not sure whether or not she should include the amortization of unrecogni...

Q: Henning Company sponsors a defined benefit pension plan for its employees.

Henning Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid. 1. The actuarial pr...

Q: Ferreri Company received the following selected information from its pension plan trustee

Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended De...

Q: Erickson Company sponsors a defined benefit pension plan. The corporation’s actuary

Erickson Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. Instructions a. Compute the actual return on...

Q: The accounting staff of Usher Inc. has prepared the following pension

The accounting staff of Usher Inc. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completi...

Q: The accounting staff of Holder Inc. has prepared the following postretirement

The accounting staff of Holder Inc. has prepared the following postretirement benefit worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assist...

Q: Garfield Company purchased, on January 1, 2017, as a

Garfield Company purchased, on January 1, 2017, as a held-to-maturity investment, $80,000 of the 9%, 5-year bonds of Chester Corporation for $74,086, which provides an 11% return. Prepare Garfield’s j...

Q: Carow Corporation purchased on January 1, 2017, as a held

Carow Corporation purchased on January 1, 2017, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semi...

Q: Mancuso Corporation amended its pension plan on January 1, 2017,

Mancuso Corporation amended its pension plan on January 1, 2017, and granted $160,000 of prior service costs to its employees. The employees are expected to provide 2,000 service years in the future,...

Q: Shin Corporation had a projected benefit obligation of $3,100

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2017. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2017...

Q: Norton Co. had the following amounts related to its pension plan

Norton Co. had the following amounts related to its pension plan in 2017. Actuarial liability loss for 2017……………………………………………………………………………$28,000 Unexpected asset gain for 2017…………………………………………………………………...

Q: Kramer Co. has prepared the following pension worksheet. Unfortunately,

Kramer Co. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and com...

Q: You have been assigned to examine the financial statements of Zarle Company

You have been assigned to examine the financial statements of Zarle Company for the year ended December 31, 2017. You discover the following situations. 1. Depreciation of $3,200 for 2017 on delivery...

Q: Each of the following items must be considered in preparing a statement

Each of the following items must be considered in preparing a statement of cash flows for Cruz Fashions Inc. for the year ended December 31, 2017. 1. Fixed assets that had cost $20,000 6½ years befor...

Q: Brecker Inc., a greeting card company, had the following statements

Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017. Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017...

Q: On March 5, 2018, you were hired by Hemingway Inc

On March 5, 2018, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records...

Q: Data for Brecker Inc. are presented in E23-13.

Data for Brecker Inc. are presented in E23-13. Instructions Prepare a statement of cash flows using the indirect method. From E23-13: Brecker Inc., a greeting card company, had the following state...

Q: The following facts pertain to a noncancelable lease agreement between Mooney Leasing

The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee. Inception date…………………………………………………………….May 1, 2017 Annual lease payment due a...

Q: A lease agreement between Mooney Leasing Company and Rode Company is described

A lease agreement between Mooney Leasing Company and Rode Company is described in E21-8. Instructions (Round all numbers to the nearest cent.) Refer to the data in E21-8 and do the following for th...

Q: Morgan Leasing Company signs an agreement on January 1, 2017,

Morgan Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 6 year...

Q: Laura Leasing Company signs an agreement on January 1, 2017,

Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Plote Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 5 year...

Q: Following are selected balance sheet accounts of Allman Bros. Corp.

Following are selected balance sheet accounts of Allman Bros. Corp. at December 31, 2017 and 2016, and the increases or decreases in each account from 2016 to 2017. Also presented is selected income s...

Q: You have completed the field work in connection with your audit of

You have completed the field work in connection with your audit of Alexander Corporation for the year ended December 31, 2017. The balance sheet accounts at the beginning and end of the year are shown...

Q: The following facts pertain to a non-cancelable lease agreement between

The following facts pertain to a non-cancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each...

Q: A lease agreement between Lennox Leasing Company and Gill Company is described

A lease agreement between Lennox Leasing Company and Gill Company is described in IFRS21-10. Refer to the data in IFRS21-10 and do the following for the lessor. Instructions (Round all numbers to t...

Q: Following are selected statement of financial position accounts of Sander Bros.

Following are selected statement of financial position accounts of Sander Bros. Corp. at December 31, 2017 and 2016, and the increases or decreases in each account from 2016 to 2017. Also presented is...

Q: The following facts pertain to a noncancelable lease agreement between Faldo Leasing

The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Inception date………………………………………January 1, 2017 Annual lease payment due at the...

Q: Ludwick Steel Company as lessee signed a lease agreement for equipment for

Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2017. Annual rental payments of $40,000 are to be made at the beginning of each lease year (D...

Q: Winston Industries and Ewing Inc. enter into an agreement that requires

Winston Industries and Ewing Inc. enter into an agreement that requires Ewing Inc. to build three diesel-electric engines to Winston’s specifications. Upon completion of the engines, Winston has agree...

Q: On January 2, 2017, $100,000 of 11

On January 2, 2017, $100,000 of 11%, 10-year bonds were issued for $97,000. The $3,000 discount was charged to Interest Expense. The bookkeeper, Mark Landis, records interest only on the interest paym...

Q: Indicate the effect—Understate, Overstate, No Effect—that

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2017 net income and 2018 net income.

Q: When the records of Debra Hanson Corporation were reviewed at the close

When the records of Debra Hanson Corporation were reviewed at the close of 2018, the following errors were discovered. For each item, indicate by a check mark in the appropriate column whether the err...

Q: The net income for Fallon Company for 2017 was $320,

The net income for Fallon Company for 2017 was $320,000. During 2017, depreciation on plant assets was $124,000, amortization of patent was $40,000, and the company incurred a loss on sale of plant as...

Q: You are compiling the consolidated financial statements for Winsor Corporation International.

You are compiling the consolidated financial statements for Winsor Corporation International. The corporation’s accountant, Anthony Reese, has provided you with the following segment...

Q: On December 31, 20X4, Puzzle Corporation acquired 90 percent of

On December 31, 20X4, Puzzle Corporation acquired 90 percent of Sunday Inc.’s common stock for $864,000. At that date, the fair value of the non controlling interest was $96,000. Of the $240,000 diffe...

Q: Select the correct answer for each of the following questions.

Select the correct answer for each of the following questions. 1. During 20X3, Park Corporation recorded sales of inventory for $500,000 to Small Company, its wholly owned subsidiary, on the same term...

Q: Assume the same facts as in E8-7 but prepare entries

Assume the same facts as in E8-7 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-7: Suspect Company issued $600,000 of 9 percent first mortgage bonds o...

Q: Assume the same facts as in E8-8 but prepare entries

Assume the same facts as in E8-8 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-8: Suspect Company issued $600,000 of 9 percent first mortgage bonds o...

Q: Assume the same facts as in E8-9 but prepare entries

Assume the same facts as in E8-9 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-9: Packed Corporation owns 70 percent of Snowball Enterprises’ stock....

Q: Pawn Corporation acquired 70 percent of Shop Corporation’s voting stock on January

Pawn Corporation acquired 70 percent of Shop Corporation’s voting stock on January 1, 20X2, for $416,500. The fair value of the non controlling interest was $178,500 at the date of acquisition. Shop r...

Q: Point Corporation acquired 60 percent of Stick Company’s stock on January 1

Point Corporation acquired 60 percent of Stick Company’s stock on January 1, 20X3, for $24,000 in excess of book value. On that date, the book values and fair values of Stickâ&...

Q: In its 20X7 consolidated income statement, Plate Development Company reported consolidated

In its 20X7 consolidated income statement, Plate Development Company reported consolidated net income of $961,000 and $39,000 of income assigned to the 30 percent non controlling interest in its only...

Q: Prime Company holds 80 percent of Suspect Company’s stock, acquired on

Prime Company holds 80 percent of Suspect Company’s stock, acquired on January 1, 20X2, for $160,000. On the acquisition date, the fair value of the non controlling interest was $40,...

Q: Prime Company holds 80 percent of Suspect Company’s stock, acquired on

Prime Company holds 80 percent of Suspect Company’s stock, acquired on January 1, 20X2, for $160,000. On the date of acquisition, Suspect reported retained earnings of $50,000 and $1...

Q: Partial trial balance data for Profile Corporation, Shadow Company, and

Partial trial balance data for Profile Corporation, Shadow Company, and the consolidated entity at December 31, 20X7, are as follows: Additional Information: 1. Profile Corporation acquired 60 perce...

Q: Prince Corporation holds 75 percent of the common stock of Sword Distributors

Prince Corporation holds 75 percent of the common stock of Sword Distributors Inc., purchased on December 31, 20X1, for $2,340,000. At the date of acquisition, Sword reported common stock with a par v...

Q: Assume the same facts as in E8-12 but prepare entries

Assume the same facts as in E8-12 but prepare entries using straight-line amortization of bond discount or premium. Data from E8-12: Sibling Company issued $500,000 par value, 10-year bonds at 104 o...

Q: Using the data in P7-33, on December 31,

Using the data in P7-33, on December 31, 20X7, Prime Company recorded the following entry on its books to adjust its investment in Suspect Company from the fully adjusted equity method to the modified...

Q: Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock

Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the non contr...

Q: Assume the same facts as in E8-15 except for the

Assume the same facts as in E8-15 except for the changes in the trial balances, but prepare entries using straight-line amortization of bond discount or premium. Required: a. Record the journal entr...

Q: Assume the same facts as in E8-1 and prepare entries

Assume the same facts as in E8-1 and prepare entries using straight-line amortization of bond discount or premium. Data from E8-1: Pretzel Corporation owns 60 percent of Stick Corporation’s voting s...

Q: Panther Enterprises owns 80 percent of Strike Corporation’s voting stock. Panther

Panther Enterprises owns 80 percent of Strike Corporation’s voting stock. Panther acquired the shares on January 1, 20X4, for $234,500. On that date, the fair value of the noncontrol...

Q: Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock

Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the non contr...

Q: Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock

Private Manufacturing Company acquired 90 percent of Secret Corporation’s outstanding common stock on December 31, 20X5, for $1,152,000. At that date, the fair value of the noncontro...

Q: Select the correct answer for each of the following questions.

Select the correct answer for each of the following questions. 1. On January 1, 20X1, Prim Inc. acquired all of Scrap Inc.’s outstanding common shares for cash equal to the stock&aci...

Q: Assume the same facts as in E8-3 but prepare entries

Assume the same facts as in E8-3 but prepare entries using straight-line amortization of bond discount or premium. “A” indicates that the item relates to Appendix 8A. Data from E8-3: Purse Corporati...

Q: Trevor Diaz wants to purchase a Maserati Qattroporte sedan, which has

Trevor Diaz wants to purchase a Maserati Qattroporte sedan, which has an invoice price of $121,737 and a total cost of $129,482. Trevor plans to put down $20,000 and will pay the rest by taking on a 5...

Q: The Yan family buying a new 3,500-square-

The Yan family buying a new 3,500-square-foot house in Muncie, Indiana, and will borrow $237,000 from Bank One at a rate of 6.375 percent for 15 years. What will be their monthly loan payment? Prepare...

Q: Fraser Corporation has announced that its net income for the year ended

Fraser Corporation has announced that its net income for the year ended June 30, 2017, was $1,353,412. The company had EBITDA of $ 4,967,855, and its depreciation and amortization expense was equal to...

Q: Analysts following the Tomkovick Golf Company were given the following balance sheet

Analysts following the Tomkovick Golf Company were given the following balance sheet information for the years ended June 30, 2017 and June 30 2016: In addition, it was reported that the company had...

Q: Sosa Corporation recently reported an EBITDA of $31.3 million

Sosa Corporation recently reported an EBITDA of $31.3 million and net income of $9.7 million. The company had $6.8 million in interest expense, and its average corporate tax rate was 35 percent. What...

Q: The Centennial Chemical Corporation announced that, for the period ending March

The Centennial Chemical Corporation announced that, for the period ending March 31, 2017, it had earned income after taxes of $2,768,028.25 on revenues of $13,144,680. The company’s costs (excluding d...

Q: Sun Devil Corporation reported EBITDA of $7,300,125

Sun Devil Corporation reported EBITDA of $7,300,125 and net income of $3,328,950 for the fiscal year ended December 31, 2017. During the same period, the company had $1,155,378 in interest expense, $1...

Q: Depreciation and amortization expenses are: a. Part of current

Depreciation and amortization expenses are: a. Part of current assets on the balance sheet. b. After-tax expenses that reduce a firm’s cash flows. c. Long-term liabilities that reduce a firm’s net wor...

Q: Compare and contrast depreciation expense and amortization expense?

Compare and contrast depreciation expense and amortization expense?

Q: Pear Corporation acquired 75 percent ownership of Sugar Company on January 1

Pear Corporation acquired 75 percent ownership of Sugar Company on January 1, 20X1, at underlying book value. At that date, the fair value of the non controlling interest was equal to 25 percent of th...

Q: Using the data presented in P10-18: a.

Using the data presented in P10-18: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X3 using the direct method of computing cash flows from operations. b. Prepare a cons...

Q: Protecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January

Protecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January 1, 20X1, for $24,000 more than book value. At that date, the fair value of the noncontroll...

Q: On January 1, 20X4, Plum Corporation acquired Silva Company,

On January 1, 20X4, Plum Corporation acquired Silva Company, a Brazilian subsidiary, by purchasing all its common stock at book value. Silva’s trial balances on January 1, 20X4, and...

Q: Refer to the information in P12-21. Assume that the

Refer to the information in P12-21. Assume that the dollar is the functional currency. Required: a. Prepare a schedule re measuring Silva Company’s December 31, 20X4, trial balance...

Q: On January 1, 20X1, Par Company purchased all the outstanding

On January 1, 20X1, Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $120,000. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was...

Q: The following 20X2 consolidated statement of cash flows is presented for Printing

The following 20X2 consolidated statement of cash flows is presented for Printing Company and its subsidiary, Sons Delivery: Printing acquired 60 percent of the voting shares of Sons Delivery in 20X...

Q: Pecan Corporation’s controller has just finished preparing a consolidated balance sheet,

Pecan Corporation’s controller has just finished preparing a consolidated balance sheet, income statement, and statement of changes in retained earnings for the year ended December 31, 20X4. Pecan own...

Q: Purple Company owns 90 percent of the common stock and 60 percent

Purple Company owns 90 percent of the common stock and 60 percent of the preferred stock of Sage Corporation, both acquired at underlying book value on January 1, 20X1. At that date, the fair value of...

Q: You are an analyst at a private equity firm that buys private

You are an analyst at a private equity firm that buys private companies, improves their operating performance, and sells them for a profit. Your boss has asked you to estimate the fair market value of...

Q: Using the enterprise value/EBITDA multiple, what is the total

Using the enterprise value/EBITDA multiple, what is the total value of Johnson Machine Tool Company? What is the per share value of Johnson’s stock? Refer to the information Johnson Machine Tool Comp...

Q: Which of the above multiples analyses do you believe is more appropriate

Which of the above multiples analyses do you believe is more appropriate? Refer to the information Johnson Machine Tool Company: Use the following information concerning Johnson Machine Tool Company....

Q: Management of March and Dine Inc. has estimated that the firm’s

Management of March and Dine Inc. has estimated that the firm’s new TV dinner project must generate $10,200 in FCF during each of the next six years to have an NPV of $0. Management anticipates that...

Q: The BowGus Archery Company management estimates that its new Galactically Flexible Bow

The BowGus Archery Company management estimates that its new Galactically Flexible Bow project will have to generate EBIT of $20,000 each year to be viable. The project’s fixed cash expenses are expec...

Q: Chip’s Home Brew Whiskey management forecasts that if the firm sells each

Chip’s Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 90 percen...

Q: The Generic Publications Textbook Company sells all of its books for $

The Generic Publications Textbook Company sells all of its books for $100 per book, and it currently costs $50 in variable costs to produce each text. The fixed costs, which include depreciation and a...

Q: If a firm has a fixed asset base, meaning that its

If a firm has a fixed asset base, meaning that its depreciation and amortization for any year is positive, discuss the relation between its Accounting DOL and its Cash flow DOL?

Q: Commodore Motors management is considering a project to produce toy cars.

Commodore Motors management is considering a project to produce toy cars. The project would require an initial outlay of $100,000 and have an expected life of 10 years. Management estimates that eac...

Q: WalkAbout Kangaroo Shoe Stores forecasts that it will sell 9,500

WalkAbout Kangaroo Shoe Stores forecasts that it will sell 9,500 pairs of shoes next year. The firm buys its shoes for $50 per pair from the wholesaler and sells them for $75 per pair. If the firm wil...

Q: Retro Inc. sells vintage football jerseys for $72 each.

Retro Inc. sells vintage football jerseys for $72 each. Variable costs are $58 per unit and total fixed costs (including depreciation and amortization expense) are $84,000 per year. If sales for next...

Q: Luminosity Inc. produces modern light fixtures that sell for $150

Luminosity Inc. produces modern light fixtures that sell for $150 per unit. The firm’s management is considering purchasing a high-capacity manufacturing machine. If the high-capacity machine is purch...

Q: Paper Christmas Trees Inc. is considering introducing a new line of

Paper Christmas Trees Inc. is considering introducing a new line of inexpensive Christmas trees. The initial outlay for the project is $175,000, and the company will have to invest $5,000 in working c...

Q: You are considering opening another restaurant in the TexasBurgers chain. The

You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $300,000 and operating expenses of $150,000. The annual depreciation and amorti...

Q: Sessler Corporation is a private company that had EBIT of $186

Sessler Corporation is a private company that had EBIT of $186 million and depreciation and amortization of $22 million in the most recent fiscal year. At the end of that year, a similar, public firm...

Q: The Yellow Shelf Company sells all of its shelves for $100

The Yellow Shelf Company sells all of its shelves for $100 per shelf, and incurs $50 in variable costs to produce each. If the fixed costs for the firm are $2,000,000 per year, what will the EBIT for...

Q: Hydrogen Batteries sells its specialty automobile batteries for $85 each,

Hydrogen Batteries sells its specialty automobile batteries for $85 each, while its current variable cost per unit is $65. Total fixed costs (including depreciation and amortization expense) are $150,...

Q: The Vinyl CD Co. is going to take on a project

The Vinyl CD Co. is going to take on a project that is expected to increase its EBIT by $90,000, its fixed cost cash expenditures by $100,000, and its depreciation and amortization by $80,000 next yea...

Q: During 2016, Palo Fiero purchases the following property for use in

During 2016, Palo Fiero purchases the following property for use in his calendar year-end manufacturing business: Palo uses the accelerated depreciation method under MACRS, if available, and does no...

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1. Assume that a taxpayer purchases a computer in 2016 that has an estimated useful life of 10 years. If the computer is used 100 percent for business and no election to expense was made, what is the...

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An entity has established a bond sinking fund to repurchase a portion of the outstanding bonds each year. The auditor can best verify the entity’s bond sinking fund transactions and year-end bond bala...

Q: This simulation, also available online, presents an Analytical Procedures/

This simulation, also available online, presents an Analytical Procedures/Risk Assessment Analysis document prepared by two members of your audit team—your responsibility is to evalu...

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This simulation, available online, presents an audit request list document for materials requested of management that has been prepared by an audit team staff member for the Keystone audit. Because th...

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Q: Heather McIntosh of Watertown, South Dakota, recently purchased a home

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Q: Sweetwater Company sells $300,000 of 13%, 15-

Sweetwater Company sells $300,000 of 13%, 15-year bonds for 96.8507 on April 1, 2016. The market rate of interest on that day is 13.5%. Interest is paid each year on April 1. Sweetwater Company uses t...

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Q: On January 31, 2016, Danvers Logistics, Inc., issued

On January 31, 2016, Danvers Logistics, Inc., issued five-year, 7% bonds payable with a face value of $10,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Danvers Logist...

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Score Ltd. is authorized to issue $2,000,000 of 3%, 10-year bonds payable. On December 31, 2016, when the market interest rate is 7%, the company issues $1,600,000 of the bonds. Score Ltd. amortizes b...

Q: On June 30, 2016, the market interest rate is 8

On June 30, 2016, the market interest rate is 8%. Team Sports Ltd. issues $800,000 of 10%, 10-year bonds payable. The bonds pay interest on June 30 and December 31. Team Sports Ltd. amortizes bond pre...

Q: On January 31, 2016, Stonewall Logistics, Inc., issued

On January 31, 2016, Stonewall Logistics, Inc., issued 10-year, 5% bonds payable with a face value of $6,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Stonewall Logi...

Q: City Bank has $100,000 of 7% debenture bonds

City Bank has $100,000 of 7% debenture bonds outstanding. The bonds were issued at 103 in 2016 and mature in 2036. The bonds have annual interest payments. Requirements 1. How much cash did City Ban...

Q: ActiveGo Sports Ltd. is authorized to issue $5,000

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Q: On June 30, 2016, the market interest rate is 6

On June 30, 2016, the market interest rate is 6%. Grommet Candies Ltd. issues $2,000,000 of 8%, 10-year bonds payable. The bonds pay interest on June 30 and December 31. Grommet Candies Ltd. amortizes...

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Refer to the consolidated financial statements of Under Armour, Inc., in Appendix B and online in the filings section of http:// www.sec.gov. During 2014, the company reported net revenues of $3,084 m...

Q: Insurance companies and pension plans hold large quantities of bond investments.

Insurance companies and pension plans hold large quantities of bond investments. Bolton Insurance Corp. purchased $2,800,000 of 9% bonds of Souza, Inc., for 112 on January 1, 2016. These bonds pay int...

Q: Insurance companies and pension plans hold large quantities of bond investments.

Insurance companies and pension plans hold large quantities of bond investments. Variety Insurance Corp. purchased $3,900,000 of 4% bonds of Sherman, Inc., for 114 on January 1, 2016. These bonds pay...

Q: On February 28, 2016, Mackerel Corp. issues 6%,

On February 28, 2016, Mackerel Corp. issues 6%, 20-year bonds payable with a face value of $1,800,000. The bonds pay interest on February 28 and August 31. Mackerel Corp. amortizes bond discount by th...

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Q: On December 31, 2016, Rugaboo Corp. issues 6%,

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Q: On February 28, 2016, Marlin Corp. issues 8%,

On February 28, 2016, Marlin Corp. issues 8%, 10-year bonds payable with a face value of $900,000. The bonds pay interest on February 28 and August 31. Marlin Corp. amortizes bond discount by the stra...

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The notes to the Friendship Ltd. financial statements reported the following data on December 31, Year 1 (end of the fiscal year): Friendship Ltd. amortizes bond discou...

Q: On December 31, 2016, Zenith Corp. issues 7%,

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Q: Sunshine Pools purchased $100,000 of 12% BHT bonds

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Q: Hartley Corporation issued $520,000 of 5%, 12-

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Q: Jackson Corporation issued $600,000 of 6%, 10-

Jackson Corporation issued $600,000 of 6%, 10-year bonds payable on January 1, 2016. The market interest rate at the date of issuance was 4%, and the Jackson Corporation bonds pay interest semiannuall...

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Q: Superior Drive-Ins Ltd. borrowed money by issuing $1

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Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

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The finance director of Small Machine Parts Ltd is considering the acquisition of a lease of a small workshop in a warehouse complex that is being redeveloped by City Redevelopers Ltd at a steady rate...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

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The comparative balance sheets of Barberton Movie Theater Company at September 30, 2016 and 2015, reported the following: Barberton’s transactions during the year ended September 3...

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Q: Bloomfield Investments specializes in low-risk government bonds. Identify each

Bloomfield Investments specializes in low-risk government bonds. Identify each of Bloomfield’s transactions as operating (O), investing (I), ï¬...

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Consider three independent cases for the cash flows of Sharma Merchandising Corp. For each case, identify from the statement of cash flows how Sharma Merchandising Corp....

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Consider three independent cases for the cash flows of Loader Company. For each case, identify from the statement of cash flows how Loader Company generated the cash to a...

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Gill Company, organized in 2020, has the following transactions related to intangible assets. Instructions Prepare the necessary entries to record these intangibles. All costs incurred were for cash...

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The intangible assets section of Sappelt Company at December 31, 2020, is presented below. Patents ($70,000 cost less $7,000 amortization) ……………………………………….. $63,000 Franchises ($48,000 cost less $19,2...

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Q: The financial statements of Apple Inc. are presented in Appendix A

The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company’s website...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

Q: Amazon.com Inc.’s financial statements are presented in Appendix

Amazon.com Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon a...

Q: Amazon.com, Inc.’s financial statements are presented in

Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon...

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The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s webs...

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Firm W and Firm X both have goodwill and going-concern value worth approximately $1 million. However, only Firm X reports an amortization deduction with respect to its goodwill and going-concern value...

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Imagination Dragons Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds with a par value of $1,000 each to raise the money. The require...