All Related Questions of Net Income

Q: Presented below are a number of facts related to Weller, Inc

Presented below are a number of facts related to Weller, Inc. Assume that no mention of these facts was made in the financial statements and the related notes. Instructions Assume that you are...

Q: Recently, your uncle, Carlos Beltran, who knows that you

Recently, your uncle, Carlos Beltran, who knows that you always have your eye out for a profitable investment, has discussed the possibility of your purchasing some corporate bonds. He suggests that y...

Q: Ames Company reported 2014 net income of $151,000.

Ames Company reported 2014 net income of $151,000. During 2014, accounts receivable increased by $13,000 and accounts payable increased by $9,500. Depreciation expense was $44,000. Prepare the cash...

Q: Norma Smith is the controller of Baylor Corporation and is responsible for

Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year. (a) On December...

Q: Presented below is a condensed version of the comparative balance sheets for

Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31. Additional information: Investments were sold at a lo...

Q: A comparative balance sheet for Shabbona Corporation is presented below.

A comparative balance sheet for Shabbona Corporation is presented below. Additional information: 1. Net income for 2014 was $125,000. No gains or losses were recorded in 2014. 2. Cash dividen...

Q: Lansbury Inc. had the following balance sheet at December 31,

Lansbury Inc. had the following balance sheet at December 31, 2013. During 2014, the following occurred. 1. Lansbury Inc. sold part of its investment portfolio for $15,000. This transaction...

Q: Aero Inc. had the following balance sheet at December 31,

Aero Inc. had the following balance sheet at December 31, 2013. During 2014, the following occurred. 1. Aero liquidated its available-for-sale investment portfolio at a loss of $5,000. 2. A t...

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, 2014. B...

Q: The net income for the year for Genesis, Inc. is

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

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: Jill Accardo, M.D., maintains the accounting records of

Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2014, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2014,...

Q: Lebron Co. owns most but not all of the shares of

Lebron Co. owns most but not all of the shares of its subsidiary Bryant Inc. Lebron reported net income of $124,700. The amount to be attributed to the non-controlling interest in Bryant is $30,000....

Q: In 2014, Hollis Corporation reported net income of $1,

In 2014, Hollis Corporation reported net income of $1,000,000. It declared and paid preferred stock dividends of $250,000. During 2014, Hollis had a weighted average of 190,000 common shares outstan...

Q: Portman Corporation has retained earnings of $675,000 at January

Portman Corporation has retained earnings of $675,000 at January 1, 2014. Net income during 2014 was $1,400,000, and cash dividends declared and paid during 2014 totaled $75,000. Prepare a retained...

Q: Presented below are changes in all the account balances of Fritz Reiner

Presented below are changes in all the account balances of Fritz Reiner Furniture Co. during the current year, except for retained earnings. Instructions Compute the net income for the current...

Q: Presented below is information related to Viel Company at December 31,

Presented below is information related to Viel Company at December 31, 2014, the end of its first year of operations. Instructions Compute the following: (a) Income from operations, (b) Net...

Q: Presented below are selected ledger accounts of Tucker Corporation as of December

Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2014. Instructions (a) Compute net income for 2014. (b) Prepare a partial income statement beginning with...

Q: The stockholders’ equity section of Tkachuk Corporation appears below as of December

The stockholders’ equity section of Tkachuk Corporation appears below as of December 31, 2014. Net income for 2014 reflects a total effective tax rate of 34%. Included in the net income f...

Q: Eddie Zambrano Corporation began operations on January 1, 2011.

Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. The following informatio...

Q: Tim Mattke Company began operations in 2012 and for simplicity reasons,

Tim Mattke Company began operations in 2012 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2014, in accordance with other companies in its industry, Mattke changed it...

Q: Presented below is the trial balance of Thompson Corporation at December 31

Presented below is the trial balance of Thompson Corporation at December 31, 2014. A physical count of inventory on December 31 resulted in an inventory amount of $64,000; thus, cost of goods s...

Q: Presented below is a combined single-step income and retained earnings

Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2014. Additional facts are as follows. 1. “Selling, general, and administrative ex...

Q: Willie Nelson, Jr., controller for Jenkins Corporation, is preparing

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

Q: Presented below is information related to Viel Company at December 31,

Presented below is information related to Viel Company at December 31, 2014, the end of its first year of operations. Instructions Compute the following: (a) income from operations, (b) net in...

Q: Why should caution be exercised in the use of the net income

Why should caution be exercised in the use of the net income figure derived in an income statement? What are the objectives of generally accepted accounting principles in their application to the in...

Q: Corrs Company began operations in 2013 and determined its ending inventory at

Corrs Company began operations in 2013 and determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2013, and December 31, 2014. This information is presented below. I...

Q: Winans Company uses the lower-of-cost-or-

Winans Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2013, included product X. Relevant per-unit data for...

Q: Phil Collins Realty Corporation purchased a tract of unimproved land for $

Phil Collins Realty Corporation purchased a tract of unimproved land for $55,000. This land was improved and subdivided into building lots at an additional cost of $34,460. These building lots were al...

Q: Dover Company began operations in 2014 and determined its ending inventory at

Dover Company began operations in 2014 and determined its ending inventory at cost and at LCNRV at December 31, 2014, and December 31, 2015. This information is presented below. Instructions(a) Prepa...

Q: Tones Company purchased a warehouse in a downtown district where land values

Tones Company purchased a warehouse in a downtown district where land values are rapidly increasing. Gerald Carter, controller, and Wilma Ankara, financial vice president, are trying to allocate the c...

Q: Shumway Oil uses successful-efforts accounting and also provides full-

Shumway Oil uses successful-efforts accounting and also provides full-cost results as well. Under full-cost, Shumway Oil would have reported retained earnings of $42 million and net income of $4 milli...

Q: Target in 2012 reported net income of $2.9 billion

Target in 2012 reported net income of $2.9 billion, net sales of $69.8 billion, and average total assets of $45.2 billion. What is Target’s asset turnover? What is Target’s return on asset...

Q: In its 2011 annual report, Campbell Soup Company reports beginning-

In its 2011 annual report, Campbell Soup Company reports beginning-of-the-year total assets of $6,276 million, end-of-the-year total assets of $6,862 million, total sales of $7,719 million, and net in...

Q: A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was

A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2015, showing the additions, retirements, depreciation, and other data aff...

Q: On January 1, 2013, Locke Company, a small machine

On January 1, 2013, Locke Company, a small machine-tool manufacturer, acquired for $1,260,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value...

Q: A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was

A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2015, showing the additions, retirements, depreciation, and other data aff...

Q: On January 1, 2012, a machine was purchased for $

On January 1, 2012, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours before...

Q: On January 1, 2013, Locke Company, asmall machine-

On January 1, 2013, Locke Company, asmall machine-tool manufacturer, acquired for $1,260,000 a piece of new industrial equipment. Thenew equipment had a useful life of 5 years, and the salvage value w...

Q: Jerry Prior, Beeler Corporation’s controller, is concerned that net income

Jerry Prior, Beeler Corporation’s controller, is concerned that net income may be lower this year. He is afraid upper-level management might recommend cost reductions by laying off accounting st...

Q: The chief accountant for Dickinson Corporation provides you with the following list

The chief accountant for Dickinson Corporation provides you with the following list of accounts receivable written off in the current year. Dickinson Corporation follows the policy of debiting...

Q: Kimmel Company uses the net method of accounting for sales discounts.

Kimmel Company uses the net method of accounting for sales discounts. Kimmel also offers trade discounts to various groups of buyers. On August 1, 2014, Kimmel sold some accounts receivable on a wit...

Q: Soon after beginning the year-end audit work on March 10

Soon after beginning the year-end audit work on March 10 at Engone Company, the auditor has the following conversation with the controller. Controller: The year ended March 31st should be our mos...

Q: Ann M. Martin Company makes the following errors during the current

Ann M. Martin Company makes the following errors during the current year. (Evaluate each case independently and assume ending inventory in the following year is correctly stated.) 1. Ending invento...

Q: The net income per books of Linda Patrick Company was determined without

The net income per books of Linda Patrick Company was determined without knowledge of the errors indicated. Instructions Prepare a worksheet to show the adjusted net income figure for each of...

Q: As compared with the FIFO method of costing inventories, does the

As compared with the FIFO method of costing inventories, does the LIFO method result in a larger or smaller net income in a period of rising prices? What is the comparative effect on net income in a...

Q: At the balance sheet date, Clarkson Company held title to goods

At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000. This amount was omitted from the purchases figure for the year and also from the ending inventory. W...

Q: Rockland Corporation earned net income of $300,000 in 2014

Rockland Corporation earned net income of $300,000 in 2014 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds, which are conv...

Q: DiCenta Corporation reported net income of $270,000 in 2014

DiCenta Corporation reported net income of $270,000 in 2014 and had 50,000 shares of common stock outstanding throughout the year. Also outstanding all year were 5,000 shares of cumulative preferred...

Q: On January 1, 2014, Lennon Industries had stock outstanding as

On January 1, 2014, Lennon Industries had stock outstanding as follows. To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shar...

Q: Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company

Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Fitzge...

Q: On January 1, 2014, Crocker Company issued 10-year

On January 1, 2014, Crocker Company issued 10-year, $2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker’s net income in 201...

Q: Winsor Inc. recently purchased Holiday Corp., a large midwestern home

Winsor Inc. recently purchased Holiday Corp., a large midwestern home painting corporation. One of the terms of the merger was that if Holiday’s income for 2014 was $110,000 or more, 10,000 ad...

Q: On June 1, 2012, Andre Company and Agassi Company merged

On June 1, 2012, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. O...

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: At December 31, 2014, Reid Company had 600,000

At December 31, 2014, Reid Company had 600,000 shares of common stock issued and outstanding, 400,000 of which had been issued and outstanding throughout the year and 200,000 of which were issued on O...

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: An entry to record Purchases and related Accounts Payable of $13

An entry to record Purchases and related Accounts Payable of $13,000 for merchandise purchased on December 23, 2015, was recorded in January 2016. This merchandise was not included in inventory at D...

Q: Equipment was purchased on January 2, 2014, for $24

Equipment was purchased on January 2, 2014, for $24,000, but no portion of the cost has been charged to depreciation. The corporation wishes to use the straight-line method for these assets, which hav...

Q: Boey Company reported net income of $25,000 in 2015

Boey Company reported net income of $25,000 in 2015. It had the following amounts related to its pension plan in 2015: Actuarial liability gain $10,000; Unexpected asset loss $14,000; Accumulated othe...

Q: An annual report of Ford Motor Corporation states, “Net income

An annual report of Ford Motor Corporation states, “Net income a share is computed based upon the average number of shares of capital stock of all classes outstanding. Additional shares of com...

Q: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2014

Simmons Corporation owns stock of Armstrong, Inc. Prior to 2014, the investment was accounted for using the equity method. In early 2014, Simmons sold part of its investment in Armstrong, and began us...

Q: In 2014, Wild Corporation reported a net loss of $70

In 2014, Wild Corporation reported a net loss of $70,000. Wild’s only net income adjustments were depreciation expense $81,000, and increase in accounts receivable $8,100. Compute Wild’s net cash prov...

Q: Indicate in general journal form how the items below would be entered

Indicate in general journal form how the items below would be entered in a worksheet for the preparation of the statement of cash flows. (a) Net income is $317,000. (b) Cash dividends declared and pai...

Q: Pam Erickson Construction Company changed from the completed-contract to the

Pam Erickson Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2015. For tax purposes, the compa...

Q: Holder-Webb Company began operations on January 1, 2012,

Holder-Webb Company began operations on January 1, 2012, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2015. The following inform...

Q: Kalin Corporation had 2014 net income of $1,000,

Kalin Corporation had 2014 net income of $1,000,000. During 2014, Kalin paid a dividend of $2 per share on 100,000 shares of preferred stock. During 2014, Kalin had outstanding 250,000 shares of commo...

Q: Gordon Company started operations on January 1, 2009, and has

Gordon Company started operations on January 1, 2009, and has used the FIFO method of inventory valuation since its inception. In 2015, it decides to switch to the average-cost method. You are provide...

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: Presented below are income statements prepared on a LIFO and FIFO basis

Presented below are income statements prepared on a LIFO and FIFO basis for Kenseth Company, which started operations on January 1, 2013. The company presently uses the LIFO method of pricing its inve...

Q: Rockland Corporation earned net income of $300,000 in 2014

Rockland Corporation earned net income of $300,000 in 2014 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds, which are conver...

Q: Krauss Company’s income statement for the year ended December 31, 2014

Krauss Company’s income statement for the year ended December 31, 2014, contained the following condensed information. Krauss’s balance sheet contained the followin...

Q: DiCenta Corporation reported net income of $270,000 in 2014

DiCenta Corporation reported net income of $270,000 in 2014 and had 50,000 shares of common stock outstanding throughout the year. Also outstanding all year were 5,000 shares of cumulative preferred s...

Q: Presented below are the comparative income and retained earnings statements for Denise

Presented below are the comparative income and retained earnings statements for Denise Habbe Inc. for the years 2014 and 2015. The following additional information is provided: 1. In 2015, Denise Habb...

Q: Data for Krauss Company are presented in E23-5.

Data for Krauss Company are presented in E23-5. In E23-5 Krauss’s balance sheet contained the following comparative data at December 31. Instructions Prepare the operating activities...

Q: Bedard Corporation reported net income of $300,000 in 2014

Bedard Corporation reported net income of $300,000 in 2014 and had 200,000 shares of common stock outstanding throughout the year. Also outstanding all year were 45,000 options to purchase common stoc...

Q: The 2014 income statement of Wasmeier Corporation showed net income of $

The 2014 income statement of Wasmeier Corporation showed net income of $480,000 and an extraordinary loss of $120,000. Wasmeier had 100,000 shares of common stock outstanding all year. Prepare Wasmeie...

Q: Picasso Company is a wholesale distributor of professional equipment and supplies.

Picasso Company is a wholesale distributor of professional equipment and supplies. The company’s sales have averaged about $900,000 annually for the 3-year period 2012â€&#...

Q: Zoop Corporation purchased for $300,000 a 30% interest

Zoop Corporation purchased for $300,000 a 30% interest in Murphy, Inc. This investment enables Zoop to exert significant influence over Murphy. During the year, Murphy earned net income of $180,000 an...

Q: Cullen Construction Company, which began operations in 2014, changed from

Cullen Construction Company, which began operations in 2014, changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2015....

Q: Data for Brecker Inc. are presented in E23-13.

Data for Brecker Inc. are presented in E23-13. In E23-13 Instructions Prepare a statement of cash flows using the indirect method.

Q: The following information relates to Starbucks for the year ended October 2

The following information relates to Starbucks for the year ended October 2, 2011: net income 1,245.7 million; unrealized holding loss of $10.9 million related to available-for-sale securities during...

Q: Below is the net income of Anita Ferreri Instrument Co., a

Below is the net income of Anita Ferreri Instrument Co., a private corporation, computed under the three inventory methods using a periodic system. Instructions (Ignore tax considerations.) (a) Assum...

Q: Condensed financial data of Pat Metheny Company for 2014 and 2013 are

Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented below. Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant as...

Q: Bradburn Corporation was formed 5 years ago through a public subscription of

Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current pres...

Q: Presented below are data taken from the records of Alee Company.

Presented below are data taken from the records of Alee Company. Additional information: 1. Held-to-maturity securities carried at a cost of $43,000 on December 31, 2013, were sold in 2014 for $34,000...

Q: Data for Brecker Inc. are presented in E23-13.

Data for Brecker Inc. are presented in E23-13. In E23-13 Instructions Prepare a statement of cash flows using the indirect method.

Q: Matheny Inc. went public 3 years ago. The board of

Matheny Inc. went public 3 years ago. The board of directors will be meeting shortly after the end of the year to decide on a dividend policy. In the past, growth has been financed primarily through t...

Q: Presented below are data taken from the records of Alee Company.

Presented below are data taken from the records of Alee Company. Additional information: 1. Held-to-maturity securities carried at a cost of $43,000 on December 31, 2013, were sold in 2014 for $34,000...

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: Ace Inc. produces electronic components for sale to manufacturers of radios

Ace Inc. produces electronic components for sale to manufacturers of radios, television sets, and digital sound systems. In connection with her examination of Ace’s financial statements for the year e...

Q: Jobim Inc. had the following condensed balance sheet at the end

Jobim Inc. had the following condensed balance sheet at the end of operations for 2013. During 2014, the following occurred. 1. A tract of land was purchased for $9,000. 2. Bonds payable in the amount...

Q: The accounts below appear in the ledger of Anita Baker Company.

The accounts below appear in the ledger of Anita Baker Company. Instructions From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing...

Q: At December 31, 2014, Coburn Corp. has assets of

At December 31, 2014, Coburn Corp. has assets of $10,000,000, liabilities of $6,000,000, common stock of $2,000,000 (representing 2,000,000 shares of $1 par common stock), and retained earnings of $2,...

Q: Data for Anita Baker Company are presented in E23-18.

Data for Anita Baker Company are presented in E23-18. Instructions Prepare entries in journal form for all adjustments that should be made on a worksheet for a statement of cash flows. E23-20 (Workshe...

Q: The Simon Corporation issued 10-year, $5,000

The Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible subordinated debentures on January 2, 2014. The bonds have a par value of $1,000, with interest payable annually. The curr...

Q: Assume the same information as in E17-19 for Lilly Company

Assume the same information as in E17-19 for Lilly Company. In addition, assume that the investment in the Woods Inc. stock was sold during 2015 for $195,000. At December 31, 2015, the following infor...

Q: Botticelli Inc. was organized in late 2012 to manufacture and sell

Botticelli Inc. was organized in late 2012 to manufacture and sell hosiery. At the end of its fourth year of operation, the company has been fairly successful, as indicated by the following reported n...

Q: On January 1, 2015, Wilke Corp. had 480,

On January 1, 2015, Wilke Corp. had 480,000 shares of common stock outstanding. During 2015, it had the following transactions that affected the common stock account. February 1 Issued 120,000 shares...

Q: The following are two independent situations. Situation 1: Conchita

The following are two independent situations. Situation 1: Conchita Cosmetics acquired 10% of the 200,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2014....

Q: Michaels Company had available at the end of 2014 the information shown

Michaels Company had available at the end of 2014 the information shown on the next page. Instructions Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a r...

Q: Ace Company had 200,000 shares of common stock outstanding on

Ace Company had 200,000 shares of common stock outstanding on December 31, 2015. During the year 2016, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 20...

Q: Parent Co. invested $1,000,000 in Sub

Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year. Instructions Use the information in the following T-account for t...

Q: Aston Corporation performs year-end planning in November of each year

Aston Corporation performs year-end planning in November of each year before its calendar year ends in December. The preliminary estimated net income is $3 million. The CFO, Rita Warren, meets with th...

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: Flagstad Inc. presented the following data. / Instructions

Flagstad Inc. presented the following data. Instructions Compute earnings per share.

Q: The management of Utrillo Instrument Company had concluded, with the concurrence

The management of Utrillo Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Utrillo changed its method of...

Q: Comparative balance sheet accounts of Marcus Inc. are presented below.

Comparative balance sheet accounts of Marcus Inc. are presented below. Additional data (ignoring taxes): 1. Net income for the year was $42,500. 2. Cash dividends declared and paid during the year wer...

Q: The transactions listed below relate to Wainwright Inc. You are to

The transactions listed below relate to Wainwright Inc. You are to assume that on the date on which each of the transactions occurred, the corporation’s accounts showed only common stock ($100 par) ou...

Q: A portion of the combined statement of income and retained earnings of

A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows. At the end of the current year, Seminole Inc. has outstanding 8,500,000 shares of $10...

Q: Chapman Company, a major retailer of bicycles and accessories, operates

Chapman Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 20...

Q: On January 1, 2014, Pennington Corporation purchased 30% of

On January 1, 2014, Pennington Corporation purchased 30% of the common shares of Edwards Company for $180,000. During the year, Edwards earned net income of $80,000 and paid dividends of $20,000. Inst...

Q: On July 1, 2015, Fontaine Company purchased for cash 40

On July 1, 2015, Fontaine Company purchased for cash 40% of the outstanding capital stock of Knoblett Company. Both Fontaine Company and Knoblett Company have a December 31 year-end. Knoblett Company,...

Q: On January 1, 2014, Beyonce Co. purchased 25,

On January 1, 2014, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for $1,400,000. At the time, the book value and the fair value of John’s net assets were...

Q: Chantal Stores sells merchandise on open account as well as on installment

Chantal Stores sells merchandise on open account as well as on installment terms. Instructions From the data above, which cover the 3 years since Chantal Stores commenced operations, determine the net...

Q: On July 1, 2014, Selig Company purchased for cash 40

On July 1, 2014, Selig Company purchased for cash 40% of the outstanding capital stock of Spoor Corporation. Both Selig and Spoor have a December 31 year-end. Spoor Corporation, whose common stock is...

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: Holtzman Company is in the process of preparing its financial statements for

Holtzman Company is in the process of preparing its financial statements for 2014. Assume that no entries for depreciation have been recorded in 2014. The following information related to depreciation...

Q: Addison Manufacturing holds a large portfolio of debt and equity securities as

Addison Manufacturing holds a large portfolio of debt and equity securities as an investment. The fair value of the portfolio is greater than its original cost, even though some securities have decrea...

Q: On January 1, 2014, Crocker Company issued 10-year

On January 1, 2014, Crocker Company issued 10-year, $2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker’s net income in 2014 was $3...

Q: Presented below is selected information related to the financial instruments of Dawson

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2014. This is Dawson Company’s first year of operations. Instructions (...

Q: On January 1, 2014, Millay Inc. paid $700

On January 1, 2014, Millay Inc. paid $700,000 for 10,000 shares of Genso Company’s voting common stock, which was a 10% interest in Genso. At that date, the net assets of Genso totaled $6,000,000. The...

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-Spencer-...

Q: On January 3, 2013, Martin Company purchased for $500

On January 3, 2013, Martin Company purchased for $500,000 cash a 10% interest in Renner Corp. On that date, the net assets of Renner had a book value of $3,700,000. The excess of cost over the underly...

Q: On January 1, 2014, Lennon Industries had stock outstanding as

On January 1, 2014, Lennon Industries had stock outstanding as follows. To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The...

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: Charles Austin of the controller’s office of Thompson Corporation was given the

Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December...

Q: Venzuela Company’s net income for 2014 is $50,000.

Venzuela Company’s net income for 2014 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2013, each exercisable for one share at $6. None has been exerc...

Q: On January 2, 2014, Jones Company purchases a call option

On January 2, 2014, Jones Company purchases a call option for $300 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share....

Q: Winsor Inc. recently purchased Holiday Corp., a large midwestern home

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Hubbub Company Ltd. acquired equipment at the beginning of Year 1. The asset has an estimated useful life of five years. An employee has prepared depreciation schedules for this asset using two differ...

Q: Refer to the 2011 financial statements and accompanying notes of Royal Bank

Refer to the 2011 financial statements and accompanying notes of Royal Bank of Canada (RBC) that are found on the company's website ('www.royalbank.ca) or www.sedar.com. Instructions (a) What percent...

Q: Club Loop Corporation (CL) is a large owner, operator

Club Loop Corporation (CL) is a large owner, operator, and developer of golf clubs and resorts. The company is privately owned by several wealthy individuals. During the current year, according to the...

Q: LianTang, HK Corporation's controller, is concerned that net income may

LianTang, HK Corporation's controller, is concerned that net income may be lower this year. He is afraid that upper-level management might recommend cost reductions by layiog off accounting staff, him...

Q: Gibbs Inc. purchased a machine on January 1, 2014,

Gibbs Inc. purchased a machine on January 1, 2014, at a cost of $60,000. The machine is expected to have an estimated residual value of $5,000 at the end of its five-year useful life. The company capi...

Q: Nigel Corporation is interested in purchasing Lau Company Ltd. The total

Nigel Corporation is interested in purchasing Lau Company Ltd. The total of Lau’s net income amounts over the last five years is $750,000. During one of those years, Lau reported a gain on discontinue...

Q: Hermann Industries is forecasting the following income statement: /

Hermann Industries is forecasting the following income statement: The CEO would like to see higher sales and a forecasted net income of $2,500,000. Assume that operating costs (excluding depreciation...

Q: The Davidson Corporation’s balance sheet and income statement are provided here.

The Davidson Corporation’s balance sheet and income statement are provided here. a. Construct the statement of stockholders’ equity for December 31, 2008. b. How mu...

Q: Financial information for Powell Panther Corporation is shown here.

Financial information for Powell Panther Corporation is shown here. a. What was net working capital for 2007 and 2008? b. What was the 2008 free cash flow? c. How would you explain the large increase...

Q: Bailey Corporation’s financial statements (dollars and shares are in millions)

Bailey Corporation’s financial statements (dollars and shares are in millions) are provided here. a. What was net working capital for 2007 and 2008? b. What was Baileyâ€&...

Q: The Corrigan Corporation’s 2007 and 2008 financial statements follow, along with

The Corrigan Corporation’s 2007 and 2008 financial statements follow, along with some industry average ratios. a. Assess Corrigan’s liquidity position and determine...

Q: D’Leon Inc., a regional snack foods producer, after an expansion

D’Leon Inc., a regional snack foods producer, after an expansion program. D’Leon had increased plant capacity and undertaken a major marketing campaign in an attemp...

Q: Lloyd Inc. has sales of $200,000, a

Lloyd Inc. has sales of $200,000, a net income of $15,000, and the following balance sheet: The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio...

Q: Fontaine Inc. recently reported net income of $2 million.

Fontaine Inc. recently reported net income of $2 million. It has 500,000 shares of common stock, which currently trades at $40 a share. Fontaine continues to expand and anticipates that 1 year from no...

Q: Data for Barry Computer Co. and its industry averages follow.

Data for Barry Computer Co. and its industry averages follow. a. Calculate the indicated ratios for Barry. b. Construct the DuPont equation for both Barry and the industry. c. Outline Barryâ...

Q: A firm has been experiencing low profitability in recent years. Perform

A firm has been experiencing low profitability in recent years. Perform an analysis of the firm’s financial position using the DuPont equation. The firm has no lease payments but has...

Q: Laiho Industries’ 2007 and 2008 balance sheets (in thousands of dollars

Laiho Industries’ 2007 and 2008 balance sheets (in thousands of dollars) are shown. a. Sales for 2008 were $455,150,000, and EBITDA was 15% of sales. Furthermore, depreciation and a...

Q: Donna Jamison, a 2003 graduate of the University of Florida with

Donna Jamison, a 2003 graduate of the University of Florida with 4 years of banking experience, was recently brought in as assistant to the chairperson of the board of D’Leon Inc., a...

Q: The Howe Computer Company has grown rapidly during the past 5 years

The Howe Computer Company has grown rapidly during the past 5 years. Recently, its commercial bank urged the company to consider increasing its permanent financing. Its bank loan under a line of credi...

Q: Buena Terra Corporation is reviewing its capital budget for the upcoming year

Buena Terra Corporation is reviewing its capital budget for the upcoming year. It has paid a $3.00 dividend per share (DPS) for the past several years, and its shareholders expect the dividend to rema...

Q: Indicate whether the following statements are true or false. If the

Indicate whether the following statements are true or false. If the statement is false, explain why. a. If a firm repurchases its stock in the open market, the shareholders who tender the stock are su...

Q: Austin Grocers recently reported the following 2008 income statement (in millions of

Austin Grocers recently reported the following 2008 income statement (in millions of dollars): This year the company is forecasting a 25% increase in sales; and it expects that its year-end operating...

Q: At the end of last year, Roberts Inc. reported the

At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars): Looking ahead to the following year, the company’s CFO has assembled this inf...

Q: Welch Company is considering three independent projects, each of which requires

Welch Company is considering three independent projects, each of which requires a $5 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presente...

Q: Kahn Inc. has a target capital structure of 60% common

Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 13%, a before-tax cost of debt of 10%, and...

Q: Northern Pacific Heating and Cooling Inc. has a 6-month

Northern Pacific Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 40% with a $10 m...

Q: Tapley Inc. currently has assets of $5 million, has

Tapley Inc. currently has assets of $5 million, has zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends. Net income i...

Q: Southeastern Steel Company (SSC) was formed 5 years ago to

Southeastern Steel Company (SSC) was formed 5 years ago to exploit a new continuous casting process. SSC’s founders, Donald Brown and Margo Valencia, had been employed in the research department of a...

Q: Bowles Sporting Inc. is prepared to report the following income statement

Bowles Sporting Inc. is prepared to report the following income statement (shown in thousands of dollars) for the year 2009. Prior to reporting this income statement, the company wants to determine i...

Q: Sue Wilson, the new financial manager of New World Chemicals (

Sue Wilson, the new financial manager of New World Chemicals (NWC), a California producer of specialized chemicals for use in fruit orchards, must prepare a formal financial forecast for 2009. NWC&aci...

Q: Krogh Lumber’s 2008 financial statements are shown here. /

Krogh Lumber’s 2008 financial statements are shown here. a. Assume that the company was operating at full capacity in 2008 with regard to all items except fixed assets; fixed asset...

Q: In 2008, Keenan Company paid dividends totaling $3,600

In 2008, Keenan Company paid dividends totaling $3,600,000 on net income of $10.8 million. Note that 2008 was a normal year and that for the past 10 years, earnings have grown at a constant rate of 10...

Q: Beta Industries has net income of $2,000,000

Beta Industries has net income of $2,000,000, and it has 1,000,000 shares of common stock outstanding. The company’s stock currently trades at $32 a share. Beta is considering a plan in which it will...

Q: See the cash flow statement below for H. J. Heinz

See the cash flow statement below for H. J. Heinz (HNZ) (all values in thousands of dollars) a. What were Heinz’s cumulative earnings over these four quarters? What were its cumulati...

Q: Three years ago, you founded Outdoor Recreation, Inc., a

Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of equipment and clothing for recreational activities such as camping, skiing, and hiking. So far, your compa...

Q: Your firm successfully issued new debt last year, but the debt

Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum qui...

Q: Cellular Access, Inc., is a cellular telephone service provider that

Cellular Access, Inc., is a cellular telephone service provider that reported net income of $250 million for the most recent fiscal year. The firm had depreciation expenses of $100 million, capital ex...

Q: You are a manager at Percolated Fiber, which is considering expanding

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant’s report o...

Q: Bauer Industries is an automobile manufacturer. Management is currently evaluating a

Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to...

Q: Suppose the corporate tax rate is 40%. Consider a firm that

Suppose the corporate tax rate is 40%. Consider a firm that earns $1000 before interest and taxes each year with no risk. The firm’s capital expenditures equal its depreciation expenses each year, and...

Q: Pelamed Pharmaceuticals had EBIT of $325 million in 2010. In

Pelamed Pharmaceuticals had EBIT of $325 million in 2010. In addition, Pelamed had interest expenses of $125 million and a corporate tax rate of 40%. a. What was Pelamed’s 2010 net income? b. What was...

Q: Grommit Engineering expects to have net income next year of $20

Grommit Engineering expects to have net income next year of $20.75 million and free cash flow of $22.15 million. Grommit’s marginal corporate tax rate is 35%. a. If Grommit increases leverage so that...

Q: Empire Industries forecasts net income this coming year as shown below (

Empire Industries forecasts net income this coming year as shown below (in thousands of dollars): Approximately $200,000 of Empire’s earnings will be needed to make new, positive-NP...

Q: Use the following income statement and balance sheet for Global Corp.:

Use the following income statement and balance sheet for Global Corp.: Assume that Global pays out 50% of its net income. Use the percent of sales method to forecast stockholders’ eq...

Q: Use the following income statement and balance sheet for Global Corp.:

Use the following income statement and balance sheet for Global Corp.: What is the amount of net new financing needed for Global?

Q: Use the following income statement and balance sheet for Global Corp.:

Use the following income statement and balance sheet for Global Corp.: If Global decides that it will limit its net new financing to no more than $9 million, how will this affect its payout policy?

Q: Under the assumption that KMS’s market share will increase by 0.

Under the assumption that KMS’s market share will increase by 0.25% per year, you project the following depreciation: Using this information, project net income through 2015 (that is...

Q: Using the information in the table below, calculate this company’s:

Using the information in the table below, calculate this company’s: a. Internal growth rate. b. Sustainable growth rate. c. Sustainable growth rate if it pays out 40% of its net inco...

Q: IZAX, Co. had the following items on its balance sheet

IZAX, Co. had the following items on its balance sheet at the beginning of the year: Its net income this year is $20,000 and it pays dividends of $5,000. If its assets grew at its internal growth rate...

Q: For the next fiscal year, you forecast net income of $

For the next fiscal year, you forecast net income of $50,000 and ending assets of $500,000. Your firm’s payout ratio is 10%. Your beginning stockholders’ equity is $300,000 and your beginning total li...

Q: Assume your beginning debt in Problem 2 is $100,000

Assume your beginning debt in Problem 2 is $100,000. What amount of equity and what amount of debt would you need to issue to cover the net new financing in order to keep your debt-equity ratio consta...

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: Jim’s expects sales to grow by 10% next year. Using the percent of sales method, forecast:...

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: Assume that Jim’s pays out 90% of its net income. Use the percent of sales method to foreca...

Q: Sailboats Etc. is a retail company specializing in sailboats and other

Sailboats Etc. is a retail company specializing in sailboats and other sailing-related equipment. The following table contains financial forecasts as well as current (month 0) working capital levels....

Q: Emerald City Umbrellas sells umbrellas and rain gear in Seattle, so

Emerald City Umbrellas sells umbrellas and rain gear in Seattle, so its sales are fairly level across the year. However, it is branching out to other markets where it expects demand to be much more va...

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: What is the amount of net new financing needed for Jim’s?

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: If Jim’s adjusts its payout policy to 70% of net income, how will the net new financing cha...

Q: Use the following income statement and balance sheet for Global Corp.:

Use the following income statement and balance sheet for Global Corp.: Global expects sales to grow by 8% next year. Using the percent of sales method, forecast: a. Costs except depreciation b. Deprec...

Q: Construct a short-term financial plan for Springfield Snowboards based on

Construct a short-term financial plan for Springfield Snowboards based on its expansion opportunity described in the “Positive Cash Flow Shocks” part of Section 20....

Q: Benson Company was franchised on January 1, 2011. At the

Benson Company was franchised on January 1, 2011. At the end of its third year of operations, December 31, 2013, management requested a study to determine what effect different materials inventory cos...

Q: Janitorial Products, Inc., manufactures two products, brooms and mops

Janitorial Products, Inc., manufactures two products, brooms and mops, which are sold in two territories designated by the company as East Territory and West Territory. The following income statement...

Q: The fixed overhead budgeted for Hamlet Company at an expected capacity of

The fixed overhead budgeted for Hamlet Company at an expected capacity of 500,000 units is $1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net...

Q: A new product is expected to have sales of $100,

A new product is expected to have sales of $100,000, variable costs of 60% of sales, and fixed costs of $20,000. 1. Using graph paper, construct a break-even chart and label the sales line, total cost...

Q: The board of directors of Garden City Gaskets, Inc., set

The board of directors of Garden City Gaskets, Inc., set the profit goal for the calendar year 2011 at $2,200,000. It also established a bonus plan in which the top five officers of the company will s...

Q: The 2018 income statement for Anderson TV and Appliance reported sales revenue

The 2018 income statement for Anderson TV and Appliance reported sales revenue of $420,000 and net income of $65,000. Average total assets for 2018 was $800,000. Shareholders’ equity at the beginning...

Q: Refer to the facts described in BE 4–16. Show

Refer to the facts described in BE 4–16. Show the DuPont framework’s calculation of the three components of the 2018 return on shareholders’ equity for Anderson TV and Appliance. In BE 4–16 The 2018...

Q: The following is a partial year-end adjusted trial balance.

The following is a partial year-end adjusted trial balance. Income tax expense has not yet been recorded. The income tax rate is 40%. Determine the following: (a) Operating income (loss), (b) Income...

Q: O’Reilly Beverage Company reported net income of $650,000 for

O’Reilly Beverage Company reported net income of $650,000 for 2018. In addition, the company deferred a $60,000 pretax loss on derivatives and had pretax net unrealized holding gains on investment sec...

Q: The Massoud Consulting Group reported net income of $1,354

The Massoud Consulting Group reported net income of $1,354,000 for its fiscal year ended December 31, 2018. In addition, during the year the company experienced a positive foreign currency translation...

Q: The accounting records of Hampton Company provided the data below ($ in

The accounting records of Hampton Company provided the data below ($ in thousands). Net income …………………………………………………………… $ 17,300 Depreciation expense ………………………………………………… 7,800 Increase in accounts rece...

Q: Cemptex Corporation prepares its statement of cash flows using the indirect method

Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2018 fiscal year was $624,000. Depreciation and amortization expen...

Q: Chew Corporation prepares its statement of cash flows using the indirect method

Chew Corporation prepares its statement of cash flows using the indirect method of reporting operating activities. Net income for the 2018 fiscal year was $1,250,000. Depreciation expense of $140,000...

Q: Presented below is the 2018 income statement and comparative balance sheet information

Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises. Required: Prepare Tiger’s statement of cash flows, using the indirect...

Q: Refer to the situation described in E 4–20.

Refer to the situation described in E 4–20. In E 4–20 Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises....

Q: Listed below are several terms and phrases associated with income statement presentation

Listed below are several terms and phrases associated with income statement presentation and the statement of cash flows. Pair each item from List A (by letter) with the item from List B that is most...

Q: The 2018 income statement of Anderson Medical Supply Company reported net sales

The 2018 income statement of Anderson Medical Supply Company reported net sales of $8 million, cost of goods sold of $4.8 million, and net income of $800,000. The following table shows the company&aci...

Q: The following incorrect income statement was prepared by the accountant of the

The following incorrect income statement was prepared by the accountant of the Axel Corporation: Required: Prepare a multiple-step income statement for 2018 applying generally accepted accounting pr...

Q: On September 17, 2018, Ziltech, Inc., entered into

On September 17, 2018, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By Decem...

Q: The chief accountant for Grandview Corporation provides you with the company’s 2018

The chief accountant for Grandview Corporation provides you with the company’s 2018 statement of cash flows and income statement. The accountant has asked for your help with some mis...

Q: Presented below are the 2018 income statement and comparative balance sheets for

Presented below are the 2018 income statement and comparative balance sheets for Santana Industries. Additional information for the 2018 fiscal year ($ in thousands): 1. Cash dividends of $1,000 wer...

Q: Presented below are condensed financial statements adapted from those of two actual

Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industry—Johnson and Johnson (J&J) and Pfizer, Inc....

Q: Presented below are condensed financial statements adapted from those of two actual

Presented below are condensed financial statements adapted from those of two actual companies competing as the primary players in a specialty area of the food manufacturing and distribution industry (...

Q: The following condensed income statements of the Jackson Holding Company are presented

The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2018 and 2017: On October 15, 2018, Jackson entered into a tentative agree...

Q: Rice Corporation is negotiating a loan for expansion purposes and the bank

Rice Corporation is negotiating a loan for expansion purposes and the bank requires financial statements. Before closing the accounting records for the year ended December 31, 2018, Riceâ€&...

Q: Refer to the income statement of Sherwin Williams Company in Illustration 4

Refer to the income statement of Sherwin Williams Company in Illustration 4–2 of this chapter. In Illustration 4–2 Statement of Consolidated Income ($ in thousands, except per share data) ___________...

Q: Ralph Lauren Corporation is a global leader in the design, marketing

Ralph Lauren Corporation is a global leader in the design, marketing, and distribution of premium lifestyle products, including men’s, women’s and childrenâ&#...

Q: You are a part-time financial advisor. A client is

You are a part-time financial advisor. A client is considering an investment in common stock of a waste recycling firm. One motivation is a rumor the client heard that the company made huge investment...

Q: You are a new staff accountant with a large regional CPA firm

You are a new staff accountant with a large regional CPA firm, participating in your first audit. You recall from your auditing class that CPAs often use ratios to test the reasonableness of accountin...

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

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This mate...

Q: An article published in Accounting Horizons describes various techniques that companies use

An article published in Accounting Horizons describes various techniques that companies use to manage their earnings. Required: In your library, on the Internet, or from some other source, locate the...

Q: South-Central Publishing Company prepares income statements segmented by divisions,

South-Central Publishing Company prepares income statements segmented by divisions, but the chief operating officer is not certain about how the company is actually performing. Financial data for the...

Q: The production of a new product required Mirage Manufacturing Company to lease

The production of a new product required Mirage Manufacturing Company to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual salesâ...

Q: Digital Software, Inc., has two product lines. The income

Digital Software, Inc., has two product lines. The income statement for the year ended December 31 shows the following: The products, Num 1 and Num 2, are sold in two territories, North and South, as...

Q: Pittman Company is a small but growing manufacturer of telecommunications equipment.

Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its p...

Q: Colah Company purchased $1 million of Jackson, Inc. 5

Colah Company purchased $1 million of Jackson, Inc. 5% bonds at par on July 1, 2018, with interest paid semiannually. When the bonds were acquired Colah decided to elect the fair value option for acco...

Q: As a long-term investment at the beginning of the 2018

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of t...

Q: Colah Company purchased $1 million of Jackson, Inc., 5

Colah Company purchased $1 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest paid semiannually. Colah determined that it should account for the bonds as an available-for-sale in...

Q: On January 4, 2018, Runyan Bakery paid $324 million

On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan...

Q: On January 4, 2018, Runyan Bakery paid $324 million

On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan...

Q: Companies can choose the fair value option for investments that otherwise would

Companies can choose the fair value option for investments that otherwise would be accounted for under the equity method. If the fair value option is chosen, the investment is shown at fair value in t...

Q: Northwest Paperboard Company, a paper and allied products manufacturer, was

Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver...

Q: For each of the following inventory errors occurring in 2018, determine

For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018’s cost of goods sold, net income, and retained earnings. Assume that the error...

Q: The following disclosure note appeared in the December 26, 2015,

The following disclosure note appeared in the December 26, 2015, annual report of the Intel Corporation. Note 5: Cash and Investments (partial) Available-for-sale investments as of December 26, 2015,...

Q: Whaley Distributors is a wholesale distributor of electronic components. Financial statements

Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the year ended December 31, 2018, reported the following amounts and subtotals ($ in millions): In 2...

Q: Described below are three independent and unrelated situations involving accounting changes.

Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared. a. On December...

Q: Redline Publishers, Inc. produces various manuals ranging from computer software

Redline Publishers, Inc. produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the e...

Q: Fowler Inc. purchased $75,000 of bonds on January

Fowler Inc. purchased $75,000 of bonds on January 1, 2018. The bonds pay interest semiannually and mature in 20 years, at which time the $75,000 principal will be paid. The bonds do not pay any amount...

Q: Assume the same facts as in BE 12–8, but

Assume the same facts as in BE 12–8, but that Fowler intends to hold the bonds until maturity. How much unrealized gain or loss would Fowler include in 2018 net income with respect to the bonds? In B...

Q: Kim Company bought 30% of the shares of Phelps, Inc

Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2018. Kim paid $10 million for the shares. Thirty percent of the book value of Phelps’s net assets is $8 million, and the differen...

Q: LED Corporation owns $1,000,000 of Branch Pharmaceuticals

LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch’s bonds fell by $450,000, due to concerns abo...

Q: Answer BE 12-17 under the assumption that LED Corporation used

Answer BE 12-17 under the assumption that LED Corporation used the AFS Credit Loss Model introduced in ASU 2016-13 and required after 2020. BE 12-17 LED Corporation owns $1,000,000 of Branch Pharmace...

Q: LED Corporation owns $1,000,000 of Branch Pharmaceuticals

LED Corporation owns $1,000,000 of Branch Pharmaceuticals bonds and classifies its investment as securities available-for-sale. The market price of Branch’s bonds fell by $450,000, due to concerns abo...

Q: S&L Financial buys and sells securities which it classifies as

S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2019, for $8...

Q: For the Coca-Cola bonds described in BE 12-4

For the Coca-Cola bonds described in BE 12-4, prepare journal entries to record (a) Any unrealized gains or losses occurring in 2018 and (b) The sale of the bonds in 2019, including recognition of any...

Q: S&L Financial buys and sells securities that it typically classifies

S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 201...

Q: On March 31, 2018, Chow Brothers, Inc., bought

On March 31, 2018, Chow Brothers, Inc., bought 10% of KT Manufacturing’s capital stock for $50 million. KT’s net income for the year ended December 31, 2018, was $80 million. The fair value of the sha...

Q: On January 2, 2018, Sanborn Tobacco Inc. bought 5

On January 2, 2018, Sanborn Tobacco Inc. bought 5% of Jackson Industry’s capital stock for $90 million. Jackson Industry’s net income for the year ended December 31, 2018, was $120 million. The fair v...

Q: As a long-term investment, Painters’ Equipment Company purchased 20

As a long-term investment, Painters’ Equipment Company purchased 20% of AMC Supplies Inc.’s 400,000 shares for $480,000 at the beginning of the fiscal year of both companies. On the purchase date, the...

Q: As a long-term investment at the beginning of the 2018

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of t...

Q: Fizer Pharmaceutical paid $68 million on January 2, 2018,

Fizer Pharmaceutical paid $68 million on January 2, 2018, for 4 million shares of Carne Cosmetics common stock. The investment represents a 25% interest in the net assets of Carne and gave Fizer the a...

Q: On January 1, 2018, Cameron Inc. bought 20%

On January 1, 2018, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $300 million cash. At the date of acquisition of the stock, Lake’s net assets had a fair va...

Q: On July 1, 2018, Gupta Corporation bought 25% of

On July 1, 2018, Gupta Corporation bought 25% of the outstanding common stock of VB Company for $100 million cash. At the date of acquisition of the stock, VB’s net assets had a total fair value of $3...

Q: S&L Financial buys and sells securities expecting to earn profits

S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on Janu...

Q: For the Coca-Cola bonds described in BE 12-2

For the Coca-Cola bonds described in BE 12-2, prepare journal entries to record (a) Any unrealized gains or losses occurring in 2018 and (b) The sale of the bonds in 2019. In BE 12-2 S&L Financial bu...

Q: Best Buy Co, Inc., is a leading retailer specializing in

Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 30, 2016, are shown next. Liquidity and...

Q: The Canton Corporation operates in four distinct business segments. The segments

The Canton Corporation operates in four distinct business segments. The segments, along with 2018 information on revenues, assets, and net income, are listed below ($ in thousands): Required: 1. For w...

Q: Refer to E 3–21. Information from E3

Refer to E 3–21. Information from E3-21 The Canton Corporation operates in four distinct business segments. The segments, along with 2018 information on revenues, assets, and net in...

Q: The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company’s controller. As accounting manager for Sanderson, you are attempting to re...

Q: Melody Lane Music Company was started by John Ross early in 2018

Melody Lane Music Company was started by John Ross early in 2018. Initial capital was acquired by issuing shares of common stock to various investors and by obtaining a bank loan. The company operates...

Q: Cash flows during the first year of operations for the Harman-

Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $340,000; Cash paid for rent, $40,000; Cash paid to employees fo...

Q: You have recently been hired by Davis & Company, a small

You have recently been hired by Davis & Company, a small public accounting firm. One of the firm’s partners, Alice Davis, has asked you to deal with a disgruntled client, Mr. Sean Pitt, owner of the c...

Q: Newman Consulting Company maintains its records on a cash basis. During

Newman Consulting Company maintains its records on a cash basis. During 2018 the following cash flows were recorded: cash received from customers, $420,000; and cash paid for salaries, utilities, and...

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Access the financial statements for the year ended January 30, 2016 for The Gap, Inc. by downloading them from www.gapinc.com, and use them to answer the following questions. Required: 1. What amount...

Q: During the course of your examination of the financial statements of the

During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2018, you discover the following: a. An insurance policy covering three year...

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

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in the Connect. This...

Q: Haskins and Jones, Attorneys-at-Law, maintain its

Haskins and Jones, Attorneys-at-Law, maintain its books on a cash basis. During 2018, the company collected $545,000 in fees from its clients and paid out $412,000 in expenses. You are able to determi...

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Listed below are several transactions that took place during the second and third years of operations for the RPG Company. In addition, you learn that the company incurred advertising costs of $25,000...

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Refer to Case 2–1. Mr. Pitt has relented and agrees to provide you with the information necessary to convert his cash basis financial statements to accrual basis statements. He provides you with the f...

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The information necessary for preparing the 2018 year-end adjusting entries for Vito’s Pizza Parlor appears below. Vito’s fiscal year-end is December 31. a. On July 1, 2018, purchased $10,000 of IBM C...

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Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year end...

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AGF Foods Company is a large, primarily domestic, consumer Foods Company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy&acir...

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AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2018. The bonds sold for $150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, A...

Q: Schaeffer Corporation reports $50 million accumulated other comprehensive income in its

Schaeffer Corporation reports $50 million accumulated other comprehensive income in its balance sheet as a component of shareholders’ equity. In a related statement reporting comprehensive income for...

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Delta Air Lines revealed in its 10-K filing that its valuation allowance for deferred tax assets at the end of 2013 was $177 million, dramatically lower than the over $10 billion recorded at the end o...

Q: The long-term liabilities section of CPS Transportation’s December 31,

The long-term liabilities section of CPS Transportation’s December 31, 2017, balance sheet included the following: a. A lease liability with 15 remaining lease payments of $10,000 ea...

Q: Russell-James Corporation is a diversified consumer products company. During

Russell-James Corporation is a diversified consumer products company. During 2018, Russell-James discontinued its line of cosmetics, which constituted discontinued operations for financial reporting p...

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

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This mate...

Q: Reproduced below are the journal entries related to Illustration 17–12

Reproduced below are the journal entries related to Illustration 17–12 in this chapter that Global Communications used to record its pension expense and funding in 2018 and the new g...

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Q: The following is from the 2018 annual report of Kaufman Chemicals,

The following is from the 2018 annual report of Kaufman Chemicals, Inc.: Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders’...

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You are a loan officer for First Benevolent Bank. You have an uneasy feeling as you examine a loan application from Daring Corporation. The application included the following financial statements. DA...

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

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This mate...

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Comparative statements of shareholders’ equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2018, 2019, and 2020. Requir...

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The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2017: Shareholders’ Equity _________________________ ($ in millions) Common st...

Q: AGF Foods Company is a large, primarily domestic, consumer Foods

AGF Foods Company is a large, primarily domestic, consumer Foods Company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy&acir...

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Titan Networking became a public company through an IPO (initial public offering) two weeks ago. You are looking forward to the challenges of being assistant controller for a publicly owned corporatio...

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Why are preferred dividends deducted from net income when calculating EPS? Are there circumstances when this deduction is not made?

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McDonnell-Myer Corporation reported net income of $741 million. The company had 544 million common shares outstanding at January 1 and sold 36 million shares on Feb. 28. As part of an annual share rep...

Q: At December 31, 2017 and 2018, Funk & Noble Corporation

At December 31, 2017 and 2018, Funk & Noble Corporation had outstanding 820 million shares of common stock and 2 million shares of 8%, $100 par value cumulative preferred stock. No dividends were decl...

Q: Ahnberg Corporation had 800,000 shares of common stock issued and

Ahnberg Corporation had 800,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 100,000 shares of convertible...

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For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January 1, 2018, the company had 900,000 common shares outstanding. The following changes in the number of...

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The Alford Group had 202,000 shares of common stock outstanding at January 1, 2018. The following activities affected common shares during the year. There are no potential common shares outstanding. 2...

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Hardaway Fixtures’ balance sheet at December 31, 2017, included the following: Shares issued and outstanding: Common stock, $1 par ……………………………………………. $800,000 Nonconvertible preferred stock, $50 par …...

Q: On December 31, 2017, Berclair Inc. had 200 million

On December 31, 2017, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purc...

Q: On December 31, 2017, Berclair Inc. had 200 million

On December 31, 2017, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purc...

Q: On December 31, 2017, Berclair Inc. had 200 million

On December 31, 2017, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purc...

Q: On December 31, 2017, Berclair Inc. had 200 million

On December 31, 2017, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purc...

Q: Stanley Department Stores reported net income of $720,000 for

Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2018. Additional Information: Common shares outstanding at Jan. 1, 2018 ……………………………………………………………… 80,000 Incent...

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Information from the financial statements of Ames Fabricators, Inc., included the following: Ames’s net income for the year ended December 31, 2018, is $500,000. The income tax rat...

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As part of its executive compensation plan, Vertovec Inc. granted 54,000 of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. Vertovec’s com...

Q: During 2018, its first year of operations, McCollum Tool Works

During 2018, its first year of operations, McCollum Tool Works entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 100 million common shar...

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The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods, in the format illustrated by Illustration 21â€...

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The income statement and the cash flows from the operating activities section of the statement of cash flows are provided on the next page for Syntric Company. The merchandise inventory account balanc...

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The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in thousands) for Peach Computers. Required: 1. Calculate each of the followi...

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Portions of the financial statements for Myriad Products are provided below. Required: Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Com...

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Refer to the data provided in E 21–23 for Myriad Products Company. In E 21–23 Portions of the financial statements for Myriad Products are provided below. Requir...

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Refer to the data provided in E 21–25 for Clear Transmissions Company. In E 21–25 Portions of the financial statements for Clear Transmissions Company are provided...

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Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information from the accounting records of Red, Inc., are provided below. Additional information from the...

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The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31, 2017: ?????_____________________________________($ in millions) Paid-in capital: Pre...

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The comparative balance sheets for 2018 and 2017 and the income statement for 2018 are given below for Arduous Company. Additional information from Arduous’s accounting records is pr...

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Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 105 million common shares,...

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Following are selected balance sheet accounts of Del Conte Corp. at December 31, 2018 and 2017, and the increases or decreases in each account from 2017 to 2018. Also presented is selected income stat...

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Refer to the data provided in the P 21–4 for Dux Company. In P 21–4 The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given...

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Refer to the data provided in the P 21–5 for Metagrobolize Industries. In P 21–5 Comparative balance sheets for 2018 and 2017 and a statement of income for 2018 ar...

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Refer to the data provided in the P 21–11 for Arduous Company. In P 21–11 The comparative balance sheets for 2018 and 2017 and the income statement for 2018 are gi...

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Refer to the data provided in the P 21–4 for Dux Company. In P 21–4 The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given...

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

Refer to the data provided in the P 21–11 for Arduous Company. In P 21–11 The comparative balance sheets for 2018 and 2017 and the income statement for 2018 are gi...

Q: The comparative balance sheets for 2018 and 2017 and the statement of

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company. Additional information from Wright’s accounting records is p...

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National Supply’s shareholders’ equity included the following accounts at December 31, 2017: Shareholders’ Equity ____________________($ in millions) Common stock, 6 million shares at $1 par ………………………...

Q: The comparative balance sheets for 2018 and 2017 and the statement of

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for National Intercable Company. Additional information from NIC’s accounting re...

Q: The comparative balance sheets for 2018 and 2017 and the statement of

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux’s accounting records is provide...

Q: Comparative balance sheets for 2018 and 2017 and a statement of income

Comparative balance sheets for 2018 and 2017 and a statement of income for 2018 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also i...

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The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Mike Roe Computers. Required: 1. Calculate each of the following amounts for...

Q: The income statement and a schedule reconciling cash flows from operating activities

The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Macrosoft Corporation. Required: Prepare the cash flows from operating activ...

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Portions of the financial statements for Parnell Company are provided below. Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company...

Q: Portions of the financial statements for Hawkeye Company are provided below.

Portions of the financial statements for Hawkeye Company are provided below. Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company...

Q: The following schedule relates the income statement with cash flows from operating

The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods, in the format illustrated by Illustration 21â€...

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Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2018 annual report as follows. At December 31, 2015, common shares consisted of the following: Common stoc...

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Refer to the financial statements and related disclosure notes of The Kroger Company for the fiscal year ending January 30, 2016. You can locate the report online from “investor relations” at www.krog...

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Listed below are several terms and phrases associated with earnings per share. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

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Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 105 million common shares,...

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Q: On January 1, 2018, Beilich Enterprises bought 20% of

On January 1, 2018, Beilich Enterprises bought 20% of the outstanding common stock of Wolfe Construction Company for $600 million cash. Wolfe’s net income for the year ended December...

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Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone’...

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Annie Rasmussen is the owner and operator of Go44, a motivational consulting business. At the end of its accounting period, December 31, 2018, Go44 has assets of $720,000 and liabilities of $180,000....

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Teri West operates her own catering service. Summary financial data for July are presented in equation form as follows. Each line designated by a number indicates the effect of a transaction on the eq...

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Four different proprietorships, Jupiter, Mars, Saturn, and Venus, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner’s...

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Financial information related to the proprietorship of Ebony Interiors for February and March 2019 is as follows: a. Prepare balance sheets for Ebony Interiors as of February 29 and March 31, 2019....

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The financial statements at the end of Wolverine Realty’s first month of operations are as follows: Instructions By analyzing the interrelationships among the four financial statem...

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We-Sell Realty, organized August 1, 2019, is owned and operated by Omar Farah. How many errors can you find in the following statements for We-Sell Realty, prepared after its first month of operations...

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On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June: a. Opened a business bank account with a deposit of $3...

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The financial statements at the end of Atlas Realty’s first month of operations follow: Instructions By analyzing the interrelationships among the four financial statements, determ...

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Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March: a. Opened a business bank account with a deposit of $50,000 from person...

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During the month, Warwick Co. received $515,000 in cash and paid out $375,000 in cash. a. Do the data indicate that Warwick Co. had net income of $140,000 during the month? Explain. b. If the balance...

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On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business: June 1. Kris transfe...

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Connie Young, an architect, opened an office on October 1, 2019. During the month, she completed the following transactions connected with her professional practice: a. Transferred cash from a persona...

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On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred...

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Two income statements for Paragon Company follow: Prepare a horizontal analysis of Paragon Company’s income statements.

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Ken Jones, an architect, opened an office on April 1, 2019. During the month, he completed the following transactions connected with his professional practice: a. Transferred cash from a personal bank...

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Based upon the data presented in Exercise 2-13, (a) Prepare an unadjusted trial balance, listing the accounts in their proper order. (b) Based upon the unadjusted trial balance, determine the net inco...

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On August 1, 2019, Rafael Masey established Planet Realty, which completed the following transactions during the month: a. Rafael Masey transferred cash from a personal bank account to an account to b...

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The Howard Leasing Company is a privately held, medium-sized business that purchases school busses and leases them to school districts, churches, charitable organizations, and other businesses. To bet...

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Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations: For preparing the adjusting entries,...

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List the errors you find in the following balance sheet. Prepare a corrected balance sheet.

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Marcie Davies owns and operates Gemini Advertising Services. On January 1, 2018, Marcie Davies, Capital had a balance of $618,500. During the year, Marcie invested an additional $40,000 and withdrew $...

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In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchang...

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At the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney: Net income for April …&aci...

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Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations: For preparing the adjusting entries, the follo...

Q: Finders Investigative Services is an investigative services firm that is owned and

Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Serv...

Q: List (a) through (j) in the order they

List (a) through (j) in the order they would be performed in preparing and completing an end-of-period spreadsheet. a. Add the Debit and Credit columns of the Unadjusted Trial Balance columns of the s...

Q: Alert Security Services Co. offers security services to business clients.

Alert Security Services Co. offers security services to business clients. Complete the following end-of-period spreadsheet for Alert Security Services Co.:

Q: Based on the data in Exercise 4-25, prepare an

Based on the data in Exercise 4-25, prepare an income statement, statement of owner’s equity, and balance sheet for Alert Security Services Co. In Exercise 4-25

Q: Based on the data in Exercise 4-25, prepare the

Based on the data in Exercise 4-25, prepare the two closing entries for Alert Security Services Co. In Exercise 4-25

Q: The following data are taken from recent financial statement of Nike,

The following data are taken from recent financial statement of Nike, Inc. (in millions): a. Determine the amount of change (in millions) and percent of change in net income from Year 1 to Year 2. R...

Q: At the end of August, the first month of operations,

At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney: Net income for August …&aci...

Q: The Gorman Group is a financial planning services firm owned and operated

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2019, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-p...

Q: On December 31, 2019, the balances of the accounts appearing

On December 31, 2019, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain....

Q: On June 30, 2019, the balances of the accounts appearing

On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain....

Q: Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship

Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 2...

Q: Assume that a firm separately determined inventory under FIFO and LIFO and

Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a. In each space that follows, place the correct sign [less than (), or equal (=)] for each compar...

Q: Hard Bodies Co. is a fitness chain that has just completed

Hard Bodies Co. is a fitness chain that has just completed its second year of operations. At the beginning of its first fiscal year, the company purchased fitness equipment at a cost of $600,000 and estim...

Q: Tehra Dactyl is an accountant for Skeds, Inc., a footwear

Tehra Dactyl is an accountant for Skeds, Inc., a footwear and apparel company. The company’s revenue and net income have increased by more than 100% over the past three years. During the same period,...

Q: The following selected transactions were taken from the records of Shipway Company

The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Apr. 13. Wrote off account of Dean Sheppard, $8,450. May 15....

Q: The following selected transactions were taken from the records of Rustic Tables

The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: June 8. Wrote off account of Kathy Quantel, $8,440. Aug. 14. Received $3,000 a...

Q: During its first year of operations, Mack’s Plumbing Supply Co.

During its first year of operations, Mack’s Plumbing Supply Co. had sales of $3,250,000, wrote off $27,800 of accounts as uncollectible using the direct write-off method, and reported net income of $4...

Q: Using the data in Exercise 9-15, assume that during

Using the data in Exercise 9-15, assume that during the second year of operations, Mack’s Plumbing Supply Co. had sales of $4,100,000, wrote off $34,000 of accounts as uncollectible using the direct w...

Q: Casebolt Company wrote off the following accounts receivable as uncollectible for the

Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: Customer __________Amount Shawn Brooke ………………….. $ 4,650 Eve Dent...

Q: Seaforth International wrote off the following accounts receivable as uncollectible for the

Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer __________Amount Kim Abel ……â...

Q: On June 30, 2019, the balances of the accounts appearing

On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain....

Q: Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship

Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 2...

Q: Assume that a firm separately determined inventory under FIFO and LIFO and

Assume that a firm separately determined inventory under FIFO and LIFO and then compared the results. a. In each space that follows, place the correct sign [less than (), or equal (=)] for each compar...

Q: On December 31, 2019, the balances of the accounts appearing

On December 31, 2019, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain....

Q: Tehra Dactyl is an accountant for Skeds, Inc., a footwear

Tehra Dactyl is an accountant for Skeds, Inc., a footwear and apparel company. The company’s revenue and net income have increased by more than 100% over the past three years. During the same period,...

Q: The following selected transactions were taken from the records of Shipway Company

The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Apr. 13. Wrote off account of Dean Sheppard, $8,450. May 15....

Q: The following selected transactions were taken from the records of Rustic Tables

The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: June 8. Wrote off account of Kathy Quantel, $8,440. Aug. 14. Received $3,000 a...

Q: During its first year of operations, Mack’s Plumbing Supply Co.

During its first year of operations, Mack’s Plumbing Supply Co. had sales of $3,250,000, wrote off $27,800 of accounts as uncollectible using the direct write-off method, and reported net income of $4...

Q: Using the data in Exercise 9-15, assume that during

Using the data in Exercise 9-15, assume that during the second year of operations, Mack’s Plumbing Supply Co. had sales of $4,100,000, wrote off $34,000 of accounts as uncollectible using the direct w...

Q: Casebolt Company wrote off the following accounts receivable as uncollectible for the

Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: Customer __________Amount Shawn Brooke ………………….. $ 4,650 Eve Dent...

Q: Seaforth International wrote off the following accounts receivable as uncollectible for the

Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer __________Amount Kim Abel ……â...

Q: Hard Bodies Co. is a fitness chain that has just completed

Hard Bodies Co. is a fitness chain that has just completed its second year of operations. At the beginning of its first fiscal year, the company purchased fitness equipment at a cost of $600,000 and estim...

Q: Ripley Corporation’s accumulated depreciation—furniture account increased by $11,

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...

Q: Financial statement data for the years ended December 31 for Black Bull

Financial statement data for the years ended December 31 for Black Bull Inc. follow: a. Determine the earnings per share for 20Y6 and 20Y5. b. Does the change in the earnings per share from 20Y5 to...

Q: John Prado and Ayana Nicks formed a partnership, dividing income as

John Prado and Ayana Nicks formed a partnership, dividing income as follows: 1. Annual salary allowance to Prado, $10,000 and Nicks, $28,000. 2. Interest of 5% on each partner’s capital balance on Jan...

Q: Ya Wen Corporation’s accumulated depreciation—equipment account increased by $8

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...

Q: Craig Roberts purchased one-half of Ennis Leighton’s interest in the

Craig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book val...

Q: Zwilling Corporation’s comparative balance sheet for current assets and liabilities was as

Zwilling Corporation’s comparative balance sheet for current assets and liabilities was as follows: Adjust net income of $320,000 for changes in operating assets and liabilities to...

Q: Demarco Lee invested $60,000 in the Camden and Sayler

Demarco Lee invested $60,000 in the Camden and Sayler partnership for ownership equity of $60,000. Prior to the investment, equipment was revalued to a market value of $39,000 from a book value of $30...

Q: Huluduey Corporation’s comparative balance sheet for current assets and liabilities was as

Huluduey Corporation’s comparative balance sheet for current assets and liabilities was as follows: Adjust net income of $160,000 for changes in operating assets and liabilities to...

Q: The comparative financial statements of Marshall Inc. are as follows.

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2. Instructions Determine the following measures for 20Y...

Q: Addai Company has provided the following comparative information: /

Addai Company has provided the following comparative information: You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have re...

Q: Lia Chen and Martin Monroe formed a partnership, dividing income as

Lia Chen and Martin Monroe formed a partnership, dividing income as follows: 1. Annual salary allowance to Chen of $35,000. 2. Interest of 4% on each partner’s capital balance on January 1. 3. Any rem...

Q: Financial statement data for the years ended December 31 for Dovetail Corporation

Financial statement data for the years ended December 31 for Dovetail Corporation follow: a. Determine the earnings per share for 20Y3 and 20Y2. b. Does the change in the earnings per share from 20Y...

Q: a. What accounts are debited and credited to record a partner’s

a. What accounts are debited and credited to record a partner’s cash withdrawal in lieu of salary? b. The articles of partnership provide for a salary allowance of $6,000 per month to partner C. If C...

Q: The partnership of Angel Investor Associates began operations on January 1,

The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton ……………………………….. $180,000 Ben Testerman ………………………………….....

Q: Lane Stevens is to retire from the partnership of Stevens and Associates

Lane Stevens is to retire from the partnership of Stevens and Associates as of March 31, the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as fol...

Q: The statement of members’ equity for Bonanza, LLC, follows:

The statement of members’ equity for Bonanza, LLC, follows: a. What was the income-sharing ratio in 20Y3? b. What was the income-sharing ratio in 20Y4? c. How much cash did Thomas...

Q: Lewis, Zapata, and Fowler share equally in net income and

Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the...

Q: Bray, Lincoln, and Mapes arranged to import and sell orchid

Bray, Lincoln, and Mapes arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the venture. Bray and Lincoln advanced $225 and...

Q: After closing the accounts on July 1, prior to liquidating the

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, noncash assets...

Q: The capital accounts of Angel Alvarez and Emma Allison have balances of

The capital accounts of Angel Alvarez and Emma Allison have balances of $47,000 and $73,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Alvarez invested an additi...

Q: Tyler Hawes and Piper Albright formed a partnership, investing $210

Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation in the year’s net income of $290,000 under each of the following indepe...

Q: Using each of the five assumptions as to income division listed in

Using each of the five assumptions as to income division listed in Exercise 12-3, determine the income participation of Hawes and Albright if the year’s net income is $104,000. In Exercise 12-3 Tyler...

Q: Martin Farley and Ashley Clark formed a limited liability company with an

Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 to each member, respectively. In addition, the ope...

Q: Marvel Media, LLC, has three members: WLKT Partners,

Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $200,000, $40,000, and $160,000, respectively. WL...

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: Musa Moshref and Shaniqua Hollins have operated a successful firm for many

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the curre...

Q: On March 1, 20Y8, Eric Keene and Renee Wallace form

On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuat...

Q: Morrison and Greene have decided to form a partnership. They have

Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $150,000 and that Greene is to invest $50,000. Morrison is to devote one-half time to the business,...

Q: The ledger of Camila Ramirez and Ping Xue, attorneys-at

The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2: The balance in Xueâ€&#...

Q: Brian Caldwell and Adriana Estrada have operated a successful firm for many

Brian Caldwell and Adriana Estrada have operated a successful firm for many years, sharing net income and net losses equally. Kris Mays is to be admitted to the partnership on September 1 of the curre...

Q: On April 1, 20Y1, Whitney Lang and Eli Capri form

On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $18,000 cash and merchandise inventory valued at $50,000. Capri invests certain business assets at valuations agr...

Q: Dylan Howell and Demond Nickles have decided to form a partnership.

Dylan Howell and Demond Nickles have decided to form a partnership. They have agreed that Howell is to invest $50,000 and that Nickles is to invest $75,000. Howell is to devote full time to the busine...

Q: Lindsey Wilson has agreed to invest $200,000 into an

Lindsey Wilson has agreed to invest $200,000 into an LLC with Lacy Lovett and Justin Lassiter. Lovett and Lassiter will not invest any money but will provide effort and expertise to the LLC. Lovett an...

Q: Pacific Gas and Electric Company is a large gas and electric utility

Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as foll...

Q: Caterpillar Inc. and Deere & Company are two large companies that

Caterpillar Inc. and Deere & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the...

Q: O’Brien Industries Inc. is a book publisher. The comparative unclassified

O’Brien Industries Inc. is a book publisher. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 follow. Selected missing balances are shown by letters....

Q: Tommy Gunn is a division manager for K-Cern Inc.,

Tommy Gunn is a division manager for K-Cern Inc., a small pharmaceutical company. Tommy’s division has been working on a new drug that has the potential to revolutionize the treatment of skin cancer....

Q: In teams, select a public company that interests you. Obtain

In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchang...

Q: JED Capital Inc. makes investments in trading securities. Selected income

JED Capital Inc. makes investments in trading securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are a...

Q: Highland Industries Inc. makes investments in available-for-sale

Highland Industries Inc. makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative ba...

Q: During Year 1, its first year of operations, Galileo Company

During Year 1, its first year of operations, Galileo Company purchased two available-fors-ale investments as follows: Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value...

Q: During Year 2, Copernicus Corporation held a portfolio of available-

During Year 2, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $185,000. There were no purchases or sales of investments during the year. The market values at...

Q: On May 12, Year 1, Chewco Co. purchased 2

On May 12, Year 1, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On Decem...

Q: On December 31, Year 1, Valur Co. had the

On December 31, Year 1, Valur Co. had the following available-for-sale investment disclosure within the Current Assets section of the balance sheet: Available-for-sale investments (at cost) …………………………...

Q: At a total cost of $5,600,000,

At a total cost of $5,600,000, Herrera Corporation acquired 280,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this inves...

Q: On January 4, Year 1, Ferguson Company purchased 480,

On January 4, Year 1, Ferguson Company purchased 480,000 shares of Silva Company directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the D...

Q: Glacier Products Inc. is a wholesaler of rock climbing gear.

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which...

Q: Curwen Inc. reported net cash flow from operating activities of $

Curwen Inc. reported net cash flow from operating activities of $357,500 on its statement of cash flows for a recent year ended December 31. The following information was reported in the Cash flows fr...

Q: The following statement of cash flows for Shasta Inc. was not

The following statement of cash flows for Shasta Inc. was not correctly prepared: a. List the errors you find in the statement of cash flows. The cash balance at the beginning of the year was $240,0...

Q: Teasdale Inc. manufactures and sells commercial and residential security equipment.

Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 are provided below. Selected missing...

Q: The net income reported on the income statement for the current year

The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current l...

Q: The net income reported on the income statement for the current year

The net income reported on the income statement for the current year was $185,000. Depreciation recorded on equipment and a building amounted to $96,000 for the year. Balances of the current asset and...

Q: On the basis of the following stockholders’ equity accounts, indicate the

On the basis of the following stockholders’ equity accounts, indicate the items, exclusive of net income, to be reported on the statement of cash flows. There were no unpaid dividend...

Q: A company’s current year net income (after income tax) is

A company’s current year net income (after income tax) is 25% larger than that of the preceding year. Does this indicate improved operating performance? Why or why not?

Q: Dillip Lachgar is the president and majority shareholder of Argon Inc.,

Dillip Lachgar is the president and majority shareholder of Argon Inc., a small retail chain store. Recently, Dillip submitted a loan application for Argon Inc. to Compound Bank. It called for a $600,...

Q: Ralph Lauren Corporation sells apparel through company-owned retail stores.

Ralph Lauren Corporation sells apparel through company-owned retail stores. Recent financial information for Ralph Lauren follows (in thousands): Assume that the apparel industry average return on t...

Q: The following information was taken from the financial statements of Tolbert Inc

The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $20 par (no change during the year) ………………… $10,000,000 Pref...

Q: The net income reported on the income statement of Cutler Co.

The net income reported on the income statement of Cutler Co. was $4,000,000. There were 500,000 shares of $10 par common stock and 100,000 shares of $2 preferred stock outstanding throughout the curr...

Q: Explain whether Colston Company correctly reported the following items in the financial

Explain whether Colston Company correctly reported the following items in the financial statements: a. In a recent year, the company discovered a clerical error in the prior year’s accounting records....

Q: Revenue and expense data for the current calendar year for Tannenhill Company

Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electro...

Q: Income statement data for Winthrop Company for two recent years ended December

Income statement data for Winthrop Company for two recent years ended December 31 are as follows: a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decreas...

Q: For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign

For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign that included the expenditure of an additional $40,000 for advertising. At the end of the year, Leif Grando, the president, is pr...

Q: Lucas Hunter, president of Simmons Industries Inc., believes that reporting

Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the company’s just completed financial s...

Q: The comparative financial statements of Stargel Inc. are as follows.

The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Instructions Determine the following measures for 20Y...

Q: Crosby Company has provided the following comparative information: /

Crosby Company has provided the following comparative information: You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have r...

Q: For 20Y2, Macklin Inc. reported a significant increase in net

For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Instr...

Q: The financial statements for Nike, Inc., are presented in Appendix

The financial statements for Nike, Inc., are presented in Appendix D at the end of the text. Use the following additional information (in thousands): Accounts receivable at May 31, 2014 ……………………. $ 3,...

Q: Deere & Company manufactures and distributes farm and construction machinery that it

Deere & Company manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division...

Q: Marriott International, Inc., and Hyatt Hotels Corporation are two major

Marriott International, Inc., and Hyatt Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two...

Q: Forte Inc. produces and sells theater set designs and costumes.

Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a f...

Q: The following selected data were taken from the financial statements of Vidahill

The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: The 20Y7 net income was $411,000, and the 20Y6 net income was $462,500. N...

Q: The accounts of Cool River Service, Inc., at March 31

The accounts of Cool River Service, Inc., at March 31, 2012, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet...

Q: The accounts of Gleneagles Company prior to the year-end adjustments

The accounts of Gleneagles Company prior to the year-end adjustments follow. Adjusting data at the end of the year include the following: a. Unearned service revenue that has been earned, $1,650 b....

Q: Express Detail, Inc. provides mobile car washing and detailing to

Express Detail, Inc. provides mobile car washing and detailing to its customers. The Income Statement for the month ended January 31, 2012, the Balance Sheet for December 31, 2011, and details of post...

Q: Duracraft Corporation is nearing the end of its first year of operations

Duracraft Corporation is nearing the end of its first year of operations. Duracraft made inventory purchases of $745,000 during the year, as follows: Sales for the year are 5,000 units for $1,200,00...

Q: Chester’s Convenience Stores’ income statement for the year ended December 31,

Chester’s Convenience Stores’ income statement for the year ended December 31, 2011 and its balance sheet as of December 31, 2011 reported the following. The busi...

Q: The accounting records of J.L. Home Store show these

The accounting records of J.L. Home Store show these data (in millions). The shareholders are very happy with J.L.’s steady increase in net income. Auditors discovered that the endin...

Q: Eddie’s Convenience Stores’ income statement for the year ended December 31,

Eddie’s Convenience Stores’ income statement for the year ended December 31, 2011 and its balance sheet as of December 31, 2011 reported the following. The business...

Q: The accounting records of Columbia Furniture show these data (in millions

The accounting records of Columbia Furniture show these data (in millions). The shareholders are very happy with Columbia’s steady increase in net income. Auditors discovered that...

Q: For each of the following situations, identify the inventory method that

For each of the following situations, identify the inventory method that you would use; or, given the use of a particular method, state the strategy that you would follow to accomplish your goal: a. I...

Q: The net income of Solas Photography Company decreased sharply during 2012.

The net income of Solas Photography Company decreased sharply during 2012. Lisa Almond, owner of the company, anticipates the need for a bank loan in 2013. Late in 2012, Almond instructed Brad Lail, t...

Q: Refer to the consolidated financial statements of RadioShack Corporation in Appendix B

Refer to the consolidated financial statements of RadioShack Corporation in Appendix B. During 2010, the company had numerous accruals and deferrals. As a new member of RadioShack’s accounting staff ,...

Q: Tolbert Trumpet Company is nearing the end of its worst year ever

Tolbert Trumpet Company is nearing the end of its worst year ever. With two weeks until year-end, it appears that net income for the year will have decreased by 30% from last year. Jim Tolbert, the pr...

Q: Cova Corporation earned revenues of $40 million during 2013 and ended

Cova Corporation earned revenues of $40 million during 2013 and ended the year with net income of $6 million. During 2013, Cova collected $25 million from customers and paid cash for all of its expens...

Q: By the Bay Marine Supply reported the following comparative income statements for

By the Bay Marine Supply reported the following comparative income statements for the years ended June 30, 2012, and 2011: By the Bay’s president and shareholders are thrilled by t...

Q: Masters Consulting had the following selected transactions in July: Jul

Masters Consulting had the following selected transactions in July: Jul 1 Prepaid insurance for July through November, $2,000. 4 Purchased office furniture for cash, $1,000. 5 Performed services and r...

Q: The accounts of Mountain Lodge Service, Inc., at March 31

The accounts of Mountain Lodge Service, Inc., at March 31, 2012, are listed in alphabetical order. Requirements 1. All adjustments have been journalized and posted, but the closing entries have not...

Q: Cherokee Corporation earned revenues of $37 million during 2012 and ended

Cherokee Corporation earned revenues of $37 million during 2012 and ended the year with net income of $7 million. During 2012, Cherokee collected cash of $20 million from customers and paid cash for a...

Q: Healthy Hearts Consulting had the following selected transactions in December:

Healthy Hearts Consulting had the following selected transactions in December: Dec 1 Prepaid insurance for December through April, $3,500. 4 Purchased office furniture for cash, $900. 5 Performed serv...

Q: Determine whether each of the following actions in buying, selling,

Determine whether each of the following actions in buying, selling, and accounting for inventories is ethical or unethical. Give your reason for each answer. 1. In applying the lower-of-cost-or-market...

Q: Refer to the RadioShack Corporation consolidated financial statements in Appendix B at

Refer to the RadioShack Corporation consolidated financial statements in Appendix B at the end of this book. Show amounts in millions and round to the nearest $1 million. 1. Three important pieces of...

Q: Z Mart, Inc., declared bankruptcy. Let’s see why.

Z Mart, Inc., declared bankruptcy. Let’s see why. Z Mart reported these figures: Requirement Evaluate the trend of Z Mart’s results of operations during 2010 thro...

Q: Myrtle Bay Marine Supply reported the following comparative income statements for the

Myrtle Bay Marine Supply reported the following comparative income statements for the years ended June 30, 2012, and 2011: Myrtle Bay’s president and shareholders are thrilled by t...

Q: Macrovision.com uses the LIFO method to account for inventory.

Macrovision.com uses the LIFO method to account for inventory. Macrovision is having an unusually good year, with net income well above expectations. The company’s inventory costs are rising rapidly....

Q: During 2012, Valley Sales, Inc., earned revenues of $

During 2012, Valley Sales, Inc., earned revenues of $500,000 on account. Valley collected $510,000 from customers during the year. Expenses totaled $450,000, and the related cash payments were $410,00...

Q: An accountant made the following adjustments at December 31, the end

An accountant made the following adjustments at December 31, the end of the accounting period: a. Prepaid insurance, beginning, $300. Payments for insurance during the period, $900. Prepaid insurance,...

Q: Western Corporation made sales of $850 million during 2012. Of

Western Corporation made sales of $850 million during 2012. Of this amount, Western collected cash for all but $27 million. The company’s cost of goods sold was $290 million, and all other expenses fo...

Q: Prepare the closing entries from the following selected accounts from the records

Prepare the closing entries from the following selected accounts from the records of North Pole Corporation at December 31, 2012: How much net income did North Pole earn during 2012? Prepare a T-acc...

Q: On October 1, 2012, Lou Marks opened Eagle Restaurant,

On October 1, 2012, Lou Marks opened Eagle Restaurant, Inc. Marks is now at a crossroads. The October financial statements paint a glowing picture of the business, and Marks has asked you whether he s...

Q: Stanley Williams has owned and operated SW Advertising, Inc., since

Stanley Williams has owned and operated SW Advertising, Inc., since it began 10 years ago. Recently, Williams mentioned that he would consider selling the company for the right price. Assume that you...

Q: Sparrow Sporting Goods reported the following data at March 31, 2012

Sparrow Sporting Goods reported the following data at March 31, 2012, with amounts adapted in thousands: Sparrow Sporting Goods Company Income Statement For the Year Ended March 31, 2012 (Amounts in t...

Q: Refer to the Sparrow Sporting Goods Company data in Short Exercise 3

Refer to the Sparrow Sporting Goods Company data in Short Exercise 3-17. In Short Exercise 3-17 Sparrow Sporting Goods reported the following data at March 31, 2012, with amounts adapted in thousands...

Q: During 2012, Tundra Sales, Inc., earned revenues of $

During 2012, Tundra Sales, Inc., earned revenues of $530,000 on account. Tundra collected $540,000 from customers during the year. Expenses totaled $440,000, and the related cash payments were $420,00...

Q: An accountant made the following adjustments at December 31, the end

An accountant made the following adjustments at December 31, the end of the accounting period: a. Prepaid insurance, beginning, $400. Payments for insurance during the period, $1,200. Prepaid insuranc...

Q: Prepare the closing entries from the following selected accounts from the records

Prepare the closing entries from the following selected accounts from the records of North Shore Corporation at December 31, 2012: How much net income did North Shore earn during 2012? Prepare a T-a...

Q: Infografix Corporation’s consolidated sales for 2012 were $26.6 billion

Infografix Corporation’s consolidated sales for 2012 were $26.6 billion, and expenses totaled $24.8 billion. Infografix operates worldwide and conducts 37% of its business outside the United States. D...

Q: Target Corporation operates general merchandise and food discount stores in the United

Target Corporation operates general merchandise and food discount stores in the United States. The company reported the following information for the three years ending January 31, 2011: Requirement...

Q: Delaware Exchange Company completed the following long-term investment transactions during

Delaware Exchange Company completed the following long-term investment transactions during 2012: 2012 May 12 Purchased 28,000 shares, which make up 35% of the common stock of Brentwood Corporation at...

Q: The beginning balance sheet of Evita Corporation included the following:

The beginning balance sheet of Evita Corporation included the following: Long-Term Investment in Reading Software (equity-method investment)....... $611,000 Evita completed the following investment tr...

Q: Georgia Exchange Company completed the following long-term investment transactions during

Georgia Exchange Company completed the following long-term investment transactions during 2012: 2012 May 12 Purchased 21,000 shares, which make up 45% of the common stock of Portland Corporation at to...

Q: The beginning balance sheet of Moret Corporation included the following:

The beginning balance sheet of Moret Corporation included the following: Long-Term Investment in LPC Software (equity-method investment)............. $615,000 Moret completed the following investment...

Q: On January 4, 2012, G.L. Brown Co

On January 4, 2012, G.L. Brown Co. paid $235,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $1,100, $6,200 sales tax, and $37,200 for a special pla...

Q: Lily, Inc., sells electronics and appliances. The excerpts that

Lily, Inc., sells electronics and appliances. The excerpts that follow are adapted from Lily’s financial statements for 2012 and 2011. Requirements 1. How much was Lilyâ€...

Q: Suppose MyPlace owns the following investments at December 31, 2012:

Suppose MyPlace owns the following investments at December 31, 2012: a. 100% of the common stock of MyPlace United Kingdom, which holds assets of £600,000 and owes a total of £400,000. At December 31,...

Q: Cathy Talbert is the general manager of Barham Company, which provides

Cathy Talbert is the general manager of Barham Company, which provides data-management services for physicians in the Columbus, Ohio, area. Barham Company is having a rough year. Net income trails pro...

Q: McCloud Corporation owns equity-method investments in several companies. Suppose

McCloud Corporation owns equity-method investments in several companies. Suppose McCloud paid $1,800,000 to acquire a 40% investment in Simpson Software Company. Simpson Software reported net income o...

Q: Without making journal entries, record the transactions of Exercise 8-

Without making journal entries, record the transactions of Exercise 8-15A directly in the McCloud account, Long-Term Investment in Simpson Software. Assume that after all the noted transactions took p...

Q: Conroy Financial paid $510,000 for a 35% investment

Conroy Financial paid $510,000 for a 35% investment in the common stock of Timberwolf, Inc. For the first year, Timberwolf reported net income of $210,000 and at year-end declared and paid cash divide...

Q: During fiscal year 2012, Sprinkle Doughnuts reported a net income of

During fiscal year 2012, Sprinkle Doughnuts reported a net income of $134.9 million. Sprinkle received $1.3 million from the sale of other businesses. Sprinkle made capital expenditures of $10.1 milli...

Q: Media One owns 18% of the voting stock of Web Talk

Media One owns 18% of the voting stock of Web Talk, Inc. The remainder of the Web Talk stock is held by numerous investors with small holdings. Austin Cohen, president of Media One and a member of Web...

Q: Assume that on September 30, 2011, Grandair, the national

Assume that on September 30, 2011, Grandair, the national airline of Germany, purchased a Jumbo aircraft at a cost of €41,000,000 (€ is the symbol for the euro). Grandair expects the plane to remain u...

Q: Suppose on February 1, 2012, Western Motors paid $380

Suppose on February 1, 2012, Western Motors paid $380 million for a 35% investment in Phase Motors. Assume Phase earned net income of $40 million and paid cash dividends of $20 million during 2012. 1....

Q: Kohl’s Corporation operates family oriented department stores that sell moderately priced apparel

Kohl’s Corporation operates family oriented department stores that sell moderately priced apparel and housewares. The company reported the following information (adapted) for the thr...

Q: On January 7, 2012, J.B. Griffin Co

On January 7, 2012, J.B. Griffin Co. paid $240,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $1,400, $6,500 sales tax, and $29,100 for a special p...

Q: During 2012, Southeast Satellite Systems, Inc., purchased two other

During 2012, Southeast Satellite Systems, Inc., purchased two other companies for $15 million. Also during 2012, Southeast made capital expenditures of $8 million to expand its market share. During th...

Q: Use the data given in Short Exercise 8-3. Assume

Use the data given in Short Exercise 8-3. Assume that in November 2013, Western Motors sold half its investment in Phase Motors. The sale price was $130 million. Compute Western Motors’ gain or loss o...

Q: Excerpts from The XYZ Company statement of cash flows, as adapted

Excerpts from The XYZ Company statement of cash flows, as adapted, appear as follows: As the chief executive officer of The XYZ Company, your duty is to write the management letter to your stockhold...

Q: Avril, Inc., sells electronics and appliances. The excerpts that

Avril, Inc., sells electronics and appliances. The excerpts that follow are adapted from Avril’s financial statements for 2012 and 2011. Requirements 1. How much was Avrilâ&#...

Q: Kerusi, Inc., has a popular line of boogie boards.

Kerusi, Inc., has a popular line of boogie boards. Kerusi reported net income of $64 million for 2012. Depreciation expense for the year totaled $30 million. Kerusi, Inc., depreciates plant assets ove...

Q: Potter Corporation owns equity-method investments in several companies. Suppose

Potter Corporation owns equity-method investments in several companies. Suppose Potter paid $1,100,000 to acquire a 30% investment in Faulk Software Company. Faulk Software reported net income of $660...

Q: Without making journal entries, record the transactions of Exercise 8-

Without making journal entries, record the transactions of Exercise 8-26B directly in the Potter account, Long-Term Investment in Faulk Software. Assume that after all the noted transactions took plac...

Q: Wilcox Financial paid $530,000 for a 45% investment

Wilcox Financial paid $530,000 for a 45% investment in the common stock of Hornet, Inc. For the first year, Hornet reported net income of $240,000 and at year-end declared and paid cash dividends of $...

Q: During fiscal year 2012, Capitol Cupcakes reported a net income of

During fiscal year 2012, Capitol Cupcakes reported a net income of $132.4 million. Capitol received $1.4 million from the sale of other businesses. Capitol made capital expenditures of $10.5 million a...

Q: Dunder-Mifflin Inc. wanted to expand its manufacturing and sales

Dunder-Mifflin Inc. wanted to expand its manufacturing and sales facilities. The company applied for a loan from First Bank, presenting the prior-year audited financial statements and the forecast for...

Q: The following situations represent errors and frauds that could occur in financial

The following situations represent errors and frauds that could occur in financial statements. Required: State how the ratio in question would compare (higher, equal, or lower) to what the ratio shou...

Q: Horizontal analysis refers to changes of financial statement numbers and ratios across

Horizontal analysis refers to changes of financial statement numbers and ratios across two or more years. Vertical analysis refers to financial statement amounts expressed each year as proportions of...

Q: Mattel Inc., a manufacturer of toys, failed to write off

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...

Q: Follow the instructions preceding Problem 9.61. Write the audit

Follow the instructions preceding Problem 9.61. Write the audit approach section following the case in the chapter. SueCan Corporation manufactured electronic and other equipment for private customers...

Q: Aaron Rivers, CPA, is auditing the financial statements of Charger

Aaron Rivers, CPA, is auditing the financial statements of Charger Company, a client for the past five years. During past audits of Charger, Rivers identified some immaterial misstatements (most of wh...

Q: During the conduct of an audit, auditors may identify misstatements as

During the conduct of an audit, auditors may identify misstatements as a result of the completion of their substantive procedures. An important activity performed in the completion stages of the audit...

Q: Pat Colt is auditing the financial statements of Manning Company. The

Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected misstatements that Colt has identified during the past three years. These misstatements...

Q: Gustav Humphreys (chair of the board) and Ingrid VanEns (

Gustav Humphreys (chair of the board) and Ingrid VanEns (vice president, finance) prepared the draft of the financial review section of the annual report. You are reviewing it for consistency with the...

Q: Assume that the A division of Harrold Corporation experienced the following transactions

Assume that the A division of Harrold Corporation experienced the following transactions during the year ended December 31, 2013: a. Suppose division A supplied copy services for a customer for the di...

Q: Compute the missing amount (?) for each company—amounts in millions

Compute the missing amount (?) for each company—amounts in millions At the end of the year, which company has the ▶ Highest net income? ▶ Highes...

Q: The following data come from the financial statements of The Big Wave

The following data come from the financial statements of The Big Wave Company for the year ended May 31, 2013 (in millions): Requirements 1. Prepare a cash flow statement for the year ended May 31,...

Q: Assume that the A division of Truett Corporation experienced the following transactions

Assume that the A division of Truett Corporation experienced the following transactions during the year ended December 31, 2013: a. Suppose division A supplied copy services for a customer for the dis...

Q: Compute the missing amount (?) for each company—amounts in millions

Compute the missing amount (?) for each company—amounts in millions. Which company has the ▶ Highest net income? ▶ Highest percent of net income...

Q: The following data come from the financial statements of The Water Fun

The following data come from the financial statements of The Water Fun Company at the year ended May 31, 2013 (in millions). Requirements 1. Prepare a cash flow statement for the year ended May 31,...

Q: Most, Inc.’s comparative balance sheet at January 31,

Most, Inc.’s comparative balance sheet at January 31, 2013, and 2012, reports the following (in millions): Requirements: Three situations about Most’s issuance of...

Q: Glass, Inc., began 2012 with $83,000 in

Glass, Inc., began 2012 with $83,000 in cash. During 2012, Glass earned net income of $430,000, and adjustments to reconcile net income to net cash provided by operations totaled $75,000, a positive a...

Q: Assume the Dogan Copy Center ended the month of July 2012 with

Assume the Dogan Copy Center ended the month of July 2012 with these data: Requirement: Prepare the income statement and the statement of retained earnings of Dogan Copy Center, Inc., for the month...

Q: Swit, Inc.’s comparative balance sheet at January 31,

Swit, Inc.’s comparative balance sheet at January 31, 2013, and 2012, reports the following (in millions): Requirements: Three situations about Swit’s issuance of...

Q: Refer to the data inExercises 1-24A and 1-25A

Refer to the data inExercises 1-24A and 1-25A. In Exercises 1-24A and 1-25A Assume the Dogan Copy Center ended the month of July 2012 with these data: Requirement Prepare the statement of cash flow...

Q: A year out of college, you have $10,000

A year out of college, you have $10,000 to invest. A friend has started Grand Prize Unlimited, Inc., and she asks you to invest in her company. You obtain the company’s financial sta...

Q: All-Star Advertising creates, plans, and handles advertising needs

All-Star Advertising creates, plans, and handles advertising needs in the Tri-State area.Recently, All-Star had to replace an inexperienced office worker in charge of bookkeeping becauseof some seriou...

Q: Grace Rocker, an accountant for Dill Limited, discovers that her

Grace Rocker, an accountant for Dill Limited, discovers that her supervisor, Bob Doon, made several errors last year. Overall, the errors overstated the company’s net income by 20%. It is not clear wh...

Q: The trial balance of DormanSpecialties, Inc., follows.

The trial balance of DormanSpecialties, Inc., follows. Abby Ricardo, your best friend, is considering investing in Dorman Specialties, Inc. Abby seeksyour advice in interpreting this information. Sp...

Q: The trial balance of FamousSpecialties, Inc., follows:

The trial balance of FamousSpecialties, Inc., follows: Rachel Sill, your best friend, is considering making an investment in Famous Specialties, Inc.Rachel seeks your advice in interpreting the comp...

Q: Farmore Medical Service reported the following items (amounts in thousands):

Farmore Medical Service reported the following items (amounts in thousands): Requirements 1. Classify each item as (a) Income statement or balance sheet and as (b) Debit balance or credit balance. 2...

Q: The trial balance of Rectangle 120, Inc., at August 31

The trial balance of Rectangle 120, Inc., at August 31, 2012,does not balance. Requirements 1. How much out of balance is the trial balance? Determine the out-of-balance amount. Theerror lies in the...

Q: Under the allowance method for uncollectible receivables, the entry to record

Under the allowance method for uncollectible receivables, the entry to record uncollectible-accountexpense has what effect on the financial statements? a. Decreases owners’ equity and increases liabil...

Q: If Azores, Inc., fails to make an adjusting entry for

If Azores, Inc., fails to make an adjusting entry for the accrued interest, a. Net income will be understated and liabilities will be overstated. b. Net income will be understated and assets will be u...

Q: Assume Adams & Murray, theaccounting firm, advises Pappadeaux Seafood that

Assume Adams & Murray, theaccounting firm, advises Pappadeaux Seafood that its financial statements must be changed toconform to GAAP. At December 31, 2012, Pappadeaux’s accounts include the following...

Q: Assume Cline & Nichols, the accounting firm, advises Derbyshire Seafood

Assume Cline & Nichols, the accounting firm, advises Derbyshire Seafood that its financial statement must be changed to conform to GAAP. AtDecember 31, 2012, Derbyshire’s accounts include the followin...

Q: Retro Shirt Company sells on credit and manages its own receivables.

Retro Shirt Company sells on credit and manages its own receivables. Average experience for the past three years has been as follows: Jed Rivers, the owner, is considering whether to accept bankcard...

Q: Scrumptious Crumpets Bakery is budgeting cash for 2012. The cash balance

Scrumptious Crumpets Bakery is budgeting cash for 2012. The cash balance at December 31, 2011, was $14,000. Scrumptious Crumpets Bakery budgets 2012 cash receipts at $81,000. Estimated cash payments i...

Q: Sophia Loren opened anItalian restaurant. Business has been good, and

Sophia Loren opened anItalian restaurant. Business has been good, and Loren is considering expanding the restaurant.Loren, who knows little accounting, produced the following financial statements for...

Q: Refer to Amazon.com, Inc.’s financial statements in

Refer to Amazon.com, Inc.’s financial statements in Appendix A at the end of the book. Assume that Amazon.com completedthe following selected transactions during 2010. a. Made company sales (revenue)...

Q: Refer to the RadioShack Corporation financial statements in Appendix B at the

Refer to the RadioShack Corporation financial statements in Appendix B at the end of the book. Suppose you are an investor consideringbuying RadioShack Corporation common stock. The following question...

Q: A friend named Jay Barlow has asked what effect certain transactions will

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Q: Gale Communications, Inc., is preparing its cash budget for 2012

Gale Communications, Inc., is preparing its cash budget for 2012. Gale ended 2011 with cash of $85 million, and managers need to keep a cash balance of at least $78 million for operations. Collections...

Q: Donn Communications, Inc., is preparing its cash budget for 2012

Donn Communications, Inc., is preparing its cash budget for 2012. Donn ended 2011 with cash of $88 million, and managers need to keep a cash balance of at least $79 million for operations. Collections...

Q: Assume that Old Harborreported the following summarized data at December 31,

Assume that Old Harborreported the following summarized data at December 31, 2012. Accounts appear in no particularorder; dollar amounts are in millions. Prepare the trial balance of Old Harbor at D...

Q: Darlington, Inc.’s trial balance follows. /

Darlington, Inc.’s trial balance follows. Compute these amounts for the business: 1. Total assets 2. Total liabilities 3. Net income or net loss during December

Q: Accounting has its own vocabulary andbasic relationships. Match the accounting terms

Accounting has its own vocabulary andbasic relationships. Match the accounting terms at the left with the corresponding definition ormeaning at the right. ___ 1. Debit ___ 2. Expense ___ 3. Net income...

Q: Bob Morin opened a medical practice specializing in surgery. During the

Bob Morin opened a medical practice specializing in surgery. During the first month ofoperation (August), the business, titled Bob Morin, Professional Corporation (P.C.), experiencedthe following even...

Q: Refer to Exercise 2-23A. 1. After recording

Refer to Exercise 2-23A. 1. After recording the transactions in Exercise 2-23A, and assuming they all occurred in themonth of May 2012, prepare the trial balance of Lynn Dover, Attorney, at May 31, 20...

Q: Gary Smith opened a medical practice specializing in surgery. During the

Gary Smith opened a medical practice specializing in surgery. During the first month ofoperation (July), the business, titled Gary Smith, Professional Corporation (P.C.), experienced thefollowing even...

Q: Refer to Exercise 2-34B. In Exercise 2

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Q: Sunnyvale Loan Company is in the consumer loan business. Sunnyvale borrows

Sunnyvale Loan Company is in the consumer loan business. Sunnyvale borrows from banks and loans out the money at higher interest rates. Sunnyvale’s bank requires Sunnyvale to submit quarterly financia...

Q: Do U.S. GAAP and IFRS differ in the ability

Do U.S. GAAP and IFRS differ in the ability of a company to recognize in net income the recovery of impairment losses of accounts and notes receivable?

Q: Why isn’t accounting net income used in the net present value and

Why isn’t accounting net income used in the net present value and internal rate of return methods of making capital budgeting decisions?

Q: If an asset is sold at a gain, why is the

If an asset is sold at a gain, why is the gain deducted from net income when computing the net cash provided by operating activities under the indirect method?

Q: Which of the following evidence would not be considered positive in determining

Which of the following evidence would not be considered positive in determining whether Adams Corporation needs to record a valuation allowance for some or all of its deferred tax assets? a. The Compa...

Q: If a firm’s net income (profits before taxes) is $

If a firm’s net income (profits before taxes) is $120,000 and it has total assets of $1.5 million, what is its return on assets?

Q: During the current year, Marsha Engles withdrew $4,000

During the current year, Marsha Engles withdrew $4,000 monthly from the partnership of Engles and Cox Water Management Consultants. Is it possible that her share of partnership net income for the curr...

Q: A corporation with both preferred stock and common stock outstanding has a

A corporation with both preferred stock and common stock outstanding has a substantial credit balance in its retained earnings account at the beginning of the current fiscal year. Although net income...

Q: If the net income for the current year had been $196

If the net income for the current year had been $196,400 in Exercise 3-23, what would have been the correct net income if the proper adjusting entries had been made? In Exercise 3-23 The accountant f...

Q: A retail business, using the accrual method of accounting, owed

A retail business, using the accrual method of accounting, owed merchandise creditors (accounts payable) $320,000 at the beginning of the year and $350,000 at the end of the year. How would the $30,00...

Q: Indicate whether each of the following would be added to or deducted

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...

Q: For the year ending August 31, Mammalia Medical Co. mistakenly

For the year ending August 31, Mammalia Medical Co. mistakenly omitted adjusting entries for (1) Depreciation of $5,800, (2) Fees earned that were not billed of $44,500, and (3) Accrued wages of $7,30...

Q: The income statement of a proprietorship for the month of February indicates

The income statement of a proprietorship for the month of February indicates a net income of $17,500. During the same period, the owner withdrew $25,500 in cash from the business for personal use. Wou...

Q: Does every adjusting entry affect net income for a period? Explain

Does every adjusting entry affect net income for a period? Explain.

Q: Operating cash flows rather than accounting income are listed in Table 12

Operating cash flows rather than accounting income are listed in Table 12-1. Why do we focus on cash flows as opposed to net income in capital budgeting?

Q: Little Books Inc. recently reported $3 million of net income

Little Books Inc. recently reported $3 million of net income. Its EBIT was $6 million, and its tax rate was 40%. What was its interest expense? [Hint: Write out the headings for an income statement an...

Q: INCOME STATEMENT Pearson Brothers recently reported an EBITDA of $7.

INCOME STATEMENT Pearson Brothers recently reported an EBITDA of $7.5 million and net income of $1.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its...

Q: In its most recent financial statements, Newhouse Inc. reported $

In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends...

Q: Axel Telecommunications has a target capital structure that consists of 70%

Axel Telecommunications has a target capital structure that consists of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel repor...

Q: Using the earliest year available as the base year, the trend

Using the earliest year available as the base year, the trend percentage for Buffalo Bell’s net revenue during 2012 was a. 121%. b. Up by 21.1% c. 137%. d. Up by $11,555 million....

Q: At December 31, 2000, Enron Corporation reported the following data

At December 31, 2000, Enron Corporation reported the following data (condensed in millions): Total assets ................................................... $65,503 Total liabilities ...................

Q: Aqua Sport’s net income for the period is $119,300

Aqua Sport’s net income for the period is $119,300 and beginning common stockholders’ equity is $681,200. Calculate Aqua Sport’s return on common...

Q: Buffalo Bell’s common-size income statement for 2012 would report cost

Buffalo Bell’s common-size income statement for 2012 would report cost of goods sold as a. 137.9%. b. $35,147 million. c. Up by 20.1%. d. 82.4%.

Q: Buffalo Bell’s days’ sales in average receivables during 2012 was a

Buffalo Bell’s days’ sales in average receivables during 2012 was a. 137.9 days. b. 20.1 days. c. 35 days. d. 25 days.

Q: Blue Company’s net income and net sales are $38,000

Blue Company’s net income and net sales are $38,000 and $900,000, respectively, and average total assets are $250,000. What is Blue’s return on assets? a. 15.2% b. 27.8% c. 17.2% d. 4.2%

Q: The stockholders’ equity of All-Star Uniforms as of December 31

The stockholders’ equity of All-Star Uniforms as of December 31, 2012 and 2011 follows: Requirements 1. What is the par value of the common stock? 2. How many shares of common stoc...

Q: Business is going well for Park ‘N Fly, the company

Business is going well for Park ‘N Fly, the company that operates remote parking lots near major airports. The board of directors of this family-owned company believes that Park ‘N Fly could earn an a...

Q: Failure to accrue interest expense results in a. An overstatement

Failure to accrue interest expense results in a. An overstatement of net income and an understatement of liabilities. b. An understatement of net income and an overstatement of liabilities. c. An over...

Q: Mega Planes Warehouse operates in a state with a 6.5

Mega Planes Warehouse operates in a state with a 6.5% sales tax. For convenience, Mega Planes Warehouse credits Sales Revenue for the total amount (selling price plus sales tax) collected from each cu...

Q: Buffalo Bell’s inventory turnover during fiscal year 2012 was a.

Buffalo Bell’s inventory turnover during fiscal year 2012 was a. $35,147. b. Very slow. c. 83 times. d. 137.9 times.

Q: Buffalo Bell’s long-term debt bears interest at 11%. During

Buffalo Bell’s long-term debt bears interest at 11%. During the year ended December 31, 2012, Bell’s times-interest-earned ratio was a. 137.9 times. b. $35,147. c....

Q: Buffalo Bell’s trend of return on sales is a. Worrisome

Buffalo Bell’s trend of return on sales is a. Worrisome. b. Declining. c. Stuck at 22.1%. d. Improving.

Q: Wavetown Marina needs to raise $1 million to expand the company

Wavetown Marina needs to raise $1 million to expand the company. Wavetown Marina is considering the issuance of either ▶ $1,000,000 of 7% bonds payable to borrow the money, or ▶ 100,000 shares of comm...

Q: How many shares of common stock did Buffalo Bell have outstanding,

How many shares of common stock did Buffalo Bell have outstanding, on average, during 2012? a. 1,880 million b. 137.9 million c. 20.1 million d. 35,147 million

Q: Book value per share of Buffalo Bell’s common stock outstanding at December

Book value per share of Buffalo Bell’s common stock outstanding at December 31, 2012, was a. 137.9. b. $35,147. c. $2.99. d. 20.1.

Q: Companies that operate in different industries may have very different financial ratio

Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare t...

Q: Prime Nation Financial Services is considering two plans for raising $600

Prime Nation Financial Services is considering two plans for raising $600,000 to expand operations. Plan A is to borrow at 6%, and plan B is to issue 125,000 shares of common stock at $4.80 per share....

Q: An incomplete comparative income statement and balance sheet for Amherst Corporation follow

An incomplete comparative income statement and balance sheet for Amherst Corporation follow: Requirement Using the ratios, common-size percentages, and trend percentages given, complete the income s...

Q: Companies that operate in different industries may have very different financial ratio

Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare t...

Q: United Nation Financial Services is considering two plans for raising $900

United Nation Financial Services is considering two plans for raising $900,000 to expand operations. Plan A is to borrow at 10%, and plan B is to issue 250,000 shares of common stock at $3.60 per shar...

Q: Applied Technology, Inc., and Four-Star Catering are asking

Applied Technology, Inc., and Four-Star Catering are asking you to recommend their stock to your clients. Because Applied and Four-Star earn about the same net income and have similar financial positi...

Q: Columbia Motors is having a bad year. Net income is only

Columbia Motors is having a bad year. Net income is only $37,000. Also, two important overseas customers are falling behind in their payments to Columbia, and Columbia’s accounts receivable are balloo...

Q: On an indirect method statement of cash flows, a gain on

On an indirect method statement of cash flows, a gain on the sale of plant assets would be a. Reported in the investing activities section. b. Ignored, since the gain did not generate any cash. c. Ded...

Q: iLife, Inc., was set to report the following statement of

iLife, Inc., was set to report the following statement of retained earnings for the year ended December 31, 2012: iLife, Inc. Statement of Retained Earnings Year Ended December 31, 2012 Retained earni...

Q: Use the statement of stockholders’ equity to answer the following questions about

Use the statement of stockholders’ equity to answer the following questions about Osborn Electronics Corporation: 1. How much cash did the issuance of common stock bring in during...

Q: During 2012, Resource, Inc., had sales of $7

During 2012, Resource, Inc., had sales of $7.16 billion, operating profi t of $2.70 billion, and net income of $3.70 billion. EPS was $4.50. On June 9, 2013, one share of Resource’s common stock was p...

Q: Palace Loan Company’s balance sheet reports the following: Preferred stock

Palace Loan Company’s balance sheet reports the following: Preferred stock, $20 par value, 2%, 11,000 shares issued ............ $ 220,000 Common stock, $2.50 par, 1,100,000 shares issued................

Q: Clean, Inc., a household products chain, reported a prior

Clean, Inc., a household products chain, reported a prior-period adjustment in 2012. An accounting error caused net income of 2011 to be understated by $15 million. Retained earnings at December 31, 2...

Q: At December 31, 2012, Mendonca Mall, Inc., reported

At December 31, 2012, Mendonca Mall, Inc., reported stockholders’ equity as follows: Common stock, $0.50 par, 500,000 shares authorized, 350,000 shares issued......... $ 175,000 Additional paid-in cap...

Q: During 2012, Beta, Inc., had sales of $6

During 2012, Beta, Inc., had sales of $6.86 billion, operating profit of $2.20 billion, and net income of $3.40 billion. EPS was $4.80. On May 11, 2013, one share of Beta’s common stock was priced at...

Q: Hampton Loan Company’s balance sheet reports the following: Preferred stock

Hampton Loan Company’s balance sheet reports the following: Preferred stock, $80 par value, 8%, 11,000 shares issued ............ $ 880,000 Common stock, $2.50 par, 1,500,000 shares issued...............

Q: Dwelling, Inc., a household products chain, reported a prior

Dwelling, Inc., a household products chain, reported a prior-period adjustment in 2012. An accounting error caused net income of 2011 to be overstated by $16 million. Retained earnings at December 31,...

Q: At December 31, 2012, Rondeau Mall, Inc., reported

At December 31, 2012, Rondeau Mall, Inc., reported stockholders’ equity as follows: Common stock, $1.50 par, 700,000 shares authorized, 310,000 shares issued............ $ 465,000 Additional paid-in c...

Q: How many items enter the computation of Solomon’s net cash provided by

How many items enter the computation of Solomon’s net cash provided by operating activities? a. 2 b. 5 c. 3 d. 7 Solomon Corporation formats operating cash flows by the indirect met...

Q: Examine the statement of cash flows of Mirror, Inc.

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...

Q: Top managers of Harmony Inns are reviewing company performance for 2012.

Top managers of Harmony Inns are reviewing company performance for 2012. The income statement reports a 20% increase in net income over 2011. However, most of the increase resulted from a gain on insu...

Q: Incredible America Transportation (IAT) began 2012 with accounts receivable,

Incredible America Transportation (IAT) began 2012 with accounts receivable, inventory, and prepaid expenses totaling $48,000. At the end of the year, IAT had a total of $49,000 for these current asse...

Q: Smith Clinic, Inc., is preparing its statement of cash flows

Smith Clinic, Inc., is preparing its statement of cash flows (indirect method) for the year ended March 31, 2012. Consider the following items in preparing the company’s statement of cash flows. Ident...

Q: How do Solomon’s accrued liabilities affect the company’s statement of cash flows

How do Solomon’s accrued liabilities affect the company’s statement of cash flows for 2012? a. Increase in cash provided by operating activities b. They donâ&...

Q: The financial statements of Ridgeview Employment Services, Inc., reported the

The financial statements of Ridgeview Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholdersâ...

Q: The accounting records of Michigan Fur Traders include these accounts:

The accounting records of Michigan Fur Traders include these accounts:

Q: Consider three independent cases for the cash flows of Building Blocks Corp

Consider three independent cases for the cash flows of Building Blocks Corp. For each case, identify from the statement of cash flows how Building Blocks Corp. generated the cash to acquire new plant...

Q: Compute the following items for the statement of cash flows:

Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $99,000 and $92,000, respectively. Depreciation for the period was $11,000, and purchases of...

Q: How do accounts receivable affect Solomon’s cash flows from operating activities for

How do accounts receivable affect Solomon’s cash flows from operating activities for 2012? a. Decrease in cash provided by operating activities b. Increase in cash provided by operat...

Q: The accounting records of Ashby Fur Traders include these accounts:

The accounting records of Ashby Fur Traders include these accounts: Requirement Compute Ashby’s net cash provided by (used for) operating activities during August. Use the indirect...

Q: The income statement and additional data of Breen Travel Products, Inc

The income statement and additional data of Breen Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $200,000. Of this amount, $160,000 was paid in cash and $40,000 b...

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

Consider three independent cases for the cash flows of Texas Tires Corp. For each case, identify from the statement of cash flows how Texas Tires Corp. generated the cash to acquire new plant assets....

Q: Solomon’s net cash provided by operating activities during 2012 was a

Solomon’s net cash provided by operating activities during 2012 was a. $41,000. b. $47,000. c. $38,000. d. $44,000. Solomon Corporation formats operating cash flows by the indirect...

Q: Compute the following items for the statement of cash flows:

Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $125,000 and $115,000, respectively. Depreciation for the period was $19,000, and purchases...

Q: The 2012 income statement and the 2012 comparative balance sheet of T

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: Craft, Inc., and Kleen Corporation are competitors. Compare the

Craft, Inc., and Kleen Corporation are competitors. Compare the two companies by converting their condensed income statements to common size. Which company earned more net income? Which company&acir...

Q: Use the Allstott 2012 income statement that follows and the balance sheet

Use the Allstott 2012 income statement that follows and the balance sheet from Short Exercise 13-6 to compute the following: a. Allstott’s rate of inventory turnover and days inve...

Q: How many items enter the computation of Solomon’s net cash flow from

How many items enter the computation of Solomon’s net cash flow from investing activities for 2012? a. 5 b. 3 c. 2 d. 7 Solomon Corporation formats operating cash flows by the indir...

Q: Use the financial statements of Allstott, Inc., in Short Exercises

Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7. 1. Compute the company’s debt ratio at December 31, 2012. 2. Compute the company’s...

Q: Use the financial statements of Allstott, Inc., in Short Exercises

Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7 to compute these profitability measures for 2012. Show each computation. a. Rate of return on sales b. Asset turnover c...

Q: The annual report of Feeney Cars, Inc., for the year

The annual report of Feeney Cars, Inc., for the year ended December 31, 2012, included the following items (in millions): Preferred stock outstanding, 3% ........................................ $700...

Q: Take the role of an investment analyst at Cole Binder. It

Take the role of an investment analyst at Cole Binder. It is your job to recommend investments for your client. The only information you have is the following ratio values for two companies in the gra...

Q: Compute economic value added (EVA®) for Lazeren Software. The

Compute economic value added (EVA®) for Lazeren Software. The company’s cost of capital is 3%. Net income was $755 thousand, interest expense $401 thousand, beginning long-term debt $620 thousand, and...

Q: Prepare a horizontal analysis of the comparative income statements of McMahon Music

Prepare a horizontal analysis of the comparative income statements of McMahon Music Co. Round percentage changes to the nearest one-tenth percent (three decimal places).

Q: Compute trend percentages for Peak Valley Sales & Service’s total revenue and

Compute trend percentages for Peak Valley Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest f...

Q: The book value of equipment sold during 2012 was $20,

The book value of equipment sold during 2012 was $20,000. Solomon’s net cash flow from investing activities for 2012 was a. Net cash used of $38,000. b. Net cash used of $47,000. c....

Q: Greenwood Corporation earned net income of $85,000 during the

Greenwood Corporation earned net income of $85,000 during the year ended December 31, 2012. On December 15, Greenwood declared the annual cash dividend on its 8% preferred stock (20,000 shares with to...

Q: Prepare a comparative common-size income statement for McMahon Music Co

Prepare a comparative common-size income statement for McMahon Music Co., using the 2012 and 2011 data of Exercise 13-16A and rounding to four decimal places. Data in Exercise 13-16A

Q: Identify any weaknesses revealed by the statement of cash flows of New

Identify any weaknesses revealed by the statement of cash flows of New York Apple Farms, Inc.

Q: Modern Brands recently completed a large debt refinancing. A debt refinancing

Modern Brands recently completed a large debt refinancing. A debt refinancing occurs when a company issues new bonds payable to retire old bonds. The company debits the old bonds payable and credits t...

Q: How many items enter the computation of Solomon’s net cash flow from

How many items enter the computation of Solomon’s net cash flow from financing activities for 2012? a. 3 b. 7 c. 2 d. 5 Solomon Corporation formats operating cash flows by the indir...

Q: Compute trend percentages for Maple Valley Sales & Service’s total revenue and

Compute trend percentages for Maple Valley Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest...

Q: Identify any weaknesses revealed by the statement of cash flows of Florida

Identify any weaknesses revealed by the statement of cash flows of Florida Oranges, Inc.

Q: Solomon’s largest financing cash flow for 2012 resulted from (Assume no

Solomon’s largest financing cash flow for 2012 resulted from (Assume no stock dividends were distributed.) a. Sale of equipment. b. Purchase of equipment. c. Payment of dividends. d....

Q: Witkum, Inc., reported the following sales and net income amounts

Witkum, Inc., reported the following sales and net income amounts: Show Witkum’s trend percentages for sales and net income. Use 2009 as the base year.

Q: Top managers of O’Hare Products, Inc., have asked for your

Top managers of O’Hare Products, Inc., have asked for your help in comparing the company’s profit performance and financial position with the average for the indust...

Q: You are evaluating two companies as possible investments. The two companies

You are evaluating two companies as possible investments. The two companies, which are similar in size, are commuter airlines that fly passengers up and down the West Coast. All other available inform...

Q: Comparative financial statement data of Hamden Optical Mart follow:

Comparative financial statement data of Hamden Optical Mart follow: Other information: 1. Market price of Hamden common stock: $102.17 at December 31, 2012, and $77.01 at December 31, 2011 2. Common...

Q: Top managers of Gilligan Products, Inc., have asked for your

Top managers of Gilligan Products, Inc., have asked for your help in comparing the company’s profit performance and financial position with the average for the industry. The accounta...

Q: You are evaluating two companies as possible investments. The two companies

You are evaluating two companies as possible investments. The two companies, which are similar in size, are commuter airlines that fl y passengers up and down the West Coast. All other available infor...

Q: Solomon’s net cash flow from financing activities for 2012 was (Assume

Solomon’s net cash flow from financing activities for 2012 was (Assume no stock dividends were distributed.) a. Net cash used of $25,500. b. Net cash provided of $12,000. c. Net cash...

Q: Comparative financial statement data of Panfield Optical Mart follow:

Comparative financial statement data of Panfield Optical Mart follow: Other information: 1. Market price of Panfield common stock: $94.38 at December 31, 2012, and $85.67 at December 31, 2011 2. Com...

Q: Assume that you are considering purchasing stock as an investment. You

Assume that you are considering purchasing stock as an investment. You have narrowed the choice to Topline.com and E-shop Stores and have assembled the following data. Selected income statement data f...

Q: Use the Summer Time Supply Corp. data from Problem 12-

Use the Summer Time Supply Corp. data from Problem 12-62A. Data in Problem 12-62A The 2012 and 2011 comparative balance sheets and 2012 income statement of Summer Time Supply Corp. follow: Requirem...

Q: Suppose you manage Outward Bound, Inc., a Vermont sporting goods

Suppose you manage Outward Bound, Inc., a Vermont sporting goods store that lost money during the past year. To turn the business around, you must analyze the company and industry data for the current...

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

Galvin Software Corp. has assembled the following data for the year ended December 31, 2012: Requirement Prepare Galvin Software Corp.’s statement of cash flows using the indirect...

Q: Use the Perfect Supply Corp. data from Problem P12-71B

Use the Perfect Supply Corp. data from Problem P12-71B. Data in Problem P12-71B The 2012 and 2011 comparative balance sheets and 2012 income statement of Perfect Supply Corp. follow: Requirements...

Q: POLA Corporation’s 2012 financial statements reported the following items, with 2011

POLA Corporation’s 2012 financial statements reported the following items, with 2011 figures given for comparison (adapted and in millions). Use the DuPont model to compute POLA&ac...

Q: Rodeo Drive, Inc., reported the following in its financial statements

Rodeo Drive, Inc., reported the following in its financial statements for the year ended May 31, 2012 (in thousands): Requirement 1. Determine the following cash receipts and payments for Rodeo Driv...

Q: Leslie’s Lotion Company reports several earnings numbers on its current-year

Leslie’s Lotion Company reports several earnings numbers on its current-year income statement (parentheses indicate a loss): How much net income would most investment analysts pred...

Q: Buffalo Bell’s current ratio at year end 2012 is closest to

Buffalo Bell’s current ratio at year end 2012 is closest to a. $1,420. b. 0.9. c. 22.1. d. 1.2.

Q: Copycat Corporation has income before income tax of $110,000

Copycat Corporation has income before income tax of $110,000 and taxable income of $100,000. The income tax rate is 30%. Copycat’s income statement will report net income of a. $30,000. b. $33,000. c....

Q: Examine the statement of stockholders’ equity of Wellington Electronics Corporation. What

Examine the statement of stockholders’ equity of Wellington Electronics Corporation. What was the market value of each share of the stock that Wellington gave its stockholders in the...

Q: During 2012, Granite Corporation earned net income of $5.

During 2012, Granite Corporation earned net income of $5.1 billion and paid off $2.9 billion of long-term notes payable. Granite raised $1.6 billion by issuing common stock, paid $3.9 billion to purch...

Q: Buffalo Bell’s quick (acid-test) ratio at year-

Buffalo Bell’s quick (acid-test) ratio at year-end 2012 is closest to a. 0.75. b. $8,578 million. c. 0.45. d. 0.68.

Q: John Holland, accountant for Sunny Pie Foods, was injured in

John Holland, accountant for Sunny Pie Foods, was injured in an auto accident. While he was recuperating, another inexperienced employee prepared the following income statement for the fiscal year end...

Q: Fabulous Food Specialties, Inc., reported the following statement of stockholders’

Fabulous Food Specialties, Inc., reported the following statement of stockholders’ equity for the year ended October 31, 2012: Requirements Answer these questions about Fabulous Fo...

Q: What is the largest single item included in Buffalo Bell’s debt ratio

What is the largest single item included in Buffalo Bell’s debt ratio at December 31, 2012? a. Cash and cash equivalents b. Common Stock c. Accounts payable d. Investments

Q: Jackson Hallstead, accountant for Confection Pies, was injured in an

Jackson Hallstead, accountant for Confection Pies, was injured in an auto accident. While he was recuperating, another inexperienced employee prepared the following income statement for the fiscal yea...

Q: Fall River Specialties, Inc., reported the following statement of stockholders’

Fall River Specialties, Inc., reported the following statement of stockholders’ equity for the year ended October 31, 2012: Requirements Answer these questions about Fall River Spe...

Q: Aerostar, Inc., operates as a retailer of casual apparel.

Aerostar, Inc., operates as a retailer of casual apparel. A recent, condensed income statement for Aerostar follows: Requirements 1. Assume that the following transactions were inadvertently omitted...

Q: Excursion Publishing was recently organized. The company issued common stock to

Excursion Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $20,000 to help organize the corporation. Excursion also issued common sto...

Q: Omicron Products Company reported the following stockholders’ equity on its balance sheet

Omicron Products Company reported the following stockholders’ equity on its balance sheet: Requirements 1. What caused Omicron’s preferred stock to decrease durin...

Q: Lofty Inns reported these figures for 2013 and 2012 (in millions

Lofty Inns reported these figures for 2013 and 2012 (in millions): Requirements 1. Use DuPont analysis to compute Lofty’s return on assets and return on common stockholdersâ&...

Q: Time Travel Publishing was recently organized. The company issued common stock

Time Travel Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $25,000 to help organize the corporation. Time Travel also issued common...

Q: In 2002, Enron Corporation fi led for Chapter 11 bankruptcy protection

In 2002, Enron Corporation fi led for Chapter 11 bankruptcy protection, shocking the business community: How could a company this large and this successful go bankrupt? This case explores the causes a...

Q: Zeta Products Company reported the following stockholders’ equity on its balance sheet

Zeta Products Company reported the following stockholders’ equity on its balance sheet: Requirements 1. What caused Zeta’s preferred stock to decrease during 2013...

Q: Lexington Inns reported these figures for 2013 and 2012 (in millions

Lexington Inns reported these figures for 2013 and 2012 (in millions): Requirements 1. Use DuPont analysis to compute Lexington’s return on assets and return on common stockholders...

Q: Doorman Corp. has the following stockholders’ equity information: Doorman’s

Doorman Corp. has the following stockholders’ equity information: Doorman’s charter authorizes the company to issue 7,000 shares of 10% preferred stock with par value of $140 and 750,000 shares of no-...

Q: Fresh Produce Foods, Inc., is authorized to issue 3,

Fresh Produce Foods, Inc., is authorized to issue 3,750,000 shares of $5.00 par common stock. In its initial public offering during 2012, Fresh Produce issued 360,000 shares of its $5.00 par common st...

Q: Paris Jewelry Company reported the following summarized balance sheet at December 31

Paris Jewelry Company reported the following summarized balance sheet at December 31, 2012: Assets Current assets................................................................................. $ 33,...

Q: Callman Corp. has the following stockholders’ equity information: Callman’s

Callman Corp. has the following stockholders’ equity information: Callman’s charter authorizes the company to issue 10,000 shares of 6% preferred stock with par value of $90 and 750,000 shares of no-p...

Q: Healthy Living Foods, Inc., is authorized to issue 4,

Healthy Living Foods, Inc., is authorized to issue 4,250,000 shares of $1.00 par common stock. In its initial public offering during 2012, Healthy Living issued 390,000 shares of its $1.00 par common...

Q: Madrid Jewelry Company reported the following summarized balance sheet at December 31

Madrid Jewelry Company reported the following summarized balance sheet at December 31, 2012: Assets Current assets.........................................................................................

Q: I-9 Networking Solutions began operations on January 1, 2012

I-9 Networking Solutions began operations on January 1, 2012, and immediately issued its stock, receiving cash. I-9’s balance sheet at December 31, 2012, reported the following stock...

Q: Orbit Corporation reported the following stockholders’ equity data (all dollars in

Orbit Corporation reported the following stockholders’ equity data (all dollars in millions except par value per share): Orbit earned net income of $2,920 during 2012. For each acc...

Q: Smiley Site, Inc., ended 2012 with 10 million shares of

Smiley Site, Inc., ended 2012 with 10 million shares of $1 par common stock issued and outstanding. Beginning additional paid-in capital was $9 million, and retained earnings totaled $44 million. &aci...

Q: Nate Smith and Darla Jones have written a computer program for a

Nate Smith and Darla Jones have written a computer program for a video game that may rival PlayStation and Xbox. They need additional capital to market the product, and they plan to incorporate their...

Q: On an indirect method statement of cash flows, an increase in

On an indirect method statement of cash flows, an increase in accounts payable would be a. Added to net income in the operating activities section. b. Reported in the financing activities section. c....

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

Study the 2012 income statement of Original Imports, Inc., and answer these questions about the company: 1. How much gross profi t did Original earn on the sale of its products in 2012? How much was...

Q: For fiscal year 2012, Mango Computer, Inc., reported net

For fiscal year 2012, Mango Computer, Inc., reported net sales of $19,323 million, net income of $1,997 million, and no significant discontinued operations, extraordinary items, or accounting changes....

Q: Jamison Cruise Lines, Inc., reported the following income statement for

Jamison Cruise Lines, Inc., reported the following income statement for the year ended December 31, 2012: _____________________________________Millions Operating revenues ................................

Q: Use the Amazing Way data in Short Exercise S11-3.

Use the Amazing Way data in Short Exercise S11-3. In addition, Amazing Way had unrealized gains of $1,100 on investments and a $2,400 foreign-currency translation adjustment (a gain) during 2012. Both...

Q: The difficult part of solving a problem of this nature is to

The difficult part of solving a problem of this nature is to know what to do with the information contained within a story problem. Therefore, this problem will be easier to complete if you rely on Ch...

Q: On January 1, 2016, Halstead, Inc., purchased 75

On January 1, 2016, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,480,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Se...

Q: Belden, Inc. acquires 30 percent of the outstanding voting shares

Belden, Inc. acquires 30 percent of the outstanding voting shares of Sheffield, Inc. on January 1, 2017, for $312,000, which gives Belden the ability to significantly influence Sheffield. Sheffield ha...

Q: Harper, Inc. acquires 40 percent of the outstanding voting stock

Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $210,000 in cash. The book value of Kinman’s net assets on that date was $400,000, although o...

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 January 1, 2017, Fisher Corporation purchased 40 percent (

On January 1, 2017, Fisher Corporation purchased 40 percent (80,000 shares) of the common stock of Bowden, Inc., for $982,000 in cash and began to use the equity method for the investment. The price p...

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, Puckett Company paid $1.6 million

On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison’s voting common stock, which represents a 40 percent investment. No allocation to goodwill or other specific account was m...

Q: In January 2017, Domingo, Inc., acquired 20 percent of

In January 2017, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for $700,000. This investment gave Domingo the ability to exercise significant influence over Marte...

Q: Franklin purchases 40 percent of Johnson Company on January 1 for $

Franklin purchases 40 percent of Johnson Company on January 1 for $500,000. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson’s ope...

Q: Evan Company reports net income of $140,000 each year

Evan Company reports net income of $140,000 each year and declares an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2017. On that date, Shalina purchases 40...

Q: Alex, Inc., buys 40 percent of Steinbart Company on January

Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2017, for $530,000. The equity method of accounting is to be used. Steinbart’s net assets on that date were $1.2 millio...

Q: On January 3, 2018, Matteson Corporation acquired 40 percent of

On January 3, 2018, Matteson Corporation acquired 40 percent of the outstanding common stock of O’Toole Company for $1,160,000. This acquisition gave Matteson the ability to exercise significant influ...

Q: On January 1, 2018, Fisher Corporation paid $2,

On January 1, 2018, Fisher Corporation paid $2,290,000 for 35 percent of the outstanding voting stock of Steel, Inc., and appropriately applies the equity method for its investment. Any excess of cost...

Q: On January 1, 2017, Ridge Road Company acquired 20 percent

On January 1, 2017, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,700,000 in cash. Both companies provide commercial Internet support services but serve marke...

Q: On January 1, 2018, Alamar Corporation acquired a 40 percent

On January 1, 2018, Alamar Corporation acquired a 40 percent interest in Burks, Inc., for $210,000. On that date, Burks’s balance sheet disclosed net assets with both a fair and book value of $360,000...

Q: On January 1, Intergen, Inc., invests $200,

On January 1, Intergen, Inc., invests $200,000 for a 40 percent interest in Ryan, a new joint venture with two other partners, each investing $150,000 for 30 percent interest. Intergen plans to sell a...

Q: You are considering investing in Annie’s Eatery. You have been able

You are considering investing in Annie’s Eatery. You have been able to locate the following information on the firm: Total assets are $40 million, accounts receivable are $6.0 million, ACP is 30 days,...

Q: Maggie’s Skunk Removal Corp.’s 2018 income statement listed net sales

Maggie’s Skunk Removal Corp.’s 2018 income statement listed net sales = $12.5 million, gross profit of $6.9 million, EBIT = $5.6 million, net income available to common stockholders = $3.2 million, an...

Q: In 2018, Jake’s Jamming Music, Inc. announced an ROA

In 2018, Jake’s Jamming Music, Inc. announced an ROA of 8.56 percent, ROE of 14.5 percent, and profit margin of 20.5 percent. The firm had total assets of $9.5 million at year-end 2018. Calculate the...

Q: Last year, Stumble-on-Inn, Inc., reported

Last year, Stumble-on-Inn, Inc., reported an ROE of 18 percent. The firm’s debt ratio was 55 percent, sales were $15 million, and the capital intensity was 1.25 times. Calculate the net income for Stu...

Q: You are considering investing in Nuran Security Services. You have been

You are considering investing in Nuran Security Services. You have been able to locate the following information on the firm: total assets are $24 million, accounts receivable are $3.3 million, ACP is...

Q: Last year, K9 Webb Wear, Inc., reported an ROE

Last year, K9 Webb Wear, Inc., reported an ROE of 20 percent. The firm’s debt ratio was 55 percent, sales were $20 million, and the capital intensity was 1.25 times. Calculate the net income and profi...

Q: You are considering investing in Dakota’s Security Services. You have been

You are considering investing in Dakota’s Security Services. You have been able to locate the following information on the firm: Total assets are $32 million, accounts receivable are $4.4 million, ACP...

Q: You have the following information on Els’ Putters, Inc.: sales

You have the following information on Els’ Putters, Inc.: sales to working capital is 4.6 times, profit margin is 20 percent, net income available to common stockholders is $5 million, and current lia...

Q: You are thinking of investing in Nikki T’s, Inc. You

You are thinking of investing in Nikki T’s, Inc. You have only the following information on the firm at year-end 2018: net income is $250,000, total debt is $2.5 million, and debt ratio is 55 percent....

Q: Dogs R Us reported a profit margin of 10.5 percent

Dogs R Us reported a profit margin of 10.5 percent, total asset turnover of 0.75 times, debt-to-equity of 0.80 times, net income of $500,000, and dividends paid to common stockholders of $200,000. The...

Q: Ramakrishnan Inc. reported 2018 net income of $15 million and

Ramakrishnan Inc. reported 2018 net income of $15 million and depreciation of $2,650,000. The top part of Ramakrishnan, Inc.’s 2018 and 2017 balance sheets is listed below (in millions of dollars).

Q: Chris’ Outdoor Furniture, Inc., has net cash flows from operating

Chris’ Outdoor Furniture, Inc., has net cash flows from operating activities for the last year of $340 million. The income statement shows that net income is $315 million and depreciation expense is $...

Q: Thelma and Louie, Inc., started the year with a balance

Thelma and Louie, Inc., started the year with a balance of retained earnings of $543 million and ended the year with retained earnings of $589 million. The company paid dividends of $35 million to the...

Q: Jamaica Tours, Inc., started the year with a balance of

Jamaica Tours, Inc., started the year with a balance of retained earnings of $1,780 million. The company reported net income for the year of $284 million and paid dividends of $17 million to the prefe...

Q: The Fitness Studio, Inc.’s 2018 income statement lists the

The Fitness Studio, Inc.’s 2018 income statement lists the following income and expenses: EBIT = $538,000, interest expense = $63,000, and net income = $435,000. Calculate the 2018 taxes reported on t...

Q: Mr. Husker’s Tuxedos, Corp. began the year 2018 with

Mr. Husker’s Tuxedos, Corp. began the year 2018 with $256 million in retained earnings. The firm earned net income of $33 million in 2018 and paid dividends of $5 million to its preferred stockholders...

Q: You are considering a stock investment in one of two firms (

You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, Inc.), both of which operate in the same industry and have identical operating income of $32.5 million. NoEquity...

Q: Suppose a firm pays total dividends of $500,000 out

Suppose a firm pays total dividends of $500,000 out of net income of $2 million. What would the firm’s payout ratio be?

Q: Suppose a firm pays total dividends of $750,000 out

Suppose a firm pays total dividends of $750,000 out of net income of $5 million. What would the firm’s payout ratio be?

Q: Suppose a firm has a retention ratio of 35 percent and net

Suppose a firm has a retention ratio of 35 percent and net income of $5 million. How much does it pay out in dividends?

Q: Suppose a firm has a retention ratio of 56 percent and net

Suppose a firm has a retention ratio of 56 percent and net income of $9 million. How much does it pay out in dividends?

Q: Suppose a firm has a retention ratio of 40 percent, net

Suppose a firm has a retention ratio of 40 percent, net income of $17 million, and 10 million shares outstanding. What would be the dividend per share paid out on the firm’s stock?

Q: Suppose a firm has a retention ratio of 60 percent, net

Suppose a firm has a retention ratio of 60 percent, net income of $35 million, and 140 million shares outstanding. What would be the dividend per share paid out on the firm’s stock?

Q: Elizabeth Company reported the following amounts in the stockholders’ equity section of

Elizabeth Company reported the following amounts in the stockholders’ equity section of its December 31, 2012, balance sheet. Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issu...

Q: Shown below is the liabilities and stockholders’ equity section of the balance

Shown below is the liabilities and stockholders’ equity section of the balance sheet for Ingalls Company and Wilder Company. Each has assets totaling $4,200,000. For the year, each...

Q: Clemson Company had the following stockholders’ equity as of January 1,

Clemson Company had the following stockholders’ equity as of January 1, 2012. Common stock, $5 par value, 20,000 shares issued …………………….. $100,000 Paid-in capital in excess of par—common stock …………………...

Q: Hatch Company has two classes of capital stock outstanding: 8%,

Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2012, the following accounts were included in stockholders’ equity. Preferred Stock...

Q: Washington Company has the following stockholders’ equity accounts at December 31,

Washington Company has the following stockholders’ equity accounts at December 31, 2012. Common Stock ($100 par value, authorized 8,000 shares) ………… $480,000 Retained Earnings ………………………………………………………………...

Q: The books of Conchita Corporation carried the following account balances as of

The books of Conchita Corporation carried the following account balances as of December 31, 2012. Cash …………………………………………………………………………………………………… $ 195,000 Preferred Stock (6% cumulative, nonparticipating...

Q: The following is a summary of all relevant transactions of Vicario Corporation

The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2012. In 2012, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) w...

Q: Earnhart Corporation has outstanding 3,000,000 shares of common

Earnhart Corporation has outstanding 3,000,000 shares of common stock of a par value of $10 each. The balance in its Retained Earnings account at January 1, 2012, was $24,000,000, and it then had Paid...

Q: Penn Company was formed on July 1, 2010. It was

Penn Company was formed on July 1, 2010. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock...

Q: Lois Kenseth, president of Sycamore Corporation, is concerned about several

Lois Kenseth, president of Sycamore Corporation, is concerned about several large stockholders who have been very vocal lately in their criticisms of her leadership. She thinks they might mount a camp...

Q: Despite being a publicly traded company only since 1987, Northland Cranberries

Despite being a publicly traded company only since 1987, Northland Cranberries of Wisconsin Rapids, Wisconsin, is one of the world’s largest cranberry growers. During its short life...

Q: The following information is taken from the 2012 annual report of Bugant

The following information is taken from the 2012 annual report of Bugant, Inc. Bugant’s fiscal year ends December 31 of each year. Bugant’s December 31, 2012, balance sheet is as follows. Bugant, Inc....

Q: Presented below is a list of possible transactions. 1.

Presented below is a list of possible transactions. 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1...

Q: Costner Company has been operating for several years, and on December

Costner Company has been operating for several years, and on December 31, 2012, presented the following balance sheet. The net income for 2012 was $25,000. Assume that total assets are the same in 2...

Q: Presented below is information related to Leland Inc. /

Presented below is information related to Leland Inc. Instructions (a) Compute the following ratios or relationships of Leland Inc. Assume that the ending account balances are representative unless...

Q: On January 1, 2012, Agassi Corporation had the following stockholders’

On January 1, 2012, Agassi Corporation had the following stockholders’ equity accounts. Common Stock ($10 par value, 60,000 shares issued and outstanding) ……….. $600,000 Paid-in Capital in Excess of P...

Q: The following information is taken from the 2012 annual report of Bugant

The following information is taken from the 2012 annual report of Bugant, Inc. Bugant’s fiscal year ends December 31 of each year. Bugant’s December 31, 2012, balance sheet is as follows. Bugant, Inc....

Q: On January 1, 2012, Agassi Corporation had the following stockholders’

On January 1, 2012, Agassi Corporation had the following stockholders’ equity accounts. Common Stock ($10 par value, 60,000 shares issued and outstanding) ……….. $600,000 Paid-in Capital in Excess of P...

Q: Instar Company has several investments in the securities of other companies.

Instar Company has several investments in the securities of other companies. The following information regarding these investments is available at December 31, 2012. 1. Instar holds bonds issued by Do...

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

In this simulation, you are asked to address questions related to investments. Prepare responses to all parts.

Q: Union Planters is a Tennessee bank holding company (that is,

Union Planters is a Tennessee bank holding company (that is, a corporation that owns banks). (Union Planters is now part of Regions Bank.) Union Planters manages $32 billion in assets, the largest of...

Q: Despite being a publicly traded company only since 1987, Northland Cranberries

Despite being a publicly traded company only since 1987, Northland Cranberries of Wisconsin Rapids, Wisconsin, is one of the world’s largest cranberry growers. During its short life...

Q: At December 31, 2012, Reid Company had 600,000

At December 31, 2012, Reid Company had 600,000 shares of common stock issued and outstanding, 400,000 of which had been issued and outstanding throughout the year and 200,000 of which were issued on O...

Q: On July 1, 2013, Fontaine Company purchased for cash 40

On July 1, 2013, Fontaine Company purchased for cash 40% of the outstanding capital stock of Knoblett Company. Both Fontaine Company and Knoblett Company have a December 31 year-end. Knoblett Company,...

Q: Kalin Corporation had 2012 net income of $1,000,

Kalin Corporation had 2012 net income of $1,000,000. During 2012, Kalin paid a dividend of $2 per share on 100,000 shares of preferred stock. During 2012, Kalin had outstanding 250,000 shares of commo...

Q: On July 1, 2012, Selig Company purchased for cash 40

On July 1, 2012, Selig Company purchased for cash 40% of the outstanding capital stock of Spoor Corporation. Both Selig and Spoor have a December 31 year-end. Spoor Corporation, whose common stock is...

Q: Addison Manufacturing holds a large portfolio of debt and equity securities as

Addison Manufacturing holds a large portfolio of debt and equity securities as an investment. The fair value of the portfolio is greater than its original cost, even though some securities have decrea...

Q: Rockland Corporation earned net income of $300,000 in 2012

Rockland Corporation earned net income of $300,000 in 2012 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds, which are conver...

Q: DiCenta Corporation reported net income of $270,000 in 2012

DiCenta Corporation reported net income of $270,000 in 2012 and had 50,000 shares of common stock outstanding throughout the year. Also outstanding all year were 5,000 shares of cumulative preferred s...

Q: Bedard Corporation reported net income of $300,000 in 2012

Bedard Corporation reported net income of $300,000 in 2012 and had 200,000 shares of common stock outstanding throughout the year. Also outstanding all year were 45,000 options to purchase common stoc...

Q: Presented on page 1032 are two independent situations. Situation 1

Presented on page 1032 are two independent situations. Situation 1 Hatcher Cosmetics acquired 10% of the 200,000 shares of common stock of Ramirez Fashion at a total cost of $14 per share on March 18,...

Q: Gator Co. invested $1,000,000 in Demo

Gator Co. invested $1,000,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year. Instructions Use the information in the following T-account for...

Q: The 2012 income statement of Wasmeier Corporation showed net income of $

The 2012 income statement of Wasmeier Corporation showed net income of $480,000 and an extraordinary loss of $120,000. Wasmeier had 100,000 shares of common stock outstanding all year. Prepare Wasmeie...

Q: Gregory Inc. acquired 20% of the outstanding common stock of

Gregory Inc. acquired 20% of the outstanding common stock of Handerson Inc. on December 31, 2012. The purchase price was $1,250,000 for 50,000 shares. Handerson Inc. declared and paid an $0.80 per sha...

Q: Presented below is a list of possible transactions. 1.

Presented below is a list of possible transactions. 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1...

Q: On January 1, 2012, Meredith Corporation purchased 25% of

On January 1, 2012, Meredith Corporation purchased 25% of the common shares of Pirates Company for $200,000. During the year, Pirates earned net income of $80,000 and paid dividends of $20,000. Instr...

Q: Costner Company has been operating for several years, and on December

Costner Company has been operating for several years, and on December 31, 2012, presented the following balance sheet. The net income for 2012 was $25,000. Assume that total assets are the same in 2...

Q: Presented below is information related to Leland Inc. /

Presented below is information related to Leland Inc. Instructions (a) Compute the following ratios or relationships of Leland Inc. Assume that the ending account balances are representative unless...

Q: Assume the same information as in E17-19 for Lilly Company

Assume the same information as in E17-19 for Lilly Company. In addition, assume that the investment in the Woods Inc. stock was sold during 2013 for $195,000. At December 31, 2013, the following infor...

Q: Presented below is selected information related to the financial instruments of Dawson

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2012. This is Dawson Company’s first year of operations. Instructions...

Q: On January 2, 2012, Jones Company purchases a call option

On January 2, 2012, Jones Company purchases a call option for $300 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share....

Q: On January 1, 2012, Chang Corp. had 480,

On January 1, 2012, Chang Corp. had 480,000 shares of common stock outstanding. During 2012, it had the following transactions that affected the Common Stock account. February 1 ……………………………. Issued 12...

Q: Ott Company had 210,000 shares of common stock outstanding on

Ott Company had 210,000 shares of common stock outstanding on December 31, 2012. During the year 2013, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 20...

Q: A portion of the statement of income and retained earnings of Pierson

A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows. Note 1. During the year, Pierson Inc. suffered a major casualty loss of $1,340,000 after appl...

Q: On January 1, 2012, Bailey Industries had stock outstanding as

On January 1, 2012, Bailey Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares …………….……………………….. $1,000,000 Common stock, $...

Q: On June 1, 2011, Bluhm Company and Amanar Company merged

On June 1, 2011, Bluhm Company and Amanar Company merged to form Davenport Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On A...

Q: The Ottey Corporation issued 10-year, $4,000

The Ottey Corporation issued 10-year, $4,000,000 par, 7% callable convertible subordinated debentures on January 2, 2012. The bonds have a par value of $1,000, with interest payable annually. The curr...

Q: On January 1, 2012, Lindsey Company issued 10-year

On January 1, 2012, Lindsey Company issued 10-year, $3,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Lindsey common stock. Lindsey’s net income in 2013 was $2...

Q: Zambrano Company’s net income for 2012 is $40,000.

Zambrano Company’s net income for 2012 is $40,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2011, each exercisable for one share at $8. None has been exerc...

Q: Brooks Inc. recently purchased Donovan Corp., a large midwestern home

Brooks Inc. recently purchased Donovan Corp., a large midwestern home painting corporation. One of the terms of the merger was that if Donovan’s income for 2013 was $110,000 or more, 10,000 additional...

Q: Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company

Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Fitzgera...

Q: Charles Austin of the controller’s office of Thompson Corporation was given the

Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2013. Austin...

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) What employee stock-option compensation plan...

Q: On January 1, 2011, Garner issued 10-year,

On January 1, 2011, Garner issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Garner $2 par value common stock. The company has had 10,000 shares o...

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 stock options and earnings per share computations. Prepare responses to all parts.

Q: Elizabeth Company reported the following amounts in the stockholders’ equity section of

Elizabeth Company reported the following amounts in the stockholders’ equity section of its December 31, 2012, balance sheet. Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issu...

Q: Shown below is the liabilities and stockholders’ equity section of the balance

Shown below is the liabilities and stockholders’ equity section of the balance sheet for Ingalls Company and Wilder Company. Each has assets totaling $4,200,000. For the year, each...

Q: Clemson Company had the following stockholders’ equity as of January 1,

Clemson Company had the following stockholders’ equity as of January 1, 2012. Common stock, $5 par value, 20,000 shares issued …………………….. $100,000 Paid-in capital in excess of par—common stock …………………...

Q: Hatch Company has two classes of capital stock outstanding: 8%,

Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2012, the following accounts were included in stockholders’ equity. Preferred Stock...

Q: Washington Company has the following stockholders’ equity accounts at December 31,

Washington Company has the following stockholders’ equity accounts at December 31, 2012. Common Stock ($100 par value, authorized 8,000 shares) ………… $480,000 Retained Earnings ………………………………………………………………...

Q: The books of Conchita Corporation carried the following account balances as of

The books of Conchita Corporation carried the following account balances as of December 31, 2012. Cash …………………………………………………………………………………………………… $ 195,000 Preferred Stock (6% cumulative, nonparticipating...

Q: The following is a summary of all relevant transactions of Vicario Corporation

The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2012. In 2012, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) w...

Q: Earnhart Corporation has outstanding 3,000,000 shares of common

Earnhart Corporation has outstanding 3,000,000 shares of common stock of a par value of $10 each. The balance in its Retained Earnings account at January 1, 2012, was $24,000,000, and it then had Paid...

Q: Penn Company was formed on July 1, 2010. It was

Penn Company was formed on July 1, 2010. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock...

Q: Lois Kenseth, president of Sycamore Corporation, is concerned about several

Lois Kenseth, president of Sycamore Corporation, is concerned about several large stockholders who have been very vocal lately in their criticisms of her leadership. She thinks they might mount a camp...

Q: Duck, an accrual basis corporation, sponsored a rock concert on

Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2017. Gross receipts were $300,000. The following expenses were incurred and paid as indicated: Because the coliseum was...

Q: The following calendar-year information is taken from the December 31

The following calendar-year information is taken from the December 31, 2013, adjusted trialbalance and other records of Dahlia Company. Required1. Each team member is to be responsible for computing...

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: Marissa Skye and Alexa Reichele, tire analysts for a global investment

Marissa Skye and Alexa Reichele, tire analysts for a global investment fund located in Manhattan, are examining the 20X0 earnings performance of two potential investment candidates. Reflecting the com...

Q: Condensed comparative income statements of Señorina Panchos, a Mexican restaurant chain

Condensed comparative income statements of Señorina Panchos, a Mexican restaurant chain, for the years 2009 through 2011 are presented in Exhibit 9-18 (000,000’s pesos...

Q: Based on the balance sheet and income statement data contained in Exhibit

Based on the balance sheet and income statement data contained in Exhibit 9-5, and using the suggested worksheet format shown in Exhibit 9-20 or one of your own choosing, show how the statement of cas...

Q: Refer again to Exhibits 9-5 and 9-6.

Refer again to Exhibits 9-5 and 9-6. Show how you would modify the consolidated funds statement appearing in Exhibit 9-5 to enable an investor to get a better feel for the actual investing and financi...

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: General Electric Company’s worldwide performance evaluation system is based on a policy

General Electric Company’s worldwide performance evaluation system is based on a policy of decentralization. The policy reflects its conviction that managers will become more responsible and their bus...

Q: Review the operating data incorporated in Exhibit 10-3 for the

Review the operating data incorporated in Exhibit 10-3 for the Russian subsidiary of the U.S. parent company. Required: Using Exhibit 10-3 as a guide, prepare a cash flow report from a parent curre...

Q: The scene is a conference room on the 10th floor of an

The scene is a conference room on the 10th floor of an office building on Wall Street, occupied by Anthes Enterprises, a small, rapidly growing manufacturer of electronic trading systems for equities,...

Q: Alubar, a U.S. multinational, receives royalties from

Alubar, a U.S. multinational, receives royalties from Country A, foreign-branch earnings from Country B, and dividends equal to 50 percent of net income from subsidiaries in Countries C and D. There i...

Q: Drawing on the background facts in Exercises 6 and 7, assume

Drawing on the background facts in Exercises 6 and 7, assume that the manufacturing cost per unit, based on operations at full capacity of 10,000 units, is $60, and that the uncontrolled selling price...

Q: As an analyst for a securities firm, you are aware that

As an analyst for a securities firm, you are aware that accounting practices differ around the world. Yet you wonder whether these differences really have any material effect on companies’ financial s...

Q: As an analyst for a securities firm, you are aware that

As an analyst for a securities firm, you are aware that accounting practices differ around the world. Yet you wonder whether these differences really have any material effect on companies’ financial s...

Q: Golddiggers has zero net income if it sells gold for a price

Golddiggers has zero net income if it sells gold for a price of $380. However, by shorting a forward contract it is possible to guarantee a profit of $40/oz. Suppose a manager decides not to hedge and...

Q: Consider the example in Table 4.6. Suppose that losses

Consider the example in Table 4.6. Suppose that losses are fully tax-deductible. What is the expected after-tax profit in this case? Table 4.6

Q: Rouge Company’s $250,000 net income for the quarter ended

Rouge Company’s $250,000 net income for the quarter ended September 30 included the following after-tax items: ∙ A $20,000 cumulative effect loss resulting from a change in inventory valuation method...

Q: In March of the current year, Mooney Company estimated its year

In March of the current year, Mooney Company estimated its year-end executive bonuses to be $800,000. The executive bonus paid in the previous year was $950,000. What amount of bonus expense, if any,...

Q: Noventis Corporation prepared the following estimates for the four quarters of the

Noventis Corporation prepared the following estimates for the four quarters of the current year: Additional Information ∙ First-quarter administrative costs include the $160,000 an...

Q: Cambi Company began operations on January 1, 2016. In the

Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’...

Q: Assuming that MNC entered into a forward contract to sell 10 million

Assuming that MNC entered into a forward contract to sell 10 million South Korean won on December 1, 2017, as a fair value hedge of a foreign currency receivable, what is the net impact on its net inc...

Q: On March 1, Pimlico Corporation (a U.S.-

On March 1, Pimlico Corporation (a U.S.-based company) expects to order merchandise from a supplier in Sweden in three months. On March 1, when the spot rate is $0.10 per Swedish krona, Pimlico enters...

Q: Torres Corporation (a U.S.-based company) expects

Torres Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 100,000 pounds, with delivery and payment to be made on September 20. On July 20, Torres purchase...

Q: What is the net impact on Micro’s net income for the quarter

What is the net impact on Micro’s net income for the quarter ended June 30, 2017, as a result of this forward contract hedge of a firm commitment? a. $–0–. b. $2,400 increase in net income. c. $4,000...

Q: What is the net impact on Micro’s net income for the quarter

What is the net impact on Micro’s net income for the quarter ended September 30, 2017, as a result of this forward contract hedge of a firm commitment? a. $–0–. b. $115,000 increase in net income. c....

Q: What is the net impact on Dos Santos Company’s 2017 net income

What is the net impact on Dos Santos Company’s 2017 net income as a result of this hedge of a forecasted foreign currency transaction? a. $–0–. b. $400 decrease in net income. c. $1,000 decrease in ne...

Q: What is the net impact on Dos Santos Company’s 2018 net income

What is the net impact on Dos Santos Company’s 2018 net income as a result of this hedge of a forecasted foreign currency transaction? Assume that the raw materials are consumed and become a part of t...

Q: Brandlin Company of Anaheim, California, sells parts to a foreign

Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 16,000 korunas to be received on March 1, 2018. Brandlin enters into a forward contract...

Q: Use the same facts as in Problem 31 except that Brandlin Company

Use the same facts as in Problem 31 except that Brandlin Company purchases materials from a foreign supplier on December 1, 2017, with payment of 16,000 korunas to be made on March 1, 2018. The materi...

Q: On June 1, Alexander Corporation sold goods to a foreign customer

On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,000,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell...

Q: On June 1, Cairns Corporation purchased goods from a foreign supplier

On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,000,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purch...

Q: On November 1, 2017, Bernard Company (a U.

On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered...

Q: Eximco Corporation (based in Champaign, Illinois) has a number

Eximco Corporation (based in Champaign, Illinois) has a number of transactions with companies in the country of Mongagua, where the currency is the mong. On November 30, 2017, Eximco sold equipment at...

Q: On August 1, Ling-Harvey Corporation (a U.

On August 1, Ling-Harvey Corporation (a U.S.-based importer) placed an order to purchase merchandise from a foreign supplier at a price of 400,000 ringgits. Ling-Harvey will receive and make payment f...

Q: On June 1, Vandervelde Corporation (a U.S.-

On June 1, Vandervelde Corporation (a U.S.-based manufacturing firm) received an order to sell goods to a foreign customer at a price of 100,000 leks. Vandervelde will ship the goods and receive payme...

Q: Based on past experience, Leickner Company expects to purchase raw materials

Based on past experience, Leickner Company expects to purchase raw materials from a foreign supplier at a cost of 1,000,000 marks on March 15, 2018. To hedge this forecasted transaction, the company a...

Q: On February 1, 2017, Linber Company forecasted the purchase of

On February 1, 2017, Linber Company forecasted the purchase of component parts on May 1, 2017, at a price of 100,000 euros. On that date, Linber entered into a forward contract to purchase 100,000 eur...

Q: On January 1, 2018, Primair Corporation loaned Vista Company $

On January 1, 2018, Primair Corporation loaned Vista Company $300,000 and agreed to guarantee all of Vista’s long-term debt in exchange for (1) decision-making authority over all of...

Q: The Pier Ten Company, a U.S. company,

The Pier Ten Company, a U.S. company, made credit sales to four customers in Asia on September 15, 2015, and received payment on October 15, 2015. Information related to these sales is as follows: T...

Q: Yang Corporation starts a foreign subsidiary on January 1 by investing 20

Yang Corporation starts a foreign subsidiary on January 1 by investing 20,000 rand. Yang owns all of the shares of the subsidiary’s common stock. The foreign subsidiary generates 40,000 rand of net in...

Q: Dane, Inc., owns Carlton Corporation. For the current year

Dane, Inc., owns Carlton Corporation. For the current year, Dane reports net income (without consideration of its investment in Carlton) of $185,000 and the subsidiary reports $105,000. The parent had...

Q: Mattoon, Inc., owns 80 percent of Effingham Company. For

Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s cont...

Q: In many cases, EPS is computed based on the parent’s portion

In many cases, EPS is computed based on the parent’s portion of consolidated net income and parent company shares and convertibles. However, a different process must be used for some business combinat...

Q: Aaron Company’s books show current earnings of $430,000 and

Aaron Company’s books show current earnings of $430,000 and $46,000 in cash dividends. Zeese Company earns $164,000 in net income and declares $11,500 in dividends. Aaron has held a 70 percent interes...

Q: Redfield Company reports current earnings of $420,000 while declaring

Redfield Company reports current earnings of $420,000 while declaring $52,000 in cash dividends. Snedeker Company earns $147,000 in net income and declares $13,000 in dividends. Redfield has held a 70...

Q: Many companies make annual reports available on their corporate website, often

Many companies make annual reports available on their corporate website, often under an Investors tab. Annual reports also can be accessed through the SEC’s EDGAR system at www.sec.gov (under Filings,...

Q: On June 30, 2018, Plaster, Inc., paid $

On June 30, 2018, Plaster, Inc., paid $916,000 for 80 percent of Stucco Company’s outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling...

Q: A staff employee for the CPA firm of O’Brien, Leahy,

A staff employee for the CPA firm of O’Brien, Leahy, and Sweeney is currently preparing Form 1041 as an income tax return for an estate. The staff employee knows that the estate is allowed a deduction...

Q: Which of the following does not accurately describe a requirement that a

Which of the following does not accurately describe a requirement that a company must fulfill when adopting IFRS for the first time? a. The company must prepare an opening IFRS balance sheet at the be...

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: Abacab Company’s shares are listed on the New Market Stock Exchange,

Abacab Company’s shares are listed on the New Market Stock Exchange, which allows the use of either International Financial Reporting Standards (IFRS) or U.S. GAAP. On January 1, Year 1, Abacab Compan...

Q: Quantacc Ltd. began operations on January 1, 2015, and

Quantacc Ltd. began operations on January 1, 2015, and uses IFRS to prepare its consolidated financial statements. Although not required to do so, to facilitate comparisons with companies in the Unite...

Q: Unless they use IFRS, foreign companies with securities listed in the

Unless they use IFRS, foreign companies with securities listed in the United States (in the form of ADRs) are required to reconcile their net income and stockholders’ equity to U.S. GAAP in the annual...

Q: Primus, Inc., owns all outstanding stock of Sonston, Inc

Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $600,000. Primus has 100,000 shares of common stock ou...

Q: On January 1, 2016, Parker, Inc., a U

On January 1, 2016, Parker, Inc., a U.S.-based firm, acquired 100 percent of Suffolk PLC located in Great Britain for consideration paid of 52,000,000 British pounds ($), which was equal to fair value...

Q: Pavin acquires all of Stabler’s outstanding shares on January 1, 2015

Pavin acquires all of Stabler’s outstanding shares on January 1, 2015, for $460,000 in cash. Of this amount, $30,000 was attributed to equipment with a 10-year remaining life and $40...

Q: Garfun, Inc., owns all of the stock of Simon,

Garfun, Inc., owns all of the stock of Simon, Inc. For 2018, Garfun reports income (exclusive of any investment income) of $480,000. Garfun has 80,000 shares of common stock outstanding. It also has 5...

Q: Go to the website www.sec.gov and, under

Go to the website www.sec.gov and, under the Filings heading, click on “Filings” and then click on “Company Filing Search.” Enter the name of a well-known company such as Facebook. A list of available...

Q: Smith, Inc., has the following stockholders’ equity accounts as of

Smith, Inc., has the following stockholders’ equity accounts as of January 1, 2018: Preferred stock—$100 par, nonvoting and nonparticipating, 8% cumulative dividend . . . . . . . $2,000,000 Common sto...

Q: On January 1, 2017, Mona, Inc., acquired 80

On January 1, 2017, Mona, Inc., acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its preferred shares. Mona paid $65,000 in cash for the preferred stock, w...

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: Net cash flows from operating activities were a. $12

Net cash flows from operating activities were a. $12,000 b. $20,000 c. $24,000 d. $25,000 Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned sub...

Q: Net cash flows from financing activities were a. $(25

Net cash flows from financing activities were a. $(25,000) b. $(37,000) c. $(38,000) d. $(42,000) Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–o...

Q: Through the payment of $10,468,000 in cash

Through the payment of $10,468,000 in cash, Drexel Company acquires voting control over Young Company. This price is paid for 60 percent of the subsidiary’s 100,000 outstanding common shares ($40 par...

Q: Prairie Corporation is a primary beneficiary for Vintage Company, a variable

Prairie Corporation is a primary beneficiary for Vintage Company, a variable interest entity. When Prairie obtained financial control over Vintage, any excess fair value over Prairie’s book value was...

Q: Blanchard Company management targets an annual after-tax income of $

Blanchard Company management targets an annual after-tax income of $810,000. The company is subject to a 20% income tax rate. Assume that fixed costs remain at $562,500. Compute the (1) unit sales to...

Q: Cooper Company expects to sell 200,000 units of its product

Cooper Company expects to sell 200,000 units of its product next year, which would generate total sales of $17 million. Management predicts that pretax net income for next year will be $1,250,000 and...

Q: Vanna Co. produces and sells two products, T and O

Vanna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company...

Q: Mingei Co. produces and sells two products, BB and TT

Mingei Co. produces and sells two products, BB and TT. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the compa...

Q: Ming Company had net income of $772,200 based on

Ming Company had net income of $772,200 based on variable costing. Beginning and ending inventories were 7,800 units and 5,200 units, respectively. Assume the fixed overhead per unit was $3.00 for bot...

Q: Polarix is a retailer of ATVs (all-terrain vehicles)

Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell, on average, for $3,800. Variable sell...

Q: Mortech had net income of $250,000 based on variable

Mortech had net income of $250,000 based on variable costing. Beginning and ending inventories were 50,000 units and 48,000 units, respectively. Assume the fixed overhead per unit was $0.75 for both t...

Q: Blazer Chemical produces and sells an ice-melting granular used on

Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells about 100 tons of its granular. In its nine-year history, the compan...

Q: Refer to information about Azule Company in Problem 6-1B.

Refer to information about Azule Company in Problem 6-1B. In the company’s planning documents,Roberta Azule, the company president, reports that the company’s break-even volume in unit sales is 55,715...

Q: Chem-Melt produces and sells an ice-melting granular used

Chem-Melt produces and sells an ice-melting granular used on roadways and sidewalks in winter. The company annually produces and sells about 300,000 lbs of its granular. In its ten-year history, the c...

Q: Refer to information about Dowell Company in Problem 6-1A.

Refer to information about Dowell Company in Problem 6-1A. In the company’s planning documents, Kyra Dowell, the company’s president, reports that the break-even volume (in units) for the company is 2...

Q: Azule Company produces a single product. Its income statement under absorption

Azule Company produces a single product. Its income statement under absorption costing for its first two years of operation follow. Additional Informationa. Sales and production data for these first...

Q: The Prince-Robbins partnership has the following capital account balances on

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000 Robbins, Capital . . . . ....

Q: Purkerson, Smith, and Traynor have operated a bookstore for a

Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. Atthe beginning of 2018, capital balances were as follows: Purkerson . . . . . . . . . . . . . . . . . ....

Q: On January 1, 2017, the dental partnership of Angela,

On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when thepartners contributed $30,000, $58,000, and $60,000, respectively. Over the next three years, thebusiness repor...

Q: Boswell and Johnson form a partnership on May 1, 2016.

Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $50,000;Johnson conveys title to the following properties to the partnership: The partners agree to start their par...

Q: Gray, Stone, and Lawson open an accounting practice on January

Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,to be operated as a partnership. Gray and Stone will serve as the senior partners because oftheir years...

Q: Steve Reese is a well-known interior designer in Fort Worth

Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own businessand convinces Rob O’Donnell, a local merchant, to contribute the capital to form a partnership.On...

Q: A partnership begins its first year with the following capital balances:

A partnership begins its first year with the following capital balances: Alfred, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000 Bernard, Capital . . . . . . . . . . . . . . ....

Q: A partnership begins its first year of operations with the following capital

A partnership begins its first year of operations with the following capital balances: Winston, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . $110,000 Durham, Capital . . . . . . . . . ....

Q: The Ace and Deuce partnership has been created to operate a law

The Ace and Deuce partnership has been created to operate a law firm. The partners are attempting to devise a fair system to allocate profits and losses. Ace plans to work more billable hours each yea...

Q: Massa Company, which has been operating for three years, provides

Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management...

Q: Compute net income based on the adjusted trial balance in M4-

Compute net income based on the adjusted trial balance in M4-8. Then compute Romney’s Marketing Company’s net profit margin for 2012. In M4-8. Romneyâ€...

Q: Refer to P4-2 . Zimmerman Company’s annual accounting

Refer to P4-2 . Zimmerman Company’s annual accounting year ends on December 31. It is December 31, 2011, and all of the 2011 entries except the following adjusting entries have been...

Q: Refer to P4-3. Brayden Towing Company is

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

Q: Skidmore Music Company had the following transactions in March: a

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

Q: Avon Products, Inc., is a leading manufacturer and marketer of

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

Q: Megan Company (not a corporation) was careless about its financial

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

Q: Papa John’s is one of the fastest-growing pizza delivery and

Papa John’s is one of the fastest-growing pizza delivery and carry-out restaurant chains in the country. Presented here are selected income statement and balance sheet amounts (dolla...

Q: The Kroger Co. is one of the largest retailers in the

The Kroger Co. is one of the largest retailers in the United States and also manufactures and processes some of the food for sale in its supermarkets. Kroger reported the following January 31 balances...

Q: Following are terms related to the income statement. Match each definition

Following are terms related to the income statement. Match each definition with its related term by entering the appropriate letter in the space provided.

Q: Supply the missing dollar amounts for the 2012 income statement of NexTech

Supply the missing dollar amounts for the 2012 income statement of NexTech Company for each of the following independent cases.

Q: Supply the missing dollar amounts for the 2012 income statement of BGT

Supply the missing dollar amounts for the 2012 income statement of BGT Company for each of the following independent cases.

Q: Tiffany & Co. is one of the world’s premier jewelers and

Tiffany & Co. is one of the world’s premier jewelers and a designer of other fine gifts and house wares. Presented here are selected income statement and balance sheet amounts (d...

Q: Saunders, Inc., recently reported the following December 31 amounts in

Saunders, Inc., recently reported the following December 31 amounts in its financial statements (dollars in thousands): Compute return on assets for the current year. What does this ratio measure?...

Q: What is the effect of the write-off of bad debts

What is the effect of the write-off of bad debts (using the allowance method) on (a) net income and (b) accounts receivable, net?

Q: Recent balance sheets of Dell, Inc., a leading producer and

Recent balance sheets of Dell, Inc., a leading producer and marketer of a broad range of personal computers, mobility products, software, and related tools and services, are provided. Required: 1. I...

Q: The following data are from annual reports of Jen’s Jewelry Company:

The following data are from annual reports of Jen’s Jewelry Company: Compute Jen’s total asset turnover ratio for 2012 and 2011. What do these results suggest to...

Q: A recent annual report for Target contained the following information (dollars

A recent annual report for Target contained the following information (dollars in thousands) at the end of its fiscal year: A footnote to the financial statements disclosed that uncollectible accoun...

Q: On January 1, 2011, Anson Company started the year with

On January 1, 2011, Anson Company started the year with a $250,000 credit balance in Retained Earnings and a $300,000 balance in Contributed Capital. During 2011, the company earned net income of $50,...

Q: Stride Rite Corporation manufactures and markets shoes under the brand names Stride

Stride Rite Corporation manufactures and markets shoes under the brand names Stride Rite, Keds, and Sperry Top-Sider. Three recent years produced a combination of declining sales revenue and net incom...

Q: Siemens is one of the world’s largest electrical engineering and electronics companies

Siemens is one of the world’s largest electrical engineering and electronics companies. Headquartered in Germany, the company has been in business for over 160 years and operates in...

Q: The following data presented in income statement order were taken from the

The following data presented in income statement order were taken from the year-end records of Berugu Export Company. Fill in all of the missing amounts and show computations.

Q: Stacey’s Piano Rebuilding Company has been operating for one year (2010

Stacey’s Piano Rebuilding Company has been operating for one year (2010). At the start of 2011, its income statement accounts had zero balances and its balance sheet account balances...

Q: Income is to be evaluated under four different situations as follows:

Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIF...

Q: Dana Holding Corporation designs and manufactures component parts for the vehicular,

Dana Holding Corporation designs and manufactures component parts for the vehicular, industrial, and mobile off-highway original equipment markets. In a recent annual report, Dana’s inventory note ind...

Q: Abercrombie and Fitch is a leading retailer of casual apparel for men

Abercrombie and Fitch is a leading retailer of casual apparel for men, women, and children. Assume that you are employed as a stock analyst and your boss has just completed a review of the new Abercro...

Q: Daniel Company uses a periodic inventory system. Data for 2012:

Daniel Company uses a periodic inventory system. Data for 2012: beginning merchandise inventory (December 31, 2011), 2,000 units at $38; purchases, 8,000 units at $40; expenses (excluding income taxes...

Q: Zocco Ski Company mistakenly recorded purchases of inventory on account received during

Zocco Ski Company mistakenly recorded purchases of inventory on account received during the last week of December 2011 as purchases during January of 2012 (this is called a purchases cutoff error). Zo...

Q: Several years ago, the financial statements of Gibson Greeting Cards,

Several years ago, the financial statements of Gibson Greeting Cards, now part of American Greetings, contained the following note: On July 1, the Company announced that it had determined that the in...

Q: An annual report of ConocoPhillips contained the following note: During

An annual report of ConocoPhillips contained the following note: During 2008, certain international inventory quantity reductions caused a liquidation of LIFO inventory values resulting in a $39 milli...

Q: Indicate whether the FIFO or LIFO inventory costing method normally produces each

Indicate whether the FIFO or LIFO inventory costing method normally produces each of the following effects under the listed circumstances. a. Declining costs Highest net income ______ Highest inven...

Q: Which of the following regarding the lower of cost or market rule

Which of the following regarding the lower of cost or market rule for inventory are true? (1) The lower of cost or market rule is an example of the historical cost principle. (2) When the replacemen...

Q: Income is to be evaluated under four different situations as follows:

Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: F...

Q: Harvey Company prepared its annual financial statements dated December 31, 2011

Harvey Company prepared its annual financial statements dated December 31, 2011. The company applies the FIFO inventory costing method; however, the company neglected to apply LCM to the ending invent...

Q: An annual report for General Motors Corporation included the following note:

An annual report for General Motors Corporation included the following note: Inventories are stated generally at cost, which is not in excess of market. The cost of substantially all domestic inventor...

Q: According to its annual report, Wendy’s International serves “the best

According to its annual report, Wendy’s International serves “the best hamburgers in the business” and other fresh food including salads, chicken...

Q: The income statement for Pruitt Company summarized for a four-year

The income statement for Pruitt Company summarized for a four-year period shows the following: An audit revealed that in determining these amounts, the ending inventory for 2012 was overstated by $1...

Q: Brianna Webb, a connoisseur of fine chocolate, opened Bri’s Sweets

Brianna Webb, a connoisseur of fine chocolate, opened Bri’s Sweets in Collegetown on February 1, 2011. The shop specializes in a selection of gourmet chocolate candies and a line of...

Q: Total liabilities on a balance sheet at the end of the year

Total liabilities on a balance sheet at the end of the year are $150,000, retained earnings at the end of the year is $80,000, net income for the year is $60,000, and contributed capital is $35,000. W...

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: Wexler Company had the following activities for the year ended December 31

Wexler Company had the following activities for the year ended December 31, 2012: Sold land that cost $18,000 for $18,000 cash; purchased $181,000 of equipment, paying $156,000 in cash and signing a n...

Q: Company X is going to retire equipment that is fully depreciated with

Company X is going to retire equipment that is fully depreciated with no residual value. The equipment will simply be disposed of, not sold. Which of the following statements is false? a. Total asset...

Q: Why is depreciation expense added to net income (indirect method)

Why is depreciation expense added to net income (indirect method) on the statement of cash flows?

Q: Refer to AP4-2 . Hannah Company’s annual accounting

Refer to AP4-2 . Hannah Company’s annual accounting year ends on June 30. It is June 30, 2012, and all of the entries for the current year have been made except the following adjust...

Q: Big Dog Holdings, Inc., is the parent company of Big

Big Dog Holdings, Inc., is the parent company of Big Dog USA, a company that develops, markets, and retails a collection of consumer products centered around the signature BIG DOGS name, logo, and &ac...

Q: Alpine Stables, Inc., was established in Denver, Colorado,

Alpine Stables, Inc., was established in Denver, Colorado, on April 1, 2011. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new a...

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, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book. Required: 1. By wha...

Q: Refer to AP4-3. Bill’s Catering Company is

Refer to AP4-3. Bill’s Catering Company is at its accounting year-end, December 31, 2011. The following data that must be considered were developed from the companyâ€...

Q: As a team, select an industry to analyze. Reuters provides

As a team, select an industry to analyze. Reuters provides lists of industries under Sectors and Industries at www.reuters.com . (Click on an industry and then select Company Rankings for a list of me...

Q: Match each definition with its related term by entering the appropriate letter

Match each definition with its related term by entering the appropriate letter in the space provided. There should be only one definition per term (that is, there are more definitions than terms)....

Q: Payson Sports, Inc., sells sports equipment to customers. Its

Payson Sports, Inc., sells sports equipment to customers. Its fiscal year ends on December 31. The following transactions occurred in 2012: a. Purchased $314,000 of new sports equipment inventory; pai...

Q: The following transactions occurred during a recent year: a

The following transactions occurred during a recent year: a. Issued stock to organizers for cash (example). b. Purchased equipment on credit. c. Declared and paid cash dividends. d. Earned revenue...

Q: Wolverine World Wide, Inc., manufactures military, work, sport

Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, and Bates, to a global mark...

Q: Stoscheck Moving Corporation has been in operation since January 1, 2012

Stoscheck Moving Corporation has been in operation since January 1, 2012. It is now December 31, 2012, the end of the annual accounting period. The company has not done well financially during the fir...

Q: Waddell Company was organized on January 1, 2011. At the

Waddell Company was organized on January 1, 2011. At the end of the first year of operations, December 31, 2011, the bookkeeper prepared the following trial balances (amounts in thousands of dollars):...

Q: Note 1: On April 1, 2011, Warren Corporation received

Note 1: On April 1, 2011, Warren Corporation received a $30,000, 10 percent note from a customer in settlement of a $30,000 open account receivable. According to the terms, the principal of the note a...

Q: Cohen & Boyd, Inc., publishers of movie and song trivia

Cohen & Boyd, Inc., publishers of movie and song trivia books, made the following errors in adjusting the accounts at year-end (December 31): a. Did not accrue $1,400 owed to the company by anoth...

Q: On December 31, 2011, Yates Company prepared an income statement

On December 31, 2011, Yates Company prepared an income statement and balance sheet and failed to take into account four adjusting entries. The income statement, prepared on this incorrect basis, refle...

Q: On December 31, 2011, the bookkeeper for Grillo Company prepared

On December 31, 2011, the bookkeeper for Grillo Company prepared the following income statement and balance sheet summarized here but neglected to consider three adjusting entries. Data on the three...

Q: Parent, a domestic corporation, owns 100% of Block,

Parent, a domestic corporation, owns 100% of Block, a foreign corporation, and Chip, a domestic corporation. Parent also owns 45% of Trial, a domestic corporation. Parent receives no distributions fro...

Q: Mini, Inc., earns pretax book net income of $750

Mini, Inc., earns pretax book net income of $750,000 in 2014. Mini deducted $20,000 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini records no other te...

Q: Prance, Inc., earns pretax book net income of $800

Prance, Inc., earns pretax book net income of $800,000 in 2014. Prance acquires a depreciable asset in 2014, and first-year tax depreciation exceeds book depreciation by $80,000. Prance reported no ot...

Q: Prance, in Problem 4, reports $600,000 of

Prance, in Problem 4, reports $600,000 of pretax book net income in 2015. Prance’s book depreciation exceeds tax depreciation in this year by $20,000. Prance reports no other temporary or permanent bo...

Q: Using the facts of Problem 11, determine the 2015 end-

Using the facts of Problem 11, determine the 2015 end-of-year balance in Prance’s deferred tax asset and deferred tax liability balance sheet accounts. Problem 11: Prance, in Problem 4, reports $600,...

Q: Mini, in Problem 13, reports $800,000 of

Mini, in Problem 13, reports $800,000 of pretax book net income in 2015. Mini did not deduct any bad debt expense for book purposes but did deduct $15,000 in bad debt expense for tax purposes. Mini re...

Q: Using the facts of Problem 15, determine the 2015 end-

Using the facts of Problem 15, determine the 2015 end-of-year balance in Mini’s deferred tax asset and deferred tax liability balance sheet accounts. Problem 15: Mini, in Problem 13, reports $800,000...

Q: Polaris and Arctic Cat compete in several on-road and off

Polaris and Arctic Cat compete in several on-road and off-road motorized vehicle categories.Sales, income, and asset information is provided for each company below. Required1. Compute profit margin...

Q: Improvement Station is a national home improvement chain with more than 100

Improvement Station is a national home improvement chain with more than 100 storesthroughout the country. The manager of each store receives a salary plus a bonus equal to a percent of the store’s ne...

Q: Esme Company’s management is trying to decide whether to eliminate Department Z

Esme Company’s management is trying to decide whether to eliminate Department Z, which has produced low profits or losses for several years. The company’s 2013 depa...

Q: Below are departmental income statements for a guitar manufacturer. The manufacturer

Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising,...

Q: Signal mistakenly produced 10,000 defective cell phones. The phones

Signal mistakenly produced 10,000 defective cell phones. The phones cost $60 each to produce. A salvage company will buy the defective phones as they are for $30 each. It would cost Signal $80 per pho...

Q: What is the average amount invested in a machine during its predicted

What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? Assume that net income is received evenly throughout each yea...

Q: A machine costs $700,000 and is expected to yield

A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year.Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st...

Q: You must prepare a return on investment analysis for the regional manager

You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (...

Q: Factor Company is planning to add a new product to its line

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $480,000 cost with an expected four-year life and a $20,000 salvag...

Q: Most Company has an opportunity to invest in one of two new

Most Company has an opportunity to invest in one of two new projects. Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. Project Z requires a $350,0...

Q: Cortino Company is planning to add a new product to its line

Cortino Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $300,000 cost with an expected four-year life and a $20,000 salva...

Q: Peng Company is considering an investment expected to generate an average net

Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Comp...

Q: Refer to information in Exercise 9-8. Compute profit margin

Refer to information in Exercise 9-8. Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most ef...

Q: The following information is available for Zetrov Company: a.

The following information is available for Zetrov Company: a. The cash budget for March shows an ending bank loan of $10,000 and an ending cash balance of $50,000. b. The sales budget for March indica...

Q: Williams Company began operations in January 2013 with two operating (selling

Williams Company began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. Williams plans to open a th...

Q: Adria Lopez expects second quarter 2014 sales of her new line of

Adria Lopez expects second quarter 2014 sales of her new line of computer furniture to be thesame as the first quarter’s sales (reported below) without any changes in strategy. Month...

Q: Georgia Orchards produced a good crop of peaches this year. After

Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts...

Q: Williams Company began operations in January 2013 with two operating (selling

Williams Company began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. Williams plans to open a th...

Q: Georgia Orchards produced a good crop of peaches this year. After

Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts...

Q: Bonanza Entertainment began operations in January 2013 with two operating (selling

Bonanza Entertainment began operations in January 2013 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. The company plans to o...

Q: Rita and Rick Redding own and operate a tomato grove. After

Rita and Rick Redding own and operate a tomato grove. After preparing the following income statement, Rita believes they should have offered the No. 3 tomatoes to the public for free and saved themsel...

Q: Refer to information in QS 9-5. Assume a target

Refer to information in QS 9-5. Assume a target income of 12% of average invested assets. Compute residual income for each division. In QS 9-5

Q: A company’s shipping division (an investment center) has sales of

A company’s shipping division (an investment center) has sales of $2,420,000, net income of $516,000, and average invested assets of $2,250,000. Compute the division’s profit margin and investment tur...

Q: Compute return on assets for each of the divisions below (each

Compute return on assets for each of the divisions below (each is an investment center). Comment on the relative performance of each investment center.

Q: Fill in the blanks in the schedule below for two separate investment

Fill in the blanks in the schedule below for two separate investment centers A and B. Round answers to the nearest whole percent.

Q: Suresh Co. expects its five departments to yield the following income

Suresh Co. expects its five departments to yield the following income for next year. Recompute and prepare the departmental income statements (including a combined total column) for the company unde...

Q: Marinette Company makes several products, including canoes. The company has

Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is...

Q: Merline, a one-product mail-order firm, buys

Merline, a one-product mail-order firm, buys its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statem...

Q: Elegant Decor Company’s management is trying to decide whether to eliminate Department

Elegant Decor Company’s management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company’...

Q: Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs.

Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first year of operations, and the stockholders want to kno...

Q: Roy Akins was the accounting manager at Zelco, a tire manufacturer

Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO, who was something of a celebrity in the community. The CEO stood to earn a substant...

Q: One year ago, Tyler Stasney founded Swift Classified Ads. Stasney

One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his b...

Q: The net income of Steinbach & Sons, a landscaping company,

The net income of Steinbach & Sons, a landscaping company, decreased sharply during 2018. Mort Steinbach, owner and manager of the company, anticipates the need for a bank loan in 2019. Late in 2018,...

Q: Chef’s Catering completed the following selected transactions during May 2018:

Chef’s Catering completed the following selected transactions during May 2018: Chef’s Catering completed the following selected transactions during May 2018: Re...

Q: How is net income calculated? Define revenues and expenses.

How is net income calculated? Define revenues and expenses.

Q: The following data at July 31, 2018, are given for

The following data at July 31, 2018, are given for RCO: a. Depreciation, $600. b. Prepaid rent expires, $200. c. Interest expense accrued, $700. d. Employee salaries owed for Monday through Thursday...

Q: Consider the following accounting terms and definitions, and match each term

Consider the following accounting terms and definitions, and match each term to the definition:

Q: Wizco Advertising’s balance sheet data at May 31, 2018, and

Wizco Advertising’s balance sheet data at May 31, 2018, and June 30, 2018, follow: For each of the following situations that occurred in June, 2018 with regard to common stock and...

Q: The unadjusted trial balance of Data Solution at November 30, 2018

The unadjusted trial balance of Data Solution at November 30, 2018, follows: Additional information at November 30, 2018: a. Accrued Service Revenue, $800. b. Depreciation, $350. c. Accrued Salaries...

Q: During 2018, Flowing Rivers Spa reported revenue of $30,

During 2018, Flowing Rivers Spa reported revenue of $30,000. Total expenses for the year were $15,000. Flowing Rivers Spa ended the year with total assets of $43,000, and it owed debts totaling $14,00...

Q: The adjusted trial balance of Stone Sign Company follows:

The adjusted trial balance of Stone Sign Company follows: Requirements: 1. Assume Stone Sign Company has a January 31 year-end. Journalize Stone’s closing entries at January 31. 2....

Q: The records of Felix Company show the following at December 31,

The records of Felix Company show the following at December 31, 2018: Requirements: 1. Compute the missing amount for Felix Company. You will need to determine Retained Earnings, December 31, 2018,...

Q: This problem continues the Canyon Canoe Company situation and focuses on no

This problem continues the Canyon Canoe Company situation and focuses on no merchandising transactions, adjusting and closing entries, and preparing financial statements. Canyon Canoe Company does not...

Q: Party-Time T-Shirts sells T-shirts for parties

Party-Time T-Shirts sells T-shirts for parties at the local college. The company completed the first year of operations, and the shareholders are generally pleased with operating results as shown by t...

Q: Crazy Cookies earned net sales revenue of $66,000,

Crazy Cookies earned net sales revenue of $66,000,000 in 2018. Cost of goods sold was $39,600,000, and net income reached $7,000,000, the company’s highest ever. Compute the company’s gross profit per...

Q: This and similar cases in later chapters focus on the financial statements

This and similar cases in later chapters focus on the financial statements of a real company—Target Corporation, a discount merchandiser that sells a wide assortment of general merchandise and food. T...

Q: The adjusted trial balance of Quality Office Systems at March 31,

The adjusted trial balance of Quality Office Systems at March 31, 2018, follows: Requirements: 1. Journalize the required closing entries at March 31, 2018. 2. Set up T-accounts for Income Summary;...

Q: Ocean Life Boat Supply uses the periodic inventory method. The adjusted

Ocean Life Boat Supply uses the periodic inventory method. The adjusted trial balance of Ocean Life Boat Supply at December 31, 2018, follows: Requirements: 1. Journalize the required closing entrie...

Q: Alice Appliance Service had net income for the year of $58

Alice Appliance Service had net income for the year of $58,500. In addition, the balance sheet reports the following balances: Calculate the return on assets for Alice Appliance Service for the year...

Q: Exeter is a building contractor on the Gulf Coast. After losing

Exeter is a building contractor on the Gulf Coast. After losing a number of big lawsuits, it was facing its first annual net loss as the end of the year approached. The owner, Hank Snow, was under int...

Q: Matured Water Services had net income for the month of October of

Matured Water Services had net income for the month of October of $50,880. Assets as of the beginning and end of the month totaled $362,000, and $486,000, respectively. Calculate Matured Water Service...

Q: Roland’s Overhead Doors reports the following financial information: Assets …………………………………………………………………………….$

Roland’s Overhead Doors reports the following financial information: Assets …………………………………………………………………………….$ 45,800 Liabilities ……………………………………………………………………………17,220 Common Stock ………………………………………………………………...

Q: Your friend, Dean McChesney, requested that you advise him on

Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners. Time is short, so you cannot journalize the trans...

Q: Refer to Polaris’s financial statements in Appendix A to answer the following

Refer to Polaris’s financial statements in Appendix A to answer the following. 1. Is Polaris’s statement of cash flows prepared under the direct method or the indirect method? How do you know? 2. For...

Q: Common-size and trend percents for Rustynail Company’s sales, cost

Common-size and trend percents for Rustynail Company’s sales, cost of goods sold, and expenses follow. Determine whether net income increased, decreased, or remained unchanged in thi...

Q: Express the following comparative income statements in common-size percents and

Express the following comparative income statements in common-size percents and assess whether or not this company’s situation has improved in the most recent year (round the percent...

Q: Selected comparative financial statements of Korbin Company follow. /

Selected comparative financial statements of Korbin Company follow. Required1. Compute each year’s current ratio. (Round ratio amounts to one decimal.) 2. Express the income state...

Q: Selected comparative financial statements of Haroun Company follow. /

Selected comparative financial statements of Haroun Company follow. Required1. Compute trend percents for all components of both statements using 2008 as the base year. (Round percents to one decim...

Q: Selected year-end financial statements of Cabot Corporation follow. (

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $48,900; total assets, $189,400; com...

Q: Summary information from the financial statements of two companies competing in the

Summary information from the financial statements of two companies competing in the same industry follows. Required1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) ac...

Q: Selected account balances from the adjusted trial balance for Olinda Corporation as

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar yearend December 31, 2013, follow. RequiredAnswer each of the following questions by providing sup...

Q: Selected comparative financial statement information of Bluegrass Corporation follows.

Selected comparative financial statement information of Bluegrass Corporation follows. Required1. Compute each year’s current ratio. (Round ratio amounts to one decimal.) 2. Expre...

Q: Selected comparative financial statements of Tripoly Company follow. /

Selected comparative financial statements of Tripoly Company follow. Required1. Compute trend percents for all components of both statements using 2008 as the base year. (Round percents to one deci...

Q: Selected year-end financial statements of Overton Corporation follow. (

Selected year-end financial statements of Overton Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2012, were inventory, $17,400; total assets, $94,900; co...

Q: Summary information from the financial statements of two companies competing in the

Summary information from the financial statements of two companies competing in the same industry follows. Required1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) ac...

Q: Selected account balances from the adjusted trial balance for Harbor Corp.

Selected account balances from the adjusted trial balance for Harbor Corp. as of its calendar year-end December 31, 2013, follow. RequiredAnswer each of the following questions by providing supporti...

Q: If a company reports positive net income for the year, can

If a company reports positive net income for the year, can it also show a net cash outflow from operating activities? Explain.

Q: Peugeot S.A. reports the following financial information for the

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.

Q: Salud Company reports net income of $400,000 for the

Salud Company reports net income of $400,000 for the year ended December 31, 2013. It also reports $80,000 depreciation expense and a $20,000 gain on the sale of machinery. Its comparative balance she...

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: Refer to the information reported about Forten Company in Problem 12-

Refer to the information reported about Forten Company in Problem 12-1A. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activities us...

Q: Refer to the information in Problem 12-7B.

Refer to the information in Problem 12-7B. RequiredPrepare the cash flows from operating activities section only of the company’s 2013 statement of cash flows using the direct metho...

Q: Team members are to coordinate and independently answer one question within each

Team members are to coordinate and independently answer one question within each of thefollowing three sections. Team members should then report to the team and confirm or correct teammates’ answers....

Q: Refer to Forten Company’s financial statements and related information in Problem 12

Refer to Forten Company’s financial statements and related information in Problem 12-1A. RequiredPrepare a complete statement of cash flows; report its operating activities according...

Q: Complete the following spreadsheet in preparation of the statement of cash flows

Complete the following spreadsheet in preparation of the statement of cash flows. (The statement of cash flows is not required.) Prepare the spreadsheet as in Exhibit 12A.1; report operating activitie...

Q: The following selected information is from the Princeton Company’s comparative balance sheets

The following selected information is from the Princeton Company’s comparative balance sheets. The company’s net income for the year ended December 31, 2013, was...

Q: Use the following balance sheets and income statement to answer QS 12

Use the following balance sheets and income statement to answer QS 12-6 through QS 12-11. RequiredUse the indirect method to prepare the cash provided or used from operating activities section only...

Q: Refer to the data in QS 12-6. Furniture costing

Refer to the data in QS 12-6. Furniture costing $55,000 is sold at its book value in 2013. Acquisitions of furniture total $45,000 cash, on which no depreciation is necessary because it is acquired at...

Q: Gazelle Corporation, a merchandiser, recently completed its calendar-year

Gazelle Corporation, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts...

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. Assume that all common stock is issued for cash. What amount of cash dividends is paid during 2013?2. Assume that no additional notes payable are issued in 2013. What...

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. How much cash is paid to acquire merchandise inventory during year 2013? 2. How much cash is paid for operating expenses during year 2013? In QS 12-6

Q: Refer to the data in QS 12-6. Use the

Refer to the data in QS 12-6. Use the direct method to prepare the cash provided or used from operating activities section only of the statement of cash flows for this company. In QS 12-6

Q: Golden Corp., a merchandiser, recently completed its 2013 operations.

Golden Corp., a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3)...

Q: For each of the following separate cases, compute cash flows from

For each of the following separate cases, compute cash flows from operations. The list includes all balance sheet accounts related to operating activities.

Q: Use the following financial statements and additional information to (1

Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method, and (2) analyze and briefl...

Q: Use the following information to determine this company’s cash flows from operating

Use the following information to determine this company’s cash flows from operating activities using the indirect method.

Q: Refer to the data in QS 12-6. 1

Refer to the data in QS 12-6. 1. How much cash is received from sales to customers for year 2013? 2. What is the net increase or decrease in cash for year 2013? In QS 12-6

Q: Refer to the information reported about Golden Corporation in Problem 12-

Refer to the information reported about Golden Corporation in Problem 12-4A. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report operating activities un...

Q: Adria Lopez, owner of Success Systems, decides to prepare a

Adria Lopez, owner of Success Systems, decides to prepare a statement of cash flows for herbusiness. (Although the serial problem allowed for various ownership changes in earlier chapters, we will pre...

Q: Refer to the information reported about Gazelle Corporation in Problem 12-

Refer to the information reported about Gazelle Corporation in Problem 12-1B. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activiti...

Q: Key figures for Polaris and Arctic Cat follow. /

Key figures for Polaris and Arctic Cat follow. Required1. Compute common-size percents for each of the companies using the data provided. (Round percents to one decimal.) 2. Which company retains a...

Q: Access the February 17, 2012, filing of the December 31

Access the February 17, 2012, filing of the December 31, 2011, 10-K report of The HersheyCompany (ticker HSY) at www.sec.gov and complete the following requirements. RequiredCompute or identify the...

Q: Refer to Golden Corporation’s financial statements and related information in Problem 12

Refer to Golden Corporation’s financial statements and related information in Problem 12-4A. RequiredPrepare a complete statement of cash flows; report its cash flows from operating...

Q: Refer to Gazelle Corporation’s financial statements and related information in Problem 12

Refer to Gazelle Corporation’s financial statements and related information in Problem 12-1B. RequiredPrepare a complete statement of cash flows; report its operating activities acco...

Q: Lansing Company’s 2013 income statement and selected balance sheet data at December

Lansing Company’s 2013 income statement and selected balance sheet data at December 31, 2012 and 2013, follow. RequiredPrepare the cash flows from operating activities section only...

Q: Satu Company, a merchandiser, recently completed its 2013 operations.

Satu Company, a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3)...

Q: Use the following information to determine this company’s cash flows from financing

Use the following information to determine this company’s cash flows from financing activities. a. Net income was $35,000. b. Issued common stock for $64,000 cash. c. Paid cash dividend of $14,600. d....

Q: Access the March 30, 2012, filing of the 10-

Access the March 30, 2012, filing of the 10-K report (for year ending December 31, 2011) ofMendocino Brewing Company, Inc., at www .sec.gov. Required1. Does Mendocino Brewing use the direct or indi...

Q: Refer to the information in Problem 12-7A.

Refer to the information in Problem 12-7A. RequiredPrepare the cash flows from operating activities section only of the company’s 2013 statement of cash flows using the direct metho...

Q: Forten Company, a merchandiser, recently completed its calendar-year

Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from...

Q: Refer to the information reported aboutSatu Company in Problem 12-4B

Refer to the information reported aboutSatu Company in Problem 12-4B. RequiredPrepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report operating activities under the...

Q: Refer to the information in Exercise 12-10. Using the

Refer to the information in Exercise 12-10. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2013. In Exercise 12-10 The following financial statements and add...

Q: Refer to Satu Company’s financial statements and related information in Problem 12

Refer to Satu Company’s financial statements and related information in Problem 12-4B. RequiredPrepare a complete statement of cash flows; report its cash flows from operating activ...

Q: Salt Lake Company’s 2013 income statement and selected balance sheet data at

Salt Lake Company’s 2013 income statement and selected balance sheet data at December 31, 2012 and 2013, follow. RequiredPrepare the cash flows from operating activities section on...

Q: The Eastern Trading Company of Singapore ships prepackaged spices to Hong Kong

The Eastern Trading Company of Singapore ships prepackaged spices to Hong Kong,the United Kingdom, and the United States, where they are resold by sales affiliates.Eastern Trading is concerned with wh...

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: The financial statements of Nike, Inc., reveal the information regarding

The financial statements of Nike, Inc., reveal the information regarding income taxes shown in Exhibit 2.17. REQUIRED a. Assuming that Nike had no significant permanent differences between book incom...

Q: Combined data for three years for two firms follows (in millions

Combined data for three years for two firms follows (in millions). One of these firms is Amazon.com, a rapidly growing Internet retailer, and the other is Kroger, a retail grocery store chain growing...

Q: Financial reporting classifies derivatives as (a) Speculative investments,

Financial reporting classifies derivatives as (a) Speculative investments, (b) Fair value hedges, or (c) Cash flow hedges. However, firms revalue all derivatives to market value each period regardl...

Q: SunTrust Banks, Inc., owns a large block of The Coca

SunTrust Banks, Inc., owns a large block of The Coca-Cola Company (Coke) common stock that it has held for many years. SunTrust indicates in a note to its financial statements that all equity securiti...

Q: On December 31, 2014, Pace Co. paid $3

On December 31, 2014, Pace Co. paid $3,000,000 to Sanders Corp. shareholders to acquire 100% of the net assets of Sanders Corp. Pace Co. also agreed to pay former Sanders shareholders $200,000 in cash...

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: Stebbins Corporation established a wholly owned Canadian subsidiary on January 1,

Stebbins Corporation established a wholly owned Canadian subsidiary on January 1, Year 1, by contributing US$500,000 for all of the subsidiary’s common stock. The exchange rate on th...

Q: Refer to Problem 8.25 for Stebbins Corporation for Year 1

Refer to Problem 8.25 for Stebbins Corporation for Year 1, its first year of operations. Exhibit 8.34 shows the amounts for the Canadian subsidiary for Year 2. The average exchange rate during Year 2...

Q: Alpha Computer Systems (ACS) designs, manufactures, sells,

Alpha Computer Systems (ACS) designs, manufactures, sells, and services networked computer systems; associated peripheral equipment; and related network, communications, and software products. Exhibit...

Q: The financial statements of ABC Corporation, a retail chain, reveal

The financial statements of ABC Corporation, a retail chain, reveal the information for income taxes shown in Exhibit 2.15. REQUIRED a. Assuming that ABC had no significant permanent differences betw...

Q: Exhibit 8.24 presents selected financial statement data for three chemical

Exhibit 8.24 presents selected financial statement data for three chemical companies: Monsanto Company, Olin Corporation, and New Market Corporation. (New Market was formed from a merger of Ethyl Corp...

Q: U.S. GAAP requires firms to account for equity investments

U.S. GAAP requires firms to account for equity investments in which ownership is between 20% and 50% using the equity method. Ace Corporation owns 35% of Spear Corporation during 2014. Spear Corporati...

Q: Prepaid Legal Services (PPD) is a company that sells insurance

Prepaid Legal Services (PPD) is a company that sells insurance for legal expenses. Customers pay premiums in advance for coverage over some specified period. Thus, PPD obtains cash but has unearned re...

Q: Excerpts from the disclosures on derivatives made by a large beverage manufacturer

Excerpts from the disclosures on derivatives made by a large beverage manufacturer in Year 4 appear below: Our Company uses derivative financial instruments primarily to reduce our exposure to adverse...

Q: Identify the working capital accounts related to (a) Revenues

Identify the working capital accounts related to (a) Revenues recognized and deferred, (b) Cost of goods sold, (c) Employee salary and wages, and (d) Income tax expense. For each account, indicate...

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 &A...

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: Assume Walmart acquires a tract of land on January 1, 2009

Assume Walmart acquires a tract of land on January 1, 2009, for $100,000 cash. On December 31, 2009, the current market value of the land is $150,000. On December 31, 2010, the current market value of...

Q: For this exercise, use the preceding data for Schwartz Company.

For this exercise, use the preceding data for Schwartz Company. Now assume that Schwartz pays common shareholders a dividend of $25 in Year +1. Also assume that Schwartz uses long-term debt as a flexi...

Q: Refer to the financial statement forecasts for Massachusetts Stove Company (MSC

Refer to the financial statement forecasts for Massachusetts Stove Company (MSC) prepared for Case 10.2. The management of MSC wants to know the equity valuation implications of adding gas stoves unde...

Q: Selected data for The Hershey Company for 2010–2012 appear in

Selected data for The Hershey Company for 2010–2012 appear in Exhibit 4.29. REQUIRED a. Compute ROA and its decomposition for 2010–2012. Assume a tax rate of 35%....

Q: Refer to Problem 2.12. Assume that Walmart has accounted

Refer to Problem 2.12. Assume that Walmart has accounted for the value of the land at acquisition cost and sells the land on December 31, 2011, for a two-year note receivable with a present value of $...

Q: Three years of combined data for two firms follows (in millions

Three years of combined data for two firms follows (in millions). The two firms experienced similar growth rates in revenues during the three-year period. One of these firms is Accenture Ltd., a manag...

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: Henry Company is a marketer of branded foods to retail and foodservice

Henry Company is a marketer of branded foods to retail and foodservice channels. Exhibit 6.18 presents Henry’s income statements for Year 10, Year 11, and Year 12. Notes to the finan...

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: 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: Montgomery Ward operates a retail department store chain. It filed for

Montgomery Ward operates a retail department store chain. It filed for bankruptcy during the first quarter of Year 12. Exhibit 3.24 presents a statement of cash flows for Montgomery Ward for Year 7 to...

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: Three years of combined data for two firms follows (in millions

Three years of combined data for two firms follows (in millions). One of these firms is FedEx, a relatively high-growth firm that provides courier services, and the other is Kellogg Company, a more ma...

Q: Exhibit 7.19 summarizes the information disclosed by a large conglomerate

Exhibit 7.19 summarizes the information disclosed by a large conglomerate regarding its stock option plans for Years 2–4. Assume an income tax rate of 35%. REQUIRED a. The average o...

Q: JCPenney operates a chain of retail department stores, selling apparel,

JCPenney operates a chain of retail department stores, selling apparel, shoes, jewelry, and home furnishings. It also offers most of its products through catalog distribution. During fiscal Year 5, it...

Q: Selected data for General Mills for 2007, 2008, and 2009

Selected data for General Mills for 2007, 2008, and 2009 appear below (amounts in millions). REQUIRED a. Compute the rate of ROCE for 2007, 2008, and 2009. b. Compute basic EPS for 2007, 2008, and 20...

Q: Explain the intuition of residual income. Distinguish between net income available

Explain the intuition of residual income. Distinguish between net income available to the common shareholders and residual income.

Q: Analysts can compare ROCEs across companies but should not compare basic EPSs

Analysts can compare ROCEs across companies but should not compare basic EPSs despite the fact that both ratios use net income to the common shareholders in the numerator. Explain.

Q: Access the investor relations or corporate information section of the websites of

Access the investor relations or corporate information section of the websites of Apple Computer (www.apple.com) and Dell (www.dell.com). Study the strategies of each firm. Examine the following commo...

Q: Nucor, a steel manufacturer, reported net income for 2008 of

Nucor, a steel manufacturer, reported net income for 2008 of $1,831 million on sales of $23,663 million. Interest expense for 2008 was $135 million, and non-controlling interest was $314 million for 2...

Q: Phillips-Van Heusen, an apparel manufacturer, reported net income

Phillips-Van Heusen, an apparel manufacturer, reported net income (amounts in thousands) for Year 4 of $58,615 on sales of $1,460,235. It declared preferred dividends of $21,122. Preferred shareholder...

Q: TJX, Inc., an apparel retailer, reported net income (

TJX, Inc., an apparel retailer, reported net income (amounts in thousands) of $609,699 for Year 4. The weighted average of common shares outstanding during Year 4 was 488,809 shares. TJX, Inc., subtra...

Q: Boston Scientific, a medical device manufacturer, reported net income (

Boston Scientific, a medical device manufacturer, reported net income (amounts in millions) of $1,062 on sales of $5,624 during Year 4. Interest expense totaled $64. The income tax rate was 35%. Avera...

Q: Valero Energy, a petroleum company, reported net income of $

Valero Energy, a petroleum company, reported net income of $1,803.8 on revenues of $54,618.6 for Year 4. Interest expense totaled $359.7, and preferred dividends totaled $12.5. Average total assets fo...

Q: Firms often provide supplemental disclosures that report and discuss income figures that

Firms often provide supplemental disclosures that report and discuss income figures that do not necessarily equal bottom-line net income from the income statement. Discuss the merits and shortcomings...

Q: Rock of Ages, Inc., is the largest integrated granite quarrier

Rock of Ages, Inc., is the largest integrated granite quarrier, manufacturer, and retailer of finished granite memorials in North America. The firm reported a net loss for 2004 of $3.2 million. In 200...

Q: Access the investor relations or corporate information section of the websites of

Access the investor relations or corporate information section of the websites of Dollar General (www.dollargeneral.com) and Macy’s Inc. (www.macysinc.com). Study the strategies of e...

Q: VF Corporation is an apparel company that owns recognizable brands like Timberland

VF Corporation is an apparel company that owns recognizable brands like Timberland, Vans, Reef, and 7 For All Mankind. Exhibit 5.19 and 5.20 present balance sheets and income statements, respectively,...

Q: Sun Microsystems, Inc., develops, manufactures, and sells computers

Sun Microsystems, Inc., develops, manufactures, and sells computers for network systems. Exhibit 5.21 presents selected financial data for Sun Microsystems for each of the five years ending June 30, 2...

Q: Exhibit 5.22 presents selected financial data for Best Buy Co

Exhibit 5.22 presents selected financial data for Best Buy Co., Inc., and Circuit City Stores, Inc., for fiscal 2008 and 2007. Best Buy and Circuit City operate as specialty retailers offering a wide...

Q: Exhibit 5.23 presents selected financial data for ABC Auto,

Exhibit 5.23 presents selected financial data for ABC Auto, and XYZ Comics, for fiscal Year 5 and Year 6. ABC Auto manufactures automobile components that it sells to automobile manufacturers. Competi...

Q: Exhibit 5.24 presents selected financial data for The Tribune Company

Exhibit 5.24 presents selected financial data for The Tribune Company and The Washington Post Company for fiscal 2006 and 2007. The Washington Post Company is an education and media company. It owns,...

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: Checkpoint Systems is a leading provider of source tagging, handheld labeling

Checkpoint Systems is a leading provider of source tagging, handheld labeling systems, retail merchandising systems, and bar-code labeling systems. In a press release, Checkpoint stated the following:...

Q: Delta Air Lines, Inc., is one of the largest airlines

Delta Air Lines, Inc., is one of the largest airlines in the United States. It has operated on the verge of bankruptcy for several years. Exhibit 5.18 presents selected financial data for Delta Air Li...

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: While a firm’s sales and net income have been steady during the

While a firm’s sales and net income have been steady during the last three years, the firm has experienced a decrease in its accounts receivable and inventory turnovers and an increase in its accounts...

Q: Alfa Romeo incurs direct cash costs of $30,000 in

Alfa Romeo incurs direct cash costs of $30,000 in manufacturing a red convertible automobile during 2009. Assume that it incurs all of these costs in cash. Alfa Romeo sells this automobile to you on J...

Q: Most economists describe three determinants of the interest rates on a borrower’s

Most economists describe three determinants of the interest rates on a borrower’s debt: a real interest rate, which is a charge for using capital; an adjustment for expected inflation to insure that d...

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: Kelly Services (Kelly) places employees at clients’ businesses on a

Kelly Services (Kelly) places employees at clients’ businesses on a temporary basis. It segments its services into (1) Commercial, (2) Professional and technical, and (3) Internat...

Q: Suppose the following hypothetical data represent total assets, book value,

Suppose the following hypothetical data represent total assets, book value, and market value of common shareholders’ equity (dollar amounts in millions) for three firms. Each of thes...

Q: Suppose the following hypothetical data represent total assets, book value,

Suppose the following hypothetical data represent total assets, book value, and market value of common shareholders’ equity (dollar amounts in millions) for Abbott Labs, IBM, and Tar...

Q: Intel Corporation’s consolidated income statement appears in Exhibit 6.20.

Intel Corporation’s consolidated income statement appears in Exhibit 6.20. Note 15, which follows, explains the source of the restructuring charges, the breakdown of the charges into...

Q: The Coca-Cola Company is a global soft drink beverage company

The Coca-Cola Company is a global soft drink beverage company (ticker symbol ¼ KO) that is a primary and direct competitor with PepsiCo. The data in Exhibits 12.14–12.1...

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: Suppose the following hypothetical data represent total assets, book value,

Suppose the following hypothetical data represent total assets, book value, and market value of common shareholders’ equity (dollar amounts in millions) for Microsoft, Intel, and Del...

Q: Exhibit 4.22 presents selected operating data for three retailers for

Exhibit 4.22 presents selected operating data for three retailers for a recent year. Macy’s operates several department store chains selling consumer products such as brand-name clot...

Q: ‘‘Asset valuation and recognition of net income closely relate.’’

‘‘Asset valuation and recognition of net income closely relate.’’ Explain, including conditions when they do not.

Q: The text states, ‘‘Over sufficiently long time periods, net

The text states, ‘‘Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners.’’ Demonstrate the accuracy of this statement in the follo...

Q: Exhibit 3.27 presents common-size statements of cash flows

Exhibit 3.27 presents common-size statements of cash flows for eight firms in various industries. All amounts in the common-size statements of cash flows are expressed as a percentage of cash flow fro...

Q: Eli Lilly and Company produces pharmaceutical products for humans and animals.

Eli Lilly and Company produces pharmaceutical products for humans and animals. Exhibit 7.18 includes a footnote excerpt from the annual report of Lilly for the period ending December 31, 2004. REQUIR...

Q: Nojiri Pharmaceutical Industries develops, manufactures, and markets pharmaceutical products in

Nojiri Pharmaceutical Industries develops, manufactures, and markets pharmaceutical products in Japan. The Japanese economy experienced recessionary conditions in recent years. In response to these co...

Q: Flight Training Corporation is a privately held firm that provides fighter pilot

Flight Training Corporation is a privately held firm that provides fighter pilot training under contracts with the U.S. Air Force and the U.S. Navy. The firm owns approximately 100 Lear jets that it e...

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: Gap Inc. operates chains of retail clothing stores under the names

Gap Inc. operates chains of retail clothing stores under the names of Gap, Banana Republic, and Old Navy. Exhibit 3.21 presents the statement of cash flows for Gap for Year 0 to Year 4. REQUIRED Disc...

Q: Select data for Avis and Hertz for 2012 follow. Based only

Select data for Avis and Hertz for 2012 follow. Based only on this information and ratios that you construct, speculate on similarities and differences in the operations and financing decisions of the...

Q: Exhibit 13.7 presents selected hypothetical data from projected financial statements

Exhibit 13.7 presents selected hypothetical data from projected financial statements for Steak ‘n Shake for Year +1 to Year +11. The amounts for Year +11 reflect a long-term growth a...

Q: The Coca-Cola Company is a global soft drink beverage company

The Coca-Cola Company is a global soft drink beverage company (ticker: KO) that is a primary and direct competitor with PepsiCo. The data in Chapter 12’s Exhibits 12.14, 12.15, and 1...

Q: In Problem 10.16, we projected financial statements for Walmart

In Problem 10.16, we projected financial statements for Walmart Stores, Inc. (Walmart) for Years +1 through +5. The data in Chapter 12’s Exhibits 12.17, 12.18, and 12.19 include the...

Q: Why might the operating profit calculated by CVP analysis differ from the

Why might the operating profit calculated by CVP analysis differ from the net income reported in financial statements for external reporting?

Q: What is the effect on cost of goods sold, gross profit

What is the effect on cost of goods sold, gross profit, and net income if ending merchandise inventory is understated?

Q: Weddings on Demand sells on account and manages its own receivables.

Weddings on Demand sells on account and manages its own receivables. Average experience for the past three years has been as follows: Sales ……………………………………….……..……………………………………..$ 350,000 Cost of Goods...

Q: Pauline’s Pottery has always used the direct write-off method to

Pauline’s Pottery has always used the direct write-off method to account for uncollectibles. The company’s revenues, bad debt write-offs, and year-end receivables f...

Q: Suppose you manage Campbell Appliance. The store’s summarized financial statements for

Suppose you manage Campbell Appliance. The store’s summarized financial statements for 2019, the most recent year, follow: Assume that you need to double net income. To accomplish...

Q: On January 3, 2018, Rapid Delivery Service purchased a truck

On January 3, 2018, Rapid Delivery Service purchased a truck at a cost of $100,000. Before placing the truck in service, Rapid spent $3,000 painting it, $600 replacing tires, and $10,400 overhauling t...

Q: On January 3, 2018, Speedy Delivery Service purchased a truck

On January 3, 2018, Speedy Delivery Service purchased a truck at a cost of $67,000. Before placing the truck in service, Speedy spent $3,000 painting it, $1,200 replacing tires, and $3,500 overhauling...

Q: Nature Foods Grocery reported the following comparative income statements for the years

Nature Foods Grocery reported the following comparative income statements for the years ended June 30, 2019 and 2018: During 2019, Nature Foods Grocery discovered that ending 2018 merchandise invent...

Q: Calm Day reported the following income statement for the year ended December

Calm Day reported the following income statement for the year ended December 31, 2019: Requirements: 1. Compute Calm Day’s inventory turnover rate for the year. (Round to two decim...

Q: Amber and Zack Wilson are pleased with the growth of their business

Amber and Zack Wilson are pleased with the growth of their business and have decided to invest its temporary excess cash in a brokerage account. The company had the following securities transactions i...

Q: Peyton Investments completed the following investment transactions during 2018:

Peyton Investments completed the following investment transactions during 2018: Requirements: 1. Journalize Peyton’s investment transactions. Explanations are not required. 2. Prep...

Q: Strategic Investments completed the following investment transactions during 2018:

Strategic Investments completed the following investment transactions during 2018: Requirements: 1. Journalize Strategic’s investment transactions. Explanations are not required. 2...

Q: Money Man Investments completed the following transactions during 2018:

Money Man Investments completed the following transactions during 2018: Requirements: 1. Journalize Money Man’s transactions. Explanations are not required. 2. Classify and prepare...

Q: Suppose that on January 6, 2018, East Coast Motors paid

Suppose that on January 6, 2018, East Coast Motors paid $280,000,000 for its 35% investment in Boxcar Motors. East Coast has significant influence over Boxcar after the purchase. Assume Boxcar earned...

Q: Montane Exploration Company reported these figures for 2018 and 2017:

Montane Exploration Company reported these figures for 2018 and 2017: Compute the rate of return on total assets for 2018. (Round to two decimals.)

Q: The beginning balance sheet of Waterfall Source Co. included a $

The beginning balance sheet of Waterfall Source Co. included a $400,000 investment in Evan stock (20% ownership, Waterfall has significant influence over Evan). During the year, Waterfall Source compl...

Q: The beginning balance sheet of Text Source Co. included a $

The beginning balance sheet of Text Source Co. included a $700,000 investment in Taylor stock (20% ownership). During the year, Text Source completed the following investment transactions: Requireme...

Q: What method is used for investments in equity securities when the investor

What method is used for investments in equity securities when the investor has significant influence and typically 20% to 50% ownership? Briefly describe how dividends declared and received and share...

Q: On January 1, 2018, Bark Company invests $10,

On January 1, 2018, Bark Company invests $10,000 in Roots, Inc. stock. Roots pays bark a $400 dividend on August 1, 2018. Bark sells the Roots’s stock on August 31, 2018, for $10,450. Assume the inves...

Q: On January 1, 2018, Bryant, Inc. decides to

On January 1, 2018, Bryant, Inc. decides to invest in 3,750 shares of Farrier stock when the stock is selling for $16 per share. On August 1, 2018, Farrier paid a $0.70 per share cash dividend to stoc...

Q: On February 1, 2018, Bell Co. decides to invest

On February 1, 2018, Bell Co. decides to invest excess cash of $16,800 by purchasing a Grant, Inc. bond at face value. At year-end, December 31, 2018, the fair value of the Grant bond was $19,600. The...

Q: On June 1, 2018, Josh’s Restaurant decides to invest excess

On June 1, 2018, Josh’s Restaurant decides to invest excess cash of $54,400 from the tourist season by purchasing a Jackrabbit, Inc. bond at face value. At year- end, December 31, 2018, Jackrabbit’s b...

Q: Empire State Carpets’s books show the following data. In early 2020

Empire State Carpets’s books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $8,000 and that the ending merch...

Q: The following financial information was obtained from the year ended 2018 income

The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and Pennington Automotive: Requirements: 1. Compute the times-interest-earned ratio fo...

Q: McNight Industries completed the following transactions during 2018: /

McNight Industries completed the following transactions during 2018: Journalize the transactions. Explanations are not required. Round to the nearest dollar.

Q: Futuristic Electronic Center began October with 65 units of merchandise inventory that

Futuristic Electronic Center began October with 65 units of merchandise inventory that cost $82 each. During October, the store made the following purchases: Futuristic uses the periodic inventory s...

Q: The income statement for California Communications follows. Assume California Communications signed

The income statement for California Communications follows. Assume California Communications signed a 3-month, 9%, $3,000 note on June 1, 2018, and that this was the only note payable for the company....

Q: The income statement for Vermont Communications follows. Assume Vermont Communications signed

The income statement for Vermont Communications follows. Assume Vermont Communications signed a 3-month, 3%, $6,000 note on June 1, 2018, and that this was the only note payable for the company. Req...

Q: On December 31, Weston Company estimates that it will pay its

On December 31, Weston Company estimates that it will pay its employees a 5% bonus on net income after deducting the bonus. The company reports net income of $64,000 before the calculation of the bonu...

Q: Antique Carpets’s books show the following data. In early 2020,

Antique Carpets’s books show the following data. In early 2020, auditors found that the ending merchandise inventory for 2017 was understated by $8,000 and that the ending merchandis...

Q: SB Electronics is considering two plans for raising $4,000

SB Electronics is considering two plans for raising $4,000,000 to expand operations. Plan A is to issue 9% bonds payable, and plan B is to issue 500,000 shares of common stock. Before any new financin...

Q: Right Now Electronic Center began October with 100 units of merchandise inventory

Right Now Electronic Center began October with 100 units of merchandise inventory that cost $70 each. During October, the store made the following purchases: Right Now uses the periodic inventory sy...

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: After looking into debt financing through notes, mortgage, and bonds

After looking into debt financing through notes, mortgage, and bonds payable, Canyon Canoe Company decides to raise additional capital for the planned business expansion. The company will be able to a...

Q: Lena Kay and Kathy Lauder have a patent on a new line

Lena Kay and Kathy Lauder have a patent on a new line of cosmetics. They need additional capital to market the products, and they plan to incorporate the business. They are considering the capital str...

Q: LaSalle Exploration Company reported these figures for 2018 and 2017:

LaSalle Exploration Company reported these figures for 2018 and 2017: Compute rate of return on common stockholders’ equity for 2018 assuming no dividends were declared or paid to...

Q: The charter for ASAP-TV, Inc. authorizes the company

The charter for ASAP-TV, Inc. authorizes the company to issue 100,000 shares of $5, no-par preferred stock and 500,000 shares of common stock with $1 par value. During its start-up phase, ASAP-TV comp...

Q: Kelly May Bakery, Inc. reported a prior-period adjustment

Kelly May Bakery, Inc. reported a prior-period adjustment in 2018. An accounting error caused net income of prior years to be overstated by $1,000. Retained Earnings at December 31, 2017, as previousl...

Q: Rocket Corp. earned net income of $153,040 and

Rocket Corp. earned net income of $153,040 and paid the minimum dividend to preferred stockholders for 2018. Assume that there are no changes in common shares outstanding during 2018. Rocketâ
...

Q: D-Mobile Wireless needed additional capital to expand, so the

D-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes D-Mobile to issue 50,000 shares of 8%, $50 par value cumulative pr...

Q: The balance sheet of Goldstein Management Consulting, Inc. at December

The balance sheet of Goldstein Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity: During 2018, Goldstein completed the following selecte...

Q: Bianchi Company reported these figures for 2018 and 2017:

Bianchi Company reported these figures for 2018 and 2017: Requirements: 1. Compute Bianchi Company’s earnings per share for 2018. Assume the company paid the minimum preferred divi...

Q: C-Mobile Wireless needed additional capital to expand, so the

C-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes C-Mobile to issue 120,000 shares of 9%, $150 par value cumulative...

Q: HEB Corporation had net income for 2018 of $60,450

HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shares of common stock outstanding at the beginning of the year and 20,100 shares of common stock outstanding as of December 31, 2018...

Q: Refer to the HEB data in Short Exercise S13-16.

Refer to the HEB data in Short Exercise S13-16. Assume the market price of HEB’s common stock is $19.50 per share. Compute HEB’s price/earnings ratio. Short Exercise S13-16: HEB Corporation had net...

Q: Java Company earned net income of $85,000 during the

Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, $120,000) and a $0.25 pe...

Q: The balance sheet of Cullins Management Consulting, Inc. at December

The balance sheet of Cullins Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity: During 2018, Cullins completed the following selected tr...

Q: Gullo Company reported these figures for 2018 and 2017:

Gullo Company reported these figures for 2018 and 2017: Requirements: 1. Compute Gullo Company’s earnings per share for 2018. Assume the company paid the minimum preferred dividend...

Q: Theater by Design and Show Cinemas are asking you to recommend their

Theater by Design and Show Cinemas are asking you to recommend their stock to your clients. Because Theater by Design and Show Cinemas earn about the same net income and have similar financial positio...

Q: Muscateer Corp. reported the following revenues and net income amounts:

Muscateer Corp. reported the following revenues and net income amounts: Requirements: 1. Calculate Muscateer’s trend analysis for revenues and net income. Use 2016 as the base year...

Q: Data for Connor, Inc. and Alto Corp. follow:

Data for Connor, Inc. and Alto Corp. follow: Requirements: 1. Prepare common-size income statements. 2. Which company earns more net income? 3. Which company’s net income is a high...

Q: Accel’s Companies, a home improvement store chain, reported the following

Accel’s Companies, a home improvement store chain, reported the following summarized figures: Accel’s has 10,000 common shares outstanding during 2018. Requireme...

Q: Accel’s Companies, a home improvement store chain, reported the following

Accel’s Companies, a home improvement store chain, reported the following summarized figures: Accel’s has 10,000 common shares outstanding during 2018. Requireme...

Q: Accel’s Companies, a home improvement store chain, reported the following

Accel’s Companies, a home improvement store chain, reported the following summarized figures: Accel’s has 10,000 common shares outstanding during 2018. Requireme...

Q: Accel’s Companies, a home improvement store chain, reported the following

Accel’s Companies, a home improvement store chain, reported the following summarized figures: Accel’s has 10,000 common shares outstanding during 2018. Requireme...

Q: Accel’s Companies, a home improvement store chain, reported the following

Accel’s Companies, a home improvement store chain, reported the following summarized figures: Accel’s has 10,000 common shares outstanding during 2018. Requireme...

Q: Old Mills’s income statement appears as follows (amounts in thousands):

Old Mills’s income statement appears as follows (amounts in thousands): Use the following ratio data to complete Old Mills’s income statement: 1. Inventory turno...

Q: The statement of cash flows categorizes like transactions for optimal reporting.

The statement of cash flows categorizes like transactions for optimal reporting. Identify each item as a (n): • Operating activity—addition to net income (O+) or subtraction from net income (O-) • Inv...

Q: The records of Vintage Color Engraving reveal the following:

The records of Vintage Color Engraving reveal the following: Compute cash flows from operating activities by the indirect method for year ended December 31, 2018.

Q: Moss Exports is having a bad year. Net income is only

Moss Exports is having a bad year. Net income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss’s accounts receivable are ballooning. The c...

Q: The income statement of Boost Plus, Inc. follows:

The income statement of Boost Plus, Inc. follows: Additional data follow: a. Acquisition of plant assets is $124,000. Of this amount, $108,000 is paid in cash and $16,000 by signing a note payable....

Q: Consider the following facts for Java Jolt: a. Beginning

Consider the following facts for Java Jolt: a. Beginning and ending Retained Earnings are $45,000 and $70,000, respectively. Net income for the period is $60,000. b. Beginning and ending Plant Assets...

Q: Rouse Exercise Equipment, Inc. reported the following financial statements for

Rouse Exercise Equipment, Inc. reported the following financial statements for 2018: Requirements: 1. Compute the amount of Rouse Exercise’s acquisition of plant assets. Assume the...

Q: Use the Rouse Exercise Equipment data in Exercise E14-23.

Use the Rouse Exercise Equipment data in Exercise E14-23. Prepare the company’s statement of cash flows—indirect method—for the year ended Decembe...

Q: Use the Rouse Exercise Equipment data in Exercises E14-23 and

Use the Rouse Exercise Equipment data in Exercises E14-23 and E14-24. Rouse plans to purchase a truck for $23,000 and a forklift for $125,000 next year. In addition, it plans to pay cash dividends of...

Q: The accounting records of Four Seasons Parts reveal the following:

The accounting records of Four Seasons Parts reveal the following: Compute cash flows from operating activities using the direct method for the year ended December 31, 2018.

Q: The income statement and additional data of Value Corporation follow:

The income statement and additional data of Value Corporation follow: a. Collections from customers are $13,000 more than sales. b. Dividend revenue, interest expense, and income tax expense equal t...

Q: Details about a company’s cash flows appear in a number of places

Details about a company’s cash flows appear in a number of places in the annual report. Use Target Corporation’s Fiscal 2015 Annual Report to answer the following questions. Visit http://www.pearsonhi...

Q: A-One Mobile Homes reported the following in its financial statements

A-One Mobile Homes reported the following in its financial statements for the year ended December 31, 2018: Requirements: 1. Compute the collections from customers. 2. Compute payments for merchandi...

Q: Accountants for Morganson, Inc. have assembled the following data for

Accountants for Morganson, Inc. have assembled the following data for the year ended December 31, 2018: Prepare Morganson’s statement of cash flows using the indirect method. Incl...

Q: The 2018 income statement and comparative balance sheet of Rolling Hills,

The 2018 income statement and comparative balance sheet of Rolling Hills, Inc. follow: Additionally, Rolling Hills purchased land of $21,100 by financing it 100% with longterm notes payable during...

Q: The comparative balance sheet of Jackson Educational Supply at December 31,

The comparative balance sheet of Jackson Educational Supply at December 31, 2018, reported the following: Jackson’s transactions during 2018 included the following: Requirements:...

Q: Use the Rolling Hills, Inc. data from Problem P14-

Use the Rolling Hills, Inc. data from Problem P14-34A. Problem P14-34A: The 2018 income statement and comparative balance sheet of Rolling Hills, Inc. follow: Additionally, Rolling Hills purchase...

Q: The 2018 comparative balance sheet and income statement of Appleton Group,

The 2018 comparative balance sheet and income statement of Appleton Group, Inc. follow. Appleton disposed of a plant asset at book value during 2018. Prepare the spreadsheet for the 2018 statement...

Q: Accountants for Benson, Inc. have assembled the following data for

Accountants for Benson, Inc. have assembled the following data for the year ended December 31, 2018: Prepare Benson’s statement of cash flows using the indirect method. Include an...

Q: The 2018 income statement and comparative balance sheet of Sweet Valley,

The 2018 income statement and comparative balance sheet of Sweet Valley, Inc. follow: Additionally, Sweet Valley purchased land of $20,900 by financing it 100% with longterm notes payable during 201...

Q: The comparative balance sheet of Robeson Educational Supply at December 31,

The comparative balance sheet of Robeson Educational Supply at December 31, 2018, reported the following: Robeson’s transactions during 2018 included the following: Requirements:...

Q: Use the Sweet Valley data from Problem P14-41B.

Use the Sweet Valley data from Problem P14-41B. Problem P14-41B.: The 2018 income statement and comparative balance sheet of Sweet Valley, Inc. follow: Additionally, Sweet Valley purchased land of...

Q: The 2018 comparative balance sheet and income statement of Attleboro Group,

The 2018 comparative balance sheet and income statement of Attleboro Group, Inc. follow. Attleboro disposed of a plant asset at book value in 2018. Prepare the spreadsheet for the 2018 statement of...

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: Destiny Corporation is preparing its statement of cash flows by the indirect

Destiny Corporation is preparing its statement of cash flows by the indirect method. Destiny has the following items for you to consider in preparing the statement: a. Increase in accounts payable b....

Q: Preston Media Corporation had the following income statement and balance sheet for

Preston Media Corporation had the following income statement and balance sheet for 2018: Requirements: 1. Compute the acquisition of plant assets for Preston Media Corporation during 2018. The busi...

Q: Winding Road Cellular accountants have assembled the following data for the year

Winding Road Cellular accountants have assembled the following data for the year ended April 30, 2018: Prepare the operating activities section using the indirect method for Winding Road Cellular&ac...

Q: Use the data in Short Exercise S14-5 to complete this

Use the data in Short Exercise S14-5 to complete this exercise. Prepare Winding Road Cellular’s statement of cash flows using the indirect method for the year ended April 30, 2018. A...

Q: Use the Preston Media Corporation data in Short Exercise S14-7

Use the Preston Media Corporation data in Short Exercise S14-7 and the results you calculated from the requirements. Prepare Preston Media’s statement of cash flows—...

Q: Jennifer’s Wedding Shops earned net income of $27,000,

Jennifer’s Wedding Shops earned net income of $27,000, which included depreciation of $16,000. Jennifer’s acquired a $119,000 building by borrowing $119,000 on a longterm note payable. Requirements:...

Q: Amazon.com, Inc. serves its customers through its retail

Amazon.com, Inc. serves its customers through its retail Web sites, selling millions of unique products. In addition, the company manufactures and sells electronic devices including Kindle e-readers a...

Q: The company wants to invest some of its excess cash in trading

The company wants to invest some of its excess cash in trading securities and is considering two investments, The Paddle Company (PC) and Recreational Life Vests (RLV). The income statement, balance s...

Q: Grand Oaks Realty’s net revenue and net income for the following five

Grand Oaks Realty’s net revenue and net income for the following five-year period, using 2015 as the base year, follow: Requirements: 1. Compute a trend analysis for net revenue an...

Q: Data for Mulberry Designs, Inc. follow: /

Data for Mulberry Designs, Inc. follow: Requirements: 1. Prepare a horizontal analysis of the comparative income statement of Mulberry Designs, Inc. Round percentage changes to one decimal place. 2....

Q: Refer to the data presented for Mulberry Designs, Inc. in

Refer to the data presented for Mulberry Designs, Inc. in Exercise E15-13. Exercise E15-13.: Data for Mulberry Designs, Inc. follow: Requirements: 1. Prepare a comparative common-size income state...

Q: Micatin, Inc.’s comparative income statement follows. The 2017

Micatin, Inc.’s comparative income statement follows. The 2017 data are given as needed. Requirements: 1. Calculate the profit margin ratio for 2019 and 2018. 2. Calculate the rate...

Q: Data for Oxford State Bank follow: /

Data for Oxford State Bank follow: Evaluate the common stock of Oxford State Bank as an investment. Specifically, use the three stock ratios to determine whether the common stock has increased or de...

Q: Net sales revenue, net income, and common stockholders’ equity for

Net sales revenue, net income, and common stockholders’ equity for Eyesight Mission Corporation, a manufacturer of contact lenses, follow for a four-year period. Requirements: 1. C...

Q: The Klein Department Stores, Inc. chief executive officer (CEO

The Klein Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. T...

Q: Consider the data for Klein Department Stores presented in Problem P15-

Consider the data for Klein Department Stores presented in Problem P15-24A. Problem P15-24A.: The Klein Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company&aci...

Q: Comparative financial statement data of Sanfield, Inc. follow:

Comparative financial statement data of Sanfield, Inc. follow: 1. Market price of Sanfield’s common stock: $51.48 at December 31, 2018, and $37.08 at December 31, 2017. 2. Common s...

Q: Assume that you are purchasing an investment and have decided to invest

Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Digitalized Corp. and Every Zone, Inc. and have asse...

Q: In its annual report, ABC Athletic Supply, Inc. includes

In its annual report, ABC Athletic Supply, Inc. includes the following five-year financial summary: Requirements: Analyze the company’s financial summary for the fiscal years 2014&...

Q: Net sales revenue, net income, and common stockholders’ equity for

Net sales revenue, net income, and common stockholders’ equity for Azbel Mission Corporation, a manufacturer of contact lenses, follow for a four-year period. Requirements: 1. Comp...

Q: The Randall Department Stores, Inc. chief executive officer (CEO

The Randall Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry....

Q: Consider the data for Randall Department Stores presented in Problem P15-

Consider the data for Randall Department Stores presented in Problem P15-31B. Problem P15-31B: The Randall Department Stores, Inc. chief executive officer (CEO) has asked you to compare the company&...

Q: Assume that you are purchasing an investment and have decided to invest

Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to All Digital Corp. and Green Zone, Inc. and have asse...

Q: In its annual report, XYZ Athletic Supply, Inc. includes

In its annual report, XYZ Athletic Supply, Inc. includes the following five-year financial summary: Requirements: Analyze the company’s financial summary for the fiscal years 2014&...

Q: Carmen opens a retail store. Her sales during the first year

Carmen opens a retail store. Her sales during the first year are $600,000, of which $30,000 has not been collected at year-end. Her purchases are $400,000. She still owes $20,000 to her suppliers, and...

Q: Using the following facts, answer the questions below concerning Jaron’s 2017

Using the following facts, answer the questions below concerning Jaron’s 2017 tax liability. 1. Two years ago, in November 2015, when his wife died, Jaron left the CPA firm he was working for and sta...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) some more.

Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where Dick’s got its money, and what Dick’s has been doing to create valu...

Q: Lynne Jamison was recording the daily transactions of Liberty Physical Therapy,

Lynne Jamison was recording the daily transactions of Liberty Physical Therapy, Inc., into the accounting records so she could prepare financial statements and apply for a bank loan. Some of the busin...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) some more.

Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where it got its money, and what it has been doing to create value. Is Di...

Q: Jilian Carter was preparing the adjusting journal entries for Jilian’s Java,

Jilian Carter was preparing the adjusting journal entries for Jilian’s Java, a business that uses the accrual basis of accounting, in order to prepare the adjusted trial balance and financial statemen...

Q: The revenue recognition principle says a. divide time into equal

The revenue recognition principle says a. divide time into equal periods to measure net income or net loss properly. b. record revenue only after you have earned it. c. match revenues and expenses in...

Q: It’s the end of the month, and cash flow has been

It’s the end of the month, and cash flow has been a little slow, as it usually is during this time of the accounting period. It just seems to be a little slower this month. You know that Wednesday the...

Q: You have received a letter from a disgruntled client concerning this year’s

You have received a letter from a disgruntled client concerning this year’s tax return that your firm recently completed for his or her company. The client’s business is in the second year of operatio...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) some more.

Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where it got its money, and what it has been doing to create value. Is Di...

Q: This case uses both the income statement (statement of operations)

This case uses both the income statement (statement of operations) and the balance sheet of Columbia Sportswear in Appendix A at the end of the book. Requirements 1. What income statement format does...

Q: Lisa Hill and her husband Mike were the owners of LM Enterprises

Lisa Hill and her husband Mike were the owners of LM Enterprises, Inc. They applied for a small business loan, and the bank requested the most recent business financial statements. When Lisa compiled...

Q: During April, Bargain Hardware made sales of $42,300

During April, Bargain Hardware made sales of $42,300 and ended the month with inventories totaling $5,400. Cost of Goods Sold was $21,900. Total operating expenses were $10,800. How much net income di...

Q: Purpose: To help you understand the importance of cash flows in

Purpose: To help you understand the importance of cash flows in the operation of a small business. You have just received your year-end financial statements from your CPA and you notice one very distu...

Q: According to the Real World Accounting Video, the excess of sales

According to the Real World Accounting Video, the excess of sales revenue over cost of goods sold is called _______________. a. the sales margin or net sales b. the gross margin or gross profit c. net...

Q: The following selected accounts and balances appear on the adjusted trial balance

The following selected accounts and balances appear on the adjusted trial balance for Waverly, Inc., on July 31, 2016:
1. What is the net income or net loss? 2. What is the change in Retained Earn...

Q: According to the Real World Accounting Video, a __________ is a

According to the Real World Accounting Video, a __________ is a profitability measure computed as net income/net sales. a. gross profit margin ratio b. profit margin ratio c. net income ratio d. net s...

Q: According to the Real World Accounting Video, ________ is a profitability

According to the Real World Accounting Video, ________ is a profitability measure thatshows how much net income is earned on every dollar of sales. a. sales ratio b. expense ratio c. asset financing r...

Q: Use the data from S4-11 to calculate the gross profit

Use the data from S4-11 to calculate the gross profit percentage and the net income percentage for The Skate Shed, Inc., for 2016. Information S4-11: The accounting records for The Skate Shed, Inc.,...

Q: The analysis of Cunnington, Inc.’s first eight transactions follows

The analysis of Cunnington, Inc.’s first eight transactions follows. The business only soldstock once and paid no dividends.
1. Label each of the transactions in the preceding analysis with the co...

Q: The adjusting entries for the following adjustments were omitted at period-

The adjusting entries for the following adjustments were omitted at period-end: a. Prepaid rent expired, $1,300 b. Depreciation, $1,000 c. Employee salaries owed for Monday through Wednesday of a five...

Q: The balance sheet data for Angel’s Countertops, Inc.at August

The balance sheet data for Angel’s Countertops, Inc.at August 31, 2016, and September 30, 2016, follow:
Requirement The following are three independent assumptions about the business during Septem...

Q: Brent Robertson and his banker were reviewing the quarterly income statements for

Brent Robertson and his banker were reviewing the quarterly income statements for his consulting business, Robertson and Associates, Inc. The banker was impressed with the growth of sales revenue and...

Q: Joe Reese is the accountant for Lawn BoyzLawnservice, Inc. During

Joe Reese is the accountant for Lawn BoyzLawnservice, Inc. During the month, numerous payments were made for wages for which he was properly debiting the Wage Expense account and crediting Cash. Joe b...

Q: Presented here is information for Anderson Sign, Inc., for the

Presented here is information for Anderson Sign, Inc., for the year ended August 31, 2016.
Requirements 1. What is the beginning stockholders’ equity of Anderson Sign, Inc.? 2. What is the ending...

Q: Whole Foods, Inc., had Gross Sales of $582,

Whole Foods, Inc., had Gross Sales of $582,000, Sales Returns and Allowances of $18,000, and Sales Discounts of $4,000 in 2016. Cost of goods sold was $224,000, and net income was $84,000 for the year...

Q: The balance sheet data for Bell Computers, Inc., at August

The balance sheet data for Bell Computers, Inc., at August 31, 2016, and September 30, 2016, follow:
Requirement The following are three independent assumptions about the business during September...

Q: Which inventory costing method results in the lowest net income during a

Which inventory costing method results in the lowest net income during a period of declining inventory costs? a. Last-in, first-out (LIFO) b. Specific-unit cost c. Average cost d. First-in, first-out...

Q: Presented here is information for Eliason, Inc., for the year

Presented here is information for Eliason, Inc., for the year ended August 31, 2016.
Requirements 1. What is the beginning stockholders’ equity of Eliason, Inc.? 2. What is the ending stockholders...

Q: The adjusting entries for the following adjustments were omitted at period-

The adjusting entries for the following adjustments were omitted at period-end: a. Prepaid rent expired, $1,250 b. Depreciation, $1,100 c. Employee salaries owed for Monday through Wednesday of a five...

Q: Shanna Peters worked as an accountant at a local accounting firm for

Shanna Peters worked as an accountant at a local accounting firm for five years after graduating from college. Recently, she opened her own accounting practice, which she operates as a corporation. Th...

Q: Certified Security, Inc., began the year with $35,

Certified Security, Inc., began the year with $35,000 of common stock and $32,400 of retained earnings. On May 5, investors bought $8,000 of additional stock in the business. On August 22, the busines...

Q: Sunshine Solar, Inc., had Sales Revenue of $470,

Sunshine Solar, Inc., had Sales Revenue of $470,000, Sales Returns and Allowances of $19,000, and Sales Discounts of $6,000 in 2016. Cost of goods sold was $193,000, and net income was $96,000 for the...

Q: The following errors occurred in the accounting records of Certifed Security,

The following errors occurred in the accounting records of Certifed Security, Inc.: a. The company accountant recorded the receipt of cash for service revenue by debiting Cash for $1,140 instead of th...

Q: Darin Oliver worked as an accountant at a local accounting firm for

Darin Oliver worked as an accountant at a local accounting firm for five years after graduating from college. Recently, he opened his own accounting practice, which he operates as a corporation. The n...

Q: The accounts of Wellington Electronics Repair, Inc., follow with their

The accounts of Wellington Electronics Repair, Inc., follow with their normal balances at October 31, 2016. The accounts are listed in no particular order.
Requirements 1. Prepare the company’s tr...

Q: Use the data for River City Fabrication, Inc., from P4

Use the data for River City Fabrication, Inc., from P4-41A. Information P4-41A: The account balances for the year ended December 31, 2016, for River City Fabrication, Inc., are listed next:
Requir...

Q: The following errors occurred in the accounting records of Wilburton Electronics,

The following errors occurred in the accounting records of Wilburton Electronics, Inc.: a. The company accountant recorded the receipt of cash for service revenue by debit ing Cash for $1,640 instead...

Q: Warren Enterprises, Inc., completed the following selected transactions and prepared

Warren Enterprises, Inc., completed the following selected transactions and prepared these adjusting entries during March:
Requirements 1. State whether the transaction would increase revenues, de...

Q: Use the data for Lake City Industries, Inc., from P4

Use the data for Lake City Industries, Inc., from P4-48B. Information P4-48B: The accounts for the year ended October 31, 2016, for Lake City Industries, Inc., are listed next:
Requirements 1. Cal...

Q: Fischer Remodeling, Inc., completed the following selected transactions and prepared

Fischer Remodeling, Inc., completed the following selected transactions and prepared these adjusting entries during August:
Requirements 1. State whether the transaction would increase revenues, d...

Q: Let’s say that two companies, identical in every way except that

Let’s say that two companies, identical in every way except that one used FIFO and one used LIFO, went into a bank on the same day to get a loan to deal with the rising cost of acquiring inventory. De...

Q: Consider the overall effects of the transactions in questions 5, 6

Consider the overall effects of the transactions in questions 5, 6, and 7 on Wave Rider.What is Wave Rider’s net income or net loss? a. Net loss of $4,000 b. Net income of $46,000 c. Net income of $14...

Q: At December 31, 2014, Island Equipment understated ending inventory by

At December 31, 2014, Island Equipment understated ending inventory by $2,500. How does this error affect cost of goods sold and net income for 2014? a. Understates costs of goods sold and overstates...

Q: Tandy, Incorporated, was issued a charter on January 15,

Tandy, Incorporated, was issued a charter on January 15, 2011, that authorized the following capital stock: Common stock, no-par, 103,000 shares Preferred stock, 9 percent, par value $8 per share, 4,...

Q: A company has net income of $225,000 and declares

A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. What is the net impact on retained earnings? a. Increase of $225,000 b. Decrease of $75,000 c. Increase...

Q: Heather and Scott, two young financial analysts, were reviewing financial

Heather and Scott, two young financial analysts, were reviewing financial statements for Dell, one of the world’s largest manufacturers of personal computers. Scott noted that the company did not repo...

Q: Witt Corporation received its charter during January 2011. The charter authorized

Witt Corporation received its charter during January 2011. The charter authorized the following capital stock: Preferred stock: 10 percent, par $10, authorized 21,000 shares Common stock: par $8, aut...

Q: During January 2011, Pentagon Company purchased 12,000 shares of

During January 2011, Pentagon Company purchased 12,000 shares of the 200,000 outstanding common shares (no-par value) of Square Corporation at $25 per share. This block of stock was purchased as a lon...

Q: Company A purchased a certain number of Company B’s outstanding voting shares

Company A purchased a certain number of Company B’s outstanding voting shares at $20 per share as a long-term investment. Company B had outstanding 20,000 shares of $10 par value sto...

Q: On January 1, 2011, PurchaseAgent.com acquired 30 percent

On January 1, 2011, PurchaseAgent.com acquired 30 percent (1,200,000 shares) of the common stock of E-Transaction Corporation. The accounting period for both companies ends December 31. Give the journ...

Q: Using the following categories, indicate the effects of the transactions listed

Using the following categories, indicate the effects of the transactions listed in M12-7. Use + for increaseand − for decrease and indicate the amounts. Data from M12-7. On January...

Q: When recording dividends received from a stock investment accounted for using the

When recording dividends received from a stock investment accounted for using the equity method, which of the following statements is true? a. Total assets are increased and net income is increased. b...

Q: Bott Company acquired 500 shares of stock of Barus Company at $

Bott Company acquired 500 shares of stock of Barus Company at $50 per share as a long-term investment. This represents 10 percent of the outstanding voting shares of Barus. During the year, Barus paid...

Q: Bott Company acquired 500 shares of stock of Barus Company at $

Bott Company acquired 500 shares of stock of Barus Company at $50 per share as a long-term investment. This represents 40 percent of the outstanding voting shares of Barus. During the year, Barus paid...

Q: Cruise Corporation had outstanding 100,000 shares of no-par

Cruise Corporation had outstanding 100,000 shares of no-par common stock. On January 10, 2011, DockCompany purchased a block of these shares in the open market at $20 per share for long-term investmen...

Q: Below are selected T-accounts for Gauge Company.

Below are selected T-accounts for Gauge Company. Required: Complete the following journal entries and answer the following questions: a. Purchased additional investments in affiliated companies for...

Q: During 2011, Bradford Company purchased some of the 90,000

During 2011, Bradford Company purchased some of the 90,000 shares of common stock, par $6, of Hall,Inc., as a long-term investment. The annual accounting period for each company ends December 31. Thef...

Q: During January 2011, Pareto Glass Company purchased the following securities as

During January 2011, Pareto Glass Company purchased the following securities as its long-term securities available for sale investment portfolio: D Corporation Common Stock: 11,000 shares (95,000 out...

Q: Audio House , Inc., is developing its annual financial statements at

Audio House , Inc., is developing its annual financial statements at December 31, 2013. The statementsare complete except for the statement of cash flows. The completed comparative balance sheets andi...

Q: Use the information concerning Ingersol Construction Supply Company provided in Alternate Problem

Use the information concerning Ingersol Construction Supply Company provided in Alternate Problem 13-1 to fulfill the following requirements. Required: 1. Prepare the statement of cash flows using th...

Q: Ingersol Construction Supply Company is developing its annual financial statements at December

Ingersol Construction Supply Company is developing its annual financial statements at December 31,2012. The statements are complete except for the statement of cash flows. The completed comparativebal...

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: 1. Does Urban Outfitters use the direct or indirect method to report cash flows from opera...

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

Refer to the financial statements of American Eagle Outfitters (Appendix B) and Urban Outfitters (Appendix C) and the Industry Ratio Report (Appendix D) at the end of this book. Required: 1. Compute...

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

Refer to the financial statements of American Eagle Outfitters given in Appendix B at the end of this book. Required: 1. On the statement of cash flows, what was the largest item (in absolute value)...

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: New Vision Company completed its income statement and balance sheet for 2011

New Vision Company completed its income statement and balance sheet for 2011 and provided the following information: Required: Present the operating activities section of the statement of cash flows...

Q: Time Warner Inc. is a leading media and entertainment company with

Time Warner Inc. is a leading media and entertainment company with businesses in television networks, filmed entertainment, and publishing. The company’s 2008 annual report contained the following inf...

Q: Deep Waters Company was started several years ago by two diving instructors

Deep Waters Company was started several years ago by two diving instructors. The company’s comparative balance sheets and income statement are presented below, along with additional...

Q: Refer to the information for Satellite Company in Exercise 13-6

Refer to the information for Satellite Company in Exercise 13-6. Information from Exercise 13-6 The following information pertains to Satellite Company: Required: Present the operating activities s...

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: An analysis of accounts follows: a. Purchased equipment,

An analysis of accounts follows: a. Purchased equipment, $19,000, and issued capital stock in full payment. b. Purchased a long-term investment for cash, $15,000. c. Paid cash dividend, $10,000. d. So...

Q: To compare statement of cash flows reporting under the direct and indirect

To compare statement of cash flows reporting under the direct and indirect methods, enter check marks to indicate which items are used with each method.

Q: The following information pertains to Satellite Company: /

The following information pertains to Satellite Company: Required: Present the operating activities section of the statement of cash flows for Satellite Company using the indirect method.

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: Lisa K. Corporation reported net income of $86,000

Lisa K. Corporation reported net income of $86,000, depreciation expense of $2,000, and cash flow from operations of $52,500. Compute the quality of income ratio. What does the ratio tell you about th...

Q: Which of the following is not added to net income when computing

Which of the following is not added to net income when computing cash flows from operationsunder the indirect method? a. The net increase in accounts payable. b. The net decrease in accounts receivabl...

Q: The total change in cash as shown near the bottom of the

The total change in cash as shown near the bottom of the statement of cash flows for the year should agree with which of the following? a. The difference in retained earnings when reviewing the compar...

Q: If the balance in prepaid expenses has increased during the year,

If the balance in prepaid expenses has increased during the year, what action should be taken on the statement of cash flows when following the indirect method, and why? a. The change in the account b...

Q: Consider the following: Net income  =  $10,000, 

Consider the following: Net income  =  $10,000, depreciation expense  =  $2,000, accounts receivable increased by $700, inventory decreased by $400, and accounts payable increased by $300. Based on th...

Q: Use the information concerning HiDefFilms , Inc., provided in Problem 13

Use the information concerning HiDefFilms , Inc., provided in Problem 13-1 to fulfill the following requirements. Required: 1. Prepare the statement of cash flows using the direct method for the year...

Q: XS Supply Company is developing its annual financial statements at December 31

XS Supply Company is developing its annual financial statements at December 31, 2011. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and i...

Q: HiDef Films , Inc., is developing its annual financial statements at

HiDef Films , Inc., is developing its annual financial statements at December 31, 2012. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and...

Q: BG Wholesalers is developing its annual financial statements at December 31,

BG Wholesalers is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and inco...

Q: Under the indirect method, depreciation expense is added to net income

Under the indirect method, depreciation expense is added to net income to report cash flows from operating activities. Does depreciation cause an inflow of cash?

Q: Winter Corporation has just completed its comparative statements for the year ended

Winter Corporation has just completed its comparative statements for the year ended December 31, 2012. At this point, certain analytical and interpretive procedures are to be undertaken. The completed...

Q: Richard Company has just prepared the following comparative annual financial statements for

Richard Company has just prepared the following comparative annual financial statements for 2012: Required (round percentages and ratios to two decimal places): 1. For 2012, compute the tests of ( a...

Q: The following information was contained in the annual financial statements of Cone

The following information was contained in the annual financial statements of Cone Company, whichstarted business January 1, 2011 (assume account balances only in Cash and Capital Stock on this date;a...

Q: In this chapter, we discussed the ROE profit driver (or

In this chapter, we discussed the ROE profit driver (or DuPont model). Using that framework, find the missing amount in each case that follows: Case 1: ROE is 10 percent; net income is $200,000; asset...

Q: Match each ratio or percentage with its computation. /

Match each ratio or percentage with its computation.

Q: Compute the return on equity ratio for 2012 given the following data

Compute the return on equity ratio for 2012 given the following data:

Q: The comparative financial statements prepared at December 31, 2012, for

The comparative financial statements prepared at December 31, 2012, for Prince Company showed the following summarized data: *One-third was credit sales. † During 2012, cash divide...

Q: Use the data given in P14-6 for Prince Company.

Use the data given in P14-6 for Prince Company. Required: 1. Present component percentages for 2012 only. 2. Respond to the following for 2012: a. What was the average percentage markup on sales? b....

Q: Use the 2012 data in P14-6 for Prince Company.

Use the 2012 data in P14-6 for Prince Company. Assume a stock price of $28 per share. Compute the appropriate ratios. Data from P14-6 The comparative financial statements prepared at December 31, 201...

Q: Hershey’s is a familiar name in snacks. There’s a good chance

Hershey’s is a familiar name in snacks. There’s a good chance you have recently enjoyed one of itsproducts. The company manufactures confectionery products in a var...

Q: The 2012 financial statements for the Price and Waterhouse companies are summarized

The 2012 financial statements for the Price and Waterhouse companies are summarized here: The companies are in the same line of business and are direct competitors in a large metropolitan area. Bot...

Q: Arbor Corporation’s financial statements for 2011 showed the following:

Arbor Corporation’s financial statements for 2011 showed the following: Income Statement Revenues .................................................................$300,000 Expenses...

Q: Whole Foods Market, Inc., is the world’s leading natural and

Whole Foods Market, Inc., is the world’s leading natural and organic foods supermarket. The company is based in Austin, Texas, and conducts business through various wholly-owned subs...

Q: At December 31, 2011, the records of Duo Corporation provided

At December 31, 2011, the records of Duo Corporation provided the following selected and incomplete data: Common stock (par $1; no changes during the year). Shares authorized, 5,000,000. Shares issued...

Q: Procter & Gamble is a $77 billion company that sells products

Procter & Gamble is a $77 billion company that sells products that are part of most of our daily lives, including Mr. Clean, Cheer, Crest, Vicks, Scope, Pringles, Folgers, Vidal Sassoon, Zest, and Cha...

Q: The table below presents the retained earnings statements for Dillsboro Corporation for

The table below presents the retained earnings statements for Dillsboro Corporation for 3 successive years. Certain numbers are missing. Required: Use your understanding of the relationship between su...

Q: Data from the financial statements of four different companies are presented in

Data from the financial statements of four different companies are presented in separate columns in the table below. Each column has one or more data items missing. Required: Use your understanding of...

Q: Leno Corporation reported the following amounts for assets and liabilities at the

Leno Corporation reported the following amounts for assets and liabilities at the beginning and end of a recent year. Required: Calculate Leno’s net income or net loss for the year i...

Q: At the beginning of 2019, KJ Corporation had total assets of

At the beginning of 2019, KJ Corporation had total assets of $525,700, total liabilities of $290,800, common stock of $100,000, and retained earnings of $134,900. During 2019, KJ had net income of $20...

Q: Susan Eel wants to sell you her wholesale fish store. She

Susan Eel wants to sell you her wholesale fish store. She shows you a balance sheet with total assets of $150,000 and total liabilities of $20,000. According to the income statement, last year’s net i...

Q: Balance Sheet listed below are items that may appear on a balance

Balance Sheet listed below are items that may appear on a balance sheet. Item Classification 1. Accounts payable........................................ a. Current assets 2. Machinery.............

Q: An analysis of the transactions of Canary Cola Inc. yields the

An analysis of the transactions of Canary Cola Inc. yields the following information: service revenue, $78,000; supplies expense, $33,200; rent expense, $20,500; and dividends, $7,000. Required: What...

Q: The following are several transactions for Halpin Advertising Company. a

The following are several transactions for Halpin Advertising Company. a. Purchased $1,000 of supplies. b. Sold $5,000 of advertising services, on account, to customers. c. Used $250 of supplies. d. C...

Q: Lauhl Corporation provides janitorial services to several office buildings. During April

Lauhl Corporation provides janitorial services to several office buildings. During April, Lauhl engaged in the following transactions: a. On April 1, Lauhl received $24,000 from Metro Corporation to p...

Q: Listed below are several users of accounting information and decisions that user

Listed below are several users of accounting information and decisions that user may make. User of Accounting Decision Information 1. Manager a. Determines whether the compa...

Q: How does accrual-basis net income differ from cash-basis

How does accrual-basis net income differ from cash-basis net income?

Q: Listed below are events that affect stockholders’ equity. a.

Listed below are events that affect stockholders’ equity. a. Reported net income of $85,000. b. Paid a cash dividend of $10,000. c. Reported sales revenue of $120,000. d. Issued common stock of $50,00...

Q: Listed below are three independent scenarios. /

Listed below are three independent scenarios. Required: Compute the missing amount in each row. Assume no withdrawals or dividends.

Q: On January 1, 2019, Mulcahy Manufacturing Inc., a newly

On January 1, 2019, Mulcahy Manufacturing Inc., a newly formed corporation, issued 1,000 shares of common stock in exchange for $150,000 cash. No other shares were issued during 2019, and no shares we...

Q: During 2019, Moore Corporation paid $20,000 of dividends

During 2019, Moore Corporation paid $20,000 of dividends. Moore’s assets, liabilities, and common stock at the end of 2018 and 2019 were: Required: Using the information provided, c...

Q: A list of accounting concepts and related definitions is presented below.

A list of accounting concepts and related definitions is presented below. Concept Definition 1. Revenue a. Owner’s claim on the resources of a company 2. Expense b. The difference between reven...

Q: Reproduced below are portions of the president’s letter to stockholders and selected

Reproduced below are portions of the president’s letter to stockholders and selected income statement and balance sheet data for the Wright Brothers Aviation Company. Wright Brothers...

Q: Obtain Apple Inc.’s 2016 annual report either through the ‘‘

Obtain Apple Inc.’s 2016 annual report either through the ‘‘Investor Relations’’ portion of their website (do a web search for Apple investor relations) or go to www.sec.gov and click ‘‘Company Filing...

Q: Refer to the 10-K reports of Under Armour, Inc

Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com. Required: Answer the following questions: 1. D...

Q: Each column presents financial information taken from one of four different companies

Each column presents financial information taken from one of four different companies, with one or more items of data missing. Required: Use your understanding of the relationships among financial s...

Q: The table below presents the retained earnings statements for Bass Corporation for

The table below presents the retained earnings statements for Bass Corporation for 3 successive years. Certain numbers are missing. Required: Use your understanding of the relationship between success...

Q: Data from the financial statements of four different companies are presented in

Data from the financial statements of four different companies are presented in separate columns in the table below. Each column has one or more data items missing. Required: Use your understanding o...

Q: Carson Corporation reported the following amounts for assets and liabilities at the

Carson Corporation reported the following amounts for assets and liabilities at the beginning and end of a recent year. Required: Calculate Carson’s net income or net loss for the ye...

Q: At the beginning of 2019, Huffer Corporation had total assets of

At the beginning of 2019, Huffer Corporation had total assets of $232,400, total liabilities of $94,200, common stock of $50,000, and retained earnings of $88,200. During 2019, Huffer had net income o...

Q: Information for TTL Inc. is given below. /

Information for TTL Inc. is given below. Required: Use the relationships in the balance sheet, income statement, and retained earnings statement to determine the missing values.

Q: Each column presents financial information taken from one of four different companies

Each column presents financial information taken from one of four different companies, with one or more items of data missing. Required: Use your understanding of the relationships among financial s...

Q: Problem 13.18 and Exhibit 13.7 in Chapter 13

Problem 13.18 and Exhibit 13.7 in Chapter 13 present selected hypothetical data from projected financial statements for Steak ‘n Shake for Year +1 to Year +11. The amounts for Year +...

Q: The Coca-Cola Company is a global soft-drink beverage

The Coca-Cola Company is a global soft-drink beverage company that is a primary and direct competitor with PepsiCo. The data in Chapter 12 Exhibits 12.14–12.16 include the actual amo...

Q: In this chapter, we evaluated shares of common equity in PepsiCo

In this chapter, we evaluated shares of common equity in PepsiCo using the value-to-book approach, market multiples, price differentials, and reverse engineering. The Coca-Cola Company competes direct...

Q: We projected financial statements for Walmart Stores for Years þ1 through +

We projected financial statements for Walmart Stores for Years þ1 through +5. The data in Chapter 12 Exhibits 12.17–12.19 include the actual amounts for 2012 and the p...

Q: Bart and Elizabeth Forrest are married and have no dependents. They

Bart and Elizabeth Forrest are married and have no dependents. They have asked you to advise them whether they should file jointly or separately in 2017. They present you with the following informatio...

Q: A law practice was incorporated on January 1, 2017, and

A law practice was incorporated on January 1, 2017, and expects to earn $25,000 per month before deducting the lawyer’s salary. The lawyer owns 100% of the stock. The corporation and the lawyer both u...

Q: Prance, Inc., earns pretax book net income of $800

Prance, Inc., earns pretax book net income of $800,000 in 2016. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $80,000. Prance reported no...

Q: Using the facts of Problem 28, determine the 2016 end-

Using the facts of Problem 28, determine the 2016 end-of-year balance in Prance’s deferred tax asset and deferred tax liability balance sheet accounts. Facts of Problem 28 Prance, Inc., earns pretax...

Q: Schedule M–1 of Form 1120 is used to reconcile financial

Schedule M–1 of Form 1120 is used to reconcile financial accounting net income with taxable income reported on the corporation’s income tax return as follows: Net income per books + Additions ─ Subtra...

Q: In the current year, Pelican, Inc., incurs $10

In the current year, Pelican, Inc., incurs $10,000 of meals and entertainment expenses that it deducts in computing net income per the corporation’s financial statements. All of the meals and entertai...

Q: Forrester owns a nonrental business with two separate departments. Department A

Forrester owns a nonrental business with two separate departments. Department A generates net income of $70,000, and Department B generates a net loss of $58,000. Forrester participates 800 hours in t...

Q: Chaz transfers cash of $60,000 to a newly formed

Chaz transfers cash of $60,000 to a newly formed corporation for 100% of the stock. In its initial year, the corporation has net income of $15,000. The income is credited to its earnings and profits a...

Q: Mike, an attorney, earns $200,000 from his

Mike, an attorney, earns $200,000 from his law practice and receives $45,000 in dividends and interest during the year. In addition, he incurs a loss of $50,000 from an investment in a passive activit...

Q: Sean Moon is president, secretary, treasurer, sole director,

Sean Moon is president, secretary, treasurer, sole director, and sole shareholder of Streetz, an S corporation real estate company. He manages all aspects of the company’s operations...

Q: An exempt organization is considering conducting bingo games on Thursday nights as

An exempt organization is considering conducting bingo games on Thursday nights as a way of generating additional revenue to support its exempt purpose. Before doing so, however, the president of the...

Q: For each of the following organizations, determine its UBTI and any

For each of the following organizations, determine its UBTI and any related UBIT. a. AIDS, Inc., an exempt charitable organization that provides support for individuals with AIDS, operates a retail me...

Q: On June 1 of the current tax year, Elisha and Ezra

On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $200,000. Ezra contributes a building and l...

Q: One of the key concepts in fiduciary income taxation is that of

One of the key concepts in fiduciary income taxation is that of distributable net income (DNI). List the major functions of DNI on one PowerPoint slide, with no more than five bullets, to present to y...

Q: Using Exhibit 28.4 as a guide, describe the computation

Using Exhibit 28.4 as a guide, describe the computation of a fiduciary entity’s accounting income, taxable income, and distributable net income. Exhibit 28.4

Q: Sanjog and Rajiv Gupta have started a business that manufactures and sells

Sanjog and Rajiv Gupta have started a business that manufactures and sells thermal mugs. Users personalize the mugs by plugging them into a laptop and downloading their favorite images from a digital...

Q: Wujo is a Shanghai company that designs high-end software to

Wujo is a Shanghai company that designs high-end software to enhance and edit digital images. Its software, EzPhoto, is more powerful and easier to use than Adobe Photoshop, but sells at a much lower...

Q: Old Rosebud is a Kentucky horse farm that specializes in boarding thoroughbred

Old Rosebud is a Kentucky horse farm that specializes in boarding thoroughbred breeding mares and their foals. Customers bring their breeding mares to Old Rosebud for delivery of their foals and after...

Q: The telecom division of Kothari Inc. produces and sells 100,

The telecom division of Kothari Inc. produces and sells 100,000 line modulators. Half of the modulators are sold externally at $150 per unit, and the other half are sold internally at variable manufac...

Q: The following data summarize the operating performance of your company’s wholly owned

The following data summarize the operating performance of your company’s wholly owned Canadian subsidiary for 2009 to 2011. The cost of capital for this subsidiary is 10 percent. Req...

Q: Premier Brands buys and manages consumer personal products brands such as cosmetics

Premier Brands buys and manages consumer personal products brands such as cosmetics, hair care, and personal hygiene. Premier management purchases underperforming brands and redesigns their marketing...

Q: Using the data from Table 10–6, recast the analysis

Using the data from Table 10–6, recast the analysis with one change of assumption: Instead of assuming that an additional $17,000 of overhead was incurred in both years, assume that...

Q: DigiEar has invented and patented a new digital behind-the-

DigiEar has invented and patented a new digital behind-the-ear hearing aid with adaptive noise reduction and automatic feedback cancellation. DigiEar produces four different models of its DigiEar devi...

Q: The Easton plant produces sheet metal chassis for television sets. Its

The Easton plant produces sheet metal chassis for television sets. Its customer is General Electric Appliances. The chassis are manufactured on a computerized, numerically controlled (NC) machine that...

Q: Familia Insurance Company (FMC) specializes in offering insurance products to

Familia Insurance Company (FMC) specializes in offering insurance products to the Hispanic community. It has its own direct sales organization of agents that sells three lines of insurance: life insur...

Q: Compute the unknowns: / There is no opening or

Compute the unknowns: There is no opening or closing finished goods or work-in-process inventory.

Q: Alliance Tooling produces a single product in its plant. At the

Alliance Tooling produces a single product in its plant. At the beginning of the year, there were no units in inventory. During the year, Alliance produced 120,000 units and sold 100,000 units at $26....

Q: Old Turkey Mash is a whiskey manufactured by distilling grains and

Old Turkey Mash is a whiskey manufactured by distilling grains and corn and then aging the mixture for five years in 50-gallon oak barrels. Distilling requires about a week and aging takes place in c...

Q: Aspen View produces a full line of sunglasses. This year it

Aspen View produces a full line of sunglasses. This year it began producing a new model of sunglasses, the Peak 32. It produced 5,300 pairs and sold 4,900 pairs. The following table summarizes the fix...

Q: Avant Designs designs and manufactures polished-nickel fashion bracelets. It

Avant Designs designs and manufactures polished-nickel fashion bracelets. It offers two bracelets: Aztec and Mayan. The following data summarize budgeted operations for the current year: Budgeted fixe...

Q: Federal Mixing (FM) is a division of Federal Chemicals,

Federal Mixing (FM) is a division of Federal Chemicals, a large diversified chemical company. FM provides mixing services for both outside customers and other Federal divisions. FM buys or receives li...

Q: Kollel is a private hospital that operates in a large metropolitan area

Kollel is a private hospital that operates in a large metropolitan area. The hospital admits “regular” patients and “private” pa...

Q: Beckett is a large car dealership that sells several different automobile manufacturers

Beckett is a large car dealership that sells several different automobile manufacturers new cars (Toyota, Ford, Lexus, and Subaru). Beckett also consists of a Pre-owned Cars Department and a large ser...

Q: A large consulting firm is looking to expand the services currently offered

A large consulting firm is looking to expand the services currently offered its clients. The firm has developed a new performance metric called “Economic Earnings,” or EE for short. The performance me...

Q: Taylor designs and manufactures high-performance bicycle chains for professional racers

Taylor designs and manufactures high-performance bicycle chains for professional racers and serious amateurs. Two new titanium chain sets, the Challenger and the Tour, sell for €110 a...

Q: Goodstone Tires designs, manufactures, and sells automotive tires through three

Goodstone Tires designs, manufactures, and sells automotive tires through three profit centers (divisions): Passenger Vehicles, Industrial Vehicles, and Racing. The Racing Division develops state-of t...

Q: Picture Maker is a freestanding photo kiosk consumers use to download their

Picture Maker is a freestanding photo kiosk consumers use to download their digital photos and make prints. Shashi Sharma has a small business that leases several Picture Makers from the manufacturer...

Q: Allied Adhesives (AA) manufactures specialty bonding agents for very specialized

Allied Adhesives (AA) manufactures specialty bonding agents for very specialized applications (electronic circuit boards, aerospace, health care, etc.). AA operates a number of small plants around the...

Q: CJ Equity Partners is a privately held firm that buys small family

CJ Equity Partners is a privately held firm that buys small family-owned firms, installs professional managers to run the firms, and then sells them 3–5 years later, often for a subs...

Q: Vorma manufactures two proprietary all-natural fruit antioxidant food additives that

Vorma manufactures two proprietary all-natural fruit antioxidant food additives that are approved by the U.S. Food and Drug Administration. One is for liquid vitamins (LiqVita) and the other is used b...

Q: Navisky designs, manufactures, and sells specialized GPS (Global Positioning

Navisky designs, manufactures, and sells specialized GPS (Global Positioning System) devices for commercial applications. For example, Navisky currently sells a system for environmental studies and is...