Questions from Financial Accounting

Q: On January 1, 2017, Worldwide Manufacturing purchased a machine for

On January 1, 2017, Worldwide Manufacturing purchased a machine for $810,000 that it expected to have a useful life of four years. The company estimated that the residual value of the machine was $5...

Q: Jackson Petroleum, a giant oil company, holds reserves of oil

Jackson Petroleum, a giant oil company, holds reserves of oil and gas assets. At the end of 2018, assume the cost of Jackson’s oil reserves totaled $180 billion, representing 10 billion barrels of oil...

Q: Suppose a Walmart store in Fillmore, Missouri, ended January 2018

Suppose a Walmart store in Fillmore, Missouri, ended January 2018 with 900,000 units of merchandise that cost $5 each. Suppose the store then sold 50,000 units for $510,000 during February. Further, a...

Q: Munchies, Inc., dominates the snack-food industry with its

Munchies, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that Munchies purchased Sweet Snacks Company for $5.4 million cash. The market value of Sweet Snacks’ assets is $10...

Q: For each of the following scenarios, indicate whether a long-

For each of the following scenarios, indicate whether a long-term asset has been impaired (Y for yes and N for no) and, if so, the amount of the loss that should be recorded.

Q: In 2018, Ambrosia Corporation LO 7reported $100 million in sales

In 2018, Ambrosia Corporation LO 7reported $100 million in sales, $18 million in net income, and average total assets of $200 million. What is Ambrosia’s return on assets in 2018?

Q: Lexington Garden Supply pays $280,000 for a group purchase

Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $124,000, the building’s current market...

Q: Oscar Optical Corporation provides a full line of designer eyewear to

Oscar Optical Corporation provides a full line of designer eyewear to consumers. Oscar reported the following information for 2018 and 2017: Compute return on assets (ROA) for 2018 and 2017. Using th...

Q: During 2018, Silverspring Systems, Inc., purchased two other companies

During 2018, Silverspring Systems, Inc., purchased two other companies for $10 million in cash. Also during 2018, Silverspring made capital expenditures of $8.6 million in cash to expand its market sh...

Q: Identify each of the following items as a capital expenditure, an

Identify each of the following items as a capital expenditure, an immediate expense, or neither. 1. Constructed a new parking lot on leased property for $300,000. 2. Paid property taxes of $75,000 for...