Question: Explain how transactions related to plant assets

> The stockholders’ equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Preferred Stock (7%, $100 par noncumulative, 5,000 shares authorized) $ 300,000 Common Stock ($4 stated value, 300,000 shares authorized) 1,000,000 Paid-in C

> At December 31, 2016, Suisse Imports reported this information on its balance sheet. Instructions (a) Prepare the journal entries to record each of these fi ve transactions. Assume that no cash discounts were taken on the collections of accounts receiva

> Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Ehler had the following transactions related to notes payable. Sept.1 Issued a $12,000 note to Pippen to

> On May 15, Wild Quest Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480. Instructions (a) Determine

> Trayer Corporation has income from continuing operations of $290,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes). 1. An unrealized loss of $80,000 on available-for-sale securities. 2. A gain of

> An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts of Hailey Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary. (a) Payment of inter

> Sagan Co. had these transactions during the current period. June 12 Issued 80,000 shares of $1 par value common stock for cash of $300,000. July 11 Issued 3,000 shares of $100 par value preferred stock for cash at $106 per share. Nov. 28 Purchased 2,000

> a. Beauty Island Corporation began operations on April 1 by issuing 55,000 shares of $5 par value common stock for cash at $13 per share. In addition, Beauty Island issued 1,000 shares of $1 par value preferred stock for $6 per share. Journalize the issu

> a. PK Photography reported net income of $100,000 for 2017. Included in the income statement were depreciation expense of $6,300, patent amortization expense of $4,000, and a gain on disposal of plant assets of $3,600. PK’s comparative

> What term is commonly used under IFRS in reference to the balance sheet?

> Peete Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. (a) 900 units of inventory shipped on consignment by Peete to another comp

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information in the financial statements, determine each of the followin

> a. Mantle Company has been in business several years. At the end of the current year, the unadjusted trial balance shows: Accounts Receivable $ 310,000 Dr. Sales Revenue 2,200,000 Cr. Allowance for Doubtful Accounts 5,700 Cr. Bad de

> Columbia Sportswear Company’s financial statements are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information contained in these financial statements, compute free cash flow

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information in these financial statements, compute the 2014 return on c

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information contained in these financial statements, compute the curren

> Busch Company has these obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments and (c) interest payable of $15,000 on the mortgage, and (d) accounts pa

> Each of these items must be considered in preparing a statement of cash flows for Irvin Co. for the year ended December 31, 2017. For each item, state how it should be shown in the statement of cash flows for 2017. (a) Issued bonds for $200,000 cash. (b)

> Jenny Perez believes a current liability is a debt that can be expected to be paid in one year. Is Jenny correct? Explain.

> What is component depreciation, and when must it be used?

> Kiley Corporation had these transactions during 2017. (a) Purchased a machine for $30,000, giving a long-term note in exchange. (b) Issued $50,000 par value common stock for cash. (c) Issued $200,000 par value common stock upon conversion of bonds having

> Indicate whether each of the following statements is true or false. ______ 1. The corporation is an entity separate and distinct from its owners. ______ 2. The liability of stockholders is normally limited to their investment in the corporation. ______ 3

> Define current assets. What basis is used for ordering individual items within the current assets section?

> These items are taken from the financial statements of Martin Corporation for 2017. Retained earnings (beginning of year)……………………………$31,000 Utilities expense………………………………………………………………..2,000 Equipment………………………………………………………………………66,000 Accounts payable………………

> Moss Corporation had the following transactions. 1. Issued $160,000 of bonds payable. 2. Paid utilities expense. 3. Issued 500 shares of preferred stock for $45,000. 4. Sold land and a building for $250,000. 5. Loaned $30,000 to Dead End Corporation, rec

> Joe, a student, asks your help in understanding some characteristics of a corporation. Explain each of these to Joe. (a) Separate legal existence. (b) Limited liability of stockholders. (c) Transferable ownership rights.

> Explain sustainable income. What relationship does this concept have to the treatment of discontinued operations on the income statement?

> (a) What is a statement of cash flows? (b) Pat Marx maintains that the statement of cash flows is an optional financial statement. Do you agree? Explain.

> On January 1, 2017, the ledger of Romada Company contained these liability accounts. Accounts Payable $42,500 Sales Taxes Payable 6,600 Unearned Service Revenue 19,000 During January, the following selected transactions occurred. Jan.

> Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016. Instructions (a) Prepare a vertical analysis of the 2017 income statement data for Duke Co

> You are provided with the following information regarding events that occurred at Moore Corporation during 2017 or changes in account balances as of December 31, 2017. Instructions Moore prepares its statement of cash flows using the indirect approach.

> Tidal Corporation was organized on January 1, 2017. It is authorized to issue 20,000 shares of 6%, $50 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were complete

> Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for liabilities.

> Discuss the differences that exist in the treatment of bank overdrafts under GAAP and IFRS.

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information contained in these fi nancial statements, compute the follo

> How is the cost for a plant asset measured in a cash transaction? In a noncash transaction?

> Kelly Jones and Tami Crawford borrowed $15,000 on a 7-month, 8% note from Gem State Bank to open their business, JC’s Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018. Instructions (a) Prepare the entry to record

> For its fiscal year ending October 31, 2017, Haas Corporation reports the following partial data shown below. Income before income taxes $540,000 Income tax expense (20% × $420,000) 84,000 Income from continuing operations 456,000 L

> During its first year of operations, Mona Corporation had these transactions pertaining to its common stock. Jan. 10 Issued 30,000 shares for cash at $5 per share. July 1 Issued 60,000 shares for cash at $7 per share. Instructions (a) Journalize the tran

> a. You and several classmates are studying for the next accounting examination. They ask you to answer the following questions: 1. If cash is borrowed on a $60,000, 9-month, 10% note on August 1, how much interest expense would be incurred by December 31

> In its proposed 2017 income statement, Hrabik Corporation reports income before income taxes $500,000, income taxes $100,000 (not including unusual items), loss on operation of discontinued music division $60,000, gain on disposal of discontinued music d

> The financial statements of Apple Inc. are presented in Appendix A. Instructions for accessing and using the company’s complete annual report, including the notes to the financial statements, are also provided in Appendix A. Instructions Answer the follo

> Your parents are considering investing in Apple Inc. common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Financial statements of Apple are presented in Appendix A. Instructions for accessing and using the com

> The financial statements of Apple Inc. are presented in Appendix A. Instructions Answer the following questions. (a) What was the amount of net cash provided by operating activities for the year ended September 27, 2014? For the year ended September 28,

> The stockholders’ equity section of Apple Inc.’s balance sheet is shown in the Consolidated Statement of Financial Position in Appendix A. Instructions for accessing and using the company’s complete annual report, including the notes to its financial sta

> Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

> Refer to the financial statements of Apple Inc. in Appendix A. Instructions Answer the following questions. (a) What were Apple’s total current liabilities at September 27, 2014? What was the increase/decrease in Apple’s total current liabilities from th

> Adama Company incurred the following costs. Instructions Indicate to which account Adama would debit each of the costs. 1. Sales tax on factory machinery purchased 2. Painting of and lettering on truck immediately upon purchase 3. Installation and t

> (a) Identify the three activities that pertain to a petty cash fund, and indicate an internal control principle that is applicable to each activity. (b) When are journal entries required in the operation of a petty cash fund?

> (a) Describe cash equivalents and explain how they are reported. (b) How should restricted cash funds be reported on the balance sheet?

> You are comparing two companies in the same industry. You have determined that Gore Corp. depreciates its plant assets over a 40-year life, whereas Ross Corp. depreciates its plant assets over a 20-year life. Discuss the implications this has for compari

> Trisha Massey asks for your help concerning an NSF check. Explain to Trisha (a) what an NSF check is, (b) how it is treated in a bank reconciliation, and (c) whether it will require an adjusting entry on the company’s books.

> Mesa Corporation uses straightline depreciation for financial reporting purposes but an accelerated method for tax purposes. Is it acceptable to use different methods for the two purposes? What is Mesa Corporation’s motivation for doing this?

> Peyton Corporation and Rogers Corporation operate in the same industry. Peyton uses the straightline method to account for depreciation, whereas Rogers uses an accelerated method. Explain what complications might arise in trying to compare the results of

> Cassy Dominic, a marketing executive for Fresh Views Inc., has proposed expanding its product line of framed graphic art by producing a line of lower-quality products. These would require less processing by the company and would provide a lower profit ma

> The financial statements of Louis Vuitton are presented in Appendix F. Instructions for accessing and using the company’s complete annual report, including the notes to its financial statements, are also provided in Appendix F. Instructions Using the not

> Since hiring a new sales director, Tilton Inc. has enjoyed a 50% increase in sales. The CEO has also noticed, however, that the company’s average collection period has increased from 17 days to 38 days. What might be the cause of this increase? What are

> How do these principles apply to cash disbursements? (a) Physical controls. (b) Human resource controls.

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Identify two accounts on Columbia’s balance sheet that provide evidence that Columbi

> Often research and development costs provide companies with benefits that last a number of years. (For example, these costs can lead to the development of a patent that will increase the company’s income for many years.) However, generally accepted accou

> Basic information relating to a new machine purchased by Gotham Company is presented in E9-5. Instructions Using the facts presented in E9-5, compute depreciation using the following methods in the year indicated. (a) Declining-balance using double the s

> The president of Ericson Inc. proudly announces her company’s improved liquidity since its current ratio has increased substantially from one year to the next. Does an increase in the current ratio always indicate improved liquidity? What other ratio or

> Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $100,000. Over its 4-year useful life, the bus is expected to be driven 160,000 miles. Salvage value is expected to be $

> Under what conditions is goodwill recorded? What is the proper accounting treatment for amortizing goodwill?

> Mendez Corporation reported net income of $58,000. Depreciation expense for the year was $132,000. The company calculates depreciation expense using the straight-line method, with a useful life of 10 years. Top management would like to switch to a 15-yea

> Bailey Corp. significantly reduced its requirements for credit sales. As a result, sales during the current year increased dramatically. It had receivables at the beginning of the year of $38,000 and ending receivables of $191,000. Credit sales were $380

> Ricci’s Pizza operates strictly on a carryout basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can see other employees making the pizzas and the large ovens in which the piz

> Linley Company reports the following information (in millions) during a recent year: net sales, $11,408.5; net earnings, $264.8; total assets, ending, $4,312.6; and total assets, beginning, $4,254.3. Instructions (a) Calculate the (1) return on assets, (

> Kael Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August. Aug. 1 Established the petty cash fund by writing a check payable to the petty cash custodian for $200. 15 Replenished the petty cash

> Warwick Company hires an accounting intern who says that intangible assets should always be amortized over their legal lives. Is the intern correct? Explain.

> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions (a) Based on the information contained in these financial statements, determine the foll

> Lymen International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a significant step up in quality above the companyâ€&#153

> General Motors Company has accounts receivable and notes receivable. How should the receivables be reported on the balance sheet?

> Assume that Kohl’s Department Stores installed new cash registers in its stores. How do cash registers improve internal control over cash receipts?

> The following ratios are available for Ming Inc. Instructions (a) Is Ming’s short-term liquidity improving or deteriorating in 2017? Be specifi c in your answer, referring to relevant ratios. (b) Do changes in turnover ratios affect pr

> During a recent management meeting, Bruce Dunn, director of marketing, proposed that the company begin capitalizing its marketing expenditures as goodwill. In his words, “Marketing expenditures create goodwill for the company which benefits the company f

> Mendosa Company dishonors a note at maturity. What are the options available to the lender?

> Wes Unsel is concerned with control over mail receipts at Wooden Sporting Goods. All mail receipts are opened by Mel Blount. Mel sends the checks to the accounting department, where they are stamped “For Deposit Only.” The accounting department records a

> Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017. 1. Collections from customers: January $71,000 and February $146,000. 2. Payments to suppliers: Janu

> The questions listed below are independent of one another. Instructions Provide a brief answer to each question. (a) Why should a company depreciate its buildings? (b) How can a company have a building that has a zero reported book value but substantial

> Suppose the following information was taken from the 2017 financial statements of FedEx Corporation, a major global transportation/delivery company. Instructions Answer each of the following questions. (a) Calculate the accounts receivable turnover and

> If your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses to the following. (a) How is cash defined in the Codification? (b) How are cash equivalents defined in the Codification? (c) W

> Len Kumar started his own consulting firm, Kumar Consulting, on June 1, 2017. The trial balance at June 30 is as follows. In addition to those accounts listed on the trial balance, the chart of accounts for Kumar also contains the following accounts: Ac

> Alliance Atlantis Communications Inc. changed its accounting policy to amortize broadcast rights over the contracted exhibition period, which is based on the estimated useful life of the program. Previously, the company amortized broadcast rights over th

> The following is a list of activities that companies perform in relation to their receivables. 1. Selling receivables to a factor. 2. Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business. 3. Collecting information on co

> A new accountant at Wyne Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2017. 1. $60 of currency and coin in a locked box used

> Marsh Corporation owns a machine that is fully depreciated but is still being used. How should Marsh account for this asset and report it in the financial statements?

> On January 1, 2017, Haley Company had a balance of $360,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional t

> On December 1, 2017, Ravenwood Company had the following account balances. During December, the company completed the following transactions. Dec. 7 Received $3,600 cash from customers in payment of account (no discount allowed). 12 Purchased merchandis

> Some people argue that the internal control requirements of the Sarbanes-Oxley Act (SOX) put U.S. companies at a competitive disadvantage to companies outside the United States. Discuss the competitive implications (both pros and cons) of SOX.

> Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices. 1. Once a month, the sales department sends sales invoices to the accou

> What was Apple’s balance in cash and cash equivalents at December 31, 2014? Did it report any restricted cash? How did Apple define cash equivalents?

> Mark Coney is considering investing in Wiggles Pet Food Company. Wiggles’ net income increased considerably during the most recent year even though many other companies in the same industry reported disappointing earnings. Mark wants to know whether the

> Albert Company discovers in 2017 that its ending inventory at December 31, 2016, was $5,000 under- stated. What effect will this error have on: (a) 2016 net income, (b) 2017 net income, and (c) the combined net income for the 2 years?

> Earl Massey, director of marketing, wants to reduce the selling price of his company’s products by 15% to increase market share. He says, “I know this will reduce our gross profit rate, but the increased number of units sold will make up for the lost mar

> Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it. (a) An employee’s monthly credit card payments are nearly 75% of their monthly earnings. (b) An employee earns minimum wage

> Identify the basic principles of cash management.

> How can the amount of collections from customers be determined?

> How does the average-cost method of inventory costing differ between a perpetual inventory system and a periodic inventory system?

> Hank Cook is confused about the lack of agreement between the cash balance per books and the balance per bank. Explain the causes for the lack of agreement to Hank and give an example of each cause.