Question: Financial information related to Udder Products

> The following errors took place in journalizing and posting transactions: a. Cash of $8,800 received on account was recorded as a debit to Fees Earned and a credit to Cash. b. A $1,760 purchase of supplies for cash was recorded as a debit to Supplies Exp

> The following errors took place in journalizing and posting transactions: a. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. b. A withdrawal of $10,000 by Brian Phillips, owne

> Identify the errors in the following trial balance. All accounts have normal balances. Mascot Co. Unadjusted Trial Balance For the Month Ending July 31, 2019 Account No. Debit Credit Balances Balances Cash 11 36,000 ... Accounts Receivable.. 12 112,

> Oak Interiors is owned and operated by Fred Biggs, an interior decorator. In the ledger of Oak Interiors, the first digit of the account number indicates its major account classification (1—assets, 2—liabilities, 3—owner’s equity, 4—revenues, 5—expenses)

> State for each account whether it is likely to have (a) Debit entries only, (b) Credit entries only, or (c) Both debit and credit entries. Also indicate its normal balance. 1. Accounts Payable 2. Cash 3. Del Robinson, Drawing 4. Miscellaneous Expense 5.

> State for each account whether it is likely to have (a) Debit entries only, (b) Credit entries only, or (c) Both debit and credit entries. Also indicate its normal balance. 1. Accounts Receivable 2. Commissions Earned 3. Heidi Schmidt, Capital 4. Rent Ex

> The following errors occurred in posting from a two-column journal: 1. A credit of $6,000 to Accounts Payable was not posted. 2. An entry debiting Accounts Receivable and crediting Fees Earned for $5,300 was not posted. 3. A debit of $2,700 to Accounts P

> The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not balance: When the ledger and other records are reviewed, you discover the following: (1) The debits and credits in the cash account total $77,600 and $62

> The following accounts appeared in recent financial statements of Delta Air Lines: Accounts Payable Advanced Payments for Equipment Air Traffic Liability Aircraft Fuel (Expense) Aircraft Maintenance (Expense) Aircraft Rent (Expense) Cargo Revenue Cash

> The following accounts appeared in recent financial statements of Delta Air Lines: Accounts Payable Advanced Payments for Equipment Air Traffic Liability Aircraft Fuel (Expense) Aircraft Maintenance (Expense) Aircraft Rent (Expense) Cargo Revenue Cash

> A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2019, follows: Cash receipts: Cash received from customers ……………………………………………………… $734,000 Cash received from additional investment of owner …………………………… 36,000 Cash payments

> A summary of cash flows for Adventure Travel Service for the year ended April 30, 2019, follows: Cash receipts: Cash received from customers ………………………………………………………. $2,080,000 Cash received from additional investment of owner ………………………………. 60,000 Cash pay

> Describe the difference between an account receivable and an account payable.

> Using the following data for Sentinel Travel Service as well as the statement of owner’s equity shown in Practice Exercise 1-5B, prepare a report form balance sheet as of August 31, 2019: Accounts payable ………………………… $ 44,600 Accounts receivable ………………………

> The revenues and expenses of Sentinel Travel Service for the year ended August 31, 2019, follow: Fees earned ……………………………………… $750,000 Office expense ……………………………………. 295,000 Miscellaneous expense ………………………….. 12,000 Wages expense …………………………………… 450,000 P

> The revenues and expenses of Adventure Travel Service for the year ended April 30, 2019, follow: Fees earned …………………………………. $2,180,000 Office expense …………………………………. 400,000 Miscellaneous expense ……………………….. 25,000 Wages expense ………………………………. 1,300,000 P

> On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July: a. Opened a business bank account with a deposit of $25,000 from personal funds. b. Purchased office supplies on account, $1,850.

> Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: 1. Received cash from owner as additional investment, $18,000. 2. Paid advertising expense, $4,

> Bridgeport Delivery Service is owned and operated by Jerome Foley. The following selected transactions were completed by Bridgeport Delivery Service during February: 1. Received cash from owner as additional investment, $40,000. 2. Billed customers for d

> Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank w

> Marco Brolo is one of three partners who own and operate Silkroad Partners, a global import–export business. Marco is the partner in charge of recording partnership transactions in the accounts. On his way to work one day, Marco’s car broke down. At the

> Using the following data for Adventure Travel Service as well as the statement of owner’s equity shown in Practice Exercise 1-5A, prepare a report form balance sheet as of April 30, 2019: Accounts payable …………………………. $105,000 Accounts receivable ……………………

> Amazon.com, an Internet retailer, was incorporated and began operation in the mid-nineties. On the statement of cash flows, would you expect Amazon.com’s net cash flows from operating, investing, and financing activities to be positive

> By satisfying certain specific requirements, accountants may become certified as public accountants (CPAs), management accountants (CMAs), or internal auditors (CIAs). Find the certification requirements for one of these accounting groups by accessing on

> Lisa Duncan, a junior in college, has been seeking ways to earn extra spending money. As an active sports enthusiast, Lisa plays tennis regularly at the Phoenix Tennis Club, where her family has a membership. The president of the club recently approached

> On January 1, 2018, Dr. Marcie Cousins established Health-Wise Medical, a medical practice organized as a proprietorship. The following conversation occurred the following August between Dr. Cousins and a former medical school classmate, Dr. Avi Abu, at

> There are two common causes of business and accounting fraud: • A failure of individual character • A culture of greed or ethical indifference within an organization Write a brief memo describing how these two factors could lead to accounting fraud.

> 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 Exchange Commission (SEC). It includes the company’s financia

> Big Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and operated by Joe Flannery, a well-known sports enthusiast and hunter. Joe’s wife, Pam, owns and operates Glacier Boutique, a wome

> Peyton Smith enjoys listening to all types of music and owns countless CDs. Over the years, Peyton has gained a local reputation for knowledge of music from classical to rap and the ability to put together sets of recordings that appeal to all ages. Duri

> The amounts of the assets and liabilities of Wilderness Travel Service at April 30, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Harper Borg, owner, was $180,000 at May 1, 2018, the beginning of the year, an

> 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 personal funds. b. Purchased supplies on account, $4,000. c.

> a. Land with an assessed value of $750,000 for property tax purposes is acquired by a business for $900,000. Ten years later, the plot of land has an assessed value of $1,200,000 and the business receives an offer of $2,000,000 for it. Should the monetar

> 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, determine the proper amounts for (a) through (p). Atlas

> Bev’s Dry Cleaners is owned and operated by Beverly Zahn. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company for a fee. The assets and the liabilities of th

> On April 1, 2019, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April: a. Opened a business bank account with a deposit of $24,000 from personal funds. b. Paid rent on office and equipment for the m

> Jose Loder established Bronco Consulting on August 1, 2019. The effect of each transaction and the balances after each transaction for August follow: Instructions 1. Prepare an income statement for the month ended August 31, 2019. 2. Prepare a statemen

> 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 $30,000 from personal funds. b. Purchased office supplie

> Lowe’s Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over 1,800 stores. Lowe’s recently reported the following balance sheet data (in millions): a. Determine the tota

> The Home Depot is the world’s largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Home Depot operates over 2,200 Home Depot® stores that sell a wide assortmen

> Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business. At the end of its accounting period, December 31, 2018, Be-The-One has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the fo

> 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? We-Sell Realty Income Statement August 31, 2019

> A summary of cash flows for Ethos Consulting Group for the year ended May 31, 2019, follows: Cash receipts: Cash received from customers ……………………………………………………. $637,500 Cash received from additional investment of owner ………………………… 62,500 Cash payments: Cas

> Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the year ended August 31, 2019. Barb Schroeder, the owner, invested an additional $36,000 in the business during the year an

> 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 statements, determine the proper amounts for (a) through (p)

> Each of the following items is shown in the financial statements of Exxon Mobil Corporation: 1. Accounts payable 2. Cash equivalents 3. Crude oil inventory 4. Equipment 5. Exploration expenses 6. Income taxes payable 7. Investments 8. Long-term debt 9. M

> 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. b. Determine the amount of net income for March, assum

> One item is omitted in each of the following summaries of balance sheet and income statement data for the following four different proprietorships: Determine the missing amounts, identifying them by letter. Freeman Heyward Jones Ramirez Beginning o

> Dairy Services was organized on August 1, 2019. A summary of the revenue and expense transactions for August follows: Fees earned ……………………………………….. $783,000 Wages expense …………………………………….. 550,000 Rent expense …………………………………………. 35,000 Supplies expense ………

> Seth Feye established Reliance Financial Services on July 1, 2019. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July follow: Instructions 1. Prep

> From the following list of selected items taken from the records of Rosewood Appliance Service as of a specific date, identify those that would appear on the balance sheet: 1. Accounts Payable 2. Accounts Receivable 3. Andrew King, Capital 4. Cash 5. Fee

> Terry Fleming is the owner and operator of Go-For-It LLC, a motivational consulting business. At the end of its accounting period, December 31, 2018, Go-For-It has assets of $675,000 and liabilities of $215,000. Using the accounting equation, determine t

> 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 equity, are summarized as follows: On the basis of t

> Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owner’s equity for the year ended April 30, 2019. Jerome Foley, the owner, invested an additional $60,000 in the business during the year and

> The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $670,000 on January 1, 2019, the beginning of the year. D

> 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 equation. Each increase and decrease in ownerâ&#12

> The following selected transactions were completed by Silverado Delivery Service during February: 1. Received cash from owner as additional investment, $25,000. 2. Purchased supplies for cash, $750. 3. Paid rent for February, $3,000. 4. Paid advertising

> 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. Using the accounting equation and considering each cas

> a. A vacant lot acquired for $115,000 is sold for $298,000 in cash. What is the effect of the sale on the total amount of the seller’s (1) Assets, (2) Liabilities, and (3) Owner’s equity? b. Assume that the seller owes $80,000 on a loan for the land. Aft

> Describe how the following business transactions affect the three elements of the accounting equation: a. Invested cash in business. b. Paid for utilities used in the business. c. Purchased supplies for cash. d. Purchased supplies on account. e. Received

> The following data were taken from Alvarado Company’s balance sheet: a. Compute the ratio of liabilities to owner’s equity. b. Has the creditor’s risk increased or decreased from December 31, 2018,

> The following data were taken from Mesa Company’s balance sheet: a. Compute the ratio of liabilities to owner’s equity. b. Has the creditor’s risk increased or decreased from December 31, 2018, to D

> Indicate whether each of the following is identified with (1) An asset, (2) A liability, or (3) Owner’s equity: a. accounts receivable b. accounts payable c. cash d. fees earned e. land f. rent expense g. supplies

> A fertilizer manufacturing company wants to relocate to Lakeside County. A report from a fired researcher at the company indicates the company’s product is releasing toxic by-products. The company suppressed that report. A later report commissioned by th

> D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company for a fee. The assets and liabilities of the busi

> The following is a list of well-known companies: 1. Alcoa Inc. 2. Boeing 3. Caterpillar 4. Citigroup Inc. 5. CVS 6. Delta Air Lines 7. eBay Inc. 8. FedEx 9. Ford Motor Company 10. Gap Inc. 11. H&R Block 12. Hilton Hospitality, Inc. 13. Procter & Gamble 1

> Why is a treaty important to a nonresident worker in the United States?

> What is a permanent establishment and why is it an important part of most income tax treaties?

> What is the primary goal of the United States in negotiating income tax treaties with other countries?

> Describe a reason why a generation-skipping tax was necessary to augment the estate and gift taxes.

> People sometimes confuse the unified credit with the exemption equivalent. Describe how these terms differ and how they are related.

> True or False: Including taxable gifts when calculating the estate tax subjects these transfers to double taxation. Explain.

> Describe a reason why transfers of terminable interests should not qualify for the marital deduction.

> Explain why the fair market value of a life estate is more difficult to estimate than an income interest.

> Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively. a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above? b. Complete UpAHill’s

> Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which were conducted through a foreign branch. Spartania taxes branch income at 25 percent, and the United States taxes corporate inc

> Explain how a remainder and an income interest are valued for transfer tax purposes.

> Identify the factors that determine the proportion of the value of property held in joint tenancy with the right of survivorship that will be included in a decedent’s gross estate.

> List the conditions for making an election to split gifts.

> Describe the conditions for using the annual exclusion to offset an otherwise taxable transfer.

> Renée operates Scandinavian Imports, a furniture shop in Olney, Maryland that ships goods to customers in all 50 states. Scandinavian Imports also appraises antique furniture and has recently conducted in-home appraisals in the District of Columbia, Mary

> Freon Corporation, a U.S. corporation, manufactures air-conditioning and warm air heating equipment. Freon reported gross sales from this product group of $50,000,000, of which $10,000,000 were foreign source. The gross profit percentage for domestic sal

> Identify two types of transfers for inadequate consideration that are specifically excluded from imposition of the gift tax.

> Describe a situation in which a transfer of cash to a trust might be considered an incomplete gift.

> Describe a property transfer or payment that is not, by definition, a transfer for inadequate consideration.

> Describe the requirements for a complete gift, and contrast a gift of a present interest with a gift of a future interest.

> IBM incurs $250 million of research and experimental expenditures (R&E) in the United States. How does the “exclusive apportionment” of this deduction differ depending on the R&E apportionment method chosen in the computation of the foreign tax credit li

> Hank is a single individual who possesses a life insurance policy worth $300,000 that will pay his two children a total of $800,000 upon his death. This year Hank transferred the policy and all incidents of ownership to an irrevocable trust that pays inc

> Suppose Vince dies this year with a gross estate of $15 million and no adjusted prior gifts. Calculate the amount of estate tax due (if any) under the following alternative conditions. a. Vince leaves his entire estate to his spouse, Millie. b. Vince lea

> Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2016 under both the daily allocation and the specific identification allocation methods? Ref

> Montgomery has decided to engage in wealth planning and has listed the value of his assets below. The life insurance has a cash surrender value of $120,000 and the proceeds are payable to Montgomery’s estate. The trust is an irrevocable

> Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made additional gifts in 2009, at which time he gave $1,750,000 to each of his three children and an additional $1,000,000 to State University (a charity). The annual exclusion

> What is the difference between a sales tax and a use tax?

> Carmen SanDiego, a U.S. citizen, is employed by General Motors Corporation, a U.S. corporation. On April 1, 2016, GM relocated Carmen to its Brazilian operations for the remainder of 2016. Carmen was paid a salary of $120,000 and was employed on a 5-day

> Owl Vision Corporation (OVC) is a North Carolina corporation engaged in the manufacture and sale of contact lens and other optical equipment. The company handles its export sales through sales branches in Belgium and Singapore. The average tax book value

> Waco Leather, Inc., a U.S. corporation, reported total taxable income of $5 million. Taxable income included 1.5 million of foreign source taxable income from the company’s branch operations in Mexico. All of the branch income is general category income.

> Mackinac Corporation, a U.S. corporation, reported total taxable income of $5 million. Taxable income included $1.5 million of foreign source taxable income from the company’s branch operations in Canada. All of the branch income is general category inco

> Distinguish between a definitely related deduction and a not definitely related deduction in the allocation and apportionment of deductions to foreign source taxable income.

> How does the U.S.-Belgium treaty define a permanent establishment for determining nexus? Look at Article 5 of the 2007 U.S.-Belgium income tax treaty, which you can find on the IRS Website, www.irs.gov.

> Falmouth Kettle Company, a U.S. corporation, sells its products in the United States and Europe. During the current year, selling, general, and administrative (SG&A) expenses included: Personnel department………………………………………………………………………………$