Jansen Company’s general ledger showed a checking account balance of $23,820 at the end of May 2021. The May 31 cash receipts of $2,340, included in the general ledger balance, were placed in the night depository at the bank on May 31 and were processed by the bank on June 1. The bank statement dated May 31, 2021, showed bank service charges of $38. All checks written by the company had been processed by the bank by May 31 and were listed on the bank statement except for checks totaling $1,890. Required: Prepare a bank reconciliation as of May 31, 2021.
> On January 1, 2021, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2021: Required: Calculate the estimated ending inventory and cost of goods sold for 2021 using the information provided.
> Adams Corporation uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of September 2021: The company used the average cost flow method and es
> LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2021: Sales are recorded net of employee discou
> Almaden Valley Variety Store uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Required: Estimate the ending inventory and cost of goods sold for 2021, applying the conventional retail met
> Crosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the three months e
> Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2021: Required: Determine the December 31, 2021, inventory by applying the conventional retail method using the information provided.
> During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the
> San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2021: Required: Estimate the average cost of ending
> National Distributing Company uses a periodic inventory system to track its merchandise inventory and the gross profit method to estimate ending inventory and cost of goods sold for interim periods. Net purchases for the month of August were $31,000. The
> A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2021 = $1,900,000 Purchases to date = 5,800,000 Freight-in = 400,000 Sales to date = 8,200,0
> On July 15, 2021, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the gross method of accounting for purchase discounts. Required: 1. Pr
> The Phoenix Corporation’s fiscal year ends on December 31. Phoenix determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company’s controller has asked for your help in deciding if the followi
> The December 31, 2021, year-end inventory balance of the Raymond Corporation is $210,000. You have been asked to review the following transactions to determine if they have been correctly recorded. 1. Goods shipped to Raymond f.o.b. destination on Decemb
> The Kwok Company’s inventory balance on December 31, 2021, was $165,000 (based on a 12/31/2021 physical count) before considering the following transactions: 1. Goods shipped to Kwok f.o.b. destination on December 20, 2021, were received on January 4, 20
> The Playa Company has the following information in its records. Certain data have been intentionally omitted ($ in thousands). Required: Determine the missing numbers. Show computations where appropriate.
> On January 1, 2021, the general ledger of Tripley Company included the following account balances: The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2021, the company had the following transactions: Jan.
> On January 1, 2021, Displays Incorporated had the following account balances: From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account for $330,000. b. Sold inventory on account for $570,000. The cost
> Refer to the situation described in BE 7–4. Answer the questions assuming that Tristar uses the net method to account for sales discounts. Data from BE 7-4: On December 28, 2021, Tristar Communications sold 10 units of its new satellite uplink system to
> The June 30, 2021, year-end trial balance for Askew Company contained the following information: In addition, you determine that the June 30, 2021, inventory balance is $40,000. Required: Calculate the cost of goods sold for the Askew Company for the yea
> Mercury Company has only one inventory pool. On December 31, 2021, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $200,000. Inventory data are as follows: Required: Compute the in
> On January 1, 2021, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $660,000. The 2021 and 2022 ending inventory valued at year-end costs were $690,000 and $760,000, respectively. The
> The table below contains selected information from recent financial statements of The Home Depot, Inc., and Lowe’s Companies, Inc., two companies in the home improvement retail industry ($ in millions): Required: Calculate the gross pro
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine each of the following: 1. The specific nine-digit Codification citation (XXX-XX-XXX-X) that describes the disclosure requirements that must be made by publicl
> The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inventory of 20,000 units consisted of the following, listed in chronological order of acquisition: 12,000 units at a cost of $8.
> The Reuschel Company began 2021 with inventory of 10,000 units at a cost of $7 per unit. During 2021, 50,000 units were purchased for $8.50 each. Sales for the year totaled 54,000 units leaving 6,000 units on hand at the end of 2021. Reuschel uses a peri
> AmerisourceBergen is an American drug wholesale company. The company uses the LIFO inventory method for external reporting but maintains its internal records using FIFO. The following disclosure note was included in a recent quarterly report: 5. Inventor
> Tipton Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: Jan. 1: Inventory on hand—80,000 units; cost $4.25 each. Feb. 14: Purcha
> John’s Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May: 1. John’s purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash. 2. John’s returned some of the
> On December 28, 2021, Tristar Communications sold 10 units of its new satellite uplink system to various customers for $25,000 each. The terms of each sale were 1/10, n/30. Tristar uses the gross method to account for sales discounts. In what year will i
> To more efficiently manage its inventory, Treynor Corporation maintains its internal inventory records using first-in, first-out (FIFO) under a perpetual inventory system. The following information relates to its merchandise inventory during the year: Ja
> Causwell Company began 2021 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During 2021, an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end of 2021 (20,000 units therefor
> The following information is taken from the inventory records of the CNB Company for the month of September: Required: 1. Assuming that CNB uses a periodic inventory system and employs the average cost method, determine cost of goods sold for September a
> Alta Ski Company’s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. Required: 1. Which method, FIFO or LIFO, will result in the highest cost of goods sol
> Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug. 1: Inventory on hand—2,000 units; cost $5.30 each. 8: Purchased 8,000 units for $5.50 each. 14: Sold 6,000 units for $12.00 e
> Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug. 1: Inventory on hand—2,000 units; cost $5.30 each. 8: Purchased 8,000 units for $5.50 each. 14: Sold 6,000 units for $12.00 e
> Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug. 1 Inventory on hand—2,000 units; cost $5.30 each. 8: Purchased 8,000 units for $5.50 each. 14: Sold 6,000 units for $12.00 ea
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine each of the following: 1. The specific eight-digit Codification citation (XXX-XX-XX-X) that describes the meaning of cost as it applies to the initial measure
> Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual
> On July 15, 2021, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts. Required: 1. Prep
> Thaler Inc. holds a $1 million receivable ($800,000 principal, $200,000 accrued interest) from Einhorn Industries, and agrees to settle the receivable outright for $900,000 given Einhorn’s difficult financial situation. How much gain or loss should Thale
> The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on accounting for accounts receivable using the FASB’s Codif
> Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax’s sales are for credit (no cash is collected at the time of sale). The company began 2021
> Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepare
> Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the gross method of accounting for cash discounts. Required: 1. Prepa
> Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $600 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Required: 1. Prepare the
> Parker Inc. has the following cash balances: Required: 1. Prepare the current assets and current liabilities section of Parker’s 2021 balance sheet, assuming Parker reports under U.S. GAAP. 2. Prepare the current assets and current liab
> On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: During January 2021, the following transactions occur: 1. January 2: Provide services to customers for cash, $35,100. 2. January 6: Provide services to
> At January 1, 2021, Clayton Hoists Inc. owed Third BancCorp $12 million, under a 10% note due December 31, 2022. Interest was paid last on December 31, 2019. Clayton was experiencing severe financial difficulties and asked Third BancCorp to modify the te
> Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2021 bank statement included the following information: The companyâ
> Shan Enterprises received a bank statement listing its May 31, 2021, bank balance as $47,582. Shan determined that as of May 31 it had cash receipts of $2,500 that were not yet deposited and checks outstanding of $7,224. Calculate Shan’s correct May 31,
> The petty cash fund of Ricco’s Automotive contained the following items at the end of September 2021: The petty cash fund was established at the beginning of September with a transfer of $150 from cash to the petty cash account. Require
> Loucks Company established a $200 petty cash fund on October 2, 2021. The fund is replenished at the end of each month. At the end of October 2021, the fund contained $37 in cash and the following receipts: Required: Prepare the necessary general journal
> The current asset section of the Moorcroft Outboard Motor Company’s balance sheet reported the following amounts: The average collection period for 2021 is 50 days. Required: Determine net sales for 2021.
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Required: Indicate the specific seven-digit Codification citation (XXX-XX-XX) for each of the following items: 1. Accounts receivables from related parties should be sh
> Microsoft Corporation reported the following information in its financial statements for three successive quarters ($ in millions): Required: Compute the receivables turnover ratio and the average collection period for Q1 and Q4. Assume that each quarter
> Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021: Mar. 17: Accounts receivable of $1,700 were written off as uncollectible. The company uses the allowance method. 3
> Listed below are several terms and phrases associated with cash and receivables. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. List A: 1. Internal control 2. Trade discount 3. Cash equival
> Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due on July 1, 2021. On February 28, 2020, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 12%. Re
> Mountain High Ice Cream Company reports under IFRS. Mountain High transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cov
> Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. W
> Marin Company’s general ledger indicates a cash balance of $22,340 as of September 30, 2021. Early in October Marin received a bank statement indicating that during September Marin had an NSF check of $1,500 returned to a customer and incurred service ch
> If the adjusting entries prepared in BE 2–5 were not recorded, would net income be higher or lower and by how much? Data from BE 2-5: Prepare the necessary adjusting entries at December 31 for each of the items listed in BE 2–4. Depreciation on the equi
> Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivabl
> On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2021, the company borrowed $450,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The
> On January 1, 2021, the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January 1, 2022. The 2021 income statement reported $2,200 in interest reven
> On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2023. The effective interest rate is 8%. Required: 1. How
> Delta Automotive Corporation has the following assets listed in its 12/31/2021 trial balance: Required: 1. Determine the correct balance of cash and cash equivalents to be reported in the current asset section of the 2021 balance sheet. 2. For each of th
> On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $30,000 on March 21, 2022. The fair value of the merchandise exchanged is $28,200. Esquire views the fi
> On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% rate is appropriate in this situation. Require
> General Mills reported the following information in its 2017 financial statements ($ in millions): A note disclosed that the allowance for uncollectible accounts had a balance of $24.3 million and $29.6 million at the end of 2017 and 2016, respectively.
> Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $17,280 at the beginning of 2021 and a $22,410 credit balance at the end of 2021 (after adjusting entries). If the direct w
> Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts receivable totaled $625,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balanc
> Refer to the situation described in BE 7–19. Assuming that the sale criteria are not met, describe how Logitech would account for the transfer. Data from BE 7-19: Logitech Corporation transferred $100,000 of accounts receivable to a local bank. The tran
> Zuo Software categorizes its accounts receivable into four age groups for purposes of estimating its allowance for uncollectible accounts. 1. Accounts not yet due = $400,000; estimated uncollectible = 8%. 2. Accounts 1–30 days past due = $50,000; estimat
> Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance for uncollectible accounts. 1. Accounts not yet due = $180,000; estimated uncollectible = 10%. 2. Accounts 1–45 days past due = $25,000; e
> Ervin Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2021, net credit sales totaled $4,500,000, and the estimated bad debt percentage is 1.5%. No pr
> Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $30,000 at the beginning of 2021. No previously written-off ac
> Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $250,000 of services on account. In 2021, the company wrote off uncollectible accounts of $10,000. By the end of 2
> The controller of the Red Wing Corporation is in the process of preparing the company’s 2021 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The fol
> On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 5,000 units of Comfort Office Keyboard to one of its clients, Bionics, Inc., at a fixed price of $95,000, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021
> On March 1, 2021, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s
> n 2021, Long Construction Corporation began construction work under a three-year contract. The contract price is $1,600,000. Long recognizes revenue over time according to percentage of completion for financial reporting purposes. The financial statement
> Brady Construction Company contracted to build an apartment complex for a price of $5,000,000. Construction began in 2021 and was completed in 2023. The following is a series of independent situations, numbered 1 through 6, involving differing costs for
> On April 19, 2021, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%. What amount of sales revenue would Millipede recognize on April 19, 2021
> On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2021, costs of $2,000,000 were incurred, with estimated costs of $4,000,000 yet to be incurred. Billings o
> On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2021, costs of $2,000,000 were incurred with estimated costs of $4,000,000 yet to be incurred. Billings of
> On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $220 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs inc
> Ski West, Inc., operates a downhill ski area near Lake Tahoe, California. An all-day adult lift ticket can be purchased for $85. Adult customers also can purchase a season pass that entitles the pass holder to ski any day during the season, which typical
> Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: Required: 1. Compute the amount of revenue and g
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Required: Determine the specific nine-digit Codification citation (XXX-XX-XX-XX) for accounting for each of the following items: 1. What disclosures are required with r
> Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor receives $600,000 in exchange for satisfying the following separate performance obligations: (1) franchisees have a five-year right
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Required: Determine the specific nine-digit Codification citation (XXX-XX-XX-XX) for accounting for each of the following items: 1. What alternative approaches can be u
> Furtastic manufactures imitation fur garments. On June 1, 2021, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2021. In a separate transaction on June 15, 2021, Furtastic purc
> Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $40,000. Seneca paid for the snowmobiles on January 1, 2021, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time
> On December 1, 2021, Davenport Company sold merchandise to a customer for $20,000. In payment for the merchandise, the customer signed a 6% note requiring the payment of interest and principal on March 1, 2022. How much interest revenue will the company
> Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2021, and Arctic received a note from Seneca indicating that Seneca will pay Arctic $40,000 on a future date. Unless informed otherwise, assume th
> Assume the same facts as in E 6–10. Required: Complete the requirements of E 6–10 assuming that Rocky bases estimates of variable consideration on the expected value it expects to receive. Data from E 6-10: Rocky Guide Service provides guided 1–5-day hi
> Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2021, of a five-period annual annuity of $5,000 under each of the following situations: 1. The first payment is received on Dec
> Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. Using the appropriate time-value of money table,
> Determine the combined present value as of December 31, 2021, of the following four payments to be received at the end of each of the designated years, assuming an annual interest rate of 8%.
