Question: Kelley Company reports $960,000 of net

> On December 31, 2015, Lujack Co. held the following short-term available-for-sale securities. Lujack had no short-term investments prior to the current period. Prepare the December 31, 2015, year-end adjusting entry to record the fair value adjustment fo

> On December 31, 2015, Reggit Company held the following short-term investments in its portfolio of available-for-sale securities. Reggit had no short-term investments in its prior accounting periods. Prepare the December 31, 2015, adjusting entry to repo

> Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during calendar-year 2015. Use the account Short-Term Investments for any transactions that you de

> Prepare journal entries to record the following transactions involving the short-term securities investments of Natura Co., all of which occurred during year 2015. a. On June 15, paid $1,000,000 cash to purchase Remedy’s 90-day short-term debt securities

> Brooks Co. purchases various investments in trading securities at a cost of $66,000 on December 27, 2015. (This is its first and only purchase of such securities.) At December 31, 2015, these securities had a fair value of $72,000. 1. Prepare the Decembe

> Prepare journal entries to record the following transactions involving the short-term securities investments of Duke Co., all of which occurred during year 2015. a. On March 22, purchased 1,000 shares of RIP Company stock at $10 per share plus an $80 bro

> The Carrefour Group reports the following description of its financial assets available-for-sale. Carrefour’s financial statements report €18 million in net unrealized losses (net of unrealized gains), which are inclu

> On May 8, 2015, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2016. Jett prepares quarterly financial statements on March 31, June 30, September 30

> Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2015, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for £1 was $1.4583.

> Kramer and Knox began a partnership by investing $60,000 and $80,000, respectively. The partners agreed to share net income and loss by granting annual salary allowances of $50,000 to Kramer and $40,000 to Knox, 10% interest allowances on their investmen

> The following information is available from the financial statements of Regae Industries. Compute Regae’s return on total assets for 2015 and 2016. (Round returns to one-tenth of a percent.) Comment on the company’s ef

> Prepare journal entries to record the following transactions and events of Kodax Company. 2015 Jan. 2 Purchased 30,000 shares of Grecco Co. common stock for $408,000 cash plus a broker’s fee of $3,000 cash. Bushtex has 90,000 shares of common stock outst

> Information regarding Carperk Company’s individual investments in securities during its calendar-year 2015, along with the December 31, 2015, fair values, follows. a. Investment in Brava Company bonds: $420,500 cost, $457,000 fair value. Carperk intends

> Ticker Services began operations in 2013 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow. Prepare journal entries to record each year-end fair value adj

> Complete the following descriptions by filling in the blanks. 1. Debt securities reflect a ______ relationship such as investments in notes, bonds, and certificates of deposit. 2. Equity securities reflect an ______ relationship such as shares of stock i

> On January 1, 2015, Shay issues $700,000 of 10%, 15-year bonds at a price of 973⁄4. Six years later, on January 1, 2021, Shay retires 20% of these bonds by buying them on the open market at 1041⁄2. All interest is accounted for and paid through December

> Citywide Company issues bonds with a par value of $150,000 on their stated issue date. The bonds mature in five years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. 1. What is the amount

> Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate a

> Woodwick Company issues 10%, five-year bonds, on December 31, 2014, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 2

> Dobbs Company issues 5%, two-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 2015;

> Kramer and Knox began a partnership by investing $60,000 and $80,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income should be allocated to the partners under each of the followi

> Paulson Company issues 6%, four-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 201

> Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. 1. What is the amount of

> Heineken N.V. reports the following information for its loans and borrowings as of December 31, 2013, including proceeds and repayments for the year ended December 31, 2013 (euros in millions). 1. Prepare Heineken’s journal entry to r

> Tano issues bonds with a par value of $180,000 on January 1, 2015. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date

> General Motors advertised three alternatives for a 25-month lease on a new Tahoe: (1) zero dollars down and a lease payment of $1,750 per month for 25 months, (2) $5,000 down and $1,500 per month for 25 months, or (3) $38,500 down and no payments for 25

> Harbor (lessee) signs a five-year capital lease for office equipment with a $10,000 annual lease payment. The present value of the five annual lease payments is $41,000, based on a 7% interest rate. 1. Prepare the journal entry Harbor will record at ince

> On May 1, 2015, Brussels Enterprises issues bonds dated January 1, 2015, that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par plus four months’ accrued interest. 1. H

> Duval Co. issues four-year bonds with a $100,000 par value on June 1, 2015, at a price of $95,948. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31. 1. Prepare an amortization table like the one in Exhibit 14.7

> Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate a

> Stanford issues bonds dated January 1, 2015, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at t

> Angela Moss and Autumn Barber organize a partnership on January 1. Moss’s initial net investment is $75,000, consisting of cash ($17,500), equipment ($82,500), and a note payable reflecting a bank loan for the new business ($25,000). Barber’s initial inv

> Montclair Company is considering a project that will require a $500,000 loan. It presently has total liabilities of $220,000 and total assets of $620,000. 1. Compute Montclair’s (a) present debt-to-equity ratio and (b) the debt-to-equity ratio assuming i

> Use the information in Exercise 14-10 to prepare the journal entries for Eagle to record the loan on January 1, 2015, and the four payments from December 31, 2015, through December 31, 2018. Information from Exercise 14-10: On January 1, 2015, Eagle bor

> On January 1, 2015, Eagle borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal total payments of accrued interest and principal on December 31 of each year from 2015 through 2018. 1. Compute the amount of each o

> On January 1, 2015, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondho

> Use the data in Exercise 13-8 to determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combine

> York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared

> The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows: On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock&aci

> On June 30, 2015, Sharper Corporation’s common stock is priced at $62 per share before any stock dividend or split, and the stockholders’ equity section of its balance sheet appears as follows. 1. Assume that the com

> Sudoku Company issues 7,000 shares of $7 par value common stock in exchange for land and a building. The land is valued at $45,000 and the building at $85,000. Prepare the journal entry to record issuance of the stock in exchange for the land and buildin

> Prepare journal entries to record the following four separate issuances of stock. 1. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash. 2. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange

> For each of the following separate cases, recommend a form of business organization. With each recommendation, explain how business income would be taxed if the owners adopt the form of organization recommended. Also list several advantages that the owne

> The following information is available for Amos Company for the year ended December 31, 2015. a. Balance of retained earnings, December 31, 2014, prior to discovery of error, $1,375,000. b. Cash dividends declared and paid during 2015, $43,000. c. It neg

> Alexander Corporation reports the following components of stockholders’ equity on December 31, 2015: In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 3,000 shares of its own stock at $25 cash per shar

> Unilever Group reports the following equity information for the years ended December 31, 2013 and 2012 (euros in millions). 1. Match each of the three account titles—share capital, share premium, and retained profit—

> The equity section of Cyril Corporation’s balance sheet shows the following: Determine the book value per share of the preferred and common stock under two separate situations. 1. No preferred dividends are in arrears. 2. Three years

> Compute the dividend yield for each of these four separate companies. Which company’s stock would probably not be classified as an income stock? Explain. A B 1 Annual Cash Market Value 2 Company Dividend per Share per Share 1 $16.0

> Compute the price-earnings ratio for each of these four separate companies. Which stock might an analyst likely investigate as being potentially undervalued by the market? Explain. A B 1 Earnings per Share Market Value 2 Company per Share 3 1 $12.00

> Indicate whether the company in each separate case 1 through 3 has entered into an operating lease or a capital lease. 1. The lessor retains title to the asset, and the lease term is three years on an asset that has a five-year useful life. 2. The title

> On October 10, the stockholders’ equity of Sherman Systems appears as follows: 1. Prepare journal entries to record the following transactions for Sherman Systems. a. Purchased 5,000 shares of its own common stock at $25 per share on

> Complete the following descriptions by filling in the blanks. 1. Consolidated ______ ______ show the financial position, results of operations, and cash flows of all entities under the parent’s control, including all subsidiaries. 2. The equity metho

> Match each description 1 through 6 with the characteristic of preferred stock that it best describes by writing the letter of that characteristic in the blank next to each description. A. Callable B. Convertible C. Cumulative D. Noncumulative E. Nonparti

> While reviewing the March 31, 2016, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market statement shows that the funds are earning an annualized return of 0

> Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2016, for Business Solutions follow. Required 1. The bank has offered a

> Santana Rey created Business Solutions on October 1, 2015. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources. a. Santana’s sister Cicely

> At the start of 2014, Santana Rey is considering adding a partner to her business. She envisions the new partner taking the lead in generating sales of both services and merchandise for Business Solutions. S. Rey’s equity in Business Solutions as of Janu

> Datamix, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2015 and 2016. 2015 May 26 Sold merchandise for 6.5 million yen to Fuji Company of Japan, payment in full to be received in 60 days. On t

> Troyer’s long-term available-for-sale portfolio at December 31, 2014, consists of the following. Troyer enters into the following long-term investment transactions during year 2015. Jan. 13 Sold 2,125 shares of Company S stock for $7

> Brinkley Company, which began operations on January 3, 2015, had the following subsequent transactions and events in its long-term investments. 2015 Jan. 5 Brinkley purchased 20,000 shares (25% of total) of Bloch’s common stock for $200,500. Aug. 1 Bloc

> Paris Enterprises, which began operations in 2015, invests in long-term available-for-sale securities. Following is a series of transactions and events involving its long-term investment activity. 2015 Mar. 10 Purchased 1,200 shares of Apple at $25.50 pe

> Assume that the Turner, Roth, and Lowe partnership of Exercise 12-10 is a limited partnership. Turner and Roth are general partners and Lowe is a limited partner. Determine how much, if any, each partner should contribute to the partnership to cover any

> Slip Systems had no short-term investments prior to 2015. It had the following transactions involving short-term investments in available-for-sale securities during 2015. Feb. 6 Purchased 3,400 shares of Nokia stock at $41.25 per share plus a $3,000 brok

> Harris Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions relate to its short-term investments in its trading securities. 2015 Mar. 10 Purchased 2,400 shares of AOL at $59.15 per share plus a

> Refer to the bond details in Problem 14-4B. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 14B.2 for the bonds’ li

> Refer to the bond details in Problem 14-5B. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3.

> At the end of the current year, the following information is available for both Atlas Company and Bryan Company. Required 1. Compute the debt-to-equity ratios for both companies. 2. Comment on your results and discuss what they imply about the relative

> On October 1, 2015, Gordon Enterprises borrows $150,000 cash from a bank by signing a three-year installment note bearing 10% interest. The note requires equal total payments each year on September 30. Required 1. Compute the total amount of each instal

> Ripkin Company issues 9%, five-year bonds dated January 1, 2015, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market rate is 8% on the issue date. Required 1. Calculate

> Romero issues $3,400,000 of 10%, 10-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000. Required 1. Prepare the January 1, 2015, journal entry to record the bonds&ac

> Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partner

> Describe how each of the following characteristics of organizations applies to a corporation. I. Owner authority and control 5. Duration of life 6. Owner liability 7. Legal status 2. Ease of formation 3. Transferability of ownership 4. Ability to ra

> Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Incurred other overhead costs (record credit to Other Accounts). 2. Application of overhead to work in process. Information from Exercise 19-7:

> Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Direct labor usage. 2. Indirect labor usage. 3. Total payroll paid in cash. Information from Exercise 19-7: The following information is avail

> 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. Paid $50,000 cash to settle a note payable at its $50

> Use the following information about sales and costs to prepare a scatter diagram. Draw a cost line that reflects the behavior displayed by this cost. Determine whether the cost is variable, step-wise, fixed, mixed, or curvilinear. Period Sales Costs

> Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory overhead, and then as a prime and/or conversion cost. (

> Lorenzo Company uses a job order costing system that charges overhead to jobs on the basis of direct material cost. At year-end, the Work in Process Inventory account shows the following. 1. Determine the predetermined overhead rate used (based on dire

> In December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead cos

> Prepare journal entries to record the following production activities. 1. Transferred completed goods from the Assembly department to finished goods inventory. The goods cost $135,600. 2. Sold $315,000 of goods on credit. Their cost is $175,000.

> Prepare journal entries to record the following production activities. 1. Paid overhead costs (other than indirect materials and indirect labor) of $38,750. 2. Applied overhead at 110% of direct labor costs. Direct labor costs were $75,000.

> The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q and the time tickets start with W. At the start of the y

> Prepare journal entries to record the following production activities. 1. Incurred $75,000 of direct labor in production (credit Factory Payroll Payable). 2. Incurred $20,000 of indirect labor in production (credit Factory Payroll Payable). 3. Paid facto

> Hudson Co. reports the contribution margin income statement for 2015 below. Using this information, compute Hudson Co.’s (1) break-even point in units and (2) break-even point in sales dollars. HUDSON CO. Contribution Margin Income

> RSTN Co. produces its product through two sequential processing departments. Direct materials and conversion are added to the product evenly throughout the process. The company uses monthly reporting periods for its process costing system. During October

> Refer to the information in Exercise 21-16. 1. Assume Hudson Co. has a target pretax income of $162,000 for 2016. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2016, what is

> The following chart shows how costs flow through a business as a product is manufactured. Some boxes in the flowchart show cost amounts. Compute the cost amounts for the boxes that contain question marks. Materials Activity Raw materlals purchases $

> Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage. Information from Exercise 19-7: The following inform

> Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. Prepare a CVP chart for the company.

> Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. The sales manager predicts that annual sales of the company’s product will soon

> Record the journal entry to close over- or underapplied factory overhead to Cost of Goods Sold for each of the two companies below. Storm Concert Valle Home Promotions Builders Actual indirect materials costs $22,000 $ 12,500 Actual indirect labor

> Refer to information in Exercise 19-7. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Information from Exercise 19-7: The following information is available for Lock-Tite Company, which produces

> Both managerial accounting and financial accounting provide useful information to decision makers. Indicate in the following chart the most likely source of information for each business decision. Primary Information Source Business Decision Manager

> Shown here are annual financial data at December 31, 2015, taken from two different companies. Required 1. Compute the cost of goods sold section of the income statement at December 31, 2015, for each company. Include the proper title and format in the

> Nazaro’s Boot Company makes specialty boots for the rodeo circuit. On December 31, 2014, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in raw materials inventory. During 2015, the company purc

> Using the data from Problem 18-2A and the inventory information for Leone Company below, complete the requirements below. Assume income tax expense is $233,725 for the year. Required 1. Prepare the company’s 2015 schedule of cost of g

> The following calendar year-end information is taken from the December 31, 2015, adjusted trial balance and other records of Leone Company. Required 1. Identify and classify each of the costs above as either a product or period cost. 2. Classify each o

> Listed here are the total costs associated with the 2015 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each. Required 1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or p

> Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar yearend December 31, 2015, follow. Required Answer each of the following questions by providing supporting computations. 1. Assume that the company&acir

> Summary information from the financial statements of two companies competing in the same industry follows. Required 1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts (including notes) receivable turnover, (d) invent