Miguel, Inc. reported net income of $2.5 million in 2017. Depreciation for the year was $160,000, accounts receivable decreased $350,000, and accounts payable decreased $280,000. Compute net cash provided by operating activities using the indirect approach.
> The following are comparative balance sheets for Mitch Company. Additional information: 1. Net income for 2017 was $93,000. 2. Depreciation expense was $34,000. 3. Cash dividends of $39,000 were declared and paid. 4. Bonds payable amounting to $50,000 w
> On October 31, the stockholders’ equity section of Manolo Company’s balance sheet consists of common stock $648,000 and retained earnings $400,000. Manolo is considering the following two courses of action: (1) declaring a 5% stock dividend on the 81,000
> You are a loan officer for White Sands Bank of Taos. Paul Jason, president of P. Jason Corporation, has just left your office. He is interested in an 8-year loan to expand the company’s operations. The borrowed funds would be used to pu
> Pete Kent and Maria Robles are examining the following statement of cash flows for Sullivan Company for the year ended January 31, 2017. Pete claims that Sullivan’s statement of cash flows is an excellent portrayal of a superb first ye
> What is just-in-time inventory management? What are its potential advantages?
> The notes that accompany a company’s financial statements provide informative details that would clutter the amounts and descriptions presented in the statements. Refer to the financial statements of Apple Inc. in Appendix A. Instructions for accessing a
> Earl Kent, your uncle, is an inventor who has decided to incorporate. Uncle Earl knows that you are an accounting major at U.N.O. In a recent letter to you, he ends with the question, “I’m filling out a state incorporation application. Can you tell me th
> The September 1, 2009, edition of CFO.com contains an article by Marie Leone and Tim Reason entitled “Dirty Secrets.” You can access this article at www.cfo.com/article.cfm/14292477?f=singlepage. Instructions Read the article and answer the following qu
> Presented below is an aging schedule for Bryan Company. At December 31, 2016, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,000. Instructions (a) Journalize and post the adjusting entry for bad debts at December 31, 2016. (
> The stockholders’ equity section of Mabry Corporation’s balance sheet consists of common stock ($8 par) $1,000,000 and retained earnings $300,000. A 10% stock dividend (12,500 shares) is declared when the market price per share is $19. Show the before-an
> What are the two principal components of stock- holders’ equity?
> Helen Powell and Paul Tang were discussing the format of the statement of cash flows of Baumgarten Co. At the bottom of Baumgarten’s statement of cash flows was a separate section entitled “Noncash investing and financing activities.” Give three examples
> (a) Identify three taxes commonly paid by employers on employees’ salaries and wages. (b) Where in the financial statements does the employer report taxes withheld from employees’ pay?
> Explain how the choice of one of the following accounting methods over the other raises or lowers a company’s net income during a period of continuing inflation. (a) Use of FIFO instead of LIFO for inventory costing. (b) Use of a 6-year life for machiner
> Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co., shown on the next page. Instructions (a) Calculate each of the following ratios for 2017 and 2016. (1) Current ratio. (2) Free cash f
> Data for Rewe Company are presented in P12-5A(given below). Instructions Prepare the operating activities section of the statement of cash flows using the direct method. REWE COMPANY Income Statement For the Year Ended December 31, 2017 Service reve
> On January 1, 2017, Kimbel Inc. had these stockholders’ equity balances. Common Stock, $1 par (2,000,000 shares authorized, 600,000 shares issued and outstanding) $ 600,000 Paid-in Capital in Excess of Par Value 1,500,000 Retained Earnings
> Gato Inc. had the following inventory situations to consider at January 31, its year-end. (a) Goods held on consignment for Steele Corp. since December 12. (b) Goods shipped on consignment to Logan Holdings Inc. on January 5. (c) Goods shipped to a custo
> Season tickets for the Dingos are priced at $320 and include 16 home games. An equal amount of revenue is recognized after each game is played. When the season began, the amount credited to Unearned Ticket Revenue was $1,728,000. By the end of October, $
> The following information is available for Nguoi Corporation. (a) Compute earnings per share for 2017 and 2016 for Nguoi, and comment on the change. Nguoi’s primary competitor, Matisse Corporation, had earnings per share of $1 per shar
> Here are the comparative income statements of Delaney Corporation. Instructions (a) Prepare a horizontal analysis of the income statement data for Delaney Corporation, using 2016 as a base. (Show the amounts of increase or decrease.) (b) Prepare a verti
> The following three accounts appear in the general ledger of Beiber Corp. during 2017. Instructions From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal
> On January 1, Graves Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 9,000 additional shares of common stock fo
> The November 16, 2011, edition of the Wall Street Journal Online contains an article by Maxwell Murphy entitled “The Big Number: 51.” Instructions Read the article and answer the following questions. (a) What do the 51 companies referred to in the title
> Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Also, bond prices change when the risks associated with those bonds change. Standard & Poor’s provides ratings for compa
> The April 25, 2012, edition of the Wall Street Journal contains an article by Spencer Jakab entitled “Amazon’s Valuation Is Hard to Justify.” Instructions Read the article and answer the following questions. (a) Explain what is meant by the statement tha
> The November 23, 2011, edition of the Wall Street Journal Online contains an article by John Jannarone entitled “Backlash from Netflix Buybacks.” Instructions Read the article and answer the following questions. (a) What was the stock price for the share
> During a recent period, the fast-food chain Wendy’s International purchased many treasury shares. This caused the number of shares outstanding to fall from 124 million to 105 million. The following information was drawn from the company
> The comparative balance sheets for Gale Company show these changes in non-cash current asset accounts: accounts receivable decreased $80,000, prepaid expenses increased $28,000, and inventories increased $40,000. Compute net cash provided by operating ac
> a. Jeri Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows. Determine the value of the company’s inventory under the lower-of-cost-or-market ap
> At the beginning of the current period, Rose Corp. had balances in Accounts Receivable of $200,000 and in Allowance for Doubtful Accounts of $9,000 (credit). During the period, it had net credit sales of $800,000 and collections of $763,000. It wrote off
> The net income for Mongan Co. for 2017 was $280,000. For 2017, depreciation on plant assets was $70,000, and the company incurred a loss on disposal of plant assets of $28,000. Compute net cash provided by operating activities under the indirect method,
> Identify three taxes commonly withheld by the employer from an employee’s gross pay.
> A corporation has been defined as an entity separate and distinct from its owners. In what ways is a corporation a separate legal entity?
> Identify and explain factors that affect quality of earnings.
> Why is it important to disclose certain noncash transactions? How should they be disclosed?
> The intangible assets section of Amato Corporation’s balance sheet at December 31, 2017, is presented here. Patents ($60,000 cost less $6,000 amortization) $54,000 Copyrights ($36,000 cost less $25,200 amortization) 10,800 Total $64,800
> Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Instructions (a) For each company, compute the following ratios. (1) Current ratio. (2) Accounts receivable turnover. (3) Average collection period. (4) In
> Rewe Company’s income statement contained the condensed information below. Rewe’s balance sheets contained the following comparative data at December 31. Accounts payable pertain to operating expenses. Instructions P
> Layes Corporation has been authorized to issue 20,000 shares of $100 par value, 7%, noncumulative preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2017, the ledge
> Malcolm Company sold $6,000,000, 7%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on December 31. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on Jan
> Buffet Wholesalers accepts from Gates Stores a $6,200, 4-month, 9% note dated May 31 in settlement of Gates’ overdue account. The maturity date of the note is September 30. What entry does Buffet make at the maturity date, assuming Gates pays the note an
> Maria Lopez, CEO of Sales Bin Stores, is considering a recommendation made by both the company’s purchasing manager and director of finance that the company should invest in a sophisticated new perpetual inventory system to replace its periodic system. E
> During the month of March, Munster Company’s employees earned wages of $64,000. Withholdings related to these wages were $4,896 for Social Security (FICA), $7,500 for federal income tax, $3,100 for state income tax, and $400 for union dues. The company i
> The following information is available for Stamos Corporation for the year ended December 31, 2017. Beginning cash balance $ 45,000 Accounts payable decrease 3,700 Depreciation expense 162,000 Accounts receivable increase
> Mesa Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the fi
> Suppose the comparative balance sheets of Nike, Inc. are presented here. Instructions (a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2016 as a base. (Show the amount of increase or decrease as well.) (b) Prepare a vertical a
> For many years, Borders Group and Barnes and Noble were the dominant booksellers in the United States. They experienced rapid growth, and in the process they forced many small, independent bookstores out of business. Recently, Borders filed for bankruptc
> The March 4, 2010, edition of the Wall Street Journal Online contains an article by Jeffrey McCracken and Tom McGinty entitled “With Fistfuls of Cash, Firms on Hunt.” Instructions Read the article and answer the following questions. (a) How much cash did
> The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Suppose selected data from recent consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions). Instructions
> What are the basic ownership rights of common stockholders in the absence of restrictive provisions?
> The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Instructions (a) Based on the information contained in these fi nancial statements, compute the following
> (a) What are the sources (inflows) of cash in a statement of cash flows? (b) What are the uses (outflows) of cash?
> The following information (in millions of dollars) is available for Limited Brands for a recent year: sales revenue $9,043, net income $220, preferred dividend $0, and weighted-average shares outstanding 333 million. Compute the earnings per share for Li
> At January 1, 2017, Youngstown Company reported the following property, plant, and equipment accounts: Accumulated depreciation—buildings $ 62,200,000 Accumulated depreciation—equipment 54,000,000 Buildings 97,400,000 Equipment 15
> The following financial information is for Priscoll Company. Additional information: 1. Inventory at the beginning of 2016 was $115,000. 2. Accounts receivable (net) at the beginning of 2016 were $86,000. 3. Total assets at the beginning of 2016 were $6
> Data for Munsun Company are presented in P12-3A(given below): Instructions Prepare the operating activities section of the statement of cash flows using the direct method. MUNSUN COMPANY Income Statement For the Year Ended November 30, 2017 Sales re
> The ledger of Waite Corporation at December 31, 2017, after the books have been closed, contains the following stockholders’ equity accounts. Preferred Stock (10,000 shares issued) $1,000,000 Common Stock (300,000 shares issued) 1,500,000 Paid-
> On October 1, 2016, Kristal Corp. issued $700,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Instructions (a) Prepare the jour
> 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 Use the compa
> 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 Use the compa
> 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 Use the compa
> A On July 31, 2017, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank
> The stockholders’ equity section of Lachlin Corporation’s balance sheet at December 31 is presented here. Instructions From a review of the stockholders’ equity section, answer the following question
> Operating data for Joshua Corporation are presented below. Instructions Prepare a schedule showing a vertical analysis for 2017 and 2016. 2017 2016 Sales revenue Cost of goods sold Selling expenses Administrative expenses $800,000 $600,000 520,000 4
> Distinguish between long-term investments and property, plant, and equipment.
> The current sections of Sunn Inc.’s balance sheets at December 31, 2016 and 2017, are presented here. Sunn’s net income for 2017 was $153,000. Depreciation expense was $27,000. Instructions Prepare the net cash provided by operatin
> Grouper Company provides you with the following balance sheet information as of December 31, 2017. In addition, Grouper reported net income for 2017 of $16,000, income tax expense of $3,200, and interest expense of $1,300. (a) Compute the current ratio
> Hoyle Corporation has issued 100,000 shares of $5 par value common stock. It was authorized 500,000 shares. The paid-in capital in excess of par value on the common stock is $263,000.The corporation has reacquired 7,000 shares at a cost of $46,000 and is
> The March 29, 2012, edition of the Wall Street Journal Online contains an article by Miguel Bustillo entitled, “Best Buy Forced to Rethink Big Box.” The article explains how the 1,100 giant stores, which enabled Best B
> Marriott Corporation split into two companies: Host Marriott Corporation and Marriott International. Host Marriott retained ownership of the corporation’s vast hotel and other properties, while Marriott International, rather than owning
> Hechinger Co. and Home Depot are two home improvement retailers. Compared to Hechinger, founded in the early 1900s, Home Depot is a relative newcomer. But in recent years, while Home Depot was reporting large increases in net income, Hechinger was report
> On January 1, 2017, Bryce Inc. changed from the LIFO method of inventory pricing to the FIFO method. Explain how this change in accounting principle should be treated in the company’s financial statements.
> The following control procedures are used in Keaton Company for over-the-counter cash receipts. 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. 2. All over-the-counter
> (a) Your roommate says, “Sales taxes are reported as an expense in the income statement.” Do you agree? Explain. (b) Leiana’s Cafe has cash proceeds from sales of $8,550. This amount includes $550 of sales taxes. Give the entry to record the proceeds.
> Moosier Inc. has been in operation for 3 years and uses the FIFO method of pricing inventory. During the fourth year, Moosier changes to the average-cost method for all its inventory. How will Moosier report this change?
> Distinguish among the three activities reported in the statement of cash flows.
> You are provided with the following information for Lazuris Enterprises, effective as of its April 30, 2017, year-end. Accounts payable……………………………………………………$ 834 Accounts receivable……………………………………………………810 Accumulated depreciation—equipment………….….…......…
> Nona Jaymes believes a corporation must be incorporated in the state in which its headquarters office is located. Is Nona correct? Explain.
> Pine Company had the following assets on January 1, 2017. During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,000. The truck was discarded on December 31. Instruction
> Condensed balance sheet and income statement data for Jergan Corporation are presented here. Additional information: 1. The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2015, 2016, and 2017, respectively. 2. Yo
> The income statement of Munsun Company is presented here. Additional information: 1. Accounts receivable decreased $380,000 during the year, and inventory decreased $300,000. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to
> On December 31, 2016, Jons Company had 1,300,000 shares of $5 par common stock issued and outstanding. At December 31, 2016, stockholders’ equity had the amounts listed here. Common Stock $6,500,000 Additional Paid-in Capital 1,800,000 Retain
> A The following section is taken from Hardesty’s balance sheet at December 31, 2016. Current liabilities Interest payable $ 40,000 Long-term liabilities Bonds payable (8%, due January 1, 2020) 500,000 Interest is payable annually on January 1. Th
> Ned Douglas owns Ned’s Blankets. Ned asks you to explain how he should treat the following reconciling items when reconciling the company’s bank account. 1. Outstanding checks. 2. A deposit in transit. 3. The bank charged to our account a check written b
> Some product development expenditures are recorded as development expenses and others as development costs. Explain the difference between these accounts and how a company decides which classification is appropriate.
> 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 Use the compa
> Overton Co. had the following transactions during the current period. Mar. 2 Issued 5,000 shares of $1 par value ordinary shares to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate. June 12 Issued 60
> On June 1, Marchon Company Ltd. borrows $60,000 from Acme Bank on a 6-month, $60,000, 8% note. The note matures on December 1. Instructions (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity (De
> Suppose the following items were taken from the December 31, 2017, assets section of the Boeing Company balance sheet. (All dollars are in millions.) Instructions Prepare the assets section of a classified balance sheet, listing the current assets in or
> Here is financial information for Glitter Inc. Instructions Prepare a schedule showing a horizontal analysis for 2017, using 2016 as the base year. December 31, 2017 December 31, 2016 $ 90,000 350,000 65,000 90,000 $106,000 Current assets Plant asse
> Sosa Company reported net income of $190,000 for 2017. Sosa also reported depreciation expense of $35,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,000 for the year
> Penland Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued
> a. Smiley Corporation issues $300,000 of bonds for $315,000. (a) Prepare the journal entry to record the issuance of the bonds, and (b) show how the bonds would be reported on the balance sheet at the date of issuance. b. Farmland Corporation issued $400
> The condensed financial statements of Murawski Company for the years 2016 and 2017 are presented as follows. (Amounts in thousands.) Compute the following ratios for 2017 and 2016. (a) Current ratio. (b) Inventory turnover. (Inventory on 12/31/15 was $3
> The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions Answer the following questions for each company. (a) What is the balance in cash and cas
> Gary Theater is in the Hoosier Mall. A cashier’s booth is located near the entrance to the theater. Two cashiers are employed. One works from 1:00 to 5:00 P. M., the other from 5:00 to 9:00 P . M. Each cashier is bonded. The cashiers receive cash from cu
> Moskow Corporation issued the following statement of cash flows for 2017. (a) Compute free cash flow for Moskow Corporation. (b) Explain why free cash flow often provides better information than “Net cash provided by operating activiti
> a. Sparks Corporation has 3,000 shares of 8%, $100 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $105,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockhold
> The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Instructions for accessing and using the companies’ complete annual reports, including the notes to the f
