[SOLVED] On January 1, 2011, Locke Company, a

> Matt Holmes recently joined Klax Company as a staff accountant in the controller’s office. Klax Company provides warehousing services for companies in several European cities. The location in Koblenz, Germany, has not been performing well due to increase

> Companies following international accounting standards are permitted to revalue fixed assets above the assetsâ historical costs. Such revaluations are allowed under various countriesâ standards and the standards issued

> King Company is contemplating the purchase of a smaller company, which is a distributor of King’s products. Top management of King is convinced that the acquisition will result in significant synergies in its selling and distribution functions. The finan

> The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://corporate.marksandspencer.com/documents/publications/2010/Annual_Report_2010. Instructions Refer to M&S’s financial statem

> In this simulation, you are asked to address questions regarding the accounting for property, plant, and equipment. Prepare responses to all parts. KWW Professional Simulation Time Remaining Property, Plant, and Equipment 1 hour 40 minutes Unspilt S

> In this simulation, you are asked to address questions related to intangible assets and similar costs. Prepare responses to all parts. KWW Professional Simulation I Intangible Assets Time Remaining O hours 40 minutes Unspit Spit Hortz Spi Vertical S

> King Company is contemplating the purchase of a smaller company, which is a distributor of King’s products. Top management of King is convinced that the acquisition will result in significant synergies in its selling and distribution functions. The finan

> Matt Holmes recently joined Klax Company as a staff accountant in the controller’s office. Klax Company provides warehousing services for companies in several midwestern cities. The location in Dubuque, Iowa, has not been performing well due to increased

> In this simulation, you are asked to address questions regarding the accounting for property, plant, and equipment. Prepare responses to all parts. KWW_Professional_Simulation In Property, Plant, and Equipment Time Remaining 1 hour 20 minutes Urspli

> Define a “compensating balance.” How should a compensating balance be reported?

> Presented below are a number of values taken from compound interest tables involving the same number of periods and the same rate of interest. Indicate what each of these four values represents. (a) 6.71008. (b) 2.15892. (c) .46319. (d) 14.48656.

> Electroboy Enterprises, Inc. operates several stores throughout the western United States. As part of an operational and financial reporting review in a response to a downturn in its markets, the company’s management has decided to perform an impairment

> On January 2, 2012, Raconteur Corp. reported the following intangible assets: (1) Copyright with a carrying value of $15,000, and (2) A trade name with a carrying value of $8,500. The trade name has a remaining life of 5 years and can be renewed at nomin

> Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing

> McDonaldâs is the largest and best-known global food service retailer, with more than 32,000 restaurants in 118 countries. On any day, McDonaldâs serves approximately 1 percent of the worldâs populati

> Merck & Co., Inc. and Johnson & Johnson are two leading producers of healthcare products. Each has considerable assets, and each expends considerable funds each year toward the development of new products. The development of a new healthcare prod

> As a new intern for the local branch office of a national brokerage firm, you are excited to get an assignment that allows you to use your accounting expertise. Your supervisor provides you the spreadsheet below, which contains data for the most recent q

> Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) What amount is reported in the balance sheets as property, plant, and equipment (net) of Coca-Cola

> Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) (1) What amounts for intangible assets were reported in their respective balance sheets by Coca-Co

> Durler Company purchased equipment on January 2, 2008, for $112,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $12,000. Durler uses straight-line depreciation on all assets. On January 2, 2012, Durler exchan

> Johnson & Johnson, the worldâs leading and most diversified healthcare corporation, serves its customers through specialized worldwide franchises. Each of its franchises consists of a number of companies throughout the world that fo

> What is the accounts receivable turnover ratio, and what type of information does it provide?

> The financial statements of P&G are presented in Appendix 5B or can be accessed at the book’s companion website, www.wiley.com/college/kieso. Instructions Refer to P&G’s financial statements and the accompanying notes to answer the following questions.

> Langer Airline is converting from piston-type planes to jets. Delivery time for the jets is 3 years, during which substantial progress payments must be made. The multimillion-dollar cost of the planes cannot be financed from working capital; Langer must

> After securing lease commitments from several major stores, Auer Shopping Center, Inc. was organized and built a shopping center in a growing suburb. The shopping center would have opened on schedule on January 1, 2012, if it had not been struck by a sev

> Counting Crows Company operates several plants at which limestone is processed into quicklime and hydrated lime. The Eagle Ridge plant, where most of the equipment was installed many years ago, continually deposits a dusty white substance over the surrou

> Czeslaw Corporation’s research and development department has an idea for a project it believes will culminate in a new product that would be very profitable for the company. Because the project will be very expensive, the department requests approval fr

> Cuevas Co. is in the process of developing a revolutionary new product. A new division of the company was formed to develop, manufacture, and market this new product. As of year-end (December 31, 2012), the new product has not been manufactured for resal

> On June 30, 2012, your client, Ferry Company, was granted two patents covering plastic cartons that it had been producing and marketing profitably for the past 3 years. One patent covers the manufacturing process, and the other covers the related product

> Jerry Prior, Beeler Corporation’s controller, is concerned that net income may be lower this year. He is afraid upper-level management might recommend cost reductions by laying off accounting staff, including him. Prior knows that depreciation is a major

> Presented below are three different and unrelated situations involving depreciation accounting. Answer the question(s) at the end of each situation. Situation I Recently, Broderick Company experienced a strike that affected a number of its operating pla

> Moon Hardware is planning to factor some of its receivables. The cash received will be used to pay for inventory purchases. The factor has indicated that it will require “recourse” on the sold receivables. Explain to the controller of Moon Hardware what

> On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hydeâs asset is referred to below as âAsset A,â and Wigginsâ is referred to as âAsset B.&acir

> Reichenbach Co., organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012 and 2013. Instructions Prepare the necessary entries to clear the Intangibl

> Laserwords Inc. is a book distributor that had been operating in its original facility since 1985. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Las

> Conan O’Brien Logging and Lumber Company owns 3,000 acres of timberland on the north side of Mount Leno, which was purchased in 2000 at a cost of $550 per acre. In 2012, O’Brien began selectively logging this timber tract. In May of 2012, Mount Leno erup

> On January 1, 2012, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker’s commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing statement

> A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2013, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period

> Information concerning Sandro Corporation’s intangible assets is as follows. 1. On January 1, 2012, Sandro signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this amount, $15,000 was pai

> Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2011, had the following balances. Land ……………………………………………. $ 300,000 Land improvements …………………………. 140,000 Buildings …………………………………

> At December 31, 2011, certain accounts included in the property, plant, and equipment section of Reagan Company’s balance sheet had the following balances. Land …………………………………………………. $230,000 Buildings ……………………………………………. 890,000 Leasehold improvements ………

> Montana Matt’s Golf Inc. was formed on July 1, 2011, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equi

> What is “imputed interest”? In what situations is it necessary to impute an interest rate for notes receivable? What are the considerations in imputing an appropriate interest rate?

> On July 31, 2012, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita reported the following balance sheet at the time of the acquisition. It was determined at the date

> During 2010, Robin Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $60,000. Construction of the building was started in 2010. The building was completed on December 31, 2011, at a cost of $3

> Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products

> On January 1, 2010, a machine was purchased for $90,000. The machine has an estimated salvage value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours before it needs to be replaced. The company closed its books

> Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2011. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on page 647. You have been asked to assist in completing th

> Klamath Company, a manufacturer of ballet shoes, is experiencing a period of sustained growth. In an effort to expand its production capacity to meet the increased demand for its product, the company recently made several acquisitions of plant and equipm

> During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000 less accumulated depreciation $50,000) for a new crane from Brigham Manufacturing Co. The new crane cost Brigham $165,000 to manuf

> Plant acquisitions for selected companies are presented below. 1. Natchez Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Vivace Co., for a lump-sum price of $680,000. At the time of purchase, Vivaceâs a

> Allegro Supply Company, a newly formed corporation, incurred the following expenditures related to Land, to Buildings, and to Machinery and Equipment. Instructions Determine the amounts that should be debited to Land, to Buildings, and to Machinery and

> Carrie Underwood believes that by establishing a loss contingency for uncollectible receivables, a company provides financial protection against the loss. What does the authoritative literature say about this belief?

> Dane Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2013. Purchase Cash paid for equipment, including sales t

> Shabbona Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2012. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of $15,000

> Pollachek Co. purchased land as a factory site for $450,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $42,000 to raze the old buildings and sold salvaged lumber and brick f

> The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses. (a) Money borrowed to pay building contractor (signed a note) â&brv

> On April 1, 2012, Pavlova Company received a condemnation award of $410,000 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $60,000 and $280,000, resp

> On December 31, 2012, Chrysler Inc. has a machine with a book value of $940,000. The original cost and related accumulated depreciation at this date are as follows. Machine ……………………………………….. $1,300,000 Accumulated depreciation …………………. 360,000 Book value

> Plant assets often require expenditures subsequent to acquisition. It is important that they be accounted for properly. Any errors will affect both the balance sheets and income statements for a number of years. Instructions For each of the following it

> The following transactions occurred during 2013. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all

> Accardo Resources Group has been in its plant facility for 15 years. Although the plant is quite functional, numerous repair costs are incurred to maintain it in sound working order. The company’s plant asset book value is currently $800,000, as indicate

> McArthur Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $7,000 plus trade-in, f.o.b. factory. McArthur Inc. paid $7,000 cash and traded in used equipment. The used equipment had originally cost $62,000; it had a book

> Access the glossary (“Master Glossary”) to answer the following. (a) What is the definition of cash? (b) What is the definition of securitization? (c) What are the three contexts that give rise to recourse?

> Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange. Instructions (a) Prepare the journal entr

> Montgomery Company purchased an electric wax melter on April 30, 2013, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter …………………………………………………………. $15,800 Cash paid ………………………

> Alatorre Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the a

> Logan Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2 These assets were purchased as a lump sum for $104,000 cash. The following information was gathered. Asset 3

> Napoleon Corporation purchased a computer on December 31, 2011, for $130,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $20,000 payable each December 31 beginning in 2012. An assumed interest rate of 10% is implici

> Sterling Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2012, to expand its production capacity to meet customers’ demand for its product. Sterling issues a $900,000, 5-year, zero-interest-bearing note to Central Mi

> Presented below is information related to Rommel Company. 1. On July 6, Rommel Company acquired the plant assets of Studebaker Company, which had discontinued operations. The appraised value of the property is: Land ………………………………. $ 400,000 Buildings …………

> Below are transactions related to Impala Company. (a) The City of Pebble Beach gives the company 5 acres of land as a plant site. The fair value of this land is determined to be $81,000. (b) 14,000 shares of common stock with a par value of $50 per share

> Chopin Engineering Corporation purchased conveyor equipment with a list price of $15,000. Presented below are three independent cases related to the equipment. (Round to nearest dollar.) (a) Chopin paid cash for the equipment 8 days after the purchase. T

> The following three situations involve the capitalization of interest. Situation I On January 1, 2012, Columbia, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,000,000. It was estimated tha

> The controller for Nesheim Construction Company believes that it is appropriate to offset a note payable to Oregon Bank against an account receivable from Oregon Bank related to remodeling services provided to the bank. What is the authoritative guidance

> On July 31, 2012, Bismarck Company engaged Duval Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2012. To help finance construction, on July 31 Bismarck issued a $

> On December 31, 2011, Hurston Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2012, the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,5

> McPherson Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2012. McPherson expected to complete the building by December 31, 2012. McPherson has the fol

> Peloton Company constructed a building at a cost of $2,400,000 and occupied it beginning in January 1993. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2013, a new roof was installed at a cost of $300,00

> In 1985, Abraham Company completed the construction of a building at a cost of $1,900,000 and first occupied it in January 1986. It was estimated that the building will have a useful life of 40 years and a salvage value of $60,000 at the end of that time

> Machinery purchased for $52,000 by Carver Co. in 2008 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2013, it is determined that the t

> Bosh Company purchased a piece of equipment at the beginning of 2009. The equipment cost $502,000. It has an estimated service life of 8 years and an expected salvage value of $70,000. The sum-of-the-years’-digits method of depreciation is being used. So

> Presented below is information related to Morrow Manufacturing Corporation. Instructions (a) Compute the rate of depreciation per year to be applied to the machines under the composite method. (b) Prepare the adjusting entry necessary at the end of the

> Goldman Corporation bought a machine on June 1, 2010, for $31,800, f.o.b. the place of manufacture. Freight to the point where it was set up was $200, and $500 was expended to install it. The machine’s useful life was estimated at 10 years, with a salvag

> Jeeter Industries presents you with the following information. Instructions Complete the table for the year ended December 31, 2013. The company depreciates all assets using the half-year convention. Accumulated Date Salvage Life in Depreciation De

> In addition to securitizations, what are the other types of transfers of financial assets identified in the Codification?

> Agazzi Company purchased equipment for $304,000 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $16,000. Estimated production is 40,000 units and estimated working hours are 20,000. During

> Maserati Corporation purchased a new machine for its assembly process on August 1, 2012. The cost of this machine was $150,000. The company estimated that the machine would have a salvage value of $24,000 at the end of its service life. Its life is estim

> Wenner Furnace Corp. purchased machinery for $279,000 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2013, Wenner Corp. uses the mach

> Cosby Company purchased a new plant asset on April 1, 2012, at a cost of $774,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Cosby’s accounting period is the calendar year. Instructions (a) Compute the depreciat

> Hasselback Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one met

> Lansbury Company purchases equipment on January 1, Year 1, at a cost of $518,000. The asset is expected to have a service life of 12 years and a salvage value of $50,000. Instructions (a) Compute the amount of depreciation for each of Years 1 through 3

> Devon Harris Company has provided information on intangible assets as follows. A patent was purchased from Bradtke Company for $2,500,000 on January 1, 2011. Harris estimated the remaining useful life of the patent to be 10 years. The patent was carried

> Fontenot Corporation was organized in 2011 and began operations at the beginning of 2012. The company is involved in interior design consulting services. The following costs were incurred prior to the start of operations. Attorney’s fees in connection wi

> In early January 2011, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In January 2012, Reymont incurred $7,800 of legal fees in a successful defense of its trade name. Instructions (a) Compute 2011 amortization, 12/31/11

> Powerglide Company, organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012. Instructions Prepare the necessary entries to clear the Intangible Asse

> In this simulation, you are asked to address questions concerning the application of time value of money concepts to accounting problems. Prepare responses to all parts. KWW_Professional_Simulation Time Value of Money Time Remaining 1 hour 20 minute

> As the recently appointed auditor for Hillary Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2012, are prepared. The controller for Hillary Corporation mentions that only one account is k

> Presented below is selected information for Palmiero Company. 1. Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2020. During 20

Question: On January 1, 2011, Locke Company, a