On January 1, 2017, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,224, and pay interest each July 1 and January 1. Prepare the company’s journal entries for a. the January 1 issuance, b. the July 1 interest payment, and c. the December 31 adjusting entry. Assume an effective-interest rate of 8%.
> On January 1, 2017, Nichols Company issued for $1,085,800 its 20-year, 11% bonds that have a maturity value of $1,000,000 and pay interest semiannually on January 1 and July 1. The following are three presentations of the long-term liability section of t
> Conan O’Brien Logging and Lumber Company owns 3,000 acres of timberland on the north side of Mount Leno, which was purchased in 2005 at a cost of $550 per acre. In 2017, O’Brien began selectively logging this timber tract. In May 2017, Mount Leno erupted
> A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period
> The following data relate to the Machinery account of Eshkol, Inc. at December 31, 2017. The following transactions occurred during 2018. a. On May 5, Machine A was sold for $13,000 cash. The company’s bookkeeper recorded this retire
> The cost of equipment purchased by Charleston, Inc., on June 1, 2017, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are esti
> Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on page 595. You have been asked to assist in completing th
> Laserwords Inc. is a book distributor that had been operating in its original facility since 1987. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Las
> Spitfire Company was incorporated on January 2, 2018, but was unable to begin manufacturing activities until July 1, 2018, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items duri
> 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
> Davenport Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2017, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for th
> The following two independent situations involve loss contingencies. Part 1: Benson Company sells two products, Grey and Yellow. Each carries a 1-year warranty. 1. Product Grey—Product warranty costs, based on past experience, will normally be 1% of sa
> Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2017. Amounts as shown below appear on the store’s books before
> Late in 2014, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Becker Departm
> As of January 1, 2017, Aristotle Inc. adopted the retail method of accounting for its merchandise inventory. To prepare the store’s financial statements at June 30, 2017, you obtain the following data. Instructions a. Prepare a sched
> Maddox Specialty Company, a division of Lost World Inc., manufactures three models of gear shift components for bicycles that are sold to bicycle manufacturers, retailers, and catalog outlets. Since beginning operations in 1993, Maddox has used normal ab
> Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018. Instructions a. Using the conventional retail method, prepa
> Presented below is information related to Waveland Inc. Instructions Assuming that Waveland Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at December 31, 2018. Cost Retail Inventory, 12/31/17 Purchase
> Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2016, had the following balances. Land…………………………...$ 300,000 Land improvements………. 140,000 Buildings……………………..1,100,000 Equipmen
> On April 15, 2018, fire damaged the office and warehouse of Stanislaw Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared. The following data and information have been gathered. 1.
> Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on
> Fiedler Co. follows the practice of valuing its inventory at the lower-of cost-or-market. The following information is available from the company’s inventory records as of December 31, 2017. Instructions Greg Forda is an accounting
> Presented below is a note disclosure for Matsui Corporation. Litigation and Environmental: The Company has been notified, or is a named or a potentially responsible party in a number of governmental (federal, state and local) and private actions associat
> Presented below is a schedule of property dispositions for Hollerith Co. The following additional information is available. Land: On February 15, a condemnation award was received as consideration for unimproved land held primarily as an investment, a
> Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2017, December 31, 2018, and December 31, 2019, as shown below. Instructions a. Prepare the journal entries required at December 31, 2018, and at December 31, 2019, as
> Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31,
> Remmers Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2017, the following finished desks (10 desks in each category) appear in the companyâ
> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes to answ
> Hincapie Co. (a specialty bike-accessory manufacturer) is expecting growth in sales of some products targeted to the low-price market. Hincapie is contemplating a preference share issue to help finance this expansion in operations. The company is leaning
> Teller Corporation’s post-closing trial balance at December 31, 2017, was as follows. At December 31, 2017, Teller had the following number of ordinary and preference shares. The dividends on preference shares are $4 cumulative. In
> Weisberg Corporation has 10,000 shares of $100 par value, 6%, preference shares and 50,000 ordinary shares of $10 par value outstanding at December 31, 2017. Instructions Answer the questions in each of the following independent situations. a. If the
> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes for 201
> The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2017, and that its total revenue for the pro
> On February 1, 2018, one of the huge storage tanks of Viking Manufacturing Company exploded. Windows in houses and other buildings within a one-mile radius of the explosion were severely damaged, and a number of people were injured. As of February 15, 20
> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes to answ
> Hincapie Co. manufactures specialty bike accessories. The company is most well-known for its product quality, and it has offered one of the best warranties in the industry on its higher-priced products—a lifetime guarantees. The warranty on these product
> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes to answ
> Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of $1
> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes to answ
> Falcetto Company acquired equipment on January 1, 2016, for $12,000. Falcetto elects to value this class of equipment using revaluation accounting. This equipment is being depreciated on a straight-line basis over its 6-year useful life. There is no resi
> Assume the same information as in IFRS11-11, except that Pujols intends to dispose of the equipment in the coming year. Instructions a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. b. Prepare the journa
> Presented below is information related to equipment owned by Pujols Company at December 31, 2017. Cost (residual value $0)………………………..$9,000,000 Accumulated depreciation to date…………..1,000,000 Value-in-use………………………………………….5,500,000 Fair value less cost of
> Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2015, the company expends $325,000 on a research project, but by the end of 2015, it is impossible to determine whether any ben
> Brazil Group purchases a vehicle at a cost of $50,000 on January 2, 2017. Individual components of the vehicle and useful lives are as follows. Assume that Pujols will continue to use this asset in the future. As of December 31, 2017, the equipment has
> Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of $10,000,000 (matures in
> Presented below are two different situations related to Mckee Corporation’s debt obligations. Mckee’s next financial reporting date is December 31, 2017. The financial statements are authorized for issuance on March 1, 2018. 1. Mckee has a long-term obl
> On December 31, 2017, Alexander Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2018. On January 21, 2018, the company issued 25,000 ordinary shares for $36 per share, receiving $900,000 proceeds after brokerage fee
> Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. Prepare the journal entries to record a. the issuance of the bonds, b. the payment of interest and related amortization on July 1, 2017, and c. the ac
> Assume the bonds in IFRS14-3 were issued for $644,636 and the effective-interest rate is 6%. Prepare the company’s journal entries for a. the January 1 issuance, b. the July 1 interest payment, and c. the December 31 adjusting entry. (Round to the ne
> Treasure Land Corporation incurred the following costs in 2017. Prepare the necessary 2017 journal entry(ies) for Treasure Land. Cost of laboratory research aimed at discovery of new knowledge Cost of testing in search for product alternatives Cost
> Connie Chung Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $54,000 and a retail price of $100,000. The following information is available. The price index at January 1, 20
> Amiras Corporation began operations on January 1, 2017, with a beginning inventory of $30,100 at cost and $50,000 at retail. The following information relates to 2017. Retail Net purchases (
> On December 31, 2017, Travis Tritt 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 Less: Accumulated depreciation……360,000 Book value……
> You assemble the following information for Seneca Department Store, which computes its inventory under the dollar-value LIFO method. Instructions: Compute the cost of the inventory on December 31, 2017, assuming that the inventory at retail is a. $294
> Rodriguez Corporation includes the following items in its liabilities at December 31, 2017. 1. Notes payable, $25,000,000, due June 30, 2018. 2. Deposits from customers on equipment ordered by them from Rodriguez, $6,250,000. 3. Salaries and wages pay
> Leonard Company began operations late in 2016 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2016 and no markdowns during 2016, the ending inventory for 2016 was $14,000 under both the conventional reta
> Keller Company began operations on January 1, 2016, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2016 and, because there was no beginning inventory, its ending inventory for 201
> At the beginning of 2017, Aristotle Company acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,
> The following transactions occurred during 2017. 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
> Five Satins Company purchased a piece of equipment at the beginning of 2014. The equipment cost $430,000. 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 u
> Diderot Drilling Company has leased property on which oil has been discovered. Wells on this property produced 18,000 barrels of oil during the past year that sold at an average sales price of $55 per barrel. Total oil resources of this property are esti
> On December 31, 2016, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500
> Cannondale Company purchased an electric wax melter on April 30, 2017, 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……………………………………………
> Harrisburg 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, 2017. Harrisburg expected to complete the building by December 31, 2017. Harrisburg has the
> Wallace Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following. Merchandise with a selling price of $21,000 remained undamaged af
> Presented below is the current liabilities section of Micro Corporation. Instructions Answer the following questions. a. What are the essential characteristics that make an item a liability? b. How does one distinguish between a current liability and
> Cardinals Corporation purchased a computer on December 31, 2016, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2017. An assumed interest rate of 10% is implic
> Chippewas Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capacity to meet customers’ demand for its product. Chippewas issues an $800,000, 5-year, zero-interest-bearing note to Central
> Worf 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 2017. Purchase Cash paid for equipment, including sales ta
> At December 31, 2017, Indigo Girls Company has outstanding noncancelable purchase commitments for 36,000 gallons, at $3.00 per gallon, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or marke
> The following three situations involve the capitalization of interest. Situation I: On January 1, 2017, Oksana Baiul, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,000,000. It was estimate
> During 2017, Pretenders Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Pretenders for a lump sum of $59,850 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Thre
> On July 31, 2017, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Amsterdam issu
> Corrs Company began operations in 2016 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2016, and December 31, 2017. This information is presented below. Instructions a. Prepare the journal entries require
> Referring to the inventory data for Sedato Company in E9-3, assume that Sedato follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. Instructions From the information above, determine the amount of
> LaGreca Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, included product X. Relevant per-unit data for product X are as follows. Estimated selling price………………$50 Cost……………………
> 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, 2017), the new product has not been manufactured for resal
> Ben Sisko 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
> Dover Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below. Instructions a. Prepare the journal entries required at December 31, 2017
> Sedato Company follows the practice of pricing its inventory at LCNRV, on an individual-item basis. Instructions From the information above, determine the amount of Sedato Company inventory. Cost to Complete and Sell Cost Estimated per Unit Sellin
> Rembrandt 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 meth
> Presented below are various account balances of K.D. Lang Inc. a. Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year. b. Bank loans payable of a winery, due March 10, 2021. (The product requires aging for 5 yea
> Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2017. Instructions Answer the questions in each of the following independent situations. a. If
> Pistons Inc. 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 first
> Lindsey Hunter Corporation is authorized to issue 50,000 shares of $5 par value common stock. During 2017, Lindsey Hunter took part in the following selected transactions. 1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuan
> Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000. Instructions a. Prepare the journal entry for the issuance when the market price of the common shares is $165
> Faith Evans Corporation is a regional company which is an SEC registrant. The corporation’s securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $
> On June 30, 2017, 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
> Twenty-five thousand shares reacquired by Elixir Corporation for $53 per share were exchanged for undeveloped land that has an appraised value of $1,700,000. At the time of the exchange, the common stock was trading at $62 per share on an organized excha
> Morgan Sondgeroth Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations. At December 31, 2017, Morgan Sondgeroth Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $
> Cajun Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 15,000 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years. Instructions Allocate the dividends to each type
> Matt Schmidt Company’s ledger shows the following balances on December 31, 2017. 7% Preferred stock—$10 par value, outstanding 20,000 shares…………...$ 200,000 Common stock—$100 par value, outstanding 30,000 shares…………...3,000,000 Retained earnings………………………
> The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value, 8% preferred, and 5,000 shares of $50 par value common. Instructions Assuming that the company has retained earnings of $90,000, all of which is to be
> Presented below is information from the annual report of Emporia Plastics, Inc. Instructions a. Compute the return on common stockholders’ equity and the rate of interest paid on bonds. (Assume balances for debt and equity accounts a
> Kathleen Battle Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions w
> Shown below is the liabilities and stockholders’ equity section of the balance sheet for Jana Kingston Company and Mary Ann Benson Company. Each has assets totaling $4,200,000. For the year, each company has earned the same income bef
> Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) ………………………………………………………...$200,000 Common stock,
> Bruno Corporation’s post-closing trial balance at December 31, 2017, is shown as follows. At December 31, 2017, Bruno had the following number of common and preferred shares. The dividends on preferred stock are $4 cumulative. In a
> Sinise Industries acquired two copyrights during 2017. One copyright related to a textbook that was developed internally at a cost of $9,900. This textbook is estimated to have a useful life of 3 years from September 1, 2017, the date it was published. T
> Recall from Chapter 13 that Hincapie Co. (a specialty bike-accessory manufacturer) is expecting growth in sales of some products targeted to the low-price market. Hincapie is contemplating a preferred stock issue to help finance this expansion in operati
> LVT is an international manufacturer of fragrances for women. Management at LVT is considering expanding the product line to men’s fragrances. From the best estimates of the marketing and production managers, annual sales (all for cash) for this new line
