Question: On January 1, 2021, LLB Industries borrowed $

> Refer to the situation described in E 4–13. Required: Prepare the statement of cash flows assuming that Bluebonnet prepares its financial statements according to International Financial Reporting Standards. Where IFRS allows flexibility

> The following summary transactions occurred during 2021 for Bluebonnet Bakers: The balance of cash and cash equivalents at the beginning of 2021 was $17,000. Required: Prepare a statement of cash flows for 2021 for Bluebonnet Bakers. Use the direct metho

> The statement of cash flows classifies all cash inflows and outflows into one of the three categories shown below and lettered from a through c. In addition, certain transactions that do not involve cash are reported in the statement as noncash investing

> The Massoud Consulting Group reported net income of $1,354,000 for its fiscal year ended December 31, 2021. In addition, during the year the company experienced a positive foreign currency translation adjustment of $240,000 and an unrealized loss on debt

> The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income statement reported the following items: income from continuing operations, $5 million; loss from discontinued operations, $1.6 million. All of these amou

> Pandora Corporation operates several factories in the Midwest that manufacture consumer electronics. The December 31, 2021, year-end trial balance contained the following income statement items: Required: Calculate the company’s operati

> The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year). Transactions during 2021 (current year) were as follows: 1. Sales to customers on account $800,000 2. Cash collected from customers 780,000 3. Purchase of merc

> Crell Computers categorizes its accounts receivable into four age groups for purposes of estimating its allowance for uncollectible accounts. 1. Accounts not yet due = $60,000; estimated uncollectible = 5%. 2. Accounts 1–30 days past due = $15,000; estim

> Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items: a. $50,000 in cash restricted in a savings account to pay bonds payable. The bonds matu

> The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. Additional Information: 1. Cash includes a $20,000 restricted amount to be used for repayment of

> Presented next are the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2021. Additional Information: 1. The notes receivable, along with any accrued interest, are due on November 22, 2022. 2. The notes payable are due i

> The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation. Additional Information: 1. The $120,000 balance in the land account consists of $100,000 for the cost of land where the plant and office buildings ar

> The following is a December 31, 2021, post-closing trial balance for the Jackson Corporation. Required: Prepare a classified balance sheet for Jackson Corporation at December 31, 2021, by properly classifying each of the accounts.

> The following are the typical classifications used in a balance sheet: a. Current assets b. Investments c. Property, plant, and equipment d. Intangible assets e. Other assets f. Current liabilities g. Long-term liabilities h. Paid-in capital i. Retained

> Refer to E 3–21. Required: How might your answers differ if Canton Corporation prepares its segment disclosure according to International Financial Reporting Standards? Data from E3-21: The Canton Corporation operates in four distinct

> The Canton Corporation operates in four distinct business segments. The segments, along with 2021 information on revenues, assets, and net income, are listed below ($ in thousands): Required: 1. For which segments must Canton report supplementary informa

> Best Buy Co, Inc., is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended January 28, 2017, are shown next. Liquidity and solvency ratios for the industry are as follows: Requi

> The 2021 balance sheet for Hallbrook Industries, Inc., is shown below. The company’s 2021 income statement reported the following amounts ($ in thousands): Required: Determine the following ratios for 2021: 1. Current ratio 2. Acid-tes

> At the end of the year, Syer Associates had a debit balance in its allowance for uncollectible accounts of $12,000 before adjustment. The balance in Syer’s gross accounts receivable is $600,000. Syer’s management estimates that 10% of its accounts receiv

> Hallergan Company produces car and truck batteries that it sells primarily to auto manufacturers. Dorothy Hawkins, the company’s controller, is preparing the financial statements for the year ended December 31, 2021. Hawkins asks for your advice concerni

> The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: The only asset not listed is short-term investments. The only liabilities not listed are $30,000 notes payable due in two years and

> Prepare the necessary adjusting entries at December 31, 2021, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. 1. On October 1, 2021,

> Prepare the necessary adjusting entries at December 31, 2021, for the Falwell Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. 1. A three-year fire ins

> Some of the ledger accounts for the Sanderson Hardware Company are numbered and listed below. For each of the October 2021 transactions numbered 1 through 10 below, indicate by account number which accounts should be debited and which should be credited

> Listed below are several terms and phrases associated with the accounting processing cycle. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. List A: 1. Source documents 2. Transaction analysi

> The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store. 1. Issued 100,000 shares of common stock in exchange for $500,000 cash. 2. Purchased office equipment at

> Post the journal entries prepared in E 2–2 to T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances. Data from E 2-2: Prepare journal entries to record each of the transact

> The accounting system of K and M Manufacturing consists of a general journal (GJ), a cash receipts journal (CR), a cash disbursements journal (CD), a sales journal (SJ), and a purchases journal (PJ). For each of the following, indicate which journal shou

> Prepare journal entries to record each of the transactions listed in E 2–1. Data from E 2-1: The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 30,000 shar

> At the end of the year, Breyer Associates had a credit balance in its allowance for uncollectible accounts of $12,000 before adjustment. The balance in Breyer’s gross accounts receivable is $600,000. Breyer’s management estimates that 10% of its accounts

> The Righter Shoe Store Company prepares monthly financial statements for its bank. The November 30 and December 31, 2021, trial balances contained the following account information: The following information also is known: a. The December income statemen

> The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 30,000 shares of common stock in exchange for $300,000 in cash. 2. Purchased equipment at a cost of $40,0

> The December 31, 2021, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the company’s year-end reporting date. The following year-end adjusting entries are required: a. Depreciation expense for

> Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $545,000 for services rendered to its clients and paid out $412,000 in expenses. You are able to determine the following information about accou

> Stanley and Jones Lawn Service Company (S&J) maintains its books on a cash basis. However, the company recently borrowed $100,000 from a local bank, and the bank requires S&J to provide annual financial statements prepared on an accrual basis. Du

> During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021, you discover the following: a. An insurance policy covering three years was purchased on January 1, 2021, for $6,000. The ent

> The following transactions occurred during 2021 for the Beehive Honey Corporation: Feb. 1: Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2022. Apr. 1: Paid $3,600 to an insurance company for a t

> Determine the response that best completes the following statements or questions. 1. The primary objective of financial reporting is to provide information a. About a firm’s management team. b. Useful to capital providers. c. Concerning the changes in fi

> Presented below is income statement information of the Schefter Corporation for the year ended December 31, 2021. Required: Prepare the necessary closing entries at December 31, 2021.

> American Chip Corporation’s reporting year-end is December 31. The following is a partial adjusted trial balance as of December 31, 2021. Required: Prepare the necessary closing entries at December 31, 2021.

> Assume the same facts as in BE 6–8 but that customers pay 20% less for the extended warranty if they buy it at the same time they buy a Tornado. How many performance obligations exist in the implied contract for the purchase of a vacuum cleaner? Data fr

> The following is a December 31, 2021, post-closing trial balance for Culver City Lighting, Inc. Prepare a classified balance sheet for the company.

> The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Required: 1. Prepare an income statement for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. 2. Prepare the nec

> The Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterly adjusting entries were properly reco

> The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries were prepared on December 31, 2021: Additional information: 1. The company borrowed $120,000 on Marc

> On January 1, 2021, JPS Industries borrowed $300,000 from Austin Bank by issuing a three-year, floating rate note based on LIBOR, with interest payable semi-annually on June 30 and December of each year. JPS entered into a three-year interest rate swap a

> Cleveland Company is a U.S. firm with a U.S. dollar functional currency that manufactures copper-related products. It forecasts that it will sell 5,000 feet of copper tubing to one of its largest customers at a price of ¥50,000,000. Although t

> Arlington Steel Company is a producer of raw steel and steel-related products. On January 3, 2022, Arlington enters into a firm commitment to purchase 10,000 tons of iron ore pellets from a supplier to satisfy spring production demands. The purchase is t

> On January 1, 2021, LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. LLB entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value he

> LLB Industries borrowed $200,000 from Trust Bank by issuing a two-year, 10% note, with interest payable quarterly. LLB entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value hedge. Its intent was

> Refer to the data provided in E 21–27 for Red, Inc. Required: Prepare the statement of cash flows (direct method) for Red, Inc. Use the T-account method to assist in your analysis. Data from E 21-27: Comparative balance sheets for 2021

> Assume the same facts as in BE 6–5 but that Tulane Tires reports under IFRS. How much revenue should Tulane recognize under IFRS? Data from BE 6-5: Tulane Tires wrote a contract for a $100,000 sale of tires to the new Garden District Tour Company. Tulan

> Refer to the data provided in E 21–27 for Red, Inc. Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. Data from E 21-27: Comparative balance sheets for 2021 and 2020,

> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items: 1. Disclosure of interest and income tax paid if

> The statement of cash flows (as well as the balance sheet) includes within cash the notion of cash equivalents. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Requir

> Mayer Corporation has a defined benefit pension plan. Mayer’s policy is to fund the plan annually, cash payments being made at the end of each year. Data relating to the pension plan for 2021 are as follows: Required: Recreate the journ

> Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information from the accounting records of Red, Inc., are provided below. Additional information from the accounting records: a. During 2021, $230 million of equ

> Refer to the data provided in E 21–25 for Clear Transmissions Company. Required: Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the indirect method. Data fr

> Portions of the financial statements for Clear Transmissions Company are provided on the next page. Required: Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the direct method.

> Refer to the data provided in E 21–23 for Myriad Products Company. Required: Prepare the cash flows from the operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. Data from E

> Portions of the financial statements for Myriad Products are provided below. Required: Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method.

> The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in thousands) for Peach Computers. Required: 1. Calculate each of the following amounts for Peach Computers: a. Cash received from cu

> GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2021, GoodBuy sold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31, 2021, $30,000 of the remaining gift card

> The income statement and the cash flows from the operating activities section of the statement of cash flows are provided below for Syntric Company. The merchandise inventory account balance neither increased nor decreased during the reporting period. Sy

> The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods, in the format illustrated by Illustration 21–11 in the chapter. The amounts for income state

> The statement of retained earnings of Gary Larson Publishers is presented below. Required: For the transactions that affected Larson’s retained earnings, reconstruct the journal entries that can be used to determine cash flows to be rep

> On January 1, 2021, Beilich Enterprises bought 20% of the outstanding common stock of Wolfe Construction Company for $600 million cash. Wolfe’s net income for the year ended December 31, 2021, was $300 million. During 2021, Wolfe declar

> Wilson Foods Corporation leased a commercial food processor on September 30, 2021. The five-year finance lease agreement calls for Wilson to make quarterly lease payments of $195,774, payable each September 30, December 31, March 31, June 30, with the fi

> In preparation for developing its statement of cash flows for the year ended December 31, 2021, Millennium Solutions, Inc. collected the following information: Required: 1. In Millennium’s statement of cash flows, what were net cash inf

> In preparation for developing its statement of cash flows for the year ended December 31, 2021, Rapid Pac, Inc., collected the following information: Required: 1. In Rapid Pac’s statement of cash flows, what were net cash inflows (or ou

> National Food Services, Inc., borrowed $4 million from its local bank on January 1, 2021, and issued a 4-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. Installment paymen

> Most Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $640 million on January 1, 2021. The bonds mature in 2031 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest expense is recorded at the effec

> Wolfgang Kitchens has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Wolfgang decided to change to the LIFO method. Net income in 2021 was correctly stated as $90 million. If the com

> On May 1, 2021,Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2021, to April 30, 2022, with Shaffer

> Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Flay decided to change to the LIFO method. As a result of the change, net income in 2021 was $80 million. If the company

> Millington Materials is a leading supplier of building equipment, building products, materials, and timber for sale, with over 200 branches across the Mid-South. On January 1, 2021, management decided to change from the average inventory costing method t

> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items: 1. Reporting most changes in accounting principle

> Companies often invest in the common stock of other corporations. The way we report these investments depends on the nature of the investment and the investor’s motivation for the investment. The FASB Accounting Standards Codification represents the sing

> The Crump Companies, Inc. has ownership interests in several public companies. At the beginning of 2021, the company’s ownership interest in the common stock of Silken Properties increased to the point that it became appropriate to begin using the equity

> In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2021 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the

> For each of the following inventory errors occurring in 2021, determine the effect of the error on 2021’s cost of goods sold, net income, and retained earnings. Assume that the error is not discovered until 2022 and that a periodic inve

> Below are three independent and unrelated errors. a. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $1,800. In January 2021, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following

> At the end of 2020, Majors Furniture Company failed to accrue $61,000 of interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2032. The discount on the bonds is amortized by the straight-line method. The

> Wilkins Food Products Inc. acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2019. In payment for the machine Wilkins issued a three-year installment note to be paid in three

> Kerianne paints landscapes, and in late 2021 placed four paintings with a retail price of $250 each in the Holmstrom Gallery. Kerianne’s arrangement with Holmstrom is that Holmstrom will earn a 20% commission on paintings sold to gallery patrons. As of D

> On December 12, 2021, an investment in equity securities costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment in equity securities account. Required: 1. Prepare the journal entry to correct the error, assum

> Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $60,000 higher using FIFO. Retained earnings

> During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2019 understated by $120,000 2020 overstated by 150,000 WMC uses the periodic inventory system and the FIFO

> The Commonwealth of Virginia filed suit in October 2019, against Northern Timber Corporation seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the financial statements were issued in 2

> Dreighton Engineering Group receives royalties on a technical manual written by two of its engineers and sold to William B. Irving Publishing, Inc. Royalties are 10% of net sales, receivable on October 1 for sales in January through June and on April 1 f

> The Canliss Milling Company purchased machinery on January 2, 2019, for $800,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line depreciation method and recorded $160,000 in depreciation in

> For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At

> During 2019 (its first year of operations) and 2020, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2021, Fieri decided to change to the average method for both financial reporting an

> SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are offered a variety of share-based compensation plans. Under its nonqualified stock option plan, SSG granted options to key officers on January 1, 2021. The options permit

> Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot

> Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2021, to Bassadrome. Because of a shipping backlog, Dowell held the inventory in Dowell’s warehouse until January 12, 2022 (having assured Bassadrome that it would deliver sooner if

> On January 1, 2021, Adams-Meneke Corporation granted 25 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next six years, but not before December 31, 2023

> Heidi Software Corporation provides a variety of share-based compensation plans to its employees. Under its executive stock option plan, the company granted options on January 1, 2021, that permit executives to acquire 4 million of the company’s $1 par c

> On January 1, 2021, David Mest Communications granted restricted stock units (RSUs) representing 30 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs

> Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1, 2021, granted restricted stock units (RSUs) representing 4 million of its $1 par common shares t