On June 25, Ritts Roofing extended an offer of $250,000 for land that had been priced for sale at $300,000. On July 9, Ritts accepted the seller’s counteroffer of $275,000. On October 1, the land was assessed at a value of $280,000 for property tax purposes. On December 22, Ritts was offered $305,000 for the land by a national retail chain. At what value should the land be recorded in Ritts Roofing’s records?
> Be-The-One is a motivational consulting business. At the end of its accounting period, December 31, 2012, Be-The-One has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the following amounts: a. Stockholders’ equit
> The following three identical units of Item P401C are purchased during April: Assume that one unit is sold on April 27 for $300. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in
> Paradise Realty Co. pays weekly salaries of $25,500 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Monday and (b) on Thursday.
> In a recent balance sheet, Microsoft Corporation (MSFT) reported Property, Plant, and Equipment of $38,156 million and Accumulated Depreciation of $19,800 million. a. What was the book value of the fixed assets? b. Would the book value of Microsoft’s fix
> The following accounts appear in an adjusted trial balance of Bridgewater Consulting. Indicate whether each account would be reported in the (a) Current assets; (b) Property, plant, and equipment; (c) Current liabilities; (d) Long-term liabilities; or
> The balance in the supplies account, before adjustment at the end of the year, is $9,000. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $1,575.
> At the end of October, the first month of the business year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on (
> Based upon MAD 2-4 and MAD 2-5, compare the two-year change in operating results between Target (TGT) and Wal-Mart (WMT). MAD 2-4: The following data (in millions) are taken from the financial statements of Target Corporation (TGT), the owner of
> DISH Network Corporation (DISH) provides satellite-based entertainment services to residential and business customers. Services are billed and collected on a monthly basis. DISH Network reported the following (in millions) for two recent years:
> What is the effect of each of the following transactions on the three elements (assets, liabilities, and stockholders’ equity) of the accounting equation? a. Invested cash in business in exchange for common stock. b. Paid for business expenses.
> Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) stockholders’ equity: a. accounts payable b. accounts receivable c. fees earned d. supplies e. supplies expense f. utilities expense
> Inspirational Inc. is a motivational consulting business. At the end of its accounting period, October 31, 2012, Inspirational has assets of $5,250,000 and liabilities of $1,600,000. Using the accounting equation and considering each case independently
> Determine the missing amount for each of the following:
> A business issued a 120-day, 5% note for $60,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.
> Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 2% of sales. Assume that sales were $1,500,000 for January. On February 7, a customer received warranty repairs requiring $325 of parts and $120 of labor.
> Identify each of the following as (a) a current asset or (b) property, plant, and equipment: 1. Accounts Receivable 2. Building 3. Cash 4. Equipment 5. Prepaid Insurance 6. Supplies
> On January 1, 20Y2, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,830, beginning on December 31, 20Y2. Journalize the entries to record the following:
> Bennett Enterprises issues a $400,000, 90-day, 5% note to Spectrum Industries for merchandise inventory. a. Journalize Bennett Enterprises’ entries to record: 1. the issuance of the note. 2. the payment of the note at maturity. b. Journalize
> A diesel-powered tractor with a cost of $120,000 and an estimated residual value of $16,400 is expected to have a useful operating life of 28,000 hours. During April, the tractor was operated 150 hours. Determine the depreciation for the month.
> A refrigerator used by a wholesale warehouse has a cost of $82,000, an estimated residual value of $6,200, and an estimated useful life of 8 years. What is the amount of the annual depreciation computed by the straight-line method?
> Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage: (a) 4 years, (b) 8 years, (c) 10 years, (d) 16 years, (e) 25 years, (f) 40 years, (g) 50 years.
> Warner Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service: 1. Changed the oil and greased the joints of all the trucks and vans. 2. Changed the radiator fluid on a truck that had been in s
> A building with a cost of $1,800,000 has an estimated residual value of $125,000, has an estimated useful life of 40 years, and is depreciated by the straight-line method. (a) What is the amount of the annual depreciation? (b) What is the book value at t
> The total assets and total liabilities (in millions) of Dollar Tree Inc. (DLTR) and Target Corporation (TGT) follow: Determine the stockholders’ equity of each company. Dollar Tree Target $40,262 Assets $15,901 Liabilities 11,494
> A storage tank acquired at the beginning of the fiscal year at a cost of $90,000 has an estimated residual value of $12,000 and an estimated useful life of 25 years. Determine the following: (a) the amount of annual depreciation by the straight-line meth
> At the end of the current year, the accounts receivable account has a debit balance of $1,835,000 and sales for the year total $25,690,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptio
> On June 1, 20Y2, Herbal Co. received $18,900 for the rent of land for 12 months. Journalize the adjusting entry required for unearned rent on December 31, 20Y2.
> Creative Solutions Company, a computer consulting firm, has decided to write off the $13,780 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write- off, assuming that (a) the direct write-off method is used and
> Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account. a. Determine the due date of the note. b. Determine the maturity value of the note. c. Journalize the entries to record the following: (1) receipt o
> Using the data in Exercise 8-15, assume that during the second year of operations Mack’s Plumbing Supply Co. had sales of $7,450,000, wrote off $52,000 of accounts as uncollectible using the direct write-off method, and reported net income of $800,000.
> During its first year of operations, Mack’s Plumbing Supply Co. had sales of $6,740,000, wrote off $48,600 of accounts as uncollectible using the direct write-off method, and reported net income of $712,500. Determine what the net income would have been
> Using the data in Exercise 8-11, assume that the allowance for doubtful accounts for Outlaw Bike Co. had a debit balance of $5,140 as of December 31. Journalize the adjusting entry for uncollectible accounts as of December 31. Exercise 8-11: Outlaw Bik
> Journalize the entries to record the following: a. Check No. 12-375 is issued to establish a petty cash fund of $500. b. The amount of cash in the petty cash fund is now $40. Check No. 12-476 is issued to replenish the fund, based on the following summar
> Accompanying a bank statement for Borden Company is a credit memo for $21,200 representing the principal ($20,000) and interest ($1,200) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collectio
> For (a) through (e), identify the items designated by X and Y. a. Purchases - (X + Y) = Net purchases b. Net purchases + X = Cost of inventory purchased c. Inventory (beginning) + Cost of inventory purchased = X d. Inventory available for sale - X = Cost
> The total assets and total liabilities (in millions) of McDonald’s Corporation (MCD) and Starbucks Corporation (SBUX) follow: Determine the stockholders’ equity of each company. McDonald's Starbucks Assets Liabil
> Using the data presented in Exercise 7-18, journalize the entry or entries that should be made by the company. Exercise 7-18: The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash b
> Selected accounts from the ledger of Restoration Arts for the fiscal year ended April 30, 20Y5, are as follows: Prepare a statement of stockholders’ equity for the year. Common Stock May 1 (20Y4) July 1 10,000 7,500 Retained Earni
> Which of the reconciling items listed in Exercise 7-16 require an entry in the company’s accounts? Exercise 7-16: Identify each of the following reconciling items as: (a) an addition to the cash balance according to the bank statement, (b) a deduction
> Identify each of the following reconciling items as: (a) an addition to the cash balance according to the bank statement, (b) a deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company’
> Using the data for Sacajawea Mercantile Co. in Exercise 5-35, assume that Mark Bishop pays his June 30, 20Y4, account receivable of $1,500 on July 6, 20Y4, and takes a 2% sales discount. Journalize the entry to record the payment on account from Mark Bis
> The actual cash received from cash sales was $315,280, and the amount indicated by the cash register total was $315,150. Journalize the entry to record the cash receipts and cash sales.
> The actual cash received from cash sales was $83,452, and the amount indicated by the cash register total was $83,480. Journalize the entry to record the cash receipts and cash sales.
> The following units of an item were available for sale during the year: Beginning inventory ………………………………………………………. 8,100 units at $180 Sale ……………………………………………………………………………… 5,300 units at $300 First purchase ……………………………………………………………… 15,000 units at $185 S
> On July 31, the close of the fiscal year, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a furniture retailer, are as follows: Prepare the July 31 closing entries for Serbian Interiors Company. $ 115,000 Accumula
> Based on the data in Exercise 6-15 part (a) and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet. Exercise 6-15: On the basis of the following data, determine the value of the inventory at t
> From the following list, identify the accounts that should be closed at the end of the fiscal year under a perpetual inventory system: (a) Accounts Payable, (b) Advertising Expense, (c) Cost of Goods Sold, (d) Office Equipment, (e) Inventory, (f) Sales,
> Ozark Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Ozark is owned and operated by Eric Griffith, a well-known sports enthusiast and hunter. Eric’s wife, Linda, owns and operates Lake Boutique, a women’s clothi
> The following data were taken from Alvarado Company’s balance sheet: a. Compute the ratio of liabilities to stockholders’ equity for each year. b. Has the creditor’s risk increased or decreased from
> Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $80,000,000 of five-year, 9% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following, presenting figure
> Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware issued $35,000,000 of five-year, 12% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. Compute the following, presenting figures
> Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Shunda issued $30,000,000 of five-year, 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,433,150. Interest is payable semiannually. Shunda’s fiscal
> Moss Co. issued $42,000,000 of five-year, 11% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable using the present value tables in Exhibits 5 and 7. Round to the neares
> Assume the same data as in Exercise 11-10, except that the current interest rate is 12%. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%? Why or why not?
> United States Steel Corporation’s (X) 7.5% bonds due in 2022 were reported as selling for 103.2. Were the bonds selling at a premium or at a discount? Why is United States Steel able to sell its bonds at this price?
> K. Mello Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: For hourly employees, overtime is paid for hours worked in excess of 40
> An employee earns $30 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. If the employee worked 54 hours during the week, determine the employee’s (a) gross pay and (b) net pay for the week. Assume that the social security tax
> On June 30, Collins Management Company purchased land for $400,000 and a building for $560,000, paying $360,000 cash and issuing a 5% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of
> A borrower has two alternatives for a loan: (1) issue a $150,000, 45-day, 4% note or (2) issue a $150,000, 45-day note that the creditor discounts at 4%. a. Calculate the amount of the interest expense for each option. b. Determine the proceeds received
> FedEx Corporation (FDX) had the following revenue and expense account balances (in millions) for a recent year ending May 31: a. Prepare an income statement. b. Compare your income statement with the income statement that is available at FedExâ&#
> General Motors Company (GM) disclosed estimated product warranty payable for comparative years as follows: Assume that GM’s sales were $166,380 million in the current year and that the total paid on warranty claims during the current
> On the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment occurring on the last day of the fiscal year. The first
> In a recent year’s financial statements, Procter & Gamble (PG) showed an unfunded pension liability of $5,955 million and a periodic pension cost of $432 million. Explain the meaning of the $5,955 million unfunded pension liability and the $432 million p
> A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year’s vacation pay is $42,000. a. Journalize the adjusting entry required on January 31, the end of t
> Widmer Company had gross wages of $320,000 during the week ended June 17. The amount of wages subject to social security tax was $320,000, while the amount of wages subject to federal and state unemployment taxes was $48,000. Tax rates are as follows: S
> The payroll register for D. Salah Company for the week ended May 18 indicated the following: Salaries ………………………………………………………..……………………… $615,000 Federal income tax withheld ………………………………………………….. 165,000 The salaries were all subject to the 6.0% social s
> Bon Nebo Co. sold 30,000 annual subscriptions of Bjorn for $105 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of $970,000 during the first calendar quarter
> Assume the same facts as in Exercise 9-23, except that the book value of the press traded in is $108,500. Exercise 9-23: A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading i
> Apple Inc. (AAPL) designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (iPod), mobile phones (iPhone), and smart watches (Apple Watch) along with related accessories and service
> Equipment acquired on January 8 at a cost of $212,000 has an estimated useful life of 15 years, has an estimated residual value of $14,000, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the en
> For two recent years, Robinhood Company reported the following: a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round answers to one decimal place. b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Use 36
> Toot Auto Supply distributes new and used automobile parts to local dealers throughout the Midwest. Toot’s credit terms are n/30. As of the end of business on October 31, the following accounts receivable were past due: Determine the
> Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 24. Sold merchandise on account to Old Town Cafe, $24,450.
> Journalize the following transactions in the accounts of Canyon River Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables: Jan. 19. Sold merchandise on account to Dr. Kyle Norby,
> List any errors you can find in the following partial balance sheet: Napa Vino Company Balance Sheet December 31, 20Y6 Assets Current assets: Cash $ 78,500 $ 300,000 (4,500) Notes recelvable Interest receivable Notes receivable, net 295,500 Accounts
> Journalize the following transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino: Mar. 29. Received a $30,000, 60-day, 5% note dated March 29 from Karie Platt on account. Apr. 30. Received a $24,000, 60-day, 8% note da
> The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing: Journalize the entries to record the transactions. 20Y7 Dec. 7. Received from Unitarian Clothing & Bags Co., on account, a $75,000,
> The series of five transactions, (a) through (e), recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction. Cash Notes Receivable (e) 76,500 (C) 75,000
> Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel …………â€&brvba
> Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Estimate w
> Using data in Exercise 8-9, assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $8,240 before adjustment on July 31. Journalize the adjusting entry for uncollectible accounts as of July 31. Exercise 8-9: Evers I
> The following revenue and expense account balances were taken from the ledger of Acorn Health Services Co. after the accounts had been adjusted on January 31, 20Y7, the end of the fiscal year: Prepare an income statement. Depreciation Expense Insur
> Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions discovered during October 20Y3 that one of its sales clerks had stolen an undetermined amount of cash receipts by taking the daily deposits to th
> The following bank reconciliation was prepared as of June 30, 20Y7: a. Identify the errors in the bank reconciliation. b. Prepare a corrected bank reconciliation. Poway Co. Bank Reconciliation For the Month Ended June 30,20Y7 Cash balance according
> An accounting clerk for Chesner Co. prepared the following bank reconciliation: a. From the data in this bank reconciliation, prepare a new bank reconciliation for Chesner Co., using the format shown in the Let’s Review section. b. If
> Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franchised coffee shops. During her first month as store manager, Faith encountered the following internal control situations: a. F
> The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company’s records at August 31, $42,920. 2. Cash balance according to the bank statemen
> The following units of a particular item were available for sale during the calendar year: The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after
> The following units of a particular item were available for sale during the calendar year: The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after
> Beginning inventory, purchases, and sales data for DVD players are as follows: The business maintains a perpetual inventory system, costing by the first-in, first-out method. a. Determine the cost of goods sold for each sale and the inventory balance a
> The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: a. Estimate the cost of the inventory destroyed. b. Briefly describe the situations in which the gross profit method is useful. Jan. 1
> Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 20Y1, Fonda incorrectly counted its inventory as $452,500 instead of the correct amount of $425,500. a.
> IZ Corporation purchased land for $500,000. Later in the year, the company sold a different piece of land with a book value of $250,000 for $280,000. How are the effects of these transactions reported on the statement of cash flows?
> Madison River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 20Y8, Madison incorrectly counted its inventory as $545,000 instead of the correct amount of $555,400
> The units of an item available for sale during the year were as follows: There are 208 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by
> The units of an item available for sale during the year were as follows: There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by the (a) first-in, first-out meth
> Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in
> Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated i
> Journalize the entries for the following transactions: a. Sold merchandise for cash, $25,000. The cost of the goods sold was $17,500. b. Sold merchandise on account, $98,000. The cost of the goods sold was $58,800. c. Sold merchandise to customers who us
> Journalize entries for the following related transactions of Lilly Heating & Air Company: a. Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30. b. Paid the amount owed on the invoice within the discount period. c. Discovered t
