[SOLVED] Ortiz purchased a piece of equipment that

> As discussed in the chapter, an important consideration in evaluating current liabilities is a companyâs operating cycle. The operating cycle is the average time required to go from cash to cash in generating revenue. To determine the l

> Presented below is the current liabilities section and related note of Mohican Company. Instructions Answer the following questions. a. What is the difference between the cash basis and the accrual basis of accounting for warranty costs? b. Under wh

> Despite being a publicly traded company only since 1987, Northland Cranberries of Wisconsin Rapids, Wisconsin, is one of the worldâs largest cranberry growers. During its short life as a publicly traded corporation, it has engaged in an

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s financial statements and the accompanying notes to answ

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s financial statements and the accompanying notes to ans

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s 2014 financial statements and the accompanying notes to

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to these financial statements and the accompanying notes to answ

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s financial statements and the accompanying notes to ans

> The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&G’s financial statements and the accompanying notes to answ

> The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financia

> The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financi

> The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financia

> Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2018, a new roof was installed at a cost of $30

> The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financi

> The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies’ financia

> Englehart Company sells two types of pumps. One is large and is for commercial use. The other is smaller and is used in residential swimming pools. The following inventory data is available for the month of March. In addition to the above information,

> On January 1, 2017, Agassi Corporation had the following stockholders’ equity accounts. Common Stock ($10 par value, 60,000 shares issued and outstanding)……$600,000 Paid-in Capital in Excess of Par—Common Stock………………………………………..500,000 Retained Earnings…

> The following information is taken from the 2017 annual report of Bugant, Inc. Bugantâs fiscal year ends December 31 of each year. Bugantâs December 31, 2017, balance sheet is as follows. Additional information conc

> YellowCard Company manufactures accessories for iPods. It had the following selected transactions during 2017. 1. YellowCard provides a 2-year warranty on its docking stations, which it began selling in 2017. During 2017, YellowCard spent $6,000 servicin

> On January 2, 2017, 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

> 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 companyâs management has decided to perf

> Durler Company purchased equipment on January 2, 2013, 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, 2017, Durler exchan

> Refer to the data in IFRS9-8 for Keyser’s Fleece Inc. Prepare the journal entries for (a) the wool harvested in the first six months of 2017, and (b) the wool harvested that is sold for $10,500 in July 2017. From IFRS9-8: Keyser’s Fleece Inc. holds a

> In 1990, Herman Moore Company completed the construction of a building at a cost of $2,000,000 and first occupied it in January 1991. 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

> Keyser’s Fleece Inc. holds a drove of sheep. Keyser shears the sheep on a semiannual basis and then sells the harvested wool into the specialty knitting market. Keyser has the following information related to the shearing sheep at January 1, 2017, and du

> Riegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Using the LCNRV ru

> 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

> 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. a. Prepare the journal entries required at December 31, 2017, and December

> Briefly describe the valuation of a. biological assets and b. agricultural produce.

> LaTour Inc. is based in France and prepares its financial statements in accordance with IFRS. In 2017, it reported cost of goods sold of $578 million and average inventory of $154 million. Briefly discuss how analysis of LaTour’s inventory turnover (and

> Silverman Company purchased machinery for $162,000 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $15,000, production of 84,000 units, and working hours of 42,000. During 2017, the company use

> Workman Company purchased a machine on January 2, 2017, for $800,000. The machine has an estimated useful life of 5 years and a salvage value of $100,000. Depreciation was computed by the 150% declining-balance method. What is the amount of accumulated d

> In 2017, Ghostbusters Corp. spent $420,000 for “goodwill” visits by sales personnel to key customers. The purpose of these visits was to build a solid, friendly relationship for the future and to gain insight into the problems and needs of the companies

> Wal-Mart Stores, Inc. in 2014 reported net income of $16.4 billion, net sales of $482.2 billion, and average total assets of $204.2 billion. What is Wal-Mart’s asset turnover? What is Wal-Mart’s return on assets?

> Machinery purchased for $60,000 by Tom Brady Co. in 2013 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 2018, it is determined that th

> In the extractive industries, businesses may pay dividends in excess of net income. What is the maximum permissible? How can this practice be justified?

> In 2016, Austin Powers Corporation developed a new product that will be marketed in 2017. In connection with the development of this product, the following costs were incurred in 2016: research and development costs $400,000, materials and supplies consu

> Pierre Company has a 12% note payable with a carrying value of $20,000. Pierre applies the fair value option to this note. Given an increase in market interest rates, the fair value of the note is $22,600. Prepare the entry to record the fair value optio

> Crowe Company purchased a heavy-duty truck on July 1, 2014, for $30,000. It was estimated that it would have a useful life of 10 years and then would have a trade-in value of $6,000. The company uses the straight-line method. It was traded on August 1, 2

> Andrea Torbert purchased a computer for $8,000 on July 1, 2017. She intends to depreciate it over 4 years using the double-declining-balance method. Salvage value is $1,000. Compute depreciation for 2018.

> A fire destroys all of the merchandise of Assante Company on February 10, 2017. Presented below is information compiled up to the date of the fire. Inventory, January 1, 2017……………………….$ 400,000 Sales revenue to February 10, 2017…………….1,950,000 Purchases

> A building that was purchased on December 31, 2003, for $2,500,000 was originally estimated to have a life of 50 years with no salvage value at the end of that time. Depreciation has been recorded through 2017. During 2018, an examination of the building

> Romo Company spent $190,000 developing a new process, $45,000 in legal fees to obtain a patent, and $91,000 to market the process that was patented, all in the year 2017. How should these costs be accounted for in 2017?

> Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2017, the corporation sells for cash 400 computers at a unit price of $2,500. O

> Wilco Corporation has the following account balances at December 31, 2017. Share capital—ordinary, $5 par value……. $ 510,000 Treasury shares………………………………………..90,000 Retained earnings………………………………2,340,000 Share premium—ordinary……………………1,320,000 Instructio

> On April 1, 2017, Gloria Estefan Company received a condemnation award of $430,000 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 $280,00

> Assume the bonds in BE14-2 were issued at 98. Prepare the journal entries for a. January 1, b. July 1, and c. December 31. Assume The Colson Company records straight-line amortization semiannually. From BE14-2: The Colson Company issued $300,000 of

> Tan Chin Company purchases a building for $11,300,000 on January 2, 2017. An engineer’s report shows that of the total purchase price, $11,000,000 should be allocated to the building (with a 40-year life), $150,000 to 15-year property, and $150,000 to 5-

> Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2017, at 119.792 to yield 8%. Interest is payable semiannually on July 1 and January 1. Prepare the journal entries to record a. the issuance of the bonds, b. the payment of interest a

> Tanaka Company has land that cost $15,000,000. Its fair value on December 31, 2017, is $20,000,000. Tanaka chooses the revaluation model to report its land. Explain how the land and its related valuation should be reported.

> Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions. 1. Purchased 5,000 treasury shares at $45 per share. 2. Resold 2,000 of the treasur

> Presented below is information related to Langston Hughes Corporation. Instructions: Compute the ending inventory under the dollar-value LIFO method at December 31, 2018. The cost-to-retail ratio for 2018 was 60%. Price LIFO Index Cost Retail Inve

> The financial statements of ConAgra Foods, Inc.âs 2014 annual report disclose the following information. Instructions: Compute ConAgraâs a. inventory turnover and b. the average days to sell inventory for 2014 and

> Alcide Mining Company purchased land on February 1, 2017, at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the p

> Forda Lumber Company owns a 7,000-acre tract of timber purchased in 2003 at a cost of $1,300 per acre. At the time of purchase, the land was estimated to have a value of $300 per acre without the timber. Forda Lumber Company has not logged this tract sin

> At December 31, 2017, Redmond Company has outstanding three long-term debt issues. The first is a $2,000,000 note payable which matures June 30, 2020. The second is a $6,000,000 bond issue which matures September 30, 2021. The third is a $12,500,000 sink

> 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, 2017, if it had not been struck by a se

> Riegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Instructions Usin

> Lotoya Davis Corporation has 10 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 80 cents per share cash dividend to stockholders of record as of June 14, payable June 30. Instructions a. Prepare the jou

> Marvin Gaye Company has been having difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on November 30, 2017, at a

> Soundgarden Company sold 200 color laser copiers on July 10, 2017, for $4,000 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be $330. Instructions Prepare entries to record the sale of the

> Arantxa Corporation has outstanding 20,000 shares of $5 par value common stock. On August 1, 2017, Arantxa reacquired 200 shares at $80 per share. On November 1, Arantxa reissued the 200 shares at $70 per share. Arantxa had no previous treasury stock tra

> Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2017, Sprinkle reacquired 100 shares at $87 per share. On September 1, Sprinkle reissued 60 shares at $90 per share. On November 1, Sprinkle reissued 40 shares at $83 p

> On February 1, 2017, Buffalo Corporation issued 3,000 shares of its $5 par value common stock for land worth $31,000. Prepare the February 1, 2017, journal entry.

> Wilco Corporation has the following account balances at December 31, 2017. Common stock, $5 par value………………………………$ 510,000 Treasury stock………………………………………………………. 90,000 Retained earnings……………………………………………2,340,000 Paid-in capital in excess of par—common sto

> Nottebart Corporation has outstanding 10,000 shares of $100 par value, 6% preferred stock and 60,000 shares of $10 par value common stock. The preferred stock was issued in January 2017, and no dividends were declared in 2017 or 2018. In 2019, Nottebart

> Cole Inc. owns shares of Marlin Corporation stock. At December 31, 2017, the securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On September 21, 2018, when the fair value of the securities was $

> As a cost accountant for San Francisco Cannery, you have been approached by Phil Perriman, canning room supervisor, about the 2017 costs charged to his department. In particular, he is concerned about the line item “depreciation.” Perriman is very proud

> On January 1, 2017, Henderson Corporation redeemed $500,000 of bonds at 99. At the time of redemption, the unamortized premium was $15,000. Prepare the corporation’s journal entry to record the reacquisition of the bonds.

> Teton Corporation issued $600,000 of 7% bonds on November 1, 2017, for $644,636. The bonds were dated November 1, 2017, and mature in 10 years, with interest payable each May 1 and November 1. Teton uses the effective-interest method with an effective ra

> Devers Corporation issued $400,000 of 6% bonds on May 1, 2017. The bonds were dated January 1, 2017, and mature January 1, 2020, with interest payable July 1 and January 1. The bonds were issued at face value plus accrued interest. Prepare Devers’s journ

> The Colson Company issued $300,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Colson’s journal entries for a. the January issuance, b.

> At December 31, 2017, Hyasaki Corporation has the following account balances: Bonds payable, due January 1, 2026………….$2,000,000 Discount on bonds payable……………………………..88,000 Interest payable…………………………………………….80,000 Show how the above accounts should be

> Shlee Corporation issued a 4-year, $60,000, zero-interest-bearing note to Garcia Company on January 1, 2017, and received cash of $60,000. In addition, Shlee agreed to sell merchandise to Garcia at an amount less than regular selling price over the 4-yea

> McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2017, and received a computer that normally sells for $31,495. The note requires annual interest payments each December 31. The market rate of interest for a note

> Samson Corporation issued a 4-year, $75,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $47,664. The implicit interest rate is 12%. Prepare Samson’s journal entries for a. the January 1 issuance and b. the Dece

> Coldwell, Inc. issued a $100,000, 4-year, 10% note at face value to Flint Hills Bank on January 1, 2017, and received $100,000 cash. The note requires annual interest payments each December 31. Prepare Coldwell’s journal entries to record a. the issuanc

> Mayaguez Corporation provides its officers with bonuses based on net income. For 2017, the bonuses total $350,000 and are paid on February 15, 2018. Prepare Mayaguez’s December 31, 2017, adjusting entry and the February 15, 2018, entry.

> Burnitz Manufacturing Company was organized on January 1, 2017. During 2017, it has used in its reports to management the straight-line method of depreciating its plant assets. On November 8, you are having a conference with Burnitzâs o

> Kasten Inc. provides paid vacations to its employees. At December 31, 2017, 30 employees have each earned 2 weeks of vacation time. The employees’ average salary is $500 per week. Prepare Kasten’s December 31, 2017, adjusting entry.

> Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2017, for $18 each. Prepare Sport Pro’s August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.

> Takemoto Corporation borrowed $60,000 on November 1, 2017, by signing a $61,350, 3-month, zero-interest bearing note. Prepare Takemoto’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry.

> Upland Company borrowed $40,000 on November 1, 2017, by signing a $40,000, 9%, 3-month note. Prepare Upland’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry.

> Wynn Company offers a set of building blocks to customers who send in 3 UPC codes from Wynn cereal, along with 50¢. The block sets cost Wynn $1.10 each to purchase and 60¢ each to mail to customers. During 2017, Wynn sold 1,200,000 boxes of cereal. The c

> Leppard Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2017, Leppard sold 20,000 warranty contracts at $99 each. The corporation spent $180,000 servicing warranties during 2017. Prepare Leppard

> Streep Factory provides a 2-year warranty with one of its products which was first sold in 2017. Streep sold $1,000,000 of products subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In that year, Streep spent $70,0

> Calaf’s Drillers erects and places into service an off-shore oil platform on January 1, 2018, at a cost of $10,000,000. Calaf is legally required to dismantle and remove the platform at the end of its useful life in 10 years. Calaf estimates it will cost

> Scorcese Inc. is involved in a lawsuit at December 31, 2017. a. Prepare the December 31 entry assuming it is probable that Scorcese will be liable for $900,000 as a result of this suit. b. Prepare the December 31 entry, if any, assuming it is not proba

> Nieland Industries had one patent recorded on its books as of January 1, 2017. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2017, Nieland incurred research and development costs of $96,000 and brought a patent i

> Vania Magazine Company started construction of a warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2016, and completed the building on December 31, 2016. During the construction period, Vania has the following debt oblig

> On September 1, 2017, Winans Corporation acquired Aumont Enterprises for a cash payment of $700,000. At the time of purchase, Aumont’s balance sheet showed assets of $620,000, liabilities of $200,000, and owners’ equity of $420,000. The fair value of Aum

> Gershwin Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash payment of $120,000 on April 1, 2017. The franchise grants Gershwin the right to sell certain products and services for a period of 8 years. Prepare Gershwin’s April 1 journal

> Stephan Curry, Inc., spent $68,000 in attorney fees while developing the trade name of its new product, the Mean Bean Machine. Prepare the journal entries to record the $68,000 expenditure and the first year’s amortization, using an 8-year life.

> Indicate whether the following items are capitalized or expensed in the current year. a. Purchase cost of a patent from a competitor. b. Research and development costs. c. Organizational costs. d. Costs incurred internally to create goodwill.

> Treasure Land Corporation incurred the following costs in 2017. Cost of laboratory research aimed at discovery of new knowledge …………. $120,000 Cost of testing in search for product alternatives ……………………………………... 100,000 Cost of engineering activity requ

> R. Wilson Corporation commenced operations in early 2017. The corporation incurred $60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $60,000 exp

> Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2017, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift feels the patent will be useful for 10 years. Prepare Taylor Swift’s journal entries to recor

> Holt Company purchased a computer for $8,000 on January 1, 2016. Straight-line depreciation is used, based on a 5-year life and a $1,000 salvage value. In 2018, the estimates are revised. Holt now feels the computer will be used until December 31, 2019,

> Cominsky Company purchased a machine on July 1, 2018, for $28,000. Cominsky paid $200 in title fees and county property tax of $125 on the machine. In addition, Cominsky paid $500 shipping charges for delivery, and $475 was paid to a local contractor to

Question: Ortiz purchased a piece of equipment that

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