Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2024. Power Drive has the following transactions affecting stockholders’ equity in 2024. March 1 Issues 65,000 additional shares of $1 par value common stock for $62 per share. May 10 Purchases 6,000 shares of treasury stock for $65 per share. June 1 Declares a cash dividend of $2.00 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 3,000 shares of treasury stock purchased on May 10 for $70 per share. Required: Record each of these transactions.
> To help understand an organizational culture, think about some organization to which you belong. Does your company, school, or fraternity/sorority have its own culture? How would you describe it? How does it influence individual decision-making and actio
> Can such character traits as honesty, loyalty, trustworthiness, compassion, and humility be taught? Do people learn to be selfish, greedy, or aggressive, or do these traits come naturally?
> What might be some benefits and costs of acting unethically in business? Distinguish between benefits and harms to the individual and benefits and harms to the firm.
> The right of private property is often described as a “bundle” of rights. What rights are involved in ownership of property? Given this understanding, should shareholders be considered owners of corporations?
> If the right to autonomy is the right to make your own free and deliberate choices, what limits do you think there must be on that right? Does the right to autonomy literally allow us to do anything we want?
> Some political philosophers understand the ethical foundations of legislatures to be utilitarian, while the ethical foundation of the judiciary is deontological. How would you explain this distinction?
> Why might economic growth be considered a utilitarian goal?
> Do an internet search on international human rights and/or fundamental moral rights. Can you find any moral rights that seem to be universally acknowledged across all cultures?
> What ethical disputes or dilemmas have you experienced in your own workplace? What about in a club or student group you belong to? How were these disputes or dilemmas resolved?
> What makes a decision or issue an ethical one? How would you explain the differences between ethical/non-ethical, on one hand, and ethical/unethical, on the other?
> Do professionals such as physicians, accountants, and lawyers have duties and obligations that other people do not? Where would such duties come from?
> Not all ethical norms get entrenched in law. In which philosophical tradition—consequences, rights, or virtue—are we most likely to find norms that have ended up becoming laws?
> Lisa is trying to raise funds to support the creation of a free clinic in a poor neighbor-hood in her hometown. She has been trying very hard; but she has not been able to raise enough money to get the clinic up and running. One day, she gets a huge chec
> Why might legal rules be insufficient for fulfilling one’s ethical responsibilities? Can you think of cases in which a businessperson has done something legally right, but ethically wrong? What about the opposite – are there situations in which a busines
> As a class exercise, write a brief account of any unethical or ethically questionable experience you have witnessed in a work context. Read and discuss the examples in class, keeping the authors anonymous. Consider how the organization allowed or encour
> Many people have blamed the global financial crisis of 2008-2009 on a single value or motive, namely greed. How would you define greed? How common do you think true greed is in the general population? Do you think it is more common on, say, Wall Street,
> How can your global firm best ensure that it is taking into account the perceptual differences that may exist as a result of diverse cultures, religions, ethnicities, and other factors when creating a worldwide marketing plan?
> Describe the qualities you believe are necessary in an “ethical leader.” Provide support for your point of view and explain why a leader should display these qualities in order to be considered “ethical.” Then identify someone you believe embodies these
> Your CEO recognizes you as having unusually strong skills in decision making and communications, and so she asks for guidance on how to best communicate her plans for an imminent reduction in your company’s workforce. What are some of the key strategies
> What one small change do you think would have the biggest impact on the world today? Share it in a brief essay, then convince your reader why it is so important that she or he should also care about that issue to the same extent. It may be effective to u
> Consider your own personal values and explain where they originated. Can you pinpoint their origins? To what degree have you chosen your own values? To what degree are your own values products of your family, your religious or cultural background, or you
> What values do you think motivated the engineers at Volkswagen who devised the method for falsifying emissions tests? How do you think their motivation may have evolved over the years that the scheme was in play? What do you think they would have said if
> Think about a situation in which you have witnessed someone engaging in unethical behavior but in which you failed to do anything about it. (If you can’t think of an example from your own experience, imagine yourself in the position of someone you know a
> Every year, Ethisphere Magazine publishes a list of the world's most ethical companies. Go to their website; find and evaluate their rating methodology and criteria; and engage in an assessment (i.e. provide suggestions for any modifications you might ma
> Questions of ethics and values also arise frequently in a variety of university courses—particularly in business and professional schools. Are there other courses in your school’s curriculum that talk about “the right thing to do,” without necessarily us
> During 2018, Fueltronics spends $200,000 on several different research projects to gain new knowledge about the use of alternative fuels to operate motorized vehicles. Because one of the projects shows very high promise, the company spends an additional
> The following condensed information is reported by Sporting Collectibles. Required: 1. Calculate the following profitability ratios for 2024: a. Gross profit ratio. b. Return on assets. c. Profit margin. d. Asset turnover. e. Return on equity. 2. Determi
> Refer to the information provided for Plasma Screens Corporation in E12–7. Required: 1. Calculate the following profitability ratios for 2024: a. Gross profit ratio. b. Return on assets. c. Profit margin. d. Asset turnover. e. Return on
> The balance sheets for Plasma Screens Corporation and additional information are provided below. Additional Information for 2024: 1. Net income is $184,000. 2. Sales on account are $1,890,000. 3. Cost of goods sold is $1,394,250. Required: 1. Calculate t
> The 2024 income statement of Adrian Express reports sales of $19,310,000, cost of goods sold of $12,250,000, and net income of $1,700,000. Balance sheet information is provided in the following table. Industry averages for the following four risk ratios
> The balance sheets for Federer Sports Apparel for 2025 and 2024 are presented below. Required: 1. Prepare a vertical analysis of the balance sheet data for 2025 and 2024. Express each amount as a percentage of total assets. 2. Prepare a horizontal analys
> Refer to the information provided in E12–2. Required: Prepare a horizontal analysis for 2025 using 2024 as the base year. Data from E12-2: The income statements for Federer Sports Apparel for 2025 and 2024 are presented below.
> The income statements for Federer Sports Apparel for 2025 and 2024 are presented below. Required: Prepare a vertical analysis of the data for 2025 and 2024.
> Portions of the financial statements for Peach Computer are provided below. Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the indirect method.
> The balance sheets for Plasma Screens Corporation, along with additional information, are provided below: Additional Information for 2024: 1. Net income is $79,000. 2. The company purchases $110,000 in equipment. No eq
> Beaver Construction purchases new equipment for $50,400 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for seven years (84 months) and have no resale or scrap value at the end. Beaver depreciates equipm
> Mega Screens, Inc., reports net sales of $3,200,000, cost of goods sold of $2,000,000, and income tax expense of $150,000 for the year ended December 31, 2024. Selected balance sheet accounts are as follows: Required: Calculate cash received from custome
> Refer to the information in E11–12. Required: Calculate net cash flows from financing activities. Data from E11-12: Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise): a. A building with a
> Refer to the information in E11-10. Required: Calculate net cash flows from financing activities. Data from E11-10: The following summary transactions occurred during the year for Bluebonnet.
> The following summary transactions occurred during the year for Bluebonnet. Required: Calculate net cash flows from investing activities.
> Consider each of the following independent situations: Required: For each situation, calculate the missing amount.
> Refer to the information in E10–7. In its first year of operations, Finishing Touches has net income of $160,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,400 on all preferred shares outst
> On January 1, 2024, the general ledger of Grand Finale Fireworks includes the following account balances: During January 2024, the following transactions occur: January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. January
> Financial information for Forever 18 includes the following selected data: Required: 1. Calculate earnings per share in 2023 and 2024. Did earnings per share increase in 2024? 2. Calculate the price-earnings ratio in 2023 and 2024. In which year is the s
> The financial statements of Friendly Fashions include the following selected data (in millions): Required: 1. Calculate the return on equity in 2024. 2. Calculate the dividend yield in 2024. 3. Calculate earnings per share in 2024. 4. Calculate the price
> United Apparel has the following balances in its stockholders’ equity accounts on December 31, 2024: Treasury Stock, $850,000; Common Stock, $600,000; Preferred Stock, $3,600,000; Retained Earnings, $2,200,000; and Additional Paid-in Capital, $8,800,000.
> Refer to the information in BE5–7, but now assume that the balance of Allowance for Uncollectible Accounts before adjustment is $600 (debit). The company still estimates future uncollectible accounts to be 12% of Accounts Receivable. What is the adjustin
> Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $5,500,000; and Retained Earnings, $3,000,000. Net income for the
> Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $5,500,000; and Retained Earnings, $3,000,000. Net income for the year ended Decembe
> On February 3, a company provides services on account for $25,000, terms 2/10, n/30. On February 9, the company receives payment from the customer for those services on February 3. Record the service on account on February 3 and the collection of cash on
> On January 1, 2024, Beaver Tours financed the purchase of a new building by borrowing $600,000 from the bank using a 30-year, 6% note payable. Payments of $3,597.30 are due at the end of each month, with the first installment due on January 31, 2024. Rec
> On December 18, Intel receives $260,000 from a customer as down payment on a total sale of $2.6 million for computer chips to be completed on January 23. On January 23, the computer chips were delivered and the remaining cash was received from the custom
> On April 1, 2024, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments is $100,000. Record the lease.
> Universal Sports Supply began the year with an accounts receivable balance of $200,000 and a year-end balance of $220,000. Credit sales of $750,000 generate a gross profit of $250,000. Calculate the receivables turnover ratio for the year.
> If sales are $1,150,000 in 2025 and this represents a 15% increase over sales in 2024, what were sales in 2024?
> Sales are $2.6 million in 2023, $2.7 million in 2024, and $2.5 million in 2025. What is the percentage change from 2023 to 2024? What is the percentage change from 2024 to 2025? Be sure to indicate whether the percentage change is an increase or a decrea
> Wendy Day Kite Company owns 40% of the outstanding stock of Strong String Company. During the current year, Strong String reported net income of $15 million. What effect does Strong String’s reported net income have on Wendy Day’s financial statements?
> Athletic World reports the following vertical analysis percentages. Did Athletic World’s income before tax as a percentage of sales increase, decrease, or stay the same? If net income as a percentage of sales increases, does that mean n
> Using the information presented in BE12–1, perform a horizontal analysis providing both the amount and percentage change. Data from BE12-1: Perform a vertical analysis on the following information.
> Classify each of the following accounting practices as conservative or aggressive. 1. Increase the allowance for uncollectible accounts. 2. When costs are rising, change from LIFO to FIFO. 3. Change from declining-balance to straight-line depreciation in
> Perform a vertical analysis on the following information.
> On April 1, 2023, Teleworks Company lent $100,000 to IT Industries. IT Industries pays back in full the note plus 10% interest on April 1, 2024. Determine the investing cash flows to be reported by Teleworks Company in 2024.
> Refer to the situation described in BE11–9. Determine the financing cash flows to be reported by IT Industries in 2024. Data from BE11-9: On April 1, 2023, Teleworks Company lent $100,000 to IT Industries. IT Industries pays back in full the note plus 1
> Technologies Worldwide purchased land for $850,000 in 2023 with the intent to expand operations. In 2024, the company decides the land is no longer needed, and the land is sold for $900,000. Determine the investing cash flows to be reported in 2024. Dete
> Rachel’s Designs has 2,000 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2022. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2022 or 2023. The compan
> Refer to the information in BE10-12. Determine the financial statement effects for (1) the declaration of dividends on October 1 and (2) the payment of dividends on October 31. Data from BE10-12: Divine Apparel has 4,000 shares of common stock outstandi
> Refer to the information in BE10-10. Determine the financial statement effects of the sale of treasury stock. Data from BE10-10: Refer to the situation described in BE10-8. Record the transaction if California Surf resells the 100 shares of treasury sto
> On December 29, 2024, Adams Apples purchased 1,000 shares of General Electric common stock for $19 per share. On December 31, the market value of the stock increased to $20 per share. On January 24, 2025, all of the shares are sold for $16 per share. Rec
> Refer to the information in BE10-9. Determine the financial statement effects of the sale of treasury stock. Data from BE10-9: Refer to the situation described in BE10–8. Record the transaction if California Surf resells the 100 shares of treasury stock
> Refer to the information in BE10-8. Determine the financial statement effects of the purchase of treasury stock. Data from BE10-8: California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 per share. Later in the year, the
> Refer to the information in BE10-3. Determine the financial statement effects of the issuance of common stock. Data from BE10-3: Western Wear Clothing issues 3,000 shares of its $0.01 par value common stock to provide funds for further expansion. Assumi
> Diamond Dresses began the year with a balance of $425,000 in Retained Earnings. During the year, the company had net income of $100,000 and declared no dividends. (a) Calculate the ending balance of Retained Earnings. (b) Now assume the company declared
> Refer to the situation described in BE10-8. Record the transaction if California Surf resells the 100 shares of treasury stock at $35 per share. Data from BE10-8: California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 p
> Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2024. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31. 1. Record the bond
> Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2024. Interest is paid semiannually on June 30 and December 31. 1. Record the bond issue on January 1, 2024. 2. Record the first interest payment on June
> Refer to the information in BE9–8. Determine the financial statement effects of (1) the bond issue on January 1, 2024, and (2) the first interest payment on June 30, 2024. Data from BE9-8: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount
> Refer to the information in BE9–5. Determine the financial statement effects of the lease. Data from BE9-5: On April 1, 2024, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments is $100,000. Record t
> Refer to the information in BE9–1. Determine the financial statement effects of the issuance of the installment note and the first monthly payment. Data from BE 9-1: On January 1, 2024, Corvallis Carnivals borrows $30,000 to purchase a delivery truck by
> On December 29, 2024, Adams Apples purchased 1,000 shares of General Electric common stock for $19 per share. On December 31, the market value of the stock increased to $20 per share. On January 24, 2025, all of the shares are sold for $22 per share. Rec
> Surf’s Up, a manufacturer of surfing supplies and training equipment, has the following selected data ($ in millions): Based on these amounts, calculate the following ratios for 2024: 1. Debt to equity ratio. 2. Return on assets ratio.
> Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1, 2024. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31. 1. Record the bond
> On September 1, 2024, Southwest Airlines borrows $41 million, and records the full amount as Notes Payable (long-term). On December 31, 2024 (balance sheet date), Southwest determines $10 million of the note is due next year, while the remaining $31 mill
> Refer to the information in BE8–11. Determine the financial statement effects of accounting for expected future warranty costs. Data from BE8-11: Sony introduces a new compact music player that carries a two-year warranty against manufacturer’s defects.
> Refer to the information in BE8–8. Determine the financial statement effects of sales and sales tax payable. Data from BE8-8: During December, Far West Services makes a credit sale of $3,200 (before sales taxes). The state sales tax rate is 6% and the l
> Refer to the information in BE8–6. Determine the financial statement effects of (1) the collection of the down payment on December 18 and (2) the delivery of inventory and collection of remaining cash on January 23. Data from BE8-6: On December 18, Inte
> Refer to the information in BE8–1. Determine the financial statement effects of (1) the issuance of the note and (2) the adjusting entry for interest owed by December 31, the end of the reporting period. Data from BE8-1: On November 1, Bahama Cruise Lin
> On September 1, 2024, Southwest Airlines borrows $41 million, of which $10 million is due next year. Show how Southwest Airlines would report the $41 million debt on its December 31, 2024, balance sheet.
> El Tapitio purchased restaurant furniture on September 1, 2024, for $45,000. Residual value at the end of an estimated 10-year service life is expected to be $6,000. Calculate depreciation expense for 2024 and 2025, using the straight-line method and ass
> Refer to the information in BE7–16. Determine the financial statement effects of the gain or loss on the sale of the equipment. Data from BE7-16: Piper’s Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and de
> A company purchases a small office building as its new headquarters. The building cost $750,000. To purchase the building, the company issues a 15-year installment note with 5% interest. The company is considering two options: a. Pay $0 down and make mon
> Refer to the information in BE7–15. Determine the financial statement effects of the gain or loss on the sale of the equipment. Data from BE7-15: Granite Stone Creamery sold ice cream equipment for $16,000. Granite Stone originally purchased the equipme
> Refer to the information in BE7–12. Determine the financial statement effects of depreciation using the activity-based method. Data from BE7-12: Refer to the information in BE7-10. In addition, assume the machine operated for an additional 3,400 hours i
> Refer to the information in BE7–11. Determine the financial statement effects of depreciation for each of the first two years using the straight-line method. Data from BE7-11: Refer to the information in BE7-10. Record depreciation expense for each of t
> Refer to the information in BE7–1. Determine the financial statement effects of the purchase of land. Data from BE7-1: Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the following exp
> Refer to the information in BE7-10. In addition, assume the machine operated for an additional 3,400 hours in the second year. Record depreciation expense for the first two years using the activity-based method. Data from BE7-10: On January 1, Hawaiian
> Tony and Suzie graduate from college in May 2024 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they’ll hold their first adventure
> Suppose an auditor has been paid $1,000,000 each year for the past several years by a company to perform the audit of its annual financial statements. This company is the auditor’s largest client. In the current year, the auditor notices that the prelimi
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Facebook for the year ended December 31, 2019. Locate the “Consolidated Statements of Income” and “Consolidated Balance Sheets” and answer the foll
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Which company reports higher total assets? 2. Which company r
> Financial information for Buckle. Required: 1. Determine the amounts Buckle reports for total assets, total liabilities, and total stockholders’ equity in the balance sheet for the most recent year. Verify that the basic accounting equation balances. 2.
