Question: Presented below is information related to Waveland

> Clemson Company had the following stockholders’ equity as of January 1, 2017. Common stock, $5 par value, 20,000 shares issued………. $100,000 Paid-in capital in excess of par—common stock………………. 300,000 Retained earnings…………………………………………………………. 320,000 Tot

> Penn Company was formed on July 1, 2015. It was authorized to issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and nonparticipating preferred stock. Penn Company has a July 1–June 30

> Earnhart Corporation has outstanding 3,000,000 shares of common stock with a par value of $10 each. The balance in its Retained Earnings account at January 1, 2017, was $24,000,000, and it then had Paid-in Capital in Excess of Par—Common Stock of $5,000,

> Sabonis Cosmetics Co. purchased machinery on December 31, 2016, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interest of 8% is implicit in the purchase price. Instructions

> On December 31, 2017, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2021. Faital Company’s credit rating permits it to borrow funds from its several lines of cr

> On April 1, 2017, Seminole Company sold 15,000 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2018, Seminole t

> Presented below are selected transactions on the books of Simonson Corporation. May 1, 2017……………..Bonds payable with a par value of $900,000, which are dated January 1, 2017, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at

> Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 2003, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis. The inden

> Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low downpayment and low car payments for the first year after purchase. It believes that this prom

> Crocker Corp. owes D. Yaeger Corp. a 10-year, 10% note in the amount of $330,000 plus $33,000 of accrued interest. The note is due today, December 31, 2017. Because Crocker Corp. is in financial trouble, D. Yaeger Corp. agrees to forgive the accrued inte

> Wallace Computer Company is a small, closely held corporation. Eighty percent of the stock is held by Derek Wallace, president. Of the remainder, 10% is held by members of his family and 10% by Kathy Baker, a former officer who is now retired. The balanc

> Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requires that this method be used instead of the straight-

> The following are four independent situations. a. On March 1, 2018, Wilke Co. issued at 103 plus accrued interest $4,000,000, 9% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and January 1. In addition, Wilke Co. in

> The following amortization and interest schedule reflects the issuance of 10-year bonds by Capulet Corporation on January 1, 2011, and the subsequent interest payments and charges. The company’s year-end is December 31, and financial st

> Sycamore Candy Company offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of

> To stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. Five coupons are redeemable for a premium consisting of a children’s hand puppet. In 2018, the company purchases 40,000 puppets at $1.50 each and sells 4

> Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the com

> Dos Passos Company sells televisions at an average price of $900 and also offers to each customer a separate 3-year warranty contract for $90 that requires the company to perform periodic services and to replace defective parts. During 2017, the company

> Cedarville Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed. Assume that the federal income tax withheld is 10%

> Schmitt Company must make computations and adjusting entries for the following independent situations at December 31, 2018. 1. Its line of amplifiers carries a 3-year warranty against defects. On the basis of past experience the estimated warranty costs

> You are the independent auditor engaged to audit Millay Corporation’s December 31, 2017, financial statements. Millay manufactures household appliances. During the course of your audit, you discovered the following contingent liabilities. 1. Millay bega

> On March 1, 2017, Sealy Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2017, at an effective annual interest rate (yield) of 11%. Interest is payable semiannually, and the first interest payment date is September 1, 2017. Sealy uses

> The net realizable value of Lake Corporation’s inventory has declined below its cost. Allyn Conan, the controller, wants to use the loss method to write down inventory because it more clearly discloses the decline in the net realizable value and does not

> Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques—warranties and premiums—to attract customers. Musical instruments and sound e

> Polska Corporation, in preparation of its December 31, 2017, financial statements, is attempting to determine the proper accounting treatment for each of the following situations. 1. As a result of uninsured accidents during the year, personal injury su

> On November 24, 2017, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totaling $9,000,000 were filed on January 11, 2018, against the airline by 18 injure

> During 2015, Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $60,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $320,000

> Montana Matt’s Golf Inc. was formed on July 1, 2016, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business

> Information concerning Sandro Corporation’s intangible assets is as follows. 1. On January 1, 2017, Sandro signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this amount, $15,000 was pa

> Reichenbach Co., organized in 2016, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2017 and 2018. Instructions Prepare the necessary entries to clear the Intangib

> Roland Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $10,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced

> Darby Sporting Goods Inc. has been experiencing growth in the demand for its products over the last several years. The last two Olympic Games greatly increased the popularity of basketball around the world. As a result, a European sports retailing consor

> Bronson Paper Products purchased 10,000 acres of forested timberland in March 2017. The company paid $1,700 per acre for this land, which was above the $800 per acre most farmers were paying for cleared land. During April, May, June, and July 2017, Brons

> On January 1, 2017, Nichols Company issued for $1,085,800 its 20-year, 11% bonds that have a maturity value of $1,000,000 and pay interest semiannually on January 1 and July 1. The following are three presentations of the long-term liability section of t

> Conan O’Brien Logging and Lumber Company owns 3,000 acres of timberland on the north side of Mount Leno, which was purchased in 2005 at a cost of $550 per acre. In 2017, O’Brien began selectively logging this timber tract. In May 2017, Mount Leno erupted

> A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period

> The following data relate to the Machinery account of Eshkol, Inc. at December 31, 2017. The following transactions occurred during 2018. a. On May 5, Machine A was sold for $13,000 cash. The company’s bookkeeper recorded this retire

> The cost of equipment purchased by Charleston, Inc., on June 1, 2017, is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are esti

> Kohlbeck Corporation, a manufacturer of steel products, began operations on October 1, 2016. The accounting department of Kohlbeck has started the fixed-asset and depreciation schedule presented on page 595. You have been asked to assist in completing th

> Laserwords Inc. is a book distributor that had been operating in its original facility since 1987. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Las

> Spitfire Company was incorporated on January 2, 2018, but was unable to begin manufacturing activities until July 1, 2018, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items duri

> Klamath Company, a manufacturer of ballet shoes, is experiencing a period of sustained growth. In an effort to expand its production capacity to meet the increased demand for its product, the company recently made several acquisitions of plant and equipm

> Davenport Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2017, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for th

> The following two independent situations involve loss contingencies. Part 1: Benson Company sells two products, Grey and Yellow. Each carries a 1-year warranty. 1. Product Grey—Product warranty costs, based on past experience, will normally be 1% of sa

> Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2017. Amounts as shown below appear on the store’s books before

> Late in 2014, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Becker Departm

> As of January 1, 2017, Aristotle Inc. adopted the retail method of accounting for its merchandise inventory. To prepare the store’s financial statements at June 30, 2017, you obtain the following data. Instructions a. Prepare a sched

> Maddox Specialty Company, a division of Lost World Inc., manufactures three models of gear shift components for bicycles that are sold to bicycle manufacturers, retailers, and catalog outlets. Since beginning operations in 1993, Maddox has used normal ab

> Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018. Instructions a. Using the conventional retail method, prepa

> Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2016, had the following balances. Land…………………………...$ 300,000 Land improvements………. 140,000 Buildings……………………..1,100,000 Equipmen

> On April 15, 2018, fire damaged the office and warehouse of Stanislaw Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared. The following data and information have been gathered. 1.

> Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on

> Fiedler Co. follows the practice of valuing its inventory at the lower-of cost-or-market. The following information is available from the company’s inventory records as of December 31, 2017. Instructions Greg Forda is an accounting

> Presented below is a note disclosure for Matsui Corporation. Litigation and Environmental: The Company has been notified, or is a named or a potentially responsible party in a number of governmental (federal, state and local) and private actions associat

> Presented below is a schedule of property dispositions for Hollerith Co. The following additional information is available. Land: On February 15, a condemnation award was received as consideration for unimproved land held primarily as an investment, a

> Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2017, December 31, 2018, and December 31, 2019, as shown below. Instructions a. Prepare the journal entries required at December 31, 2018, and at December 31, 2019, as

> Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31,

> Remmers Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2017, the following finished desks (10 desks in each category) appear in the companyâ

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

> Hincapie Co. (a specialty bike-accessory manufacturer) is expecting growth in sales of some products targeted to the low-price market. Hincapie is contemplating a preference share issue to help finance this expansion in operations. The company is leaning

> Teller Corporation’s post-closing trial balance at December 31, 2017, was as follows. At December 31, 2017, Teller had the following number of ordinary and preference shares. The dividends on preference shares are $4 cumulative. In

> Weisberg Corporation has 10,000 shares of $100 par value, 6%, preference shares and 50,000 ordinary shares of $10 par value outstanding at December 31, 2017. Instructions Answer the questions in each of the following independent situations. a. If the

> The financial statements of M&S are presented in Appendix E. The company’s complete annual report, including the notes to the financial statements, is available online. Instructions Refer to M&S’s financial statements and the accompanying notes for 201

> The following situations relate to Bolivia Company. 1. Bolivia provides a warranty with all its products it sells. It estimates that it will sell 1,000,000 units of its product for the year ended December 31, 2017, and that its total revenue for the pro

> On February 1, 2018, one of the huge storage tanks of Viking Manufacturing Company exploded. Windows in houses and other buildings within a one-mile radius of the explosion were severely damaged, and a number of people were injured. As of February 15, 20

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

> Hincapie Co. manufactures specialty bike accessories. The company is most well-known for its product quality, and it has offered one of the best warranties in the industry on its higher-priced products—a lifetime guarantees. The warranty on these product

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

> Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of $1

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

> Falcetto Company acquired equipment on January 1, 2016, for $12,000. Falcetto elects to value this class of equipment using revaluation accounting. This equipment is being depreciated on a straight-line basis over its 6-year useful life. There is no resi

> Assume the same information as in IFRS11-11, except that Pujols intends to dispose of the equipment in the coming year. Instructions a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. b. Prepare the journa

> Presented below is information related to equipment owned by Pujols Company at December 31, 2017. Cost (residual value $0)………………………..$9,000,000 Accumulated depreciation to date…………..1,000,000 Value-in-use………………………………………….5,500,000 Fair value less cost of

> Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2015, the company expends $325,000 on a research project, but by the end of 2015, it is impossible to determine whether any ben

> Brazil Group purchases a vehicle at a cost of $50,000 on January 2, 2017. Individual components of the vehicle and useful lives are as follows. Assume that Pujols will continue to use this asset in the future. As of December 31, 2017, the equipment has

> Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of $10,000,000 (matures in

> Presented below are two different situations related to Mckee Corporation’s debt obligations. Mckee’s next financial reporting date is December 31, 2017. The financial statements are authorized for issuance on March 1, 2018. 1. Mckee has a long-term obl

> On December 31, 2017, Alexander Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2018. On January 21, 2018, the company issued 25,000 ordinary shares for $36 per share, receiving $900,000 proceeds after brokerage fee

> Assume the same information as in IFRS14-5, except that the bonds were issued at 84.95 to yield 12%. Prepare the journal entries to record a. the issuance of the bonds, b. the payment of interest and related amortization on July 1, 2017, and c. the ac

> Assume the bonds in IFRS14-3 were issued for $644,636 and the effective-interest rate is 6%. Prepare the company’s journal entries for a. the January 1 issuance, b. the July 1 interest payment, and c. the December 31 adjusting entry. (Round to the ne

> Treasure Land Corporation incurred the following costs in 2017. Prepare the necessary 2017 journal entry(ies) for Treasure Land. Cost of laboratory research aimed at discovery of new knowledge Cost of testing in search for product alternatives Cost

> On January 1, 2017, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,224, and pay interest each July 1 and January 1. Prepare the company’s journal entries for a. the January 1 issuance, b. the July 1 interes

> Connie Chung Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $54,000 and a retail price of $100,000. The following information is available. The price index at January 1, 20

> Amiras Corporation began operations on January 1, 2017, with a beginning inventory of $30,100 at cost and $50,000 at retail. The following information relates to 2017. Retail Net purchases (

> On December 31, 2017, Travis Tritt Inc. has a machine with a book value of $940,000. The original cost and related accumulated depreciation at this date are as follows. Machine……………………………………$1,300,000 Less: Accumulated depreciation……360,000 Book value……

> You assemble the following information for Seneca Department Store, which computes its inventory under the dollar-value LIFO method. Instructions: Compute the cost of the inventory on December 31, 2017, assuming that the inventory at retail is a. $294

> Rodriguez Corporation includes the following items in its liabilities at December 31, 2017. 1. Notes payable, $25,000,000, due June 30, 2018. 2. Deposits from customers on equipment ordered by them from Rodriguez, $6,250,000. 3. Salaries and wages pay

> Leonard Company began operations late in 2016 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2016 and no markdowns during 2016, the ending inventory for 2016 was $14,000 under both the conventional reta

> Keller Company began operations on January 1, 2016, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2016 and, because there was no beginning inventory, its ending inventory for 201

> At the beginning of 2017, Aristotle Company acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,

> The following transactions occurred during 2017. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all

> Five Satins Company purchased a piece of equipment at the beginning of 2014. The equipment cost $430,000. It has an estimated service life of 8 years and an expected salvage value of $70,000. The sum of-the-years’-digits method of depreciation is being u

> Diderot Drilling Company has leased property on which oil has been discovered. Wells on this property produced 18,000 barrels of oil during the past year that sold at an average sales price of $55 per barrel. Total oil resources of this property are esti

> On December 31, 2016, Main Inc. borrowed $3,000,000 at 12% payable annually to finance the construction of a new building. In 2017, the company made the following expenditures related to this building: March 1, $360,000; June 1, $600,000; July 1, $1,500

> Cannondale Company purchased an electric wax melter on April 30, 2017, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter……………………………………………$15,800 Cash paid……………………………………………

> Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2017. Harrisburg expected to complete the building by December 31, 2017. Harrisburg has the

> Wallace Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following. Merchandise with a selling price of $21,000 remained undamaged af

> Presented below is the current liabilities section of Micro Corporation. Instructions Answer the following questions. a. What are the essential characteristics that make an item a liability? b. How does one distinguish between a current liability and

> Cardinals Corporation purchased a computer on December 31, 2016, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2017. An assumed interest rate of 10% is implic

> Chippewas Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capacity to meet customers’ demand for its product. Chippewas issues an $800,000, 5-year, zero-interest-bearing note to Central