Question:

> iWorld, Inc., was set to report the following statement of retained earnings for the year ended December 31, 2016: Before issuing its 2016 financial statements, iWorld learned that net income of 2015 was overstated by $10,000. Prepare iW

> Use the Musicality data in S11-3. In addition, Musicality had unrealized gains of $2,100 on available-for-sale investments and a $3,200 foreign-currency translation adjustment (a gain) during 2016. Both amounts are net of tax and in thousands. Start with

> Return to the Musicality data in S11-3. Musicality had 10,000 shares of common stock outstanding during 2016. Musicality declared and paid preferred dividends of $1,000 during 2016. Report Musicality’s earnings per share on the income s

> Research has shown that over 50% of financial statement frauds are committed by companies that recognize revenue improperly. What does this mean? Describe the most common ways companies improperly recognize revenue.

> The statement of stockholders’ equity for Hammer Corporation follows. Use Hammer Corporation’s statement to answer the questions: 1. How much cash did the issuance of common stock bring in during 2016? 2. What was

> Use the following statement of stockholders’ equity to answer the following questions about Beckett Corporation: 1. How much cash did the issuance of common stock bring in during 2016? 2. How much in dividends did Beckett declare dur

> At December 31, 2016, Sidestep Corporation reported the stockholders’ equity accounts shown here (with dollar amounts in millions, except per-share amounts). Common stock $1.00 par value per share, 26 million shares issued……………………………....................

> During 2016, Advantage Corporation earned net income of $5.8 billion and paid off $2.7 billion of long-term notes payable. Advantage raised $1.4 billion by issuing common stock, paid $3.0 billion to purchase treasury stock, and paid cash dividends of $1.

> Wallace Corporation is conducting a special meeting of its board of directors to address some concerns raised by the stockholders. Stockholders have submitted the following questions. Answer each question. 1. What is the difference between the redemptio

> Nestor Corporation’s 2016 financial statements reported the following items, with 2015 figures given for comparison (adapted, and in millions): Use the DuPont model to compute Nestor’s r

> Give the DuPont model formula for computing a. rate of return on total assets (ROA) and b. rate of return on common stockholders’ equity (ROE). Then answer these questions about the rate-of-return computations. 1. Explain the meaning of the component

> Fresco Ambulatory, Inc., has the following stockholders’ equity: Preferred stock, 1%, $4 par, 34,000 shares authorized and issued……………………………………………………................................... 136,000 Common stock, $4 par, 100,000 shares authorized, 65,000 shar

> Downtown Bancshares has 40,000 shares of $8 par common stock outstanding. Suppose Downtown declares and distributes a 16% stock dividend when the market value of its stock is $20 per share. 1. Journalize Downtown’s declaration and distribution of the st

> Baxter, Inc., has 25,000 shares of $1.35 preferred stock outstanding in addition to its common stock. The $1.35 designation means that the preferred stockholders receive an annual cash dividend of $1.35 per share. In 2016, Baxter declares an annual divid

> Greenwood Corporation earned net income of $90,000 during the year ended December 31, 2016. On December 15, Greenwood declared the annual cash dividend on its 2% preferred stock (15,000 shares with total par value of $150,000) and a $0.45 per share cash

> On February 5, 2016, Jubilee Rental Corporation’s board of directors declared a dividend of $0.24, to be paid on March 18, 2016, to the shareholders of record as of the close of business on March 9, 2016. Jubilee has 2,000,000 shares of $0.01 par-value c

> Lucinda Lowery Exports, Inc., is located in Clancy, New Mexico. Lowery is the only company with reliable sources for its imported gifts. The company does a brisk business with specialty stores such as Neiman Marcus. Lowery’s recent success has made the c

> Cinders Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock.................................. $ 281 Additional paid-in capital.................. 275 Retained earnings.................

> On January 10, 2016, Jenson Corporation purchased treasury stock at a cost of $21 million. On July 3, 2016, Jenson Corporation resold some of the treasury stock for $12 million; this resold treasury stock had cost Jenson Corporation $4 million. Record th

> Refer to the data in S10-7. Using only year-end figures rather than averages, compute the following for Hillcrest Employment Services: a. Net income b. Total liabilities c. Total assets (use the accounting equation) d. Net proï&no

> The financial statements of Hillcrest Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders’ equity section of Hillcrest&ac

> This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. Compare the balances in all the accounts after making both sets of entries. Are the account balances similar or different? Case A–Issue sto

> Which of the following items is most closely related to prior-period adjustments? a. Preferred stock dividends b. Retained earnings c. Treasury stock d. Earnings per share

> Use the Copyking Corporation data in Q11-42 and Q11-43. At the end of its first year of operations, Copyking’s deferred tax liability is a. $20,000. b. $30,000. c. $50,000. d. $120,000.

> Copyking Corporation in the preceding question must immediately pay income tax of a. $120,000. b. $50,000. c. $90,000. d. $30,000.

> Copyking Corporation has income before income tax of $200,000 and taxable income of $120,000. The income tax rate is 25%. Copyking’s income statement will report net income of a. $30,000. b. $50,000. c. $120,000. d. $150,000.

> Earnings per share is not reported for a. income from discontinued operations. b. comprehensive income. c. income from continuing operations.

> Foreign-currency transaction gains and losses are reported on the a. income statement. b. balance sheet. c. statement of cash flows. d. consolidation work sheet.

> Alistair Software had the following selected account balances at December 31, 2016 (all numbers and amounts are in thousands, except par value per share): Requirements 1. Prepare the stockholders’ equity section of Alistairâ&#1

> One way to hedge a foreign-currency transaction loss is to a. pay debts as late as possible. b. pay in the foreign currency. c. offset foreign-currency inventory and plant assets. d. collect in your own currency.

> Providence Systems purchased inventory on account from Megaplex. The price was ¥150,000, and a yen was quoted at $0.0088. Providence paid the debt in yen a month later when the price of a yen was $0.0093. Providence a. debited Inventory for $1,320. b.

> Return to the preceding question. Suppose you are evaluating Marva’s Lotion Company stock as an investment. You require a 10% rate of return on investments, so you capitalize Marva’s earnings at 10%. How much are you w

> Marva’s Lotion Company reports several earnings numbers on its current-year income statement (parentheses indicate a loss): How much net income would most investment analysts predict for Marva’s to earn next year? a

> What is the most relevant net income figure on a corporate multistep income statement for predicting future profits and for use in investment valuation? a. Prior-period adjustments b. Gain on sale of plant assets c. Income from continuing operations d.

> Book value per share of Miami Medical’s common stock outstanding at December 31, 2016, was a. 134.9. b. $4.73. c. 35,164. d. 20.8. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Mil

> How many shares of common stock did Miami Medical have outstanding, on average, during 2016? a. 35,164 million b. 1,122 million c. 20.8 million d. 134.9 million A1 Miami Medical Corporation Consolidated Statements of Financial Position December 3

> Miami Medical’s trend of return on sales is a. improving in 2016 as compared to 2014. b. declining. c. stuck at 21.1%. d. worrisome. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Mil

> Miami Medical’s long-term debt bears interest at 11%. During the year ended December 31, 2016, Miami’s times-interest-earned ratio was closest to: a. 20.8 times. b. 134.9 times. c. 75.6 times. d. 35,164. A1 Mia

> Miami Medical’s inventory turnover during fiscal year 2016 was a. 134.9 times. b. very slow. c. $835,164. d. 84 times. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In

> The financial statements of Wellman Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders’ equity section of Wellmanâ

> Assuming all sales were on account, Miami Medical’s days’ sales in receivables during 2016 was a. 134.9 days. b. 35 days. c. 20.8 days. d. 25 days. A1 Miami Medical Corporation Consolidated Statements of Financ

> Miami Medical’s common-size income statement for 2016 would report cost of goods sold as a. 134.9%. b. $35,164 million. c. 83.6%. d. up by 20.8%. A1 Miami Medical Corporation Consolidated Statements of Financial Position Decembe

> Using the earliest year available as the base year, the trend percentage for Miami Medical’s net revenue during 2016 was a. 135%. b. up by $10,850 million. c. 119%. d. up by 19.1%. A1 Miami Medical Corporation Consolidated State

> What is the largest single item included in Miami Medical’s debt ratio at December 31, 2016? a. Accounts payable b. Cash and cash equivalents c. Common stock d. Investments A1 Miami Medical Corporation Consolidated Statements of

> Miami Medical’s quick (acid-test) ratio at year-end 2016 is closest to a. 0.46. b. $8,623 million. c. 0.76. d. 0.68. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Millions) 2016 20

> Miami Medical’s current ratio at year-end 2016 is closest to a. 1.2. b. 0.94. c. 0.739. d. 21.1 A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In Millions) 2016 2015 4 Assets: Current

> During 2016, Miami Medical’s total assets a. increased by 26.7%. b. increased by $1,902 million. c. Both a and b d. increased by 21.1%. A1 Miami Medical Corporation Consolidated Statements of Financial Position December 31, 3 (In

> Assume Sheehan uses the direct method to prepare the statement of cash flows. Income tax payable was $4,000 at the end of the year and $3,000 at the beginning. Income tax expense for the year totaled $59,700. What amount of cash did the co

> Assume Sheehan uses the direct method to prepare the statement of cash flows. Credit sales totaled $850,000, accounts receivable increased by $60,000, and accounts payable decreased by $20,000. How much cash did the company collect from cu

> Journey Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $15,000 to help organize the corporation. Journey Publishing also issued common stock to an inventor in exchange for her patent wi

> Sheehan’s largest financing cash flow for 2016 resulted from (assume no stock dividends were distributed) a. issuance of common stock. b. payment of dividends. c. purchase of equipment. d. sale of equip

> How many items enter the computation of Sheehan’s net cash flow from financing activities for 2016? a. 2 b. 7 c. 3 d. 5 A1 Sheehan's Income Statement for 2016 1 2 Sales revenue 3 Gain on sale of equ

> The book value of equipment sold during 2016 was $20,000. Sheehan’s net cash flow from investing activities for 2016 was a. net cash used of $52,000. b. net cash used of $58,000. c. net cash used of $24,500. d. net ca

> How many items enter the computation of Sheehan’s net cash provided by operating activities? a. 2 b. 7 c. 5 d. 3 A1 Sheehan's Income Statement for 2016 1 2 Sales revenue 3 Gain on sale of equipment 4 Cost of goods sold 5 Deprecia

> A company uses the direct method to prepare the statement of cash flows. Select an activity for each of the following transactions: 1. Receiving cash dividends is a/an _____ activity. 2. Paying cash dividends is a/an _____ activity.

> On an indirect method statement of cash flows, a gain on the sale of plant assets would be a. reported in the investing activities section. b. deducted from net income in the operating activities section. c. ignored, since the gain did not generate any

> On an indirect method statement of cash flows, an increase in accounts payable would be a. reported in the financing activities section. b. added to net income in the operating activities section. c. deducted from net income in the operating activities

> On an indirect method statement of cash flows, an increase in a prepaid insurance would be a. added to increases in current assets. b. added to net income. c. deducted from net income. d. included in payments to suppliers.

> Which of the following terms appears on a statement of cash flows—indirect method? a. Depreciation expense b. Collections from customers c. Cash receipt of interest revenue d. Payments to suppliers

> Selling equipment for cash is reported on the statement of cash flows under a. operating activities. b. noncash investing and financing activities. c. investing activities. d. financing activities.

> Pinkerton Stores is authorized to issue 13,000 shares of common stock. During a two-month period, Pinkerton completed these stock-issuance transactions Requirements 1. Journalize the transactions. 2. Prepare the stockholders’ equity

> The sale of inventory for cash is reported on the statement of cash flows under a. noncash investing and financing activities. b. operating activities. c. investing activities. d. financing activities.

> Paying off bonds payable is reported on the statement of cash flows under a. investing activities. b. noncash investing and financing activities. c. financing activities. d. operating activities

> Dellanova Company’s net income and net sales are $25,000 and $1,150,000, respectively, and average total assets are $120,000. What is Dellanova’s return on assets? a. 20.8% b. 2.8% c. 9.8% d. 22.8%v

> Which of the following statements is not true about a 3-for-1 stock split? a. Par value is reduced to one-third of what it was before the split. b. Retained Earnings remains the same. c. Total stockholders’ equity increases. d. The market price of ea

> A company declares a 5% stock dividend. The debit to Retained Earnings is an amount equal to a. the market value of the shares to be issued. b. the excess of the market price over the original issue price of the shares to be issued. c. the par value of

> Which of the following is not true about a 10% stock dividend? a. Retained Earnings decreases. b. The market value of the stock is needed to record the stock dividend. c. Total stockholders’ equity remains the same. d. Par value decreases. e. Paid-i

> Assume the same facts as in Q10-66. What is the amount of dividends per share on common stock? a. $12.00 b. $6.00 c. $3.00 d. $18.00 e. None of these From Q10-66 A corporation has 50,000 shares of 12% preferred stock outstanding. Also, there are 5

> A corporation has 50,000 shares of 12% preferred stock outstanding. Also, there are 50,000 shares of common stock outstanding. Par value for each is $100. If a $900,000 dividend is paid, how much goes to the preferred stockholders? a. None b. $600,000

> Paul’s Foods has outstanding 500 shares of 9% preferred stock, $100 par value; and 1,700 shares of common stock, $20 par value. Paul’s declares dividends of $20,500. Which of the following is the correct entry? A1

> Stockholders are eligible for a dividend if they own the stock on the date of a. issuance. b. payment. c. record. d. declaration.

> Athens Holding Company operates numerous businesses, including motel, auto rental, and real estate companies. The year 2016 was interesting for Athens, which reported the following on its income statement (in millions): During 2016, Athens had the foll

> A company purchased 100 shares of its common stock at $46 per share. It then sells 45 of the treasury shares at $76 per share. The entry to sell the treasury stock includes a a. credit to Retained Earnings for $3,000. b. debit to Retained Earnings for

> When treasury stock is sold for less than its cost, the entry should include a debit to a. Gain on Sale of Treasury Stock. b. Loss on Sale of Treasury Stock. c. Retained Earnings. d. Paid-in Capital in Excess of Par.

> A company paid $28 per share to purchase 900 shares of its common stock as treasury stock. The stock was originally issued at $12 per share. Which of the following is the journal entry to record the purchase of the treasury stock? A1 A Treasury Stoc

> These account balances at December 31 relate to Sportstuff, Inc.: Sportstuff’s net income for the period is $119,200 and beginning common stockholders’ equity is $681,700. Sportstuff’s return on com

> These account balances at December 31 relate to Sportstuff, Inc.: What is total stockholders’ equity for Sportstuff, Inc.? a. $742,300 b. $677,000 c. $748,200 d. $754,100 e. None of the above Accounts Payable. $ 51,600 Paid-i

> These account balances at December 31 relate to Sportstuff, Inc.: What is total paid-in capital for Sportstuff, Inc.? (Assume that treasury stock does not reduce total paid-in capital.) a. $682,900 b. $671,100 c. $748,200 d. $677,000 e. None of th

> Which of the following classifications represents the most shares of common stock? a. Issued shares b. Outstanding shares c. Treasury shares d. Unissued shares e. Authorized shares

> Preferred stock is least likely to have which of the following characteristics? a. The right of the holder to convert to common stock b. Preference as to dividends c. Preference as to voting d. Preference as to assets on liquidation of the corporatio

> The paid-in capital portion of stockholders’ equity does not include a. Paid-in Capital in Excess of Par Value. b. Common Stock. c. Retained Earnings. d. Preferred Stock. e. both c and d.

> Par value a. may exist for common stock but not for preferred stock. b. is an arbitrary amount that establishes the legal capital for each share. c. represents the original selling price for a share of stock. d. is established for a share of stock af

> Altar Loan Company’s balance sheet at December 31, 2016, reports the following: During 2016, Altar Loan earned net income of $6,200,000. Compute Altar Loan’s earnings per common share (EPS) for 2016; round EPS to two

> United Parcel Service (UPS), Inc., had the following stockholders’ equity amounts on December 31, 2016 (adapted, in millions): Common stock and additional paid-in capital; 1,135 shares issued............... $ 278 Retained earnings.....................

> Fair Play, Inc., issues 250,000 shares of no-par common stock for $5 per share. The journal entry is which of the following? A1 A Cash Common Stock Gain on the Sale of Stock 1 a. 1,250,000 250,000 1,000,000 2 4 Б. Сash Common Stock 250,000 250,000 7

> Which of the following is a characteristic of a corporation? a. Limited liability of stockholders b. No income tax c. Mutual agency d. Both b and c

> How many items enter the computation of Sheehan’s net cash flow from investing activities for 2016? a. 5 b. 3 c. 7 d. 2 A1 Sheehan's Income Statement for 2016 1 2 Sales revenue 3 Gain on sale of equipment 4 Cost o

> Sheehan’s net cash provided by operating activities during 2016 was a. $55,000. b. $58,000. c. $61,000. d. $52,000. A1 Sheehan's Income Statement for 2016 1 2 Sales revenue 3 Gain on sale of equipment 4 Cost of goods sold 5 Depr

> How do accounts receivable affect Sheehan’s cash flows from operating activities for 2016? a. Increase in cash provided by operating activities b. Decrease in cash provided by operating activities c. They donâ&#1

> How do Sheehan’s accrued liabilities affect the company’s statement of cash flows for 2016? a. Increase in cash used by financing activities b. They don’t because the ac

> Which statement is true? a. Management audits the financial statements. b. Auditors of public companies audit financial statements as well as internal controls. c. GAAP requires companies to issue reports on corporate social responsibility (CSR). d. In

> Innovations Camera Co. sold equipment with a cost of $18,000 and accumulated depreciation of $6,000 for an amount that resulted in a gain of $4,000. What amount should Innovations report on the statement of cash flows as “proceeds from sale of plant asset

> The following information was taken from the records of Clark Cosmetics, Inc., at December 31, 2016: Requirements 1. Using the End-of-Chapter Summary Problem as an example, prepare Clark Cosmetics’ single-step income statement, which

> The accounting (not the income tax) records of Elemental Publications, Inc., provide the income statement for the year ended December 31, 2016. 2016 Total revenue...................

> During 2016, the Martell Heights Corp. income statement reported income of $320,000 before tax. The company’s income tax return filed with the IRS showed taxable income of $280,000. During 2016, Martell Heights was subject to an income tax rate of 25%.

> Megan Hodge, accountant for Natural Foods, Inc., was injured in a skiing accident. While she was recuperating, another, inexperienced employee prepared the following income statement for the fiscal year ended June 30, 2016: The individua

> Better Ventures, Ltd. (BVL), specializes in taking underperforming companies to a higher level of performance. BVL’s capital structure at December 31, 2015, included 12,000 shares of $2.20 preferred stock and 130,000 shares of common stock. During 2016,

> Suppose Lyndell Corporation completed the following international transactions: Requirements 1. Record these transactions in Lyndell’s journal and show how to report the foreign-currency transaction gain or loss on the income stateme

> Daughtry Cosmetics in P11-48A holds significant promise for carving a niche in its industry. A group of Irish investors is considering purchasing the company’s outstanding common stock. Daughtry’s stock is currently selling for $24 per share. A BetterLife

> Use the data in P11-48A to prepare the Daughtry Cosmetics statement of retained earnings for the year ended December 31, 2016. Use the Statement of Retained Earnings in the End-of-Chapter Summary Problem as a model. From P11-48A The following informati