Question: Smith Clinic, Inc., is preparing its statement

> A skeleton of Westview Country Florist’s income statement appears as follows (amounts in thousands): Income Statement Net sales …………………………………………………….. $7,300 Cost of goods sold ………………….………………………….. (a) Selling expenses …………………….……………………… 1,520 Administra

> The annual report of Feeney Cars, Inc., for the year ended December 31, 2012, included the following items (in millions): Preferred stock outstanding, 3% ........................................ $700 Net income............................................

> Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7 to compute these profitability measures for 2012. Show each computation. a. Rate of return on sales b. Asset turnover c. Rate of return on total assets. d. Leverage (equity

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

> Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7. 1. Compute the company’s debt ratio at December 31, 2012. 2. Compute the company’s times-interest-earned ratio for 2012. For operating i

> How many items enter the computation of Solomon’s net cash flow from investing activities for 2012? a. 5 b. 3 c. 2 d. 7 Solomon Corporation formats operating cash flows by the indirect method. *The book value of equipment sold during

> Use the Allstott 2012 income statement that follows and the balance sheet from Short Exercise 13-6 to compute the following: a. Allstott’s rate of inventory turnover and days inventory outstanding for 2012 b. Days’

> Use the Allstott, Inc., balance sheet data on the following page. 1. Compute Allstott, Inc.’s quick (acid-test) ratio at December 31, 2012 and 2011. 2. Use the comparative information from the table on the bottom of page 811 for Baker,

> Examine the financial data of Stephens Corporation. Show how to compute Stephens current ratio for each year 2010 through 2012. Is the company’s ability to pay its current liabilities improving or deteriorating? Year Ended Decembe

> Craft, Inc., and Kleen Corporation are competitors. Compare the two companies by converting their condensed income statements to common size. Which company earned more net income? Which company’s net income was a higher percentage of

> McCormick Software reported the following amounts on its balance sheets at December 31, 2012, 2011, and 2010: Sales and profits are high. Nevertheless, McCormick is experiencing a cash shortage. Perform a vertical analysis of McCormick Softwareâ&

> Refer to the RadioShack Corporation, consolidated financial statements in Appendix B at the end of this book. Focus on the year ended December 31, 2010. 1. What is RadioShack Corporation’s main source of cash? Is this good news or bad news to RadioShack

> Use Amazon.com, Inc.’s consolidated statement of cash flows along with the company’s other consolidated financial statements, all in Appendix A at the end of the book, to answer the following questions. Requirements 1. By which method does Amazon.com, I

> The 2012 income statement and the 2012 comparative balance sheet of T-Bar-M Camp, Inc., have just been distributed at a meeting of the camp’s board of directors. The directors raise a fundamental question: Why is the cash balance so low

> Gellman Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock...................................... $ 256 Additional paid-in capital....................... 286 Retained earnings..........

> The accounting records of Jasmine Pharmaceuticals, Inc., reveal the following: Requirement Compute cash flows from operating activities by the direct method. Also evaluate Jasmine’s operating cash flow. Give the reason for your evalua

> Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $125,000 and $115,000, respectively. Depreciation for the period was $19,000, and purchases of new plant assets were $45,000. Plant assets were so

> Solomon’s net cash provided by operating activities during 2012 was a. $41,000. b. $47,000. c. $38,000. d. $44,000. Solomon Corporation formats operating cash flows by the indirect method. *The book value of equipment sold during 201

> Consider three independent cases for the cash flows of Texas Tires Corp. For each case, identify from the statement of cash flows how Texas Tires Corp. generated the cash to acquire new plant assets. Rank the three cases from the most healthy financially

> The income statement and additional data of Breen Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $200,000. Of this amount, $160,000 was paid in cash and $40,000 by signing a note payable. b. Proceeds from sale of lan

> The accounting records of Ashby Fur Traders include these accounts: Requirement Compute Ashby’s net cash provided by (used for) operating activities during August. Use the indirect method. Do you see any potential problems in Ashby&ac

> The accounting records of South Central Distributors, Inc., reveal the following: Requirement Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section of Exhibit 12-6. Also evaluate the ope

> Indicate whether each of the following transactions affects an operating activity, an investing activity, a financing activity, or a non-cash investing and financing activity. 61,000 8. Equipment 11,000 a. Cash Common Stock 10,000 Cash 11,000 51,000

> Carter-Pierce Investments specializes in low-risk government bonds. Identify each of Carter-Pierce’s transactions as operating (O), investing (I), financing (F), non-cash investing and financing (NIF), or a transaction that is not reported on the stateme

> Compute the following items for the statement of cash flows: a. Beginning and ending Accounts Receivable are $21,000 and $17,000, respectively. Credit sales for the period total $66,000. How much are cash collections from customers? b. Cost of goods sold

> Refer to the data in S10-8. Using only year-end figures rather than averages, compute the following for Ridgeview Employment Services: a. Net income b. Total liabilities c. Total assets (use the accounting equation) d. Net profit ratio e. Asset turnover

> The income statement and additional data of One Stop, Inc., follow: Additional data: a. Collections from customers are $20,000 more than sales. b. Payments to suppliers are $1,200 less than the sum of cost of goods sold plus advertising expense. c. Pay

> Selected accounts of Jessie Antiques show the following: Requirement For each account, identify the item or items that should appear on a statement of cash flows prepared by the direct method. State where to report the item. Salary Payable Beginnin

> The accounting records of Best Pharmaceuticals, Inc., reveal the following: Requirement Compute cash flows from operating activities by the direct method. Also evaluate Best’s operating cash flow. Give the reason for your evaluation.

> How do accounts receivable affect Solomon’s cash flows from operating activities for 2012? a. Decrease in cash provided by operating activities b. Increase in cash provided by operating activities c. They don’t because

> Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $99,000 and $92,000, respectively. Depreciation for the period was $11,000, and purchases of new plant assets were $23,000. Plant assets were sold

> Consider three independent cases for the cash flows of Building Blocks Corp. For each case, identify from the statement of cash flows how Building Blocks Corp. generated the cash to acquire new plant assets. Rank the three cases from the most healthy fin

> The income statement and additional data of Bolton Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $130,000. Of this amount, $75,000 was paid in cash and $55,000 by signing a note payable. b. Proceeds from sale of lan

> The accounting records of Michigan Fur Traders include these accounts: Cash Accounts Reccivable Inventory Dec 1 100,000 Dec 1 5,000 Dec 1 6,000 Receipts 526,000 Payments 438,000 Receipts 528,000 Collections 526,000 Purchases 451,000 Cost of Sales 44

> The accounting records of Mid West Distributors, Inc., reveal the following: Requirement Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section of Exhibit 12-6. Also evaluate the operatin

> Indicate whether each of the following transactions affects an operating activity, an investing activity, a financing activity, or a non-cash investing and financing activity. h. Cash 74,000 Depreciation Expense Accumulated Depreciation Treasury Sto

> The financial statements of Ridgeview Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders’ equity section of Ridgeviewâ€&#153

> McTaggart-Hicks Investments specializes in low-risk government bonds. Identify each of McTaggart-Hicks transactions as operating (O), investing (I), financing (F), non-cash investing and financing (NIF), or a transaction that is not reported on the state

> Use the data in Short Exercise 12-14 to prepare Medford Golf Club, Inc.’s statement of cash flows for the year ended September 30, 2012. Medford uses the direct method for operating activities. In Short Exercise 12-14 Medford Golf Club

> Medford Golf Club, Inc., has assembled the following data for the year ended September 30, 2012: Prepare the operating activities section of Medford Golf Club, Inc.’s statement of cash flows for the year ended September 30, 2012. Medf

> Paloma Horse Farm, Inc., began 2012 with cash of $100,000. During the year, Paloma earned service revenue of $594,000 and collected $580,000 from customers. Expenses for the year totaled $410,000, with $400,000 paid in cash to suppliers and employees. Pa

> How do Solomon’s accrued liabilities affect the company’s statement of cash flows for 2012? a. Increase in cash provided by operating activities b. They don’t because the accrued liabilities are not y

> Use the Motorvehicles of Philadelphia data in Short Exercise 12-9 to compute the following: (Enter all amounts in thousands). a. Payments to employees b. Payments of other expenses In Short Exercise 12-9 Motorvehicles of Philadelphia, Inc., reported the

> Use the Motorvehicles of Philadelphia data in Short Exercise 12-9 to compute the following: (Enter all amounts in thousands.) a. Collections from customers b. Payments for inventory Data from Short Exercise 12-9 Motorvehicles of Philadelphia, Inc., repo

> Use the Motorvehicles of Philadelphia data in Short Exercise 12-9 to compute the following: (Enter all amounts in thousands.) a. New borrowing or payment of long-term notes payable. Motorvehicles of Philadelphia had only one long-term note payable transa

> Motorvehicles of Philadelphia, Inc., reported the following financial statements for 2012: Motorvehicles of Philadelphia, Inc. Income Statement Year Ended December 31, 2012 (In thousands) Service revenue ……â&

> Use the data in Short Exercise 12-7 to prepare Eldred Corporation’s statement of cash flows for the year ended June 30, 2012. Eldred uses the indirect method for operating activities. Data in Short Exercise 12-7 Eldred Corporation acco

> This short exercise demonstrates the similarity and the difference between two ways to acquire plant assets. Case A—Issue stock and buy the assets in separate transactions: Hampton, Inc., issued 17,000 shares of its $25 par common stock for cash of $850,

> Eldred Corporation accountants have assembled the following data for the year ended June 30, 2012: Prepare the operating activities section of Eldred’s statement of cash flows for the year ended June 30, 2012. Eldred uses the indirect

> Incredible America Transportation (IAT) began 2012 with accounts receivable, inventory, and prepaid expenses totaling $48,000. At the end of the year, IAT had a total of $49,000 for these current assets. At the beginning of 2012, IAT owed current liabili

> Top managers of Harmony Inns are reviewing company performance for 2012. The income statement reports a 20% increase in net income over 2011. However, most of the increase resulted from a gain on insurance proceeds from fi re damage to a building. The ba

> Examine the statement of cash flows of Mirror, Inc. Suppose Mirror’s operating activities provided, rather than used, cash. Identify three things under the indirect method that could cause operating cash flows to be positive. Mirr

> How many items enter the computation of Solomon’s net cash provided by operating activities? a. 2 b. 5 c. 3 d. 7 Solomon Corporation formats operating cash flows by the indirect method. *The book value of equipment sold during 2012 w

> Bryant, Inc., has experienced an unbroken string of nine years of growth in net income. Nevertheless, the company is facing bankruptcy. Creditors are calling all of Bryant’s loans for immediate payment, and the cash is simply not available. It is clear t

> State how the statement of cash flows helps investors and creditors perform each of the following functions: a. Predict future cash flows b. Evaluate management decisions

> The income statement of Royal Bank of Singapore reported the following results of operations: Earnings before income taxes and extraordinary gain ............... $187,046 Income tax expense.................................................................

> Mike Magid Toyota is an automobile dealership. Magid’s annual report includes Note 1—Summary of Significant Accounting Policies as follows: Income Recognition Sales are recognized when cash payment is received or, in the case of credit sales, which repre

> At fiscal year-end 2012, Hana Printer and Delightful Doughnuts reported these adapted amounts on their balance sheets (amounts in millions): Hana Printer: Common stock, $0.01 par value, 2,700 shares issued …………………….. $ 27 Additional paid-in capital ……………

> Prudhoe Bay Oil Co. is having its initial public offering (IPO) of company stock. To create public interest in its stock, Prudhoe Bay’s chief financial officer has blitzed the media with press releases. One, in particular, caught your eye. On November 19

> What is the best source of income for a corporation? a. Prior-period adjustments b. Continuing operations c. Discontinued operations d. Extraordinary items

> Wave Water Company reported the following items on its statement of shareholders’ equity for the year ended December 31, 2012: Requirements 1. Determine the December 31, 2012, balances in Wave Water’s shareholders&ac

> At December 31, 2012, Rondeau Mall, Inc., reported stockholders’ equity as follows: Common stock, $1.50 par, 700,000 shares authorized, 310,000 shares issued............ $ 465,000 Additional paid-in capital................................................

> Dwelling, Inc., a household products chain, reported a prior-period adjustment in 2012. An accounting error caused net income of 2011 to be overstated by $16 million. Retained earnings at December 31, 2011, as previously reported, was $345 million. Net i

> Plato Holding Company operates numerous businesses, including motel, auto rental, and real estate companies. 2012 was interesting for Plato, which reported the following on its income statement (in millions): Net revenues.................................

> Photosmart 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 Photosmart report on the statement of cash flows as “proceeds from sale of plant assets

> Hampton Loan Company’s balance sheet reports the following: Preferred stock, $80 par value, 8%, 11,000 shares issued ............ $ 880,000 Common stock, $2.50 par, 1,500,000 shares issued...................... 3,750,000 Treasury stock, common, 100,000 s

> During 2012, Campbell Heights Corp.’s income statement reported income of $300,000 before tax. The company’s income tax return fi led with the IRS showed taxable income of $260,000. During 2012, Campbell Heights was subject to an income tax rate of 25%.

> Assume that Better Buy Stores completed the following foreign-currency transactions: May 9 Purchased DVD players as inventory on account from Toyita, a Japanese company. The price was 400,000 yen, and the exchange rate of the yen was $0.0083. Jun 18 Paid

> The income statement and additional data of Value World, Inc., follow: Additional data: a. Collections from customers are $25,000 less than sales. b. Payments to suppliers are $1,600 more than the sum of cost of goods sold plus advertising expense. c.

> During 2012, Beta, Inc., had sales of $6.86 billion, operating profit of $2.20 billion, and net income of $3.40 billion. EPS was $4.80. On May 11, 2013, one share of Beta’s common stock was priced at $54.30 on the New York Stock Exchange. What investment

> The Bergeron Book Company’s accounting records include the following for 2012 (in thousands): Other revenues............................................................................... $ 1,500 Income tax expense—extraordinary gain ....................

> Suppose Whitney Cycles, Inc., reported a number of special items on its income statement. The following data, listed in no particular order, came from Whitney’s financial statements (amounts in thousands): 1. Show how the Whitney Cycl

> Revere Water Company reported the following items on its statement of shareholders’ equity for the year ended December 31, 2012: 1. Determine the December 31, 2012, balances in Revere Water’s shareholdersâ&#128

> At December 31, 2012, Mendonca Mall, Inc., reported stockholders’ equity as follows: Common stock, $0.50 par, 500,000 shares authorized, 350,000 shares issued......... $ 175,000 Additional paid-in capital..................................................

> Clean, Inc., a household products chain, reported a prior-period adjustment in 2012. An accounting error caused net income of 2011 to be understated by $15 million. Retained earnings at December 31, 2011, as previously reported, was $346 million. Net inc

> Prep Holding Company operates numerous businesses, including motel, auto rental, and real estate companies. 2012 was interesting for Prep, which reported the following on its income statement (in millions): Net revenues...................................

> Select an activity for each of the following transactions: 1. Paying cash dividends is a/an ___________ activity. 2. Receiving cash dividends is a/an ___________ activity.

> Palace Loan Company’s balance sheet reports the following: Preferred stock, $20 par value, 2%, 11,000 shares issued ............ $ 220,000 Common stock, $2.50 par, 1,100,000 shares issued..................... 2,750,000 Treasury stock, common, 120,000 sha

> During 2012, the Martell Heights Corp. income statement reported income of $500,000 before tax. The company’s income tax return fi led with the IRS showed taxable income of $440,000. During 2012, Martell Heights was subject to an income tax rate of 40%.

> ARM received $48,000,000 for the issuance of its stock on May 14. The par value of the ARM stock was only $48,000. Was the excess amount of $47,952,000 a profit to ARM? If not, what was it? Suppose the par value of the ARM stock had been $4 per share, $8

> Assume that Twitter Stores completed the following foreign-currency transactions: Jun 9 Purchased DVD players as inventory on account from Moshu, a Japanese company. The price was 600,000 yen, and the exchange rate of the yen was $0.0087. Jul 18 Paid Mos

> During 2012, Resource, Inc., had sales of $7.16 billion, operating profi t of $2.70 billion, and net income of $3.70 billion. EPS was $4.50. On June 9, 2013, one share of Resource’s common stock was priced at $54.20 on the New York Stock Exchange. What i

> The Moran Book Company accounting records include the following for 2012 (in thousands): Other revenues................................................................................ $ 1,700 Income tax expense—extraordinary gain.........................

> Suppose Dupree Cycles, Inc., reported a number of special items on its income statement. The following data, listed in no particular order, came from Dupree’s financial statements (amounts in thousands): Requirements 1. Show how the D

> The annual report of Westminster Computer, Inc., included the following: Management’s Annual Report on Internal Control over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate control over financial repo

> Use the statement of stockholders’ equity to answer the following questions about Osborn Electronics Corporation: 1. How much cash did the issuance of common stock bring in during 2012? 2. What was the effect of the stock dividends on

> iLife, Inc., was set to report the following statement of retained earnings for the year ended December 31, 2012: iLife, Inc. Statement of Retained Earnings Year Ended December 31, 2012 Retained earnings, December 31, 2011 ………….……………………… $ 70,000 Net inc

> Baxter Motor Company has preferred stock outstanding and issued additional common stock during the year. 1. Give the basic equation to compute earnings per share of common stock for net income. 2. List the income items for which Baxter must report earnin

> 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. Ignored, since the gain did not generate any cash. c. Deducted from net income in the operating activities sect

> Suppose Time Warner, Inc. , is having a bad year in 2012, as the company has incurred a $4.9 billion net loss. The loss has pushed most of the return measures into the negative column, and the current ratio dropped below 1.0. The company’s debt ratio is

> Jessica Johnson and Claudia Stein are opening a Submarine’s deli. Johnson and Stein need outside capital, so they plan to organize the business as a corporation. They come to you for advice. Write a memorandum informing them of the steps in forming a cor

> Selected accounts of Ainsley Antiques show the following: Requirement For each account, identify the item or items that should appear on a statement of cash flows prepared by the direct method. State where to report the item. Salary Payable Beginni

> The top management of Marquis Marketing Services examines the following company accounting records at August 29, immediately before the end of the year, August 31: Total current assets ..................... $ 324,500 Noncurrent assets....................

> The accounting records of Braintree Foods, Inc., include the following items at December 31, 2012: Requirements 1. Show how each relevant item would be reported on the Braintree Foods, Inc., classified balance sheet, including headings and totals for c

> Marco’s Sporting Goods is embarking on a massive expansion. Assume the plans call for opening 40 new stores during the next three years. Each store is scheduled to be 35% larger than the company’s existing locations, offering more items of inventory, and

> On December 31, 2012, Zugaboo Corp. issues 5%, 10-year convertible bonds payable with a maturity value of $5,000,000. The semiannual interest dates are June 30 and December 31. The market interest rate is 6%, and the issue price of the bonds is 92.56. Zu

> The notes to the Thankful Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year): Thankful Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31. Req

> 1. Journalize the following transactions of Lamothe Communications, Inc.: 2012 Jan 1 Issued $3,000,000 of 8%, 10-year bonds payable at 94. Interest payment dates are July 1 and January 1. Jul 1 Paid semiannual interest and amortized the bonds by the stra

> On February 28, 2012, Starfish Corp. issues 10%, fi ve-year bonds payable with a face value of $1,200,000. The bonds pay interest on February 28 and August 31. Starfish Corp. amortizes bonds by the straight-line method. Requirements 1. If the market int

> The board of directors of Media Plus authorizes the issue of $8,000,000 of 6%, 20-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May 31, 2012, at par. Requirements 1. Journalize the following transa