Question: Suppose during 2017 that Federal Express reported

> Basse Corporation has 7,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record th

> Waymon Co. has net sales of $100,000, cost of goods sold of $70,000, and operating expenses of $18,000. What is its gross profit?

> The adjusted trial balance of Doqe Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue $900,000, Freight-Out $14,000, Sales Returns and Allowances $22,000, and Sales Discounts $13,500. Instructions

> On June 30, Flores Corporation discontinued its operations in Mexico. On September 1, Flores disposed of the Mexico facility at a pretax loss of $640,000. The applicable tax rate is 25%. Show the discontinued operations section of Flores’s statement of c

> Clean Lake Corporation’s accounting records show the following at year-end December 31, 2017: Assuming that Clean Lake Corporation uses the periodic system, compute (a) cost of goods purchased and (b) cost of goods sold. $ 5,900 8,

> From the information in BE5-3, prepare the journal entries to record these transactions on McLeena Company’s books under a perpetual inventory system. Information from BE5-3: (a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company,

> Layes Inc. issues 8,000 shares of $100 par value preferred stock for cash at $106 per share. Journalize the issuance of the preferred stock.

> Carolina University sold 9,000 season football tickets at $100 each for its five-game home schedule. What entries should be made (a) when the tickets are sold and (b) after each game?

> What amount did Apple report as “Other comprehensive earnings” in its consolidated statement of comprehensive income ending September 27, 2014? By what percentage did Apple’s “Comprehensive income” differ from its “Net income”?

> (a) Explain the income measurement process in a merchandising company. (b) How does income measurement differ between a merchandising company and a service company?

> On June 10, Pais Company purchased $9,000 of merchandise from McGiver Company, terms 3/10, n/30. Pais pays the freight costs of $400 on June 11. Goods totaling $600 are returned to McGiver for credit on June 12. On June 19, Pais Company pays McGiver Comp

> Prepare the journal entries to record the following transactions on Borst Company’s books using a perpetual inventory system. (a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company, terms 2/10, n/30. The cost of the merchandise sol

> On June 1, Forrest Inc. issues 3,000 shares of no-par common stock at a cash price of $7 per share. Journalize the issuance of the shares.

> Archer Company issued (in pounds) £4,000,000 par value, 7% convertible bonds at 99 for cash. The net present value of the debt without the conversion feature is £3,800,000. Prepare the journal entry to record the issuance of the convertible bonds.

> The following are the major balance sheet classifications. Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Stockholders’ equity (SE) Intangible assets (IA) Instruct

> The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements for Wal-Mart Stores, Inc. are presented in Appendix E. Instructions (a) Based on the information in the financial statements, compute these 2014 values for eac

> Data for McLanie Company are presented in BE6-2. Compute the cost of the ending inventory under the average-cost method. (Round the cost per unit to three decimal places.) Data from BE6-2 given below: In its first month of operations, McLanie Company mad

> Matilda Company reported the following amounts (in euros) in 2017: Net income, €150,000; Unrealized gain related to revaluation of buildings, €10,000; and Unrealized loss on non-trading securities, €(35,000). Determine Matilda’s total comprehensive incom

> Rita Company buys merchandise on account from Linus Company. The selling price of the goods is $900 and the cost of the goods sold is $590. Both companies use perpetual inventory systems. Journalize the transactions on the books of both companies.

> Pietr Corporation reports operating expenses of $90,000, excluding depreciation expense of $15,000, for 2017. During the year, prepaid expenses decreased $7,200 and accrued expenses payable increased $4,400. Compute the cash payments for operating expens

> Kale Company issued $350,000 of 8%, 20-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1. Instructions Prepare the journal entries to record the following events. (a) The issuance of the bonds. (b) The accrual of int

> On May 10, Pilar Corporation issues 2,500 shares of $5 par value common stock for cash at $13 per share. Journalize the issuance of the stock.

> Presented here are long-term liability items for Stevens Inc. at December 31, 2017. Prepare the long-term liabilities section of the balance sheet for Stevens Inc. Bonds payable (due 2021) $700,000 Notes payable (due 2019) 80,000 Discount on b

> The balance sheet for Gelher Company reports the following information on July 1, 2017. Gelher decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2017. GELHER COMPANY Bala

> Clooney Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2017, at face value. Interest is paid each January 1. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2017. (b) Prepare the adjusting journal entry o

> On January 1, Kirkland Company issued $300,000, 8%, 10-year bonds at face value. Interest is payable annually on January 1. Instructions Prepare journal entries to record the following events. (a) The issuance of the bonds. (b) The accrual of interest on

> Indicate whether each of the following transactions would increase (+), decrease (−), or not affect (N/A) total assets, total liabilities, and total stockholders’ equity. Stockholders' Transaction (a) Declared cash

> The T-accounts for Equipment and the related Accumulated Depreciation—Equipment for Goldstone Company at the end of 2017 are shown here. In addition, Goldstone’s income statement reported a loss on the disposal of plan

> Data for Betsy Strand are presented in BE10-5. Prepare the employer’s journal entries to record (a) Betsy’s pay for the period and (b) the payment of Betsy’s wages. Use January 15 for the end of the pay period and the payment date.

> Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Inland Corporation. 1. Inland developed a new manufacturing process, incurring research and development costs

> Betsy Strand’s regular hourly wage rate is $16, and she receives an hourly rate of $24 for work in excess of 40 hours. During a January pay period, Betsy works 47 hours. Betsy’s federal income tax withholding is $95, and she has no voluntary deductions.

> Using the data presented in BE13-4(given below) for Rollaird Company, perform vertical analysis. December 31, 2017 December 31, 2016 Accounts receivable $ 460,000 $ 400,000 Inventory Total assets 780,000 3,164,000 650,000 2,800,000

> Ratzlaff Company issues (in euros) €2 million, 10-year, 8% bonds at 97, with interest payable annually on January 1. Instructions (a) Prepare the journal entry to record the sale of these bonds on January 1, 2017. (b) Assuming instead that the above bond

> Bramble University sells 3,500 season basketball tickets at $80 each for its 10-game home schedule. Give the entry to record (a) the sale of the season tickets and (b) the revenue recognized after playing the first home game.

> In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Cerviq Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $22,000 an

> Using these data from the comparative balance sheet of Rollaird Company, perform horizontal analysis. December 31, 2017 December 31, 2016 Accounts receivable $ 460,000 $ 400,000 Inventory Total assets 780,000 3,164,000 650,000 2,800,000

> Greenspan Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $10,388. All sales are subject to a 6% sales tax. Compute sales taxes payable and make the entry to record sales taxes payable and sales.

> The following T-account is a summary of the Cash account of Alixon Company. What amount of net cash provided (used) by financing activities should be reported in the statement of cash flows? Cash (Summary Form) Balance, Jan. 1 Receipts from customer

> Hive Company borrows $90,000 on July 1 from the bank by signing a $90,000, 7%, 1-year note payable. Prepare the journal entries to record (a) the proceeds of the note and (b) accrued interest at December 31, assuming adjusting entries are made only at th

> Meenen Corporation has the following accounts at December 31, 2017 (in euros): Share Capital—Ordinary, €10 par, 5,000 shares issued, €50,000; Share Premium—Ordinary €10,000; Retained Earnings €45,000; and Treasury Shares—Ordinary, 500 shares, €11,000. Pr

> Summary financial information for Gandaulf Company is as follows. Compute the amount and percentage changes in 2017 using horizontal analysis, assuming 2016 is the base year. Dec. 31, 2017 Dec. 31, 2016 $ 200,000 1,040,000 $ 220,000 Current assets P

> An inexperienced accountant for Silva Corporation showed the following in the income statement: income before income taxes $450,000 and unrealized gain on available-for-sale securities (before taxes) $70,000. The unrealized gain on available-for-sale sec

> On May 10, Jaurez Corporation issues 1,000 shares of $10 par value ordinary shares for cash at $18 per share. Journalize the issuance of the shares.

> Describe the treatment of each of the following items under IFRS versus GAAP. (a) Interest paid. (b) Interest received. (c) Dividends paid. (d) Dividends received.

> Peete Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order. Instructions Analyze the transactions using the following table column headings. Enter the

> The Coca-Cola Company’s accounts receivable turnover was 9.05 in 2014, and its average amount of net receivables during the period was $3,424 million. What is the amount of its net credit sales for the period? What is the average collection period in day

> Suppose in 2017 that Campbell Soup Company reported average total assets of $6,265 million, net sales of $7,586 million, and net income of $736 million. What was Campbell Soup’s return on assets?

> Pauli Company’s internal controls over cash disbursements provide for the treasurer to sign checks imprinted by a check writer after comparing the check with the approved invoice. Identify the internal control principles that are present in these control

> During October, Bismark Light Company experiences the following transactions in establishing a petty cash fund. Oct. 1 A petty cash fund is established with a check for $150 issued to the petty cash custodian. 31 A check was written to reimburse the fund

> On March 20, Harbor’s petty cash fund of $100 is replenished when the fund contains $19 in cash and receipts for postage $40, supplies $26, and travel expense $15. Prepare the journal entry to record the replenishment of the petty cash fund.

> Kwik Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi 10 cost $27,500 and is expected to have a salvage value of $500. Taxi 10 was driven 32,000 miles in 2016

> The following information is available for Bonkers Company for the month of January: expected cash receipts $59,000, expected cash disbursements $67,000, and cash balance on January 1, $12,000. Management wishes to maintain a minimum cash balance of $9,0

> Depreciation information for Gordon Chemicals Company is given in BE9-4.(given below) Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balanc

> A list of financial statement items for Chin Company includes the following: accounts receivable $14,000, prepaid insurance $2,600, cash $10,400, supplies $3,800, and debt investments (short-term) $8,200. Prepare the current assets section of the balance

> Kennewick Corp. had a beginning balance in accounts receivable of $70,000 and an ending balance of $91,000. Credit sales during the period were $598,000. Determine cash collections.

> Hunt Company reported net income of $157,000. It reported depreciation expense of $12,000 and accumulated depreciation of $47,000. Amortization expense was $8,000. Hunt purchased new equipment during the year for $50,000. Show how this information would

> Eileen Corp. had the following balances in receivable accounts at October 31, 2017 (in thousands): Allowance for Doubtful Accounts $52, Accounts Receivable $2,910, Other Receivables $189, and Notes Receivable $1,353. Instructions Prepare the balance shee

> In the month of November, Fiesta Company Inc. wrote checks in the amount of $9,750. In December, checks in the amount of $11,762 were written. In November, $8,800 of these checks were presented to the bank for payment, and $10,889 in December. What is th

> These are selected 2017 transactions for Wyle Corporation: Jan. 1 Purchased a copyright for $120,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. Mar. 1 Purchased a patent with an estimated useful life of 4 years an

> Calico Corners decides to sell $400,000 of its accounts receivable to Fast Cash Factors Inc. Fast Cash Factors assesses a service charge of 3% of the amount of receivables sold. Prepare the journal entry that Calico Corners makes to record this sale.

> Suppose the 2017 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the year. Compute 3M’s accounts receivable turnover. Compute 3M

> At July 31, Planter Company has this bank information: cash balance per bank $7,291, outstanding checks $762, deposits in transit $1,350, and a bank service charge $40. Determine the adjusted cash balance per bank at July 31.

> Suppose in its 2017 annual report that McDonald’s Corporation reports beginning total assets of $28.46 billion, ending total assets of $30.22 billion, net sales of $22.74 billion, and net income of $4.55 billion. (a) Compute McDonald’s return on assets.

> On January 10, 2017, Masterson Co. sold merchandise on account to Tompkins for $8,000, terms n/30. On February 9, Tompkins gave Masterson Co. a 7% promissory note in settlement of this account. Prepare the journal entry to record the sale and the settlem

> The major balance sheet classifications are listed below. Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Stockholders’ equity (SE) Intangible assets (IA) Instructi

> Abner Company purchases a patent for $156,000 on January 2, 2017. Its estimated useful life is 6 years. (a) Prepare the journal entry to record amortization expense for the first year. (b) Show how this patent is reported on the balance sheet at the end

> Suppose the amounts presented here are basic fi nancial information (in millions) from the 2017 annual reports of Nike and adidas. Instructions Calculate the accounts receivable turnover and average collection period for both companies. Comment on the

> On July 4, Mazie’s Restaurant accepts a Visa card for a $250 dinner bill. Visa charges a 4% service fee. Instructions Prepare the entry on Mazie’s books related to the transaction.

> Presented below are data on three promissory notes. Determine the missing amounts. Date of Maturity Date Annual Total Note Terms Principal Interest Rate Interest (a) April 1 (b) July 2 (c) March 7 60 days 30 days 6 months $600,000 90,000 9% $600 ? 12

> On May 10, Keene Company sold merchandise for $4,000 and accepted the customer’s Best Business Bank MasterCard. At the end of the day, the Best Business Bank MasterCard receipts were deposited in the company’s bank account. Best Business Bank charges a 3

> Luke Roye is uncertain about the control features of a bank account. Explain the control benefits of (a) a checking account and (b) a bank statement.

> Thieu Co. has delivery equipment that cost $50,000 and has been depreciated $24,000. Instructions Record entries for the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was sold for $37,000. (c) It was sold for $2

> Prepare journal entries to record these transactions. (a) Echo Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received. (b) Assume the same information

> The president of Mossy Enterprises asks if you could indicate the impact certain transactions have on the following ratios. Instructions Complete the table, indicating whether each transaction will increase (I), decrease (D), or have no effect (NE) on t

> On March 3, Plume Appliances sells $710,000 of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of 4% of the amount of receivables sold. Instructions Prepare the entry on Plume Appliances’ books to record the sale of

> How do the components of revenues and expenses differ between a merchandising company and a service company?

> Sheldon Company just took its physical inventory on December 31. The count of inventory items on hand at the company’s business locations resulted in a total inventory cost of $300,000. In reviewing the details of the count and related inventory transact

> Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

> As the company accountant, explain the following ideas to the management of Ortiz Company. (a) The concept of reasonable assurance in internal control. (b) The importance of the human factor in internal control.

> Perth Inc.’s bank statement from Main Street Bank at August 31, 2017, gives the following information. A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,700; receipts $74,000; disburseme

> How is a gain or a loss on the sale of a plant asset computed?

> Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2017 (in millions): other plant assets $965.8, land $221.6, patents and trademarks (at cost) $515.1, machinery and equipment $2,094.3, buildings $974.

> In its first month of operations, McLanie Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $8, and (3) 500 units at $9. Assuming there are 200 units on hand at the end of the period, compute the

> These transactions took place for Bramson Co. 2016 May 1 Received a $5,000, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney. Dec. 31 Accrued interest revenue on the R. Stoney note. 2017 May 1 Received principal plus int

> If your school has a subscription to the FASB Codifi cation, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses to the following. (a) How are receivables defi ned in the Codifi cation? (b) What are the conditions under which losses from

> (a) Explain the control principle of independent internal verification. (b) What practices are important in applying this principle?

> Banks charge fees for “bounced” checks—that is, checks that exceed the balance in the account. It has been estimated that processing bounced checks costs a bank roughly $1.50 per check. Thus, the prof

> The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2017. 1. Paid $7,000 of accrued taxes at the time the plant site was acquired. 2. Paid $200 insurance to cover a possible accident loss on new fac

> The following situations are independent of one another. 1. An accounting student recently employed by a small company doesn’t understand why the company is only depreciating its buildings and equipment, but not its land. The student prepared journal ent

> An article in the Wall Street Journal indicated that companies are selling their receivables at a record rate. Why do companies sell their receivables?

> Moses Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. Nov 1 Loaned $60,000 cash to C. Bohr on a 12-month, 7% note. Dec

> Credit card usage in the United States is substantial. Many startup companies use credit cards as a way to help meet short-term fi nancial needs. The most common forms of debt for startups are use of credit cards and loans from relatives. Suppose that yo

> During its first year of operations, Fertig Company had credit sales of $3,000,000, of which $400,000 remained uncollected at year-end. The credit manager estimates that $18,000 of these receivables will become uncollectible. (a) Prepare the journal entr

> The cash records of Upton Company show the following. For July: 1. The June 30 bank reconciliation indicated that deposits in transit total $580. During July, the general ledger account Cash shows deposits of $16,900, but the bank statement indicates tha

> An item must possess two characteristics to be classified as inventory. What are these two characteristics?

> As a new auditor for the CPA firm of Blacke and Whyte, you have been assigned to review the internal controls over mail cash receipts of Simon Company. Your review reveals that checks are promptly endorsed “For Deposit Only,” but no list of the checks is

> Shown below are the T-accounts relating to equipment that was purchased for cash by a company on the first day of the current year. The equipment was depreciated on a straight-line basis with an estimated useful life of 10 years and a salvage value of $1

> JCPenney Company accepts both its own credit cards and national credit cards. What are the advantages of accepting both types of cards?

> Hummer Company purchased a delivery truck. The total cash payment was $30,020, including the following items. Negotiated purchase price $24,000 Installation of special shelving 1,100 Painting and lettering 900 Motor vehicle licen

> As its year-end approaches, it appears that Mendez Corporation’s net income will increase 10% this year. The president of Mendez Corporation, nervous that thestockholders might expect the company to sustain this 10% growth rate in net income in future ye