Question: The following financial information is available

> Quick Mart, a retail store, has an accounts receivable turnover of 4.5 times. The industry average is 12.5 times. Does Quick Mart have a collection problem with its receivables?

> What amount did Tootsie Roll Industries report as “Other comprehensive earnings” in 2011? By what percentage did Tootsie Roll’s “Comprehensive earnings” differ from its “Net earnings”?

> On August 1, 2014, Ortega Corporation issued $600,000, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Ortega’s year-end is December 31. Instructions: Prepare journal entries to record the following events. (a) The issuance of

> Indicate which of the following items would be reported as an extraordinary item on Pitchford Corporation’s income statement. (a) Loss from damages caused by a volcano eruption in Iona. (b) Loss from the sale of short-term investments. (c) Loss attributa

> Give examples of accrual-based and cashbased ratios to measure each of these characteristics of a company: (a) Liquidity. (b) Solvency.

> During 2014, Markowitz Company exchanged $1,700,000 of its common stock for land. Indicate how the transaction would be reported on a statement of cash flows, if at all.

> Identify five items that are adjustments to convert net income to net cash provided by operating activities under the indirect method.

> Based on its statement of cash flows, in what stage of the product life cycle is Tootsie Roll Industries?

> Trayer Company obtains $20,000 in cash by signing a 9%, 6-month, $20,000 note payable to First Bank on July 1. Trayer’s fiscal year ends on September 30. What information should be reported for the note payable in the annual financial statements?

> Diane Hollowell and Terry Parmenter were discussing the format of the statement of cash flows of Snowbarger Co. At the bottom of Snowbarger’s statement of cash flows was a separate section entitled “Noncash investing and financing activities.” Give three

> What was the total cost of Tootsie Roll’s treasury stock at December 31, 2011? What was the amount of the 2011 cash dividend? What was the total charge to Retained Earnings for the 2011 stock dividend?

> Under what circumstances will the return on assets and the return on common stockholders’ equity be equal?

> Roy Toth, a friend of yours, has recently purchased a home for $125,000, paying $25,000 down and the remainder financed by a 6.5%, 20-year mortgage, payable at $745.57 per month. At the end of the first month, Roy receives a statement from the bank indic

> Goins Corporation issued a $50,000, 10%, 10-year installment note payable on January 1, 2014. Payments of $8,137 are made each January 1, beginning January 1, 2015. Instructions: (a) What amounts should be reported under current liabilities related to t

> Roy Toth, a friend of yours, has recently purchased a home for $125,000, paying $25,000 down and the remainder financed by a 6.5%, 20-year mortgage, payable at $745.57 per month. At the end of the first month, Roy receives a statement from the bank indic

> Samuel Engels says that liquidity and solvency are the same thing. Is he correct? If not, how do they differ?

> Jack and Lance are discussing how the market price of a bond is determined. Jack believes that the market price of a bond is solely a function of the amount of the principal payment at the end of the term of a bond. Is he right? Discuss.

> Assume that Ziegler Inc. sold bonds with a face value of $100,000 for $104,000. Was the market interest rate equal to, less than, or greater than the bonds’ contractual interest rate? Explain.

> Identify the liabilities classified by Tootsie Roll as current.

> Dakota 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?

> Peggy Jantzen believes a current liability is a debt that can be expected to be paid in one year. Is Peggy correct? Explain.

> “Decision-making is management’s most important function.” Do you agree? Why or why not?

> Explain how the treatment of cash equivalents will probably change in the future.

> Match the descriptions that follow with the corresponding terms. Descriptions: 1. ______ Inventory system in which goods are manufactured or purchased just as they are needed for sale. 2. ______ A method of allocating overhead based on each product’s use

> Nance Co. receives $280,000 when it issues a $280,000, 6%, mortgage note payable to finance the construction of a building at December 31, 2014. The terms provide for semiannual installment payments of $14,285 on June 30 and December 31. Instructions: P

> Indicate whether the following statements are true or false. 1. Managerial accountants explain and report manufacturing and nonmanufacturing costs, determine cost behaviors, and perform cost-volume-profit analysis, but are not involved in the budget proc

> State whether each of the following is an indicator of a company’s liquidity, solvency, or profitability. (a) Price-earnings ratio. (b) Inventory turnover. (c) Debt to assets ratio. (d) Times interest earned. (e) Return on common stockholders’ equity. (f

> Morray Corporation had the following transactions. 1. Issued $160,000 of bonds payable. 2. Paid utilities expense. 3. Issued 500 shares of preferred stock for $45,000. 4. Sold land and a building for $250,000. 5. Loaned $30,000 to Dead End Corporation, r

> Eddy Corporation began operations on April 1 by issuing 55,000 shares of $5 par value common stock for cash at $13 per share. Journalize the issuance.

> Indicate whether each of the following statements is true or false. ______ 1. The corporation is an entity separate and distinct from its owners. ______ 2. The liability of stockholders is normally limited to their investment in the corporation. ______ 3

> Gibbs Corporation purchased 2,000 shares of its $10 par value common stock for $76,000 on August 1. It will hold these in the treasury until resold. Journalize the treasury stock transaction

> During the month of February, Morrisey Corporation’s employees earned wages of $74,000. Withholdings related to these wages were $5,661 for Social Security (FICA), $7,100 for federal income tax, and $1,900 for state income tax. Costs incurred for unemplo

> During the month of February, Morrisey Corporation’s employees earned wages of $74,000. Withholdings related to these wages were $5,661 for Social Security (FICA), $7,100 for federal income tax, and $1,900 for state income tax. Costs incurred for unemplo

> On January 1, Newkirk 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 o

> Season tickets for the Wildcats are priced at $320 and include 16 games. Revenue is recognized after each game is played. When the season began, the amount credited to Unearned Ticket Revenue was $1,728,000. By the end of October, $1,188,000 of the Unear

> Gomez Company issued $380,000, 7%, 10-year bonds on January 1, 2014, for $407,968. This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annually on January 1. Gomez uses the effective-interest method to amortize bond

> Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2014, Valenti sells 6,300 subscriptions for cash, beginning with the December issue. Valenti prepares financial st

> Season tickets for the Wildcats are priced at $320 and include 16 games. Revenue is recognized after each game is played. When the season began, the amount credited to Unearned Ticket Revenue was $1,728,000. By the end of October, $1,188,000 of the Unear

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

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

> Valenti Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2014, Valenti sells 6,300 subscriptions for cash, beginning with the December issue. Valenti prepares financial st

> Dailey Company issued $300,000, 8%, 15-year bonds on December 31, 2013, for $288,000. Interest is payable annually on December 31. Dailey uses the straight-line method to amortize bond premium or discount. Instructions: Prepare the journal entries to re

> Dailey Company issued $300,000, 8%, 15-year bonds on December 31, 2013, for $288,000. Interest is payable annually on December 31. Dailey uses the straight-line method to amortize bond premium or discount. Instructions: Prepare the journal entries to re

> The administrators of Crawford County’s Memorial Hospital are interested in identifying the various costs and expenses that are incurred in producing a patient’s X-ray. A list of such costs and expenses is presented below. 1. Salaries for the X-ray machi

> Ikerd Company is a manufacturer of personal computers. Various costs and expenses associated with its operations are as follows. 1. Property taxes on the factory building. 2. Production superintendents’ salaries. 3. Memory boards and chips used in assemb

> Chambers Company produces blankets. From its accounting records, it prepares the following schedule and financial statements on a yearly basis. (a) Cost of goods manufactured schedule. (b) Income statement. (c) Balance sheet. The following items are foun

> Cole Corporation issued $400,000, 7%, 20-year bonds on January 1, 2014, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Cole uses the effective-interest method to amortize bon

> Sandberg Company has $1,000,000 in assets and $1,000,000 in stockholders’ equity, with 40,000 shares outstanding the entire year. It has a return on assets of 10%. In the past year, it had net income of $100,000. On January 1, 2014, it issued $400,000 in

> On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock $648,000 and retained earnings $400,000. Pele is considering the following two courses of action: (1) declaring a 5% stock dividend on the 81,000 $8

> Suppose the following financial information is available for Walgreen Company. Instructions: Calculate the payout ratio and return on common stockholders’ equity for 2014 and 2013. Comment on your findings. (in millions) 2014 2013

> On January 1, Newkirk 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 o

> Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations. Direct Direct Total Materials Labor Manufacturing Costs Factory Overhead $ 50,000 $140,000 $111,000 Used Used (1) $40,000 (2) (3) $

> Identify whether each of the following costs should be classified as product costs or period costs. (a) ______ Manufacturing overhead. (d) ______ Advertising expenses. (b) ______ Selling expenses. (e) ______ Direct labor. (c) ______ Administrative ex

> Listed below are the three functions of the management of an organization. 1. Planning 2. Directing 3. Controlling Identify which of the following statements best describes each of the above functions. (a) ______ requires management to look ahead and to

> Presented below are Dieker Company’s monthly manufacturing cost data related to its personal computer products. (a) Utilities for manufacturing equipment $116,000 (b) Raw material (CPU, chips, etc.) $ 85,000 (c) Depreciation on manufact

> The stockholders’ equity section of Maley Corporation’s balance sheet consists of common stock ($8 par) $1,000,000 and retained earnings $300,000. A 10% stock dividend (12,500 shares) is declared when the market price per share is $19. Show the before an

> Prophet Company issued $500,000, 6%, 30-year bonds on January 1, 2014, at 103. Interest is payable annually on January 1. Prophet uses straight-line amortization for bond premium or discount. Instructions: Prepare the journal entries to record the follo

> Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead. (a) ______ Windshield. (e) ______ Factory machinery lubricants. (b) ___

> Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (a) ______ Frames and tires used in manufacturing bicycles. (b) ______ Wages paid to production workers. (c) _

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

> Presented below is a list of costs and expenses usually incurred by Barnum Corporation, a manufacturer of furniture, in its factory. 1. Salaries for assembly line inspectors. 2. Insurance on factory machines. 3. Property taxes on the factory building. 4.

> Putnam Corporation had these transactions during 2014. (a) Purchased a machine for $30,000, giving a long-term note in exchange. (b) Issued $50,000 par value common stock for cash. (c) Issued $200,000 par value common stock upon conversion of bonds havin

> The Institute of Management Accountants (IMA) is an organization dedicated to excellence in the practice of management accounting and financial management. Address: www.imanet.org, or go to www.wiley.com/college/kimmel Instructions: At the IMA’s home pa

> Anchor Glass Container Corporation, the third largest manufacturer of glass containers in the United States, supplies beverage and food producers and consumer products manufacturers nationwide. Parent company Consumers Packaging Inc. (Toronto Stock Excha

> Tenrack is a fairly large manufacturing company located in the southern United States. The company manufactures tennis rackets, tennis balls, tennis clothing, and tennis shoes, all bearing the company’s distinctive logo, a large green question mark on a

> Wendall Company specializes in producing fashion outfits. On July 31, 2014, a tornado touched down at its factory and general office. The inventories in the warehouse and the factory were completely destroyed as was the general office nearby. Next mornin

> Mike Cichanowski founded Wenonah Canoe and later purchased Current Designs, a company that designs and manufactures kayaks. The kayak-manufacturing facility is located just a few minutes from the canoe company’s headquarters in Winona,

> Suppose 3M Company reported the following financial data for 2014 and 2013 (in millions). Instructions: (a) Calculate the current ratio for Sedgewick Boutique for 2014 and 2013. (b) Suppose that at the end of 2014, Sedgewick Boutique used $1.5 million

> The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Suppose selected data from the 2014 consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions). Instructi

> The April 21, 2008, issue of the Wall Street Journal Online included an article by David Reilly entitled “A Way Charges Stay off Bottom Line.” Instructions: Read the article and answer the following questions. (a) According to the article, how do compan

> Your parents are considering investing in Tootsie Roll Industries common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Fortunately, excerpts from a recent annual report of Tootsie Roll are presented in Appendi

> The financial statements of Tootsie Roll Industries are presented in Appendix A. Appendix A: Instructions: Answer the following questions. (a) What was the amount of net cash provided by operating activities for 2011? For 2010? (b) What was the amount

> Marriott Corporation split into two companies: Host Marriott Corporation and Marriott International. Host Marriott retained ownership of the corporation’s vast hotel and other properties, while Marriott International, rather than owning

> The November 10, 2011, edition of the Financial Times contains an article by Alan Rappeport entitled “McDonald’s Looks to Buy More Property.” Instructions: Read the article and answer the following questions. (a) Why is McDonald’s shifting away from lea

> The March 15, 2010, edition of the Wall Street Journal includes an article by Martin Peers entitled “Media’s Cash Focus Is Paying Dividends.” Instructions: Read the article and answer the following questions. (a) What action did Viacom take with its exc

> The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for Tootsie Roll in Appendix A. Appendix A: Appendix B: Instructions: (a) Based on the information in these financial statements, compute

> The stockholders’ equity section of Tootsie Roll Industries’ balance sheet is shown in the Consolidated Statement of Financial Position in Appendix A. You will also find data relative to this problem on other pages of Appendix A. (Note that Tootsie Roll

> For many years, Borders Group and Barnes and Noble were the dominant booksellers in the United States. They experienced rapid growth, and in the process they forced many small, independent bookstores out of business. Recently, Borders filed for bankruptc

> Klinger Corporation’s balance sheet at December 31, 2013, is presented below. During 2014, the following transactions occurred. 1. On January 1, 2014, Klinger issued 1,200 shares of $40 par, 7% preferred stock for $49,200. 2. On Janua

> The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for Tootsie Roll Industries in Appendix A. Appendix A: Appendix B: Instructions: (a) Based on the information contained in these financial

> Refer to the financial statements of Tootsie Roll Industries and the Notes to Consolidated Financial Statements in Appendix A. Appendix A: Instructions: Answer the following questions. (a) What were Tootsie Roll’s total current liabi

> For many years, Borders Group and Barnes and Noble were the dominant booksellers in the United States. They experienced rapid growth, and in the process they forced many small, independent bookstores out of business. Recently, Borders filed for bankruptc

> The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for Tootsie Roll Industries in Appendix A. Appendix A: Appendix B: Instructions: (a) Based on the information contained in these financial

> Refer to the financial statements of Tootsie Roll Industries and the Notes to Consolidated Financial Statements in Appendix A. Appendix A: Instructions: Answer the following questions. (a) What were Tootsie Roll’s total current liabi

> Tony Andres is studying for his next accounting examination. Explain to Tony what he should know about the differences between the income statements for a manufacturing and for a merchandising company.

> What new rules were enacted under the Sarbanes Oxley Act to address unethical accounting practices?

> Explain the primary difference between line positions and staff positions, and give examples of each.

> Linda Olsen is studying for the next accounting midterm examination. Summarize for Linda what she should know about management functions.

> In what ways can the budgeting process create incentives for unethical behavior?

> Trevor Corporation’s balance sheet at December 31, 2013, is presented below. During 2014, the following transactions occurred. 1. Trevor paid $2,500 interest on the bonds on January 1, 2014. 2. Trevor purchased $241,100 of inventory o

> Linton Company has these obligations at December 31: (a) a note payable for $100,000 due in 2 years, (b) a 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts

> How do the content of reports and the verification of reports differ between managerial and financial accounting?

> What is an enterprise resource planning (ERP) system? What are its primary benefits?

> Discuss whether the product costing techniques discussed in this chapter apply equally well to manufacturers and service companies.

> How does the output of manufacturing operations differ from that of service operations?

> Distinguish between managerial and financial accounting as to (a) primary users of reports, (b) types and frequency of reports, and (c) purpose of reports.

> Mel Finney claims that the distinction between direct and indirect materials is based entirely on physical association with the product. Is Mel correct? Why?

> The return on assets for Espino Corporation is 7.6%. During the same year, Espino’s return on common stockholders’ equity is 12.8%. What is the explanation for the difference in the two rates?

> Tom Vernon is puzzled. His company had a profit margin of 10% in 2014. He feels that this is an indication that the company is doing well. Andrea Travis, his accountant, says that more information is needed to determine the company’s financial well-being

> (a) Jennifer Gorman believes that the analysis of financial statements is directed at two characteristics of a company: liquidity and profitability. Is Jennifer correct? Explain. (b) Are short-term creditors, long-term creditors, and stockholders interes