Question: The following information is available for the

> Juno Inc. experienced the following events for the first two years of its operations: Year 1: 1. Issued $5,000 of common stock for cash. 2. Provided $80,000 of services on account. 3. Provided $22,000 of services and received cash 4. Collected $65,000 c

> The accounts receivable balance for Edd’s Shoe Repair at December 31, Year 1, was $76,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $3,200. During Year 2, $2,900 of accounts receivable were written off as uncollectible. I

> To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Daun purchased the stereo systems for $140,000 and sold them for $250,000 cash. She provided her customers with a one-year

> The following three independent sets of facts relate to contingent liabilities: 1. In November of the current year, an automobile manufacturing company recalled all pickup trucks manufactured during the past two years. A flaw in the battery cable was dis

> Which of the following would be debited to the Inventory account for a merchandising business using the perpetual inventory system? Required: a. Transportation-out. b. Purchase discount. c. Transportation-in. d. Purchase of a new computer to be used by

> The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. 1

> Required Identify each of the following long-term operational assets as either tangible (T) or intangible (I): a. Pizza oven b. Land c. Franchise d. Filing cabinet e. Copyright f. Silver mine g. Office building h. Drill press i. Patent j. Oil well k. De

> Which of the following items should be classified as long-term operational assets? a. Prepaid insurance b. Coal mine c. Office equipment d. Accounts receivable e. Supplies f. Copyright g. Delivery van h. Land used in the business i. Goodwill j. Cash k. F

> Give some examples of long term operational assets that each of the following companies is likely to own: (a) Caterpillar, (b) Amtrak, (c) Facebook, and (d) Bank of America Corp.

> Zolnick Enterprises has two hourly employees: Kelly and Jon. Both employees earn overtime at the rate of 1½ times the hourly rate for hours worked in excess of 40 per week. Assume the Social Security tax rate is 6 percent on the first $110,

> The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased equipment inventory of $380,000 on account. 3. Sold equipment for $510,000 cash (not in

> Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $16,200 of cash revenue. 2. Borrowed $12,000 cash from the bank. 3. Adjusted the accounting records to recog

> Harden Co. issued a $60,000 face value discount note to National Bank on July 1, Year 1. The note had a 6 percent discount rate and a one-year term to maturity. Required: Prepare general journal entries for the following: a. The issuance of the note on

> The following information was drawn from the balance sheets of the Kansas and Montana companies: Required: a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. Assume that both co

> The following transactions apply to Park Co. for Year 1: 1. Received $50,000 cash from the issue of common stock. 2. Purchased inventory on account for $180,000. 3. Sold inventory for $250,000 cash that had cost $140,000. Sales tax was collected at the r

> The following transactions apply to Bob’s Bike Shop for Year 1, its first year of operations: 1. Acquired $35,000 cash from the issue of common stock. 2. Acquired $9,600 of merchandise from Bob Hall, the owner, who had acquired the merchandise prior to o

> Sky Co. employed Tom Mills in Year 1. Tom earned $5,100 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom’s federal income tax withhold

> Assume the following. Queensland Company purchased a parcel of land on January 1, Year 1, for $400,000. It constructed a building on the land at a cost of $2,000,000. The building was occupied on January 1, Year 4, and is expected to have a useful life o

> The Paris Corp. incurred $3,600,000 of research cost and $800,000 of development cost during the current year. Required: a. Determine the amount of expense recognized on its income statement assuming Paris uses U.S. GAAP. b. Determine the amount of expe

> Executive Jets, LLC operates a charter flight-service company in the northwestern United States. Classic Steps, LLC is a company that provides dance lessons to students of all ages. Classic Steps has dance studios in several cities throughout the western

> Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,800 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earni

> Abardeen Corporation borrowed $90,000 from the bank on October 1, Year 1. The note had an 8 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required: a. What amount of cash

> Colorado Mining paid $600,000 to acquire a mine with 40,000 tons of coal reserves. The following statements model reflects Colorado Mining’s financial condition just prior to purchasing the coal reserves. The company extracted 15,000 to

> On January 1, Year 1, Webb Construction Company overhauled four cranes, resulting in a slight increase in the life of the cranes. Such overhauls occur regularly at two-year intervals and have been treated as a maintenance expense in the past. Management

> Sheldon Jones borrowed money by issuing two notes on March 1, Year 1. The financing transactions are described next. 1. Borrowed funds by issuing a $52,000 face value discount note to Farmers Bank. The note had an 8 percent discount rate, a one-year term

> Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During Year 1, Parish provided serv

> Tippah Antiques uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Tippah’s records for Year 2: beginning balance in inventory, $42,000; purchases, $128,000; purchase re

> On January 1, Year 1, Poultry Processing Company purchased a freezer and related installation equipment for $42,000. The equipment had a three-year estimated life with a $3,000 salvage value. Straight-line depreciation was used. At the beginning of Year

> Use the following information to prepare a classified balance sheet for Alpha Co. at the end of Year 1: $26,500 12,200 20,500 30,000 10,000 17,500 26,300 23,600 Accounts receivable Accounts payable Cash Common stock Land Long-term notes payable Merc

> On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $28,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In Year 3, Prairie Enterprises changed its plans and sold the land. Required: a. As

> The two employees of Silver Co. receive various fringe benefits. Silver Co. provides vacation at the rate of $315 per day. Each employee earns one day of vacation per month worked. In addition, Silver Co. pays a total amount of $650 per month in medical

> City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $36,000. In addition, City paid sales tax and title fees of $1,200 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $4,000. Required:

> Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a fouryear useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print produ

> At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value. Required: a. Compute the depreciation for each of the five years, assuming that the company u

> Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salva

> The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $60,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $40,000 cash. 3. Earned $72,000 in cash revenue. 4. Paid $25,000 cas

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 9, had the following normal balances: During Year 9, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 8. 2. Paid $9,000 o

> For each of the following cases determine the ending balance in the inventory account. a. Jill’s Dress Shop had a beginning balance in its inventory account of $40,000. During the accounting period, Jill’s purchased $75,000 of inventory, returned $5,000

> The following quarterly information is given for Rossie for Year 1 (amounts shown are in millions): Required: a. Divide the class into groups and organize the groups into four sections. Assign each section financial information for one of the quarters.

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 8, had the following normal balances: During Year 8, Pacillo Security Services experienced the following transactions: 1. Paid the salaries payable from Year 7. 2. Purchased equ

> Scott Putman owns and operates a lawn care company. Like most companies in the lawn care business, his company experiences a high level of employee turnover. However, he finds it relatively easy to replace employees because he pays above-market wages. He

> Assume you are examining the balance sheets of two companies and note the following information: Maxie Smith, a student who has had no accounting courses, remarks that Company A and Company B have the same amount of equipment. Required: In a short par

> Companies in the gas and oil business use a lot of property, plant, and equipment. Not only is there the significant investment they must make in equipment used to find, extract, and process the oil and natural gas, but they must also purchase the rights

> American Greetings Corporation manufactures and sells greeting cards and related items such as gift wrapping paper. CSX Corporation is one of the largest railway networks in the nation. The following data were taken from one of the companiesâ€

> The following ratios are for four companies in different industries. Some of these ratios have been discussed in the textbook, others have not, but their names explain how the ratio was computed. These data are for the companies’ 2016 f

> Sweet’s Bakery makes cakes, pies, and other pastries that it sells to local grocery stores. The company experienced the following transactions during Year 1. 1. Started business by acquiring $60,000 cash from the issue of common stock. 2. Purchased baker

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. What method of depreciation does Target use? b. What types of intangible assets does Targe

> Using either the most current Form 10-K for AutoZone, Inc. or the company’s annual report, answer the following questions. To obtain the Form 10-K, either use the EDGAR system (following the instructions in Appendix A), or the company’s website. The comp

> Nancy, who graduated from State University in June Year 1, has just landed her first real job. She is excited because her salary is $4,000 per month. Nancy is single and has been planning all month about how she will spend her $4,000. When she received h

> Advanced Micro Devices, Inc. (AMD) is “a global semiconductor company with facilities around the world.” AMD began operations in 1969. Texas Instruments, Inc. is the company that invented the integrated circuit over 45

> Newell Brands, Inc. is the marketer of the well-known Rubbermaid plastic containers, but it also markets many other consumer brands, including Sharpie, Calphalon, Parker and Waterman writing instruments, and Lenox hand and power tools. The 2016 numbers a

> In the liabilities section of its 2016 balance sheet, Bank of America reported “noninterest-bearing deposits” in U.S. offices of over $438 billion. Bank of America is a very large banking company. In the liabilities section of its 2016 balance sheet, New

> The following payroll information is available for three companies for Year 1. Each company has two employees. Assume that the Social Security tax rate is 6 percent on the first $110,000 of earnings and that the Medicare tax rate is 1.5 percent on all ea

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. What was Target’s current ratio for its fiscal year ended January 28, 2017 (2016) and 2015

> This chapter discussed how companies in different industries often use different proportions of current versus long-term assets to accomplish their business objective. The technology revolution resulting from the silicon microchip has often been led by t

> Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $45,000 of cleaning services on account. 2. Collected $39,000 cash from accounts receiv

> Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations: Events Affecting Year 1: 1. Provided $84,000 of cleaning services on account. 2. Collected $76,000 cash from acc

> The following information is available for Market, Inc. and Supply, Inc. at December 31: Required: a. What is the accounts receivable turnover for each of the companies? b. What is the average days to collect the receivables? c. Assuming both companies

> The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier (LGS) as of December 31, Year 1: Transactions for Year 2 1. LGS acquired an additional $20,000 cash from the issue of common stock. 2. LGS purchased $85,000

> The following income statements were drawn from the annual reports of the Atlanta Company and the Boston Company: Required: a. One of the companies is a high-end retailer that operates in exclusive shopping malls. The other operates discount stores loc

> Luna Company accepted credit cards in payment for $6,000 of services performed during July Year 1. The credit card company charged Luna a 4 percent service fee; it paid Luna as soon as it received the invoices. Required: a. Prepare the general journal e

> Ultra Day Spa provided $120,000 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of fa

> On May 1, Year 1, Benz’s Sandwich Shop loaned $10,000 to Mark Henry for one year at 6 937 percent interest. Required: Answer the following questions: a. What is Benz’s interest income for Year 1? b. What is Benz’s total amount of receivables at December

> Rainey Enterprises loaned $20,000 to Small Co. on June 1, Year 1, for one year at 6 percent interest. Required: a. Record these general journal entries for Rainey Enterprises: (1) The loan to Small Co. (2) The adjusting entry at December 31, Year 1. (3

> Patel Service Co. does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Co. earned $35,000 of cash revenue and $4,500 of reven

> Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: 1. Provided $91,000 of services on account. 2. Collected $72,000 cash from accounts receivable. 3. Paid $36,000 of salaries expense for the year. 4. Adjus

> Leach Inc. experienced the following events for the first two years of its operations: Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $78,000 of services on account. 3. Provided $36,000 of services and received cash. 4. Collected $69,00

> The accounts receivable balance for Renue Spa at December 31, Year 1, was $61,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $3,750. During Year 2, $2,100 of accounts receivable were written off as uncollectible. In additi

> Grover Inc. uses the allowance method to account for uncollectible accounts expense. Grover Inc. experienced the following four accounting events in Year 1: 1. Recognized $92,000 of revenue on account. 2. Collected $78,000 cash from accounts receivable.

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 7, had the following normal balances: During Year 7, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 6. 2. Paid $4,800 o

> Junker’s Stash started the Year 2 accounting period with the balances given in the financial statements model shown below. During Year 2, Junker’s Stash experienced the following business events: 1. 

> The following selected financial information is available for three companies: Required: a. Divide the class into three sections and divide each section into groups of three to five students. Assign one of the companies to each of the sections. Group

> Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: Anyone who has shopped at Target knows that many of its customers use a credit card to pay fo

> Using the most current annual reports or Forms 10-K for Whirlpool Corporation and Papa John’s International, Inc., complete the requirements that follow. To obtain the Forms 10K, use either the EDGAR system, following the instructions in Appendix A, or t

> Alonzo Saunders owns a small training services company that is experiencing growing pains. The company has grown rapidly by offering liberal credit terms to its customers. Although his competitors require payment for services within 30 days, Saunders per

> Paul Smith is opening a plumbing supply store in University City. He plans to sell plumbing parts and materials to both wholesale and retail customers. Because contractors (wholesale customers) prefer to charge parts and materials and pay at the end of t

> AutoZone, Inc. claims to be the nation’s leading auto parts retailer. It sells replacement auto parts directly to the consumer. BorgWarner, Inc. has over 30,000 employees and produces automobile parts, such as transmissions and cooling

> The following data were taken from Hershey Foods Corporation’s 2016 annual report. All dollar amounts are in thousands. Required: a. Compute Hershey’s accounts receivable turnover ratios for 2016 and 2015. b. Compute

> Presented here are the average days to collect accounts receivable for four companies in different industries. The data are for 2016. Required: Write a brief memorandum that provides possible answers to each of the following questions: a. Why would a c

> What three basic types of auditors’ opinions can be issued on audited financial statements? Describe each.

> What are several features of an effective internal control system?

> Powell Company began the Year 2 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $58,000 for $99,500 on acco

> Determine whether the following items in China Imports’ bank reconciliation require adjusting or correcting entries on China Imports’ books. When an entry is required, record it in general journal format. a. The bank statement indicated that China Import

> The following data apply to Woods Sports Inc. for April Year 1: 1. Balance per the bank on April 30: $13,750. 2. Deposits in transit not recorded by the bank: $3,600. 3. Bank error; check written by Glen Woods on his personal checking account was drawn o

> Bill Lewis owns a construction business, Lewis Supply Co. The following cash information is available for the month of October Year 1. As of October 31, the bank statement shows a balance of $21,400. The October 31 unadjusted balance in the Cash account

> Connie Stevens is a partner in a regional accounting firm. Stevens was hired by a client to audit the company’s books. After extensive work, Stevens determined that she was unable to perform the appropriate audit procedures. Required: a. Name the type o

> The following data pertain to the petty cash fund of Marsh Company: 1. The petty cash fund was established on an imprest basis at $250 on March 1. 2. On March 31, a physical count of the fund disclosed $13 in currency and coins, vouchers authorizing meal

> The following is a bank reconciliation for BBQ Express for May 31, Year 1: Because of limited funds, BBQ Express employed only one accountant who was responsible for receiving cash, recording receipts and disbursements, preparing deposits, and preparin

> After reconciling its bank account, Addy Equipment Company made the following adjusting entries: Required: Identify the event depicted in each journal entry as an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also exp

> The following information is available for Pyle Garage for March Year 1: The following is a list of checks and deposits recorded on the books of Pyle Garage for March Year 1: Other Information 1. Check no. 1462 was outstanding from February. 2. A cre

> Austin Co. established a petty cash fund by issuing a check for $300 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month: There was $21 of currency in the petty cash box at the tim

> Following is a bank reconciliation for Zocar Enterprises for June 30, Year 1: When reviewing the bank reconciliation, Zocar’s auditor was unable to locate any reference to the NSF check on the bank statement. Furthermore, the clerk wh

> The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: 1. Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30. 2. Customers returned merchandise to Ozark five days after the purchase. The

> After reconciling its bank account, Watson Company made the following adjusting entries: Required: Identify the event depicted in each journal entry as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how ea

> The following information is available for Park Valley Spa for July Year 1: The following is a list of checks and deposits recorded on the books of the Park Valley Spa for July Year 1: Other Information 1. Check no. 2350 was outstanding from June. 2.

> Determine whether the following items included in Wong Company’s January Year 1 bank reconciliation will require adjusting or correcting entries on Wong’s books. When an entry is required, record it in general journal format. a. Service charges of $50 fo

> The following data apply to Pro Beauty Supply Inc. for May Year 1: 1. Balance per the bank on May 31: $9,150. 2. Deposits in transit not recorded by the bank: $1,510. 3. Bank error; check written by Best Beauty Supply was charged to Pro Beauty Supply&aci

> Rick Hall owns a card shop: Hall’s Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $16,140. The August 31 unadjusted balance in the Cash account of Hall’s Cards is

> The bank statement of Hibbert Supplies included a $300 NSF check that one of Hibbert’s customers had written to pay for services that were provided by Hibbert. Required: a. Show the effects of recognizing the NSF check on the financial

> a. Name and describe the two categories of internal controls. b. What is the purpose of internal controls?