The following items represent liabilities on a firm’s balance sheet: a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed. b. An amount of money owed to a creditor on a note due April 30, 2018. c. An amount of money owed to a creditor on a note due August 15, 2019. d. An amount of money owed to employees for work performed during the last week in December. e. An amount of money owed to a bank for the use of borrowed funds due on March 1, 2018. f. An amount of money owed to a creditor as an annual installment payment on a ten-year note. g. An amount of money owed to the federal government based on the company’s annual income. Required: 1. For each item, state whether it should be classified as a current liability on the December 31, 2017, balance sheet. Assume that the operating cycle is shorter than one year. If the item should not be classified as a current liability, indicate where on the balance sheet it should be presented. 2. For each item identified as a current liability in part (1), state the account title that is normally used to report the item on the balance sheet. 3. Why would an investor or a creditor be interested in whether an item is a current or a longterm liability?
> Students approaching the study of chemistry must learn certain basic facts (such as the names and symbols of the most common elements), but it is much more important that they learn to think critically and to go beyond the specific examples discussed in
> Why is the ability to solve problems important in the study of chemistry? Why is it that the method used to attack a problem is as important as the answer to the problem itself?
> Although reviewing your lecture notes and reading your textbook are important, why does the study of chemistry depend so much on problem solving? Can you learn to solve problems yourself just by looking at the solved examples in your textbook or study gu
> Discuss several political, social, or personal considerations that might affect a scientist’s evaluation of a theory. Give examples of how such external forces have influenced scientists in the past. Discuss methods by which such bias might be excluded f
> Write each of the following numbers in standard scientific notation. a. 97,820 b. 42.14 * 103 c. 0.08214 * 10-3 d. 0.0003914 e. 927.1 f. 4.781 * 102 * 10-3
> True or false? If a theory is disproven, then all of the observations that support that theory are also disproven. Explain.
> Although your textbook lists the rules for converting an ordinary number to scientific notation, oftentimes students remember such rules better if they put them into their own words. Pretend you are helping your 12-year-old niece with her math homework,
> From the following list, identify whether the change in the account balance during the year would be reported as an operating (O), an investing (I), or a financing (F) activity or not separately reported on the statement of cash flows (N). Assume that th
> Sound Company manufactures and sells high-quality stereos. The most popular line sells for $2,000 each and is accompanied by a three-year warranty to repair, free of charge, any defective unit. Average costs to repair each defective unit will be $180 for
> Trena Thompson invested $2,000 in a financial institution on January 1, 2017. She leaves her investment in the institution until December 31, 2021. How much money does Trena accumulate if she earns interest, compounded annually, at the following rates?
> The Stockholders’ Equity category of Rausch Company’s balance sheet as of December 31, 2017, appeared as follows: Preferred stock, $100 par, 8%, 2,000 shares issued and outstanding ……….. $ 200,000 Common stock, $10 par, 40,000 shares issued and outstand
> For each of the following transactions, indicate whether they would be reported in the Investing Activities section of the statement of cash flows (I) or the Financing Activities section (F). Put an S in the blank if the transaction does not affect cash
> Carnival Corporation & plc is one of the largest cruise companies in the world with such well-known brands as Carnival Cruise Lines, Holland America Line, and Princess Cruises. Classify each of the following items found on the companyâ€
> Metropolis Industries invested its excess cash in the following instruments during December 2017: Certificate of deposit, due January 31, 2018 …………………………………………. $ 35,000 Certificate of deposit, due June 30, 2018 ……………………………………………….. 95,000 Investment in
> Shari Thompson invested $1,000 in a financial institution on January 1, 2017. She leaves her investment in the institution until December 31, 2021. How much money does Shari accumulate if she earns interest, compounded annually, at the following rates?
> Several independent items are listed for which the outcome of events is unknown at year-end. a. A company offers a two-year warranty on sales of new computers. It believes that 4% of the computers will require repairs. b. A company is involved in a trad
> Several independent items are listed for which the outcome of events is unknown at year-end. a. A company has been sued by the federal government for price fixing. The company’s legal counsel believes that there will be an unfavorable verdict and has ma
> Use the following legend to indicate how each transaction would be reported on the statement of cash flows. (Assume that the company uses the direct method in the Operating Activities section.) IO = Inflow from operating activities 00 = Outflow fro
> The following situations involve the application of the time value of money concepts: 1. Sampson Company just purchased a piece of equipment with a value of $53,300. Sampson financed this purchase with a loan from the bank and must make annual loan payme
> Sports Central is a sporting goods store owned by Lewis, Jamal, and Lapin in partnership. On January 1, 2017, their capital balances were as follows: Lewis, Capital …………………………………………………………………………… $20,000 Jamal, Capital ……………………………………………………………………………… 50,0
> Terry Woods opened Par Golf as a sole proprietor by investing $50,000 cash on January 1, 2017. Because the business was new, it operated at a net loss of $10,000 for 2017. During the year, Terry withdrew $20,000 from the business for living expenses. Ter
> Use the following legend to indicate how each transaction would be reported on the statement of cash flows. (Assume that the stocks and bonds of other companies are classified as long-term investments.) II = Inflow from investing activities OI = Ou
> For each of the following transactions reported on a statement of cash flows, indicate whether it would appear in the Operating Activities section (O), in the Investing Activities section (I), or in the Financing Activities section (F). Put an S in the b
> Assume that a company uses the indirect method to prepare the Operating Activities section of the statement of cash flows. For each of the following items, indicate whether it would be added to net income (A), deducted from net income (D), or not reporte
> Kelly Seaver has decided to start saving for her daughter’s college education. Kelly wants to accumulate $32,000. The bank will pay interest at the rate of 4% compounded annually. If Kelly plans to make payments of $1,600 at the end of each year, how lon
> Steve Jones has decided to start saving for his son’s college education by depositing $2,000 at the end of every year for 15 years. A bank has agreed to pay interest at the rate of 4% compounded annually. How much will Steve have in the bank immediately
> On May 1, 2016, Ryde Inc. had common stock of $345,000, additional paid-in capital of $1,298,000, and retained earnings of $3,013,000. Ryde did not purchase or sell any common stock during the year. The company reported net income of $556,000 and declare
> Madden Corporation wants to determine the amount of deferred tax that should be reported on its 2017 financial statements. It has compiled a list of differences between the accounting conducted for tax purposes and the accounting used for financial repor
> Kern Company deposited $1,000 in the bank on January 1, 2017, earning 8% interest. Kern Company withdraws the deposit plus accumulated interest on January 1, 2019. Compute the amount of money Kern withdraws from the bank assuming that interest is compoun
> Brian Inc. estimates that it will need $150,000 in ten years to expand its manufacturing facilities. A bank has agreed to pay Brian 5% interest compounded annually if the company deposits the entire amount now needed to accumulate $150,000 in ten years.
> In the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N). For items identified as operating, indicate whether the related amount would be added to or deducted
> In the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N). _______ Proceeds from issuance of bonds payable _______ Interest expense _______ Redemption of bonds
> From the following list, identify whether the change in the account balance during the year would be reported as an operating (O), an investing (I), or a financing (F) activity or not separately reported on the statement of cash flows (N). Assume that th
> The following components are computed annually when a bond is issued for other than its face value: • Cash interest payment • Interest expense • Amortization of discount/premium • Carrying value of bond Required: State whether each component will increa
> Youngblood Inc. plans to issue $500,000 face value bonds with a stated interest rate of 8%. They will mature in ten years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 8%, (b) 6%, and (c) 10%. Required:
> On January 1, 2017, Kunkel Corporation purchased an asset for $32,000. Assume that this is the only asset owned by the corporation. Kunkel has decided to use the straight-line method to depreciate it. For tax purposes, it will be depreciated over three y
> Assume that Garnett Corporation signs a lease agreement with Duncan Company to lease a piece of equipment and determines that the lease should be treated as a capital lease. Garnett records a leased asset in the amount of $53,400 and a lease obligation i
> On October 1, 2017, Ratkowski Inc. borrowed $18,000 from Second National Bank by issuing a 12-month note. The bank discounted the note at 9%. Required: 1. Identify and analyze the effect of the issuance of the note. 2. Identify and analyze the effect of
> On July 1, 2017, Jo’s Flower Shop borrowed $25,000 from the bank. Jo’s signed a ten-month, 8% promissory note for the entire amount. Jo’s uses a calendar year-end. Required: 1. Identify and analyze the effect of the issuance of the promissory note. 2. I
> Upon graduation from college, Susana Lopez signed an agreement to buy a used car. Her annual payments, which are due at the end of each year for two years, are $1,480. The car dealer used a 12% rate compounded annually to determine the amount of the paym
> Each of the following situations involves the use of discounts: 1. How much discount may Seals Inc. take in each of the following transactions? What was the annualized interest rate? a. Seals purchases inventory costing $450, terms 2/10, n/40. b. Seals p
> Several accounts that appeared on Kruse’s 2017 balance sheet are as follows: Required: 1. Prepare the Current Liabilities section of Kruse’s 2017 balance sheet. 2. Compute Kruse’s working capital. 3
> The following situations require the application of the time value of money: 1. On January 1, 2017, $16,000 is deposited. Assuming an 8% interest rate, calculate the amount accumulated on January 1, 2022, if interest is compounded (a) annually, (b) semia
> The following situations involve time value of money calculations: 1. A deposit of $7,000 is made on January 1, 2017. The deposit will earn interest at a rate of 8%. How much will be accumulated on January 1, 2022, assuming that interest is compounded (a
> A portion of the Financing Activities section of PepsiCo’s statement of cash flows for the year ended December 27, 2014, follows (in millions): 2014 Financing Activities Proceeds from issuances of long-term debt ……………………..………………. $ 3,855 Payments of lon
> Polly’s Cards & Gifts Shop had the following transactions during the year: a. Polly’s purchased inventory on account from a supplier for $8,000. Assume that Polly’s uses a periodic inventory system. b. On May 1, land was purchased for $44,500. A 20% dow
> Jackie Company had the following accounts and balances on December 31, 2017: Required: Prepare the Current Liabilities section of Jackie Company’s balance sheet as of December 31, 2017. Income Taxes Payable $61,250 Notes Payable,
> For each of the following notes, calculate the simple interest due at the end of the term. Now assume that the interest on the notes is compounded annually. Calculate the amount of interest due at the end of the term for each note. Finally, assume that
> Clean Corporation manufactures and sells dishwashers. Clean provides all customers with a two year warranty guaranteeing to repair, free of charge, any defects reported during this time period. During the year, it sold 100,000 dishwashers for $325 each.
> The following items are accounts on Smith’s balance sheet of December 31, 2017: Taxes Payable Accounts Receivable Notes Payable, 9%, due in 90 days Investment in Bonds Capital Stock Accounts Payable Estimated Warranty Payable in 2018 Retained Earnings T
> For each of the following intangible assets, indicate the amount of amortization expense that should be recorded for the year 2017 and the amount of accumulated amortization on the balance sheet as of December 31, 2017. Trademark Patent Copyright Co
> Refer to Exercise 8-6. Assume that Gonzalez Company sold the asset on July 1, 2017, and received $15,000 cash and a note for an additional $15,000. Exercise 8-6: Assume that Gonzalez Company purchased an asset on January 1, 2015, for $60,000. The asset
> Assume that Gonzalez Company purchased an asset on January 1, 2015, for $60,000. The asset had an estimated life of six years and an estimated residual value of $6,000. The company used the straight-line method to depreciate the asset. On July 1, 2017, t
> The following information is available from the balance sheets at the ends of the two most recent years and the income statement for the most recent year of Impact Company: 2017 Sales revenue ……â€&brvb
> Refer to the financial information at the back of the book for Panera Bread and Chipotle. Financial information Panera Bread: Financial information Chipotle Required: Part A. The Ratio Analysis Model For each company, determine: The debt-to-equity r
> The following information was obtained from the comparative financial statements included in Nordstrom’s Form 10-K for its 2015 fiscal year. (All amounts are in millions of dollars.) Required: 1. Using the information provided, compu
> The following information was summarized from the balance sheets included in Form 10-K of McDonald’s Corporation at December 31, 2015, and The Wendy’s Company and Subsidiaries at January 3, 2016. Required: 1. Using t
> The following information was summarized from the balance sheets included in the Form 10-K for the 2015 fiscal year of Kellogg Company and Subsidiaries at January 2, 2016, and General Mills, Inc. and Subsidiaries at May 31, 2015: Required: 1. Using th
> The following information was obtained from the fiscal year 2015 and 2014 financial statements included in Form 10-K of Kellogg Company and Subsidiaries and General Mills, Inc. and Subsidiaries. (Year-ends for Kellogg’s are January 2, 2
> The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables: Required: 1. Compute Lewis’s inventory turnover ratio for 2017 and 2016. 2. Compute the number of daysâ€&
> Adair Corp. is concerned because the average time to collect its accounts receivable was 15 days longer than its normal credit terms of net 30. Adair reported the following in the Current Assets section of its comparative balance sheets: Assuming 360 d
> The following account balances are taken from the records of the Faraway Travel Agency: Faraway extends credit terms requiring full payment in 60 days, with no discount for early payment. Required: 1. Compute Faraway’s accounts recei
> The Stockholders’ Equity section of the balance sheet for Cooperstown Corp. at the end of 2017 appears as follows: 8%, $100 par, cumulative preferred stock, 200,000 shares authorized, 50,000 shares issued and outstanding ………………………… $ 5,000,000 Additiona
> A company’s return on assets is a function of its ability to turn over its investment (asset turnover) and earn a profit on each dollar of sales (return on sales). For each of the following independent cases, determine the missing amounts. (Note: Assume
> The following selected data are taken from the financial statements of Evergreen Company: Sales revenue ………………………………………………………………. $ 650,000 Cost of goods sold ……………………………………………………………. 400,000 Gross profit ……………………………………………………………………. $ 250,000 Selling an
> Refer to the Panera Bread’s financial statements at the end of the text and answer the following questions: Panera Bread’s financial statements: 1. What are the items listed as long-term liabilities by Panera Bread?
> Rogers Inc. had 500,000 shares of $2 par common stock outstanding at the end of both 2016 and 2017. Retained earnings at the end of 2016 amounted to $1,800,000. No dividends were paid during 2017, and net income for the year was $400,000. Determine Roger
> Murphy Company’s total liabilities on December 31, 2017, amounted to $1,500,000. The debt to equity ratio on this date was 1.5 to 1. Net income for 2017 was $250,000, and the profit margin was 5%. Required: 1. Determine Murphy’s net sales for 2017. 2. D
> For the year ended September 26, 2015, Apple, Inc., reported net income of $53,394 million. Total shareholders’ equity on this date was $119,355 million, and on September 27, 2014, it was $111,547 million. No preferred stock was outstanding in either yea
> Madison Corp. reported the following in the Current Assets section of its comparative balance sheets: Supplemental information at the bottom of Madison’s 2017 statement of cash flows was as follows: Madison’s 2017
> Cass Corp.’s December 31, 2016, balance sheet reported current assets of $120,000 and current liabilities of $100,000. The current ratio increased by 25% one year later, on December 31, 2017. Current liabilities on this date were $140,000. Determine curr
> Wolf’s comparative balance sheets included inventory of $45,000 at December 31, 2016, and $63,000 at December 31, 2017. The comparative balance sheets also included accounts payable of $33,000 at December 31, 2016, and $39,000 at December 31, 2017. Wolf’
> Butler Corp. reported the following in the Current Assets section of its comparative balance sheets: The company uses the direct method on its statement of cash flows and reported that it collected $45,200 during 2017 from its customers. Determine sale
> Stanley Company’s comparative balance sheets included accounts receivable of $80,800 at December 31, 2016, and $101,100 at December 31, 2017. Sales reported by Stanley on its 2017 income statement amounted to $1,450,000. What is the amount of cash collec
> Spencer Corp. reported accounts receivable of $28,000 on its December 31, 2016, balance sheet. On December 31, 2017, accounts receivable had decreased to $22,000. Sales for the year amounted to $55,000. What is the amount of cash collections that Spencer
> Redstone Inc. has the following debt outstanding on December 31, 2017: On this date, Redstone retired the entire bond issue by paying cash of $510,000. Required: 1. Identify and analyze the transaction to record the bond retirement. 2. Describe how th
> Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain for the years ended September 26, 2015 and September 27, 2014: Required: Determine the company’s current ratio for each fis
> On its most recent statement of cash flows, a company reported net cash provided by operating activities of $12,000,000. Its capital expenditures for the same year were $2,000,000. A note to the financial statements indicated that the total amount of deb
> The following account balances for the noncash current assets and current liabilities of Suffolk Company are available: Net income for 2017 is $40,000. Depreciation expense is $20,000. Assume that all sales and all purchases are on account. Required:
> Timber Corp. began the year with a balance in its Income Taxes Payable account of $10,000. The year-end balance in the account was $15,000. The company uses the indirect method in the Operating Activities section of the statement of cash flows. Therefore
> Stanton Corp. began operations on January 1, 2017. The statement of cash flows for the first year reported dividends paid of $160,000. The balance sheet at the end of the first year reported $40,000 in dividends payable and $580,000 in ending retained ea
> The following selected account balances are available from the records of Lewistown Company: Other information available for 2017 is as follows: a. Lewistown reported net income of $285,000 for the year. b. It declared and distributed a stock dividend
> The computation of cash provided by operating activities requires analysis of the noncash current asset and current liability accounts. Determine the missing amounts for each of the following independent cases: Case 1 Accounts receivable, beginning of y
> The following account balances for the noncash current assets and current liabilities of Labrador Company are available: In addition, the income statement for 2017 is as follows: 2017 Sales revenue ……â
> Homeier Heating reported the following amounts on its comparative balance sheets: The company uses the direct method on its statement of cash flows and reported that it spent $44,000 during 2017 to acquire inventory. Determine cost of goods sold expens
> Lester Enterprises’ comparative balance sheets included inventory of $90,200 at December 31, 2016, and $70,600 at December 31, 2017. Lester’s comparative balance sheets also included accounts payable of $57,700 at December 31, 2016, and $39,200 at Decemb
> Kerry Company has 1,000 shares of $100 par value, 9% preferred stock and 10,000 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating. Dividends were paid in 2013. Since 2013, Kerry has declared and paid
> Refer to Panera Bread’s and Chipotle’s financial statements reprinted at the back of the book. Using the companies’ balance sheets and accompanying notes, write a response to the following questions:
> The Stockholders’ Equity category of Little Joe’s balance sheet on January 1, 2017, appeared as follows: Common stock, $5 par, 40,000 shares issued and outstanding ……………… $200,000 Additional paid-in capital …………………………………………………………………………. 90,000 Retained
> The Stockholders’ Equity category of Bradford Company’s balance sheet on January 1, 2017, appeared as follows: Common stock, $10 par, 10,000 shares issued and outstanding ……………… $100,000 Additional paid-in capital …………………………………………………………………………. 50,000 Re
> The following transactions are for Weber Corporation in 2017: a. On March 1, the corporation was organized and received authorization to issue 5,000 shares of 8%, $100 par value preferred stock and 2,000,000 shares of $10 par value common stock. b. On Ma
> Horace Company had the following transactions during 2017, its first year of business. a. Issued 5,000 shares of $5 par common stock for cash at $15 per share. b. Issued 7,000 shares of common stock on May 1 to acquire a factory building from Barkley Co
> Assume that the following amounts are known for Colten Company for the current year: Retained Earnings, beginning balance ………………………………………… $210,000 Retained Earnings, ending balance ……………………………………………… 250,000 Net income …………………………………………………………………………………..
> Assume that the following amounts are known for Miles Company for the current year: Retained Earnings, beginning balance …………………………………………… $420,000 Retained Earnings, ending balance ………………………………………………… 500,000 Cash dividends declared …………………………………………………
> Clifford Company’s comparative balance sheet included dividends payable of $80,000 at December 31, 2016, and $100,000 at December 31, 2017. Dividends declared by Clifford during 2017 amounted to $400,000. Required: 1. Calculate the amount of dividends a
> The Stockholders’ Equity category of Zache Company’s balance sheet appears below. Common stock, $10 par, 10,000 shares issued, 9,200 outstanding ……………………. $? Additional paid-in …………………………………………………………………………………… capital? Total contributed capital ……………………
> Armstrong Aero Ace, a flight training school, issued $100,000 of 20-year bonds at face value when the market rate was 10%. The bonds have been outstanding for ten years. The company pays annual interest on January 1. The current rate for similar bonds is
> Assume that you are a loan officer in charge of reviewing loan applications from potential new clients at a major bank. You are considering an application from Molitor Corporation, which is a fairly new company with a limited credit history. It has provi
> Following are excerpts from the notes that accompanied the financial statements of Hewlett- Packard for the year ended October 31, 2015. HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Note 17: Litigation and Contingencies In re HP Securities Litigat
> Kathy Clark owns a small company that makes ice machines for restaurants and food-service facilities. Kathy knows a great deal about producing ice machines but is less familiar with the best terms to extend to her customers. One customer is opening a new
