Tony and Suzie graduate from college in May 2024 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they’ll hold their first adventure races. These races will involve four person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts. On July 1, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 20,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as copresidents of the company. The following business activities occur during July for Great Adventures. July 1 Sell $10,000 of common stock to Suzie. July 1 Sell $10,000 of common stock to Tony. July 1 Purchase a one-year insurance policy for $4,800 ($400 per month) to cover injuries to participants during outdoor clinics. July 2 Pay legal fees of $1,500 associated with incorporation. July 4 Purchase office supplies of $1,800 on account. July 7 Pay $300 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic. July 8 Purchase 10 mountain bikes, paying $12,000 cash. July 15 On the day of the clinic, Great Adventures receives cash of $2,000 from 40 bikers. Tony conducts the mountain biking clinic. July 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,300. July 24 Pay $700 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $100 in advance or $150 on the day of the clinic. July 30 Great Adventures receives cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic. Required: 1. Record each transaction in July for Great Adventures. [Note: These same transactions can be assigned as part of a more complete accounting cycle in Chapter 3’s RWP3–1.] 2. Post each transaction to T-accounts. 3. Prepare a trial balance.
> Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $5,500,000; and Retained Earnings, $3,000,000. Net income for the
> Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $5,500,000; and Retained Earnings, $3,000,000. Net income for the year ended Decembe
> Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2024. Power Drive has the following transactions affecting stockholders’ equity in 2
> On February 3, a company provides services on account for $25,000, terms 2/10, n/30. On February 9, the company receives payment from the customer for those services on February 3. Record the service on account on February 3 and the collection of cash on
> On January 1, 2024, Beaver Tours financed the purchase of a new building by borrowing $600,000 from the bank using a 30-year, 6% note payable. Payments of $3,597.30 are due at the end of each month, with the first installment due on January 31, 2024. Rec
> On December 18, Intel receives $260,000 from a customer as down payment on a total sale of $2.6 million for computer chips to be completed on January 23. On January 23, the computer chips were delivered and the remaining cash was received from the custom
> On April 1, 2024, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments is $100,000. Record the lease.
> Universal Sports Supply began the year with an accounts receivable balance of $200,000 and a year-end balance of $220,000. Credit sales of $750,000 generate a gross profit of $250,000. Calculate the receivables turnover ratio for the year.
> If sales are $1,150,000 in 2025 and this represents a 15% increase over sales in 2024, what were sales in 2024?
> Sales are $2.6 million in 2023, $2.7 million in 2024, and $2.5 million in 2025. What is the percentage change from 2023 to 2024? What is the percentage change from 2024 to 2025? Be sure to indicate whether the percentage change is an increase or a decrea
> Wendy Day Kite Company owns 40% of the outstanding stock of Strong String Company. During the current year, Strong String reported net income of $15 million. What effect does Strong String’s reported net income have on Wendy Day’s financial statements?
> Athletic World reports the following vertical analysis percentages. Did Athletic World’s income before tax as a percentage of sales increase, decrease, or stay the same? If net income as a percentage of sales increases, does that mean n
> Using the information presented in BE12–1, perform a horizontal analysis providing both the amount and percentage change. Data from BE12-1: Perform a vertical analysis on the following information.
> Classify each of the following accounting practices as conservative or aggressive. 1. Increase the allowance for uncollectible accounts. 2. When costs are rising, change from LIFO to FIFO. 3. Change from declining-balance to straight-line depreciation in
> Perform a vertical analysis on the following information.
> On April 1, 2023, Teleworks Company lent $100,000 to IT Industries. IT Industries pays back in full the note plus 10% interest on April 1, 2024. Determine the investing cash flows to be reported by Teleworks Company in 2024.
> Refer to the situation described in BE11–9. Determine the financing cash flows to be reported by IT Industries in 2024. Data from BE11-9: On April 1, 2023, Teleworks Company lent $100,000 to IT Industries. IT Industries pays back in full the note plus 1
> Technologies Worldwide purchased land for $850,000 in 2023 with the intent to expand operations. In 2024, the company decides the land is no longer needed, and the land is sold for $900,000. Determine the investing cash flows to be reported in 2024. Dete
> Rachel’s Designs has 2,000 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2022. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2022 or 2023. The compan
> Refer to the information in BE10-12. Determine the financial statement effects for (1) the declaration of dividends on October 1 and (2) the payment of dividends on October 31. Data from BE10-12: Divine Apparel has 4,000 shares of common stock outstandi
> Refer to the information in BE10-10. Determine the financial statement effects of the sale of treasury stock. Data from BE10-10: Refer to the situation described in BE10-8. Record the transaction if California Surf resells the 100 shares of treasury sto
> On December 29, 2024, Adams Apples purchased 1,000 shares of General Electric common stock for $19 per share. On December 31, the market value of the stock increased to $20 per share. On January 24, 2025, all of the shares are sold for $16 per share. Rec
> Refer to the information in BE10-9. Determine the financial statement effects of the sale of treasury stock. Data from BE10-9: Refer to the situation described in BE10–8. Record the transaction if California Surf resells the 100 shares of treasury stock
> Refer to the information in BE10-8. Determine the financial statement effects of the purchase of treasury stock. Data from BE10-8: California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 per share. Later in the year, the
> Refer to the information in BE10-3. Determine the financial statement effects of the issuance of common stock. Data from BE10-3: Western Wear Clothing issues 3,000 shares of its $0.01 par value common stock to provide funds for further expansion. Assumi
> Diamond Dresses began the year with a balance of $425,000 in Retained Earnings. During the year, the company had net income of $100,000 and declared no dividends. (a) Calculate the ending balance of Retained Earnings. (b) Now assume the company declared
> Refer to the situation described in BE10-8. Record the transaction if California Surf resells the 100 shares of treasury stock at $35 per share. Data from BE10-8: California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $35 p
> Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2024. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31. 1. Record the bond
> Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2024. Interest is paid semiannually on June 30 and December 31. 1. Record the bond issue on January 1, 2024. 2. Record the first interest payment on June
> Refer to the information in BE9–8. Determine the financial statement effects of (1) the bond issue on January 1, 2024, and (2) the first interest payment on June 30, 2024. Data from BE9-8: Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount
> Refer to the information in BE9–5. Determine the financial statement effects of the lease. Data from BE9-5: On April 1, 2024, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments is $100,000. Record t
> Refer to the information in BE9–1. Determine the financial statement effects of the issuance of the installment note and the first monthly payment. Data from BE 9-1: On January 1, 2024, Corvallis Carnivals borrows $30,000 to purchase a delivery truck by
> On December 29, 2024, Adams Apples purchased 1,000 shares of General Electric common stock for $19 per share. On December 31, the market value of the stock increased to $20 per share. On January 24, 2025, all of the shares are sold for $22 per share. Rec
> Surf’s Up, a manufacturer of surfing supplies and training equipment, has the following selected data ($ in millions): Based on these amounts, calculate the following ratios for 2024: 1. Debt to equity ratio. 2. Return on assets ratio.
> Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1, 2024. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31. 1. Record the bond
> On September 1, 2024, Southwest Airlines borrows $41 million, and records the full amount as Notes Payable (long-term). On December 31, 2024 (balance sheet date), Southwest determines $10 million of the note is due next year, while the remaining $31 mill
> Refer to the information in BE8–11. Determine the financial statement effects of accounting for expected future warranty costs. Data from BE8-11: Sony introduces a new compact music player that carries a two-year warranty against manufacturer’s defects.
> Refer to the information in BE8–8. Determine the financial statement effects of sales and sales tax payable. Data from BE8-8: During December, Far West Services makes a credit sale of $3,200 (before sales taxes). The state sales tax rate is 6% and the l
> Refer to the information in BE8–6. Determine the financial statement effects of (1) the collection of the down payment on December 18 and (2) the delivery of inventory and collection of remaining cash on January 23. Data from BE8-6: On December 18, Inte
> Refer to the information in BE8–1. Determine the financial statement effects of (1) the issuance of the note and (2) the adjusting entry for interest owed by December 31, the end of the reporting period. Data from BE8-1: On November 1, Bahama Cruise Lin
> On September 1, 2024, Southwest Airlines borrows $41 million, of which $10 million is due next year. Show how Southwest Airlines would report the $41 million debt on its December 31, 2024, balance sheet.
> El Tapitio purchased restaurant furniture on September 1, 2024, for $45,000. Residual value at the end of an estimated 10-year service life is expected to be $6,000. Calculate depreciation expense for 2024 and 2025, using the straight-line method and ass
> Refer to the information in BE7–16. Determine the financial statement effects of the gain or loss on the sale of the equipment. Data from BE7-16: Piper’s Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and de
> A company purchases a small office building as its new headquarters. The building cost $750,000. To purchase the building, the company issues a 15-year installment note with 5% interest. The company is considering two options: a. Pay $0 down and make mon
> Refer to the information in BE7–15. Determine the financial statement effects of the gain or loss on the sale of the equipment. Data from BE7-15: Granite Stone Creamery sold ice cream equipment for $16,000. Granite Stone originally purchased the equipme
> Refer to the information in BE7–12. Determine the financial statement effects of depreciation using the activity-based method. Data from BE7-12: Refer to the information in BE7-10. In addition, assume the machine operated for an additional 3,400 hours i
> Refer to the information in BE7–11. Determine the financial statement effects of depreciation for each of the first two years using the straight-line method. Data from BE7-11: Refer to the information in BE7-10. Record depreciation expense for each of t
> Refer to the information in BE7–1. Determine the financial statement effects of the purchase of land. Data from BE7-1: Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $490,000. In addition to the purchase price, FVI makes the following exp
> Refer to the information in BE7-10. In addition, assume the machine operated for an additional 3,400 hours in the second year. Record depreciation expense for the first two years using the activity-based method. Data from BE7-10: On January 1, Hawaiian
> Suppose an auditor has been paid $1,000,000 each year for the past several years by a company to perform the audit of its annual financial statements. This company is the auditor’s largest client. In the current year, the auditor notices that the prelimi
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Facebook for the year ended December 31, 2019. Locate the “Consolidated Statements of Income” and “Consolidated Balance Sheets” and answer the foll
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Which company reports higher total assets? 2. Which company r
> Financial information for Buckle. Required: 1. Determine the amounts Buckle reports for total assets, total liabilities, and total stockholders’ equity in the balance sheet for the most recent year. Verify that the basic accounting equation balances. 2.
> Refer to the information in BE7-10. Record depreciation expense for each of the first two years using the straight-line method. Data from BE7-10: On January 1, Hawaiian Specialty Foods purchased equipment for $30,000. Residual value at the end of an est
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. Determine the amounts American Eagle reports for total assets, total liabilities, and total stockholders’ equity in the balance sheet for the most re
> Tony Matheson plans to graduate from college in May 2024 after spending four years earning a degree in sports and recreation management. Since beginning T-ball at age five, he’s been actively involved in sports and enjoys the outdoors. Each summer growin
> After years of steady growth in net income, Performance Drug Company reported a preliminary net loss in 2024. The CEO, Joe Mammoth, notices the following estimates are included in reported performance: 1. Warranty expense and liability for estimated futu
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Dick’s Sporting Goods for the year ended February 1, 2020. Locate the “Consolidated Statements of Income” (income statement) and “Consolidated Bala
> Financial information for American Eagle is presented and financial information for Buckle is presented. Required: 1. Calculate the following risk ratios for both companies for the most recent year. Based on these calculations, which company appears to b
> Income statement and balance sheet data for Great Adventures, Inc., are provided below. As you can tell from the financial statements, 2025 was an especially busy year. Tony and Suzie were able to use the money received from borrowing and the issuance of
> Bryan Eubank began his accounting career as an auditor for a Big 4 CPA firm. He focused on clients in the high-technology sector, becoming an expert on topics such as inventory write downs, stock options, and business acquisitions. Impressed with his tec
> Why can’t we pay our shareholders a dividend?” shouts your new boss at Polar Opposites. “This income statement you prepared for me says we earned $5 million in our first year!” You r
> Aggressive Corporation approaches Matt Taylor, a loan officer for Oklahoma State Bank, seeking to increase the company’s borrowings with the bank from $100,000 to $200,000. Matt has an uneasy feeling as he examines the loan application
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Alphabet Inc. for the year ended December 31, 2019. Locate the “Consolidated Statements of Cash Flows” and the “Consolidated Balance Sheets.” You m
> On January 1, Hawaiian Specialty Foods purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is expected to be $3,000. The machine operated for 3,100 hours in the first year, and the company expects the machine
> Financial information for American Eagle book, and financial information for Buckle is presented. Required: 1. Calculate American Eagle’s cash return on assets, cash flow to sales, and asset turnover ratio. 2. Calculate Buckle’s cash return on assets, ca
> Financial information for Buckle is presented. Required: 1. What was the amount of increase or decrease in cash and cash equivalents for the most recent year? 2. What was net cash from operating activities for the most recent year? Is net cash from opera
> Financial information for American eagle is presented. Required: 1. What was the amount of increase or decrease in cash and cash equivalents for the most recent year? 2. What was net cash from operating activities for the most recent year? Is net cash fr
> The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below. Additional Information for 2025: 1. Land of $500,000 was obtained by issuing a note payable to the seller. 2.â€&
> Renegade Clothing is struggling to meet analysts’ forecasts. It’s early December 2024, and the year-end projections are in. Listed below are the projections for the year ended 2024 and the comparable actual amounts for
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Abercrombie & Fitch Co. for the year ended February 1, 2020. Locate the “Consolidated Statements of Operations and Comprehensive Income” (income st
> Financial information for American Eagle and financial information for Buckle is presented. Required: 1. Calculate the return on equity for American Eagle and Buckle for the most recent year. Which company is more profitable? 2. Determine the amount repo
> Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million,
> Adrenaline Entertainment is struggling financially and its CFO, David Plesko, is starting to feel the heat. Back on January 1, 2020, Adrenaline Entertainment issued $100 million of 6% bonds, due in 15 years, with interest payable semiannually on June 30
> The Tony Hawk Skate Park was built in early 2024. The construction was financed by a $3,000,000, 7% note due in six years, with payments of $51,147 required each month. The first year has not been as profitable as hoped. The discussion at the executive b
> Refer to the information in BE6–14. Record any necessary adjusting entry for the lower of cost and net realizable value. Data from BE6-14: Powder Ski Shop reports inventory using the lower of cost and net realizable value (NRV). Inform
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Six Flags Entertainment Corporation for the year ended December 31, 2019. Locate the “Consolidated Statement of Operations” (income statement) and
> Financial information for American Eagle and financial information for Buckle is presented. Required: 1. Calculate the debt to equity ratio for American Eagle and Buckle for the most recent year. Which company has the riskier ratio? Compare your calculat
> Financial information for Buckle is presented. Required: 1. Calculate the debt to equity ratio for the past two years. Did the ratio increase or decrease in the more recent year? 2. Calculate the return on assets for the most recent year. Does the return
> Financial information for American Eagle is presented. Required: 1. Calculate the debt to equity ratio for the past two years. Did the ratio increase or decrease the more recent year? 2. Calculate the return on assets for the most recent year. Does the r
> Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and sa
> Quattro Technologies, a hydraulic manufacturer in the aeronautics industry, has reported steadily increasing net income over the past few years. The company reported net income of $120 million in 2022 and $140 million in 2023. The stock is receiving incr
> Western Manufacturing is involved with several potential contingent liabilities. Your assignment is to draft the appropriate accounting treatment for each situation described below. Western’s fiscal year-end is December 31, 2024, and the financial statem
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Target Corporation for the year ended February 1, 2020. Locate the “Consolidated Statements of Financial Position” (balance sheet). You may also fi
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Calculate the current ratio for both companies for the most r
> Financial information for Buckle is presented. Required: 1. Calculate the current ratio for the past two years. Did the current ratio improve or weaken in the more recent year? 2. Calculate the acid-test (quick) ratio for the past two years. Did the acid
> Refer to the information in BE5–6. Determine the financial statement effects of collecting cash from an account previously written off as uncollectible. Data from BE 5-6: Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. Calculate the current ratio for the past two years. Did the current ratio improve or weaken in the more recent year? 2. Calculate the acid-test (quic
> At the end of 2025, the following information is available for Great Adventures. • Additional interest for five months needs to be accrued on the $30,000, 6% note payable obtained on August 1, 2024. Recall that annual interest is paid each July 31. • A
> At a recent luncheon, you were seated next to Mr. Fogle, the president of a local company that manufactures food processors. He heard you were in a financial accounting class and asked: “Why is it that I’m forced to record depreciation expense on my prop
> Companies often are under pressure to meet or beat Wall Street earnings projections in order to increase stock prices and also to increase the value of stock options. Such pressure may cause some managers to alter their estimates for depreciation to arti
> Using EDGAR (Electronic Data Gathering, Analysis, and Retrieval system), find the annual report (10-K) for Facebook for the year ended December 31, 2019. Locate the “Consolidated Statements of Income” (income statement) and “Consolidated Balance Sheets.”
> Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Calculate American Eagle’s return on assets, profit margin, a
> Financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. The summary of significant accounting policies is located in note A to the financial statements. Locate the section on property and equipment. What depreciat
> Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2025, for $12,000. They expect to use the Suburban for five years and then sell the vehicle for $4,500
> Horizon Corporation manufactures personal computers. The company began operations in 2012 and reported profits for the years 2015 through 2022. Due primarily to increased competition and price slashing in the industry, 2023’s income statement reported a
> Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent? 2. American Eagle refers to its cost
> Refer to the information in BE5–4. Determine the financial statement effects of the adjusting entry to allow for uncollectible accounts. Data from BE 5-4: At the end of the first year of operations, Mayberry Advertising had accounts receivable of $20,00
> Presented below is a partial amortization schedule for a three-year installment note requiring monthly payments of $1,128.11. 1. What is the principal amount of the note? 2. What is the total number of monthly payments? 3. What is the total cash paid ove
> Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watch
