Travel Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $23,000 to help organize the corporation. Travel also issued common stock to an inventor in exchange for his patent with a market value of $82,000. In addition, Travel received cash both for the issuance of 2,000 shares of its preferred stock at$120 per share and for the issuance of 22,000 of its common shares at $1 per share. During the first year of operations, Travel earned net income of $50,000 and declared a cash dividend of $29,000. Without making journal entries, determine the total paid-in capital created by these transactions.
> Consider FASB standards for mergers and acquisitions by not-for-profit organizations. Answer the following questions: a. What is the difference between a merger and an acquisition? b. What is the principal difference in the accounting treatment of as
> This exercise uses the same fact setting as Exercise 11-9 except that items 1 and 2 are changed to be consistent with a private institution. The Great Lakes Maritime Institute is a private not-for-profit institution preparing cadets for careers in commer
> GASB provides guidance for reporting by special-purpose entities. That guidance depends upon whether special-purpose entities are engaged in activities that are governmental-type, business-type only, or fiduciary-type only. Discuss the guidance and list
> Use the Littleton Company data in Exercise E9-34A to show how the company reported cash flows from financing activities during 2010 (the current year). List items in descending order from largest to smallest dollar amount. From exercise 34: Littleton Co
> Clublink Corp. had the following stockholders equity at October 31 (dollars in millions, except par value per share): On December 6, Clublink split its $1.50 par common stock 3-for-1. Requirement 1. Prepare the stockholders equity section of the balanc
> During 2010, Dwyer Corporation earned net income of $5.8 billion and paid off $2.4 billion of long-term notes payable. Dwyer raised $1.1 billion by issuing common stock, paid $3.5 billion to purchase treasury stock, and paid cash dividends of $1.6 billio
> Fools Gold, Inc., has the following stockholder’s equity: That company has passed its preferred dividends for three years including the current year. Compute the book value per share of the company common stock. Preferred stock, 4
> Access Garde, Inc., has 200,000 shares of $1.80 preferred stock outstanding in addition to its common stock. The $1.80 designation means that the preferred stockholders receive an annual cash dividend of $1.80 per share. In 2010, Access Garde declares an
> Sunset Drive-Ins Ltd. borrowed money by issuing $5,000,000 of 3% bonds payable at 36.5 on July 1, 2010. The bonds are 10-year bonds and pay interest each January 1 and July 1. 1. How much cash did Sunset receive when it issued the bonds payable? 2. How
> Genius Marketing Corporation reported the following stockholders equity at December 31 (adapted and in millions): During the next year, Genius Marketing purchased treasury stock at a cost of $29 million and resold treasury stock for $8 million (this tre
> Use the Mountainpeak Employment Services data in Short Exercise 9-8 to compute Mountainpeaks a. Net income. b. Total liabilities. c. Total assets (use the accounting equation).
> At fiscal yearend 2010, Horris Printer and Delectable Doughnuts reported these adapted amounts on their balance sheets (amounts in millions): Assume each company issued its stock in a single transaction. Journalize each companys issuance of its stock, u
> Assume Cookie Corner of Wisconsin, Inc., completed the following transactions during 2010, the company 10th year of operations: Requirement 1. Analyze each transaction in terms of its effect on the accounting equation of Cookie Corner of Wisconsin, Inc
> The following transactions of Harmony Music Company occurred during 2010 and 2011: Requirement 1. Record the transactions in Harmonys journal. Explanations are not required. 2010 Mar 3 Purchased a piano (inventory) for $70,000, signing a six-month,
> Use the Lawrence data in Exercise E9-50B to show how the company reported cash flows from financing activities during 2010 (the current year). List items in descending order from largest to smallest dollar amount. From exercise 50: Lawrence Company incl
> Griffin Corp. had the following stockholders equity at March 31 (dollars in millions, except par value per share): On May 3, Griffin split its $0.30 par common stock 3-for-1. Requirement 1. Prepare the stockholders equity section of the balance sheet
> Use the Eastern Corporation data in Exercise 9-41B to prepare the stockholders equity section of the company’s balance sheet at December 31, 2011. From exercise 41: At December 31, 2010, Eastern Corporation reported the stockholders eq
> The financial statements of Mountainpeak Employment Services, Inc., reported the following accounts (adapted, with dollar amounts in thousands except for par value): Prepare the stockholders equity section of Mountainpeaks balance sheet. Net income has
> Seasonal Outdoor Furniture Company included the following stockholders equity on its year-end balance sheet at February 28, 2011: Requirements 1. Identify the different issues of stock Seasonal Outdoor Furniture Company has outstanding. 2. Give the su
> Hearty Foods, Inc., is authorized to issue 5,000,000 shares of $2.00 par common stock. In its initial public offering during 2010, Hearty issued 500,000 shares of its $2.00 par common stock for $5.00 per share. Over the next year, Heartys stock price in
> The statement of cash flows of Frappe, Inc., reported the following (adapted) for the year ended December 31, 2010: Requirement 1. Make the journal entry that Frappe would use to record each of these transactions. Cash flows from financing activiti
> The following accounts and related balances of Seagull Designers, Inc., as of December 31, 2010, are arranged in no particular order. Requirements 1. Prepare Seagulls classified balance sheet in the account format at December 31, 2010. 2. Compute rate
> Assume Dessert Destination of Montana, Inc., completed the following transactions during 2010, the companys 10th year of operations: Requirement 1. Analyze each transaction in terms of its effect on the accounting equation of Dessert Destination of Mon
> Moscow Jewelry Company reported the following summarized balance sheet at December 31, 2010: During 2011, Moscow completed these transactions that affected stockholders equity: Requirements 1. Journalize Moscows transactions. Explanations are not requ
> Elegant Outdoor Furniture Company included the following stockholders equity on its year-end balance sheet at February 28, 2011: Requirements 1. Identify the different issues of stock Elegant Outdoor Furniture Company has outstanding. 2. Give the summ
> Good Foods, Inc., is authorized to issue 5,500,000 shares of $5.00 par common stock. In its initial public offering during 2010, Good issued 475,000 shares of its $5.00 par common stock for $7.00 per share. Over the next year, Goods stock price increase
> The statement of cash flows of Smoothie, Inc., reported the following (adapted) for the year ended December 31, 2010: Requirement 1. Make the journal entry that Smoothie would use to record each of these transactions. Cash flows from financing acti
> The following accounts and related balances of Hawk Designers, Inc., as of December 31, 2010, are arranged in no particular order. Requirements 1. Prepare Hawks classified balance sheet in the account format at December 31, 2010. 2. Compute rate of re
> GIT, Inc., issued $600,000 of 5%, 12-year bonds payable at a price of 77 on March 31, 2010. The market interest rate at the date of issuance was 8%, and the GIT bonds pay interest semiannually. 1. Prepare an effective-interest amortization table for the
> Garman Corp. has the following stockholders equity information: Garmans charter authorizes the company to issue 8,000 shares of 5% preferred stock with par value of $130 and 600,000 shares of no-par common stock. The company issued 1,600 shares of the pr
> London Jewelry Company reported the following summarized balance sheet at December 31, 2010: During 2011, London completed these transactions that affected stockholder’s equity: Requirements 1. Journalize Londons transactions. Explan
> The accounting records of Brilliant Foods, Inc., include the following items at December 31, 2010: Requirements 1. Show how each relevant item would be reported on the Brilliant Foods, Inc., classified balance sheet, including headings and totals for c
> Fitzpatrick Sporting Goods is embarking on a massive expansion. Assume plans call for opening 30 new stores during the next four years. Each store is scheduled to be 45% larger than the companys existing locations, offering more items of inventory, and w
> Holman Corp. has the following stockholders equity information: Holmans charter authorizes the company to issue 5,000 shares of 8% preferred stock with par value of $110 and 400,000 shares of no-par common stock. The company issued 1,000 shares of the p
> The partners who own Liard Canoes Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as Liard Canoes, Inc. The charter from the state of Texas authorizes the corporation to issue 5,000 shares of
> Requirements 1. Journalize the following transactions of Lamore Communications, Inc.: 2. At December 31, 2010, after all year-end adjustments, determine the carrying amount of Lamore Communications bonds payable, net. 3. For the six months ended July
> On February 28, 2010, Mackerel Corp. issues 6%, 20-year bonds payable with a face value of $1,800,000. The bonds pay interest on February 28 and August 31. Mackerel Corp. amortizes bonds by the straight-line method. Requirements 1. If the market intere
> The board of directors of Pictures Plus authorizes the issue of $6,000,000 of 8%, 15-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May 31, 2010, at par. Requirements 1. Journalize the following tr
> The following transactions of Soft Sounds Music Company occurred during 2010 and 2011: Requirement 1. Record the transactions in Soft Sounds Music Companys journal. Explanations are not required. 2010 Mar 3 Purchased a piano (inventory) for $30,000
> Deer Corp. issued 15-year bonds payable with a face amount of $80,000, when the market interest rate was 5.5%. Assume that the accounting year of Deer ends on December 31. Journalize the following transactions for Deer. Include an explanation for each en
> Sea Breeze Marine experienced these events during the current year. a. December revenue totaled $110,000, and in addition, Sea Breeze collected sales tax of 8%. The tax amount will be sent to the state of Georgia early in January. b. On August 31, Sea
> The accounting records of Barnstable Foods, Inc., include the following items at December 31, 2010: Requirements 1. Show how each relevant item would be reported on the Barnstable Foods, Inc., classified balance sheet, including headings and totals for
> Paulus Sporting Goods is embarking on a massive expansion. Assume plans call for opening 25 new stores during the next three years. Each store is scheduled to be 40% larger than the company’s existing locations, offering more items of inventory, and with
> The partners who own Cohen Canoes Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as Cohen Canoes Inc. The charter from the state of Utah authorizes the corporation to issue 9,000 shares of $
> Big Wave Marine experienced these events during the current year. a. December revenue totaled $120,000, and in addition, Big Wave collected sales tax of 5%. The tax amount will be sent to the state of Florida early in January. b. On August 31, Big Wave
> Requirements 1. Journalize the following transactions of Laporte Communications, Inc.: 2. At December 31, 2010, after all year-end adjustments, determine the carrying amount of Laporte Communications bonds payable, net. 3. For the six months ended Jul
> At December 31, 2010, Northeast Corporation reported the stockholders equity accounts shown here (with dollar amounts in millions, except per share amounts). Northeasts 2011 transactions included the following: a. Net income, $446 million. b. Issuance
> Journalize the following transactions of Aliant Productions: What was the overall effect of these transactions on Aliants stockholders equity? Jan 17 May 23 Jul 11 Issued 2,200 shares of $2.50 par common stock at $10 per share. Purchased 300 shares
> Patterson Software had the following selected account balances at December 31, 2010 (in thousands, except par value per share). Requirements 1. Prepare the stockholders equity section of Pattersons balance sheet (in thousands). 2. How can Patterson hav
> Answer the following questions about the characteristics of a corporations stock: 1. Who are the real owners of a corporation? 2. What privileges do preferred stockholders have over common stockholders? 3. Which class of stockholders reap greater bene
> Lawrence Company included the following items in its financial statements for 2010, the current year (amounts in millions): Requirement 1. Compute Lawrences return on assets and return on common equity during 2010 (the current year). Lawrence has no pr
> LaSalle Inns reported these figures for 2011 and 2010 (in millions): Requirement 1. Compute LaSalles return on assets and return on common stockholder’s equity for 2011. Do these rates of return suggest strength or weakness? Give your
> The balance sheet of Eclectic Rug Company reported the following: Requirements 1. Compute the book value per share for the common stock, assuming all preferred dividends are fully paid up (none in arrears). 2. Compute the book value per share of the c
> The stockholders equity for Icy Pop Drive-Ins (IP) on December 31, 2010, follows: On August 15, 2011, the market price of IP common stock was $15 per share. Assume IP distributed a 20% stock dividend on this date. Requirements 1. Journalize the distri
> At December 31, 2010, Eastern Corporation reported the stockholders equity accounts shown here (with dollar amounts in millions, except per share amounts). Easterns 2011 transactions included the following: a. Net income, $447 million. b. Issuance of
> Journalize the following assumed transactions of Applebug Productions: What was the overall effect of these transactions on Applebugs stockholders equity? Issued 2,400 shares of $1.50 par common stock at $7 per share. Purchased 800 shares of treasur
> Bukala Software had the following selected account balances at December 31, 2010 (in thousands, except par value per share): Requirements 1. Prepare the stockholders equity section of Bukala Softwares balance sheet (in thousands). 2. How can Bukala ha
> Journey Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $24,000 to help organize the corporation. Journey also issued common stock to an inventor in exchange for his patent with a market
> Honcho Sporting Goods is authorized to issue 7,000 shares of preferred stock and 16,000 shares of common stock. During a two-month period, Honcho completed these stock issuance transactions: Requirement 1. Prepare the stockholders equity section of the
> Sweet & Sour, Inc., is authorized to issue 110,000 shares of common stock and 5,000 shares of preferred stock. During its first year, the business completed the following stock issuance transactions: Requirements 1. Journalize the transactions. Exp
> Amazon.com s consolidated financial statements appear in Appendix A at the end of this book. 1. Refer to the Consolidated Balance Sheets and Note 8 (Stockholders Equity). Describe the classes of stock that Amazon.com, Inc., has authorized. How many share
> Littleton Company included the following items in its financial statements for 2010, the current year (amounts in millions): Requirement 1. Compute Littletons return on assets and return on common equity during 2010 (the current year). Littleton has no
> Luna Inns reported these figures for 2011 and 2010 (in millions): Requirement 1. Compute Lunas return on assets and return on common stockholder’s equity for 2011. Do these rates of return suggest strength or weakness? Give your reaso
> The balance sheet of Luxury Rug Company reported the following: Requirements 1. Compute the book value per share for the common stock, assuming all preferred dividends are fully paid up (none in arrears). 2. Compute the book value per share of the com
> The stockholders equity for Heavenly Desserts Drive-Ins (HD) on December 31, 2010, follows: On May 11, 2011, the market price of HD common stock was $19 per share. Assume HD distributed a 15% stock dividend on this date. Requirements 1. Journalize the
> Clubhouse, Inc., ended 2010 with 7 million shares of $1 par common stock issued and outstanding. Beginning additional paid-in capital was $10 million, and retained earnings totaled $35 million. In April 2011, Clubhouse issued 5 million shares of common
> Space Walk Corporation reported the following stockholders equity data (all dollars in millions except par value per share): Space Walk earned net income of $2,980 during 2010. For each account except Retained Earnings, one transaction explains the chan
> Use the D-4 Networking Solutions data in Exercise 9-52 to show how the company reported cash flows from financing activities during 2010. From exercise 52: D-4 Networking Solutions began operations on January 1, 2010, and immediately issued its stock, r
> D-4 Networking Solutions began operations on January 1, 2010, and immediately issued its stock, receiving cash. D-4s balance sheet at December 31, 2010, reported the following stockholders equity During 2010, D-4 a. Issued stock for $3 per share. b. P
> Army Navy Sporting Goods is authorized to issue 10,000 shares of preferred stock and 19,000 shares of common stock. During a two-month period, Army Navy completed these stock-issuance transactions: Requirement 1. Prepare the stockholders equity section
> This (adapted) advertisement appeared in the Wall Street Chronicle. (Note: A subordinated debenture is an unsecured bond payable whose rights are less than the rights of other bondholders.) Requirements 1. Journalize Holidays issuance of these bonds
> This case is based on the consolidated financial statements of Foot Locker, Inc., given in Appendix B at the end of this book. In particular, this case uses Foot Locker, Inc.s consolidated statement of shareholder’s equity for the year 2007. (Note: The S
> Great Brands completed one of the most famous debt refinancing in history. A debt refinancing occurs when a company issues new bonds payable to retire old bonds. The company debits the old bonds payable and credits the new bonds payable. Great Brands had
> The top management of Pratt Marketing Services examines the following company accounting records at August 29, immediately before the end of the year, August 31: Suppose Pratts management wants to achieve a current ratio of 2.25. How much in current lia
> First Federal Financial Services is considering two plans for raising $600,000 to expand operations. Plan A is to borrow at 5%, and plan B is to issue 100,000 shares of common stock at $6.00 per share. Before any new financing, First Federal Financial Se
> Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare three leading companies on their current ratio, debt ra
> Worldview Imaging Ltd. issued $3,600,000 of 9% notes payable on December 31, 2010, at a price of 94. The notes term maturity is 10 years. After four years, the notes may be converted into Worldview common stock. Each $1,000 face amount of notes is conver
> Eerie Manufacturing, Inc., reported the following: Eerie Manufacturing has paid all preferred dividends through 2007. Requirement 1. Compute the total amounts of dividends to both preferred and common for 2010 and 2011 if total dividends are $100,000
> Supreme Products Company reported the following stockholders equity on its balance sheet: Requirements 1. What caused Supremes preferred stock to decrease during 2011? Cite all possible causes. 2. What caused Supremes common stock to increase during 2
> Bread & Butter, Inc., is authorized to issue 120,000 shares of common stock and 7,000 shares of preferred stock. During its first year, the business completed the following stock issuance transactions: Requirements 1. Journalize the transactions. E
> Commonwealth Bank has $400,000 of 9% debenture bonds outstanding. The bonds were issued at 104 in 2010 and mature in 2030. Requirements 1. How much cash did Commonwealth Bank receive when it issued these bonds? 2. How much cash in total will Commonwea
> On January 31, Daughtry Logistics, Inc., issued five-year, 5% bonds payable with a face value of $11,000,000. The bonds were issued at 95 and pay interest on January 31 and July 31. Daughtry Logistics, Inc., amortizes bond discounts by the straight-line
> St. Genevieve Petroleum Company is an independent oil producer in Baton Parish, Louisiana. In February, company geologists discovered a pool of oil that tripled the company’s proven reserves. Prior to disclosing the new oil to the public, St. Genevieve q
> Assume Five Mile Electronics completed these selected transactions during September 2010. a. Sales of $2,150,000 are subject to estimated warranty cost of 5%. The estimated warranty payable at the beginning of the year was $33,000, and warranty payments
> Peterson Security Systems revenues for 2010 totaled $26.2 million. As with most companies, Peterson is a defendant in lawsuits related to its products. Note 14 of the Peterson Annual Report for 2010 reported the following: Requirements 1. Suppose Peter
> New Planet Structures, Inc., builds environmentally sensitive structures. The company’s 2010 revenues totaled $2,815 million, and at December 31, 2010, the company had $654 million in current assets. The December 31, 2010 and 2009, bala
> At December 31, 2010, Saglio Real Estate reported a current liability for income tax payable of $190,000. During 2011, Saglio earned income of $1,500,000 before income tax. The companys income tax rate during 2011 was 25%. Also during 2011, Saglio paid i
> Assume that Concilio Company completed the following note-payable transactions: Requirements 1. How much interest expense must be accrued at December 31, 2010? (Round your answer to the nearest whole dollar.) 2. Determine the amount of Concilios final
> Potvin Talent Search has an annual payroll of $160,000. In addition, the company incurs payroll tax expense of 9%. At December 31, Potvin owes salaries of $7,900 and FICA and other payroll tax of $850. The company will pay these amounts early next year.
> Trevor Publishing completed the following transactions for one subscriber during 2010: Requirement 1. Journalize these transactions (explanations not required). Then report any liability on the company’s balance sheet at December 31.
> The accounting records of Made from Clay Ceramics included the following balances at the end of the period: In the past, Made from Clays warranty expense has been 4% of sales. During 2010 the business paid $5,000 to satisfy the warranty claims. Require
> First Bank Financial Services is considering two plans for raising $800,000 to expand operations. Plan A is to borrow at 10%, and plan B is to issue 200,000 shares of common stock at $4.00 per share. Before any new financing, First Bank Financial Service
> Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Compare three leading companies on their current ratio, debt r
> United Parcel Service (UPS), Inc., had the following stockholders equity amounts on December 31, 2010 (adapted, in millions): During 2010, UPS paid a cash dividend of $0.715 per share. Assume that, after paying the cash dividends, UPS distributed a 10%
> Coastalview Imaging Ltd. issued $3,300,000 of 6% notes payable on December 31, 2010, at a price of 95. The notes term to maturity is 20 years. After four years, the notes may be converted into Coastalview common stock. Each $1,000 face amount of notes is
> Huron Manufacturing, Inc., reported the following: Huron Manufacturing has paid all preferred dividends through 2007. Requirement 1. Compute the total amounts of dividends to both preferred and common for 2010 and 2011 if total dividends are $60,000 i
> Theta Products Company reported the following stockholders equity on its balance sheet: Requirements 1. What caused Thetas preferred stock to decrease during 2011? Cite all possible causes. 2. What caused Thetas common stock to increase during 2011? I
> Use the Northeast Corporation data in Exercise 9-25A to prepare the stockholders equity section of the company’s balance sheet at December 31, 2011. From exercise 25: At December 31, 2010, Northeast Corporation reported the stockholder
> Federal Bank has $500,000 of 7% debenture bonds outstanding. The bonds were issued at 103 in 2010 and mature in 2030. Requirements 1. How much cash did Federal Bank receive when it issued these bonds? 2. How much cash in total will Federal Bank pay th
> On January 31, Driftwood Logistics, Inc., issued 10-year, 6% bonds payable with a face value of $13,000,000. The bonds were issued at 94 and pay interest on January 31 and July 31. Driftwood Logistics, Inc., amortizes bonds by the straight-line method. R
