Questions and Answers of Financial Accounting 13th Edition

Explain ratio analysis and its uses?
Explain vertical analysis and its uses?
Explain horizontal analysis and its uses?
Explain why financial statement analysis is important to users of financial statements?
Explain how to prepare the statement of cash flows?
Describe the difference between the direct method and the indirect method of preparing the statement of cash flows?
Describe the classification of cash flows from operating, investing, and financing activities?
Describe the purpose and importance of the statement of cash flows?
Explain the accounting for retained earnings?
Explain the accounting for dividends and stock splits?
Explain the accounting for treasury stock?
Explain the accounting for the major components of stockholders’ equity?
Define common terminology relating to stockholders’ equity?
Define the corporate form of organization?
Summarize the accounting for leases?
Explain the accounting for interest on bonds payable?
Explain the accounting for the issuance of bonds?
Define the types of bonds?
Explain the accounting for long-term and short-term notes payable?
Define the types of long-term liabilities?
Define the types of current liabilities and explain how they are recorded?
Explain the accounting for intangible assets?
Explain the accounting for plant and equipment disposals?
Explain the depreciation of plant and equipment?
Define plant, property, and equipment and how they are valued?
Explain how inventories are valued?– Specific identification method– Weighted average method– First-in, first-out (FIFO) method– Last-in, last-out (LIFO) method– Gross profit method
Explain methods for inventory accounting?– The perpetual inventory method– The periodic inventory method
Explain the purchasing and recording of inventory?
Define and compare inventories for merchandising and manufacturing companies?
Explain the accounting for notes receivables?
Explain the write-off of an account and subsequent recovery of a receivable?
Explain the estimating and accounting for uncollectible receivables?
Define receivables?
Explain the accounting for warranties?
Explain the accounting for sales returns and allowances?
Explain the recording of credit sales?
Explain the accounting for and disclosure of investments, both long-term and short-term?
Explain accounting for petty cash?
Explain accounting procedures for cash and cash equivalents?
Discuss the managing of cash balances?
Present internal controls for cash and cash equivalents?
Explain the valuation and reporting of cash and cash equivalents?
Discuss the composition of cash and cash equivalents?
Describe specialized journals?
Explain how to make closing entries?
Explain how to make adjusting entries?
Explain how to take a trial balance?
Explain how to prepare the worksheet?
Define the accounting cycle?
Explain how to enter transactions into the journals and ledgers?
Explain how to analyze business transactions?
Introduce the structure of the accounting system?
Explain the double-entry accounting system?
Discuss the certification programs in the field of accounting?
Discuss the underlying concepts for preparing financial accounting and who determines these concepts?
Discuss the form of financial information provided to interested parties outside of the business?
Define the types of businesses and discuss the importance of financial accounting information to these business enterprises and their external users?
At December 31, 2021, Atlantic Corporation reported the stockholders’ equity accounts shown here (with dollar amounts in millions, except per-share amounts). Atlantic’s 2022 transactions
During the fourth quarter of 2021, Harvestology, Inc., generated excess cash, which the company invested in equity securities as follows: Requirements 1. Open T-accounts for Cash (including
Athens Company completed these long-term equity investment transactions during 2021: 1. Journalize Athens Company’s investment transactions. Explanations are not required.2. Assume the Techno
Use the data given in E-S-6. On May 21, 2022, Athens Company sold its investment in Techno mite stock for $28 per share.Data in E-S-6.Athens Company completed these long-term equity investment
On January 1, 2021, Western Motors paid $450 million for a 40% investment in Yaza Motors. Yaza earned net income of $65 million and declared and paid cash dividends of $45 million during 2021.1. What
On January 1, 2021, Downtown Industries purchased $8,000 of 4% JMK bonds at a price of 100 (par). Downtown intends to hold the bonds until their maturity date of January 1, 2024. The bonds pay
Brackett Insurance purchased $60,000 of 10% AMS bonds on January 1, 2021, at a price of 85 when the market rate of interest was 12%. Brackett intends to hold the bonds until their maturity date of
Using the data from E-S-12, calculate the amount of discount amortization (using the straight-line amortization method) on July 1, 2021, and record the related journal entry. What is the total
During the fourth quarter of 2021, Rainbarrel, Inc., generated excess cash, which the company invested in equity securities as follows:Requirements 1. Open T-accounts for Cash (including its
Using the data from E-S-12, make the adjusting entries that Brackett Insurance would need to make on December 31, 2021, related to the investment in AMS bonds. How would the bonds be reported on
Oregon Exchange Company completed the following long-term investment transactions during 2021: At year-end, the fair value of the Columbus stock is $30,100. The fair value of the Nashua stock is
Using the data from E-S-15, make the adjusting entries that Glimmer Pools would need to make on December 31, 2021, related to the investment in AKL bonds. How would the bonds be reported on Glimmer
Lancaster Corporation, an investment banking company, often has extra cash to invest. Suppose Lancaster buys 500 shares of Knight Corporation stock at $40 per share, representing less than 5% of
On September 30, 2021, Baytex, Inc., purchased 6.8% bonds of Whitmore Corporation at 98 as a long-term, held-to-maturity investment. The maturity value of the bonds will be $35,000 on September 30,
Illinois Exchange Company completed the following long-term investment transactions during 2021: At year-end, the fair value of the Amsterdam stock is $30,900. The fair value of the Exeter stock
On September 30, 2021, Rittex, Inc., purchased 5% bonds of McPhee Corporation at 97 as a long-term, held-to-maturity investment. The maturity value of the bonds will be $46,000 on September 30, 2026.
Insurance companies and pension plans hold large quantities of bond investments. Sea Insurance Corp. purchased $2,000,000 of 9% bonds of Sheehan, Inc., for 96 on January 1, 2021. These bonds pay
Pueblo, Inc., ended 2021 with 8 million shares of $1 par common stock issued and outstanding. On December 31, 2021, additional paid-in capital was $16 million, and retained earnings totaled $38
Parker Networking Solutions began operations on January 1, 2021, and immediately issued its stock, receiving cash. Parker’s balance sheet at December 31, 2021, reported the following
Specialties, Inc., reported the following statement of stockholders’ equity for the year ended October 31, 2021: RequirementsAnswer these questions about Patterson’s stockholders’ equity
Use the data from E-S-3 and E-S-4 for this exercise. Flores sells its entire investment of the Sherman common stock on November 22, 2022, for a total of $67,050. Record the entries for the
The following accounts and related balances of Cardinal Designers, Inc., as of December 31, 2021, are arranged in no particular order: Requirements 1. Prepare Cardinal’s classified
Assume Dotty Cakes, Inc., completed the following transactions during 2021, the company’s 10th year of operations: Requirements 1. Analyze each transaction in terms of its effect on the
Flores Company purchases 900 shares of Sherman Express common stock at the market price of $79.24 on March 23, 2021. (Flores’ investment in Sherman represents less than 5% of the outstanding stock
Madrid Jewelry Company reported the following summarized balance sheet at December 31, 2021: During 2022, Madrid Jewelry completed these transactions that affected stockholders’
Ahuja Specialties, Inc., reported the following statement of stockholders’ equity for the year ended October 31, 2021: Requirements Answer these questions about Ahuja’s stockholders’
Superior Outdoor Furniture Company included the following stockholders’ equity on its year-end balance sheet at February 28, 2022: Requirements1. Identify the different issues of stock that
The following accounts and related balances of Eagle Designers, Inc., as of December 31, 2021, are arranged in no particular order: Requirements1. Prepare Eagle’s classified balance sheet in
Assume Dessert Corner, Inc., completed the following transactions during 2021, the company’s 10th year of operations: Requirements 1. Analyze each transaction in terms of its effect on
Jubilee Jewelry Company reported the following summarized balance sheet at December 31, 2021: During 2022, Jubilee Jewelry completed these transactions that affected stockholders’
Virginia Company included the following items in its financial statements for 2021, the current year (amounts in millions): Requirements1. Use DuPont Analysis to calculate Virginia’s return on
Doorman Corp. has the following stockholders’ equity information: Doorman’s charter authorizes the company to issue 9,000 shares of 8% preferred stock with par value of $120 and 700,000 shares of
Seasonal Outdoor Furniture Company included the following stockholders’ equity on its year-end balance sheet at March 31, 2022: Requirements1. Identify the different issues of stock that
The stockholders’ equity section of the balance sheet for Yarrow Yogurt Company on August 12, 2022, follows: On August 12, 2022, the market price of Yarrow common stock was $18 per share.
Riverside Company reported the following items on its statement of shareholders’ equity for the year ended December 31, 2021 (amounts in thousands of dollars):Requirements1. Determine the December
At December 31, 2021, Creator Corporation reported the stockholders’ equity accounts shown here (with dollar amounts in millions, except per-share amounts).Creator’s 2022 transactions includeda.
Huron Manufacturing, Inc., reported the following at December 31, 2021, and December 31, 2022: Huron Manufacturing has paid all preferred dividends only through 2018. Requirement1.
Beluga Software had the following selected account balances at December 31, 2021 (all numbers and amounts are in thousands, except par value per share): Requirements 1. Prepare the
Lakeside Company reported the following items on its statement of shareholders’ equity for the year ended December 31, 2021 (amounts in thousands of dollars):Requirements1. Determine the December
The stockholders’ equity section of the balance sheet for Warren Corporation on August 16, 2022, follows: On August 16, 2022, the market price of Warren common stock was $20 per share. Warren
Bretton Software had the following selected account balances at December 31, 2021 (all numbers and amounts are in thousands, except par value per share): Requirements 1. Prepare the
Ontario Manufacturing, Inc., reported the following at December 31, 2021, and December 31, 2022: Ontario Manufacturing has paid all preferred dividends only through 2018. Requirement1.
To follow is a screenshot of the unformatted statement of stockholders’ equity for The J.M. Smucker Company.List the formatting changes you would make to the statement according to the 10 financial

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