Questions and Answers of Financial Accounting 6th Edition

Squirrel Tree Services reports the following amounts on December 31, 2024.In addition, the company reported the following cash flows.Required:1. Prepare a balance sheet.2. Prepare a statement of cash
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
What are the three components/aspects of relevance? What are the three components/aspects of faithful representation?
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
Suppose a local company has the following balance sheet accounts:Calculate the missing amounts assuming the business has total assets of $37,500. Accounts Land Equipment Salaries Payable Notes
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
Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2024, the company reports the following amounts:In addition, the company had
Refer to the data for Hartgraves Company in Mini Exercise 12-20. Assume that when the shares were purchased, management did not intend to sell the stock in the near future. Record the transactions
Demski, Inc., manufactures heating and cooling systems. It has a 75% interest in Asare Company, which manufactures thermostats, switches, and other controls for heating and cooling products. It also
Doug Stevens, controller of Nexgen, Inc., has asked his assistant, Gayle Sayres, for suggestions as to how the company can improve its reported financial performance for the year. The company is in
Apple Inc., is one of the most successful enterprises of all time. Its computers, tablets, phones, and watches are all highly desired by consumers, and the company's product innovations keep arriving
Caterpillar Inc., consists of two business units: the manufacturing company (parent corporation) and a wholly owned finance subsidiary. These two units are consolidated in Caterpillar's 2018 10-K
On January 2, 2019, Magee, Inc., purchased, as a stock investment, 20,000 shares of Dye, lnc.'s common stock for $21 per share, including commissions and taxes. On December 31, 2019, Dye announced a
Columbia Company began operations in 2019 and by year-end (December 31) had made six bond investments. Year-end information on these bond investments follows.dfsdfREQUIREDa. At what total amount will
On January 1, 2016, Gem Company purchased for $392,000 cash a 70% stock interest in Alpine, Inc., which then had common stock of $420,000 and retained earnings of $140,000. Balance sheets of the two
Following is a portion of the investments footnote 8 from MetLife lnc.'s 2017 10-K report. Investment earnings are a crucial component of the financial performance of insurance companies such as
Hewlett Packard Enterprise Company reports the following information on its cash-flow hedges (derivatives) in comprehensive income (net income plus other comprehensive income) in its 201810-K
Refer to the Easton Company acquisition described in E12-42. Instead of a 100% acquisition, assume that Easton purchased 40% of the outstanding shares of Harris Company on January I , 2019, for
Easton Company acquires 100% of the outstanding voting shares of Harris Company on January 1, 2019. To obtain these shares, Easton pays $210,000 in cash and issues 5,000 of its $10 par value common
Rayburn Company purchased all of Kanodia Company's common stock for cash on January 1, which time the separate balance sheets of the two corporations appeared as follows:During purchase negotiations,
On January 1, 2019, Engel Company purchases 100% of Ball Company for $16.8 million. At the time of acquisition, Ball's stockholders' equity (and the fair value of its identifiable net assets) is
On January 1 of the current year, Healy Company purchased all of the common shares of Miller Company for $500,000 cash. Balance sheets of the two firms at acquisition follow.During purchase
Merck & Co., Inc., reports a December 31, 2016, balance of $715 million in "Investments in affiliates accounted for using the equity method" ("Investments in affiliates"). Provide the entries for
Kasznik Company began operations on January 2, 2019, and by year-end (December 31) had made the following investments in financial securities. Year-end information on these investments follows.a. At
During 2017, Amazon.com, Inc., made two significant acquisitions intending to expand the company's retail presence. On May 12, 2017, Amazon acquired Souq Group Ltd. ("Souq"), an e-commerce company,
Refer to the data for Guay Company in Exercise 12-35. Assume that Guay Company reports under International Financial Reporting Standards (IFRS). Under IFRS, Guay can designate an equity investment
Guay Company had the following transactions and adjustment related to a passive equity investment.2019Nov. 15 Purchased 5,000 shares of Core, Inc.'s common stock at $16 per share plus a
On August 21, 2017, upon the completion of a tender offer, Intel Corporation acquired 97.3% of the outstanding ordinary shares of Mobileye. This acquisition "combines Mobileye's leading computer
On January 1, 2019, Ball Corporation purchased, as a stock investment, 10,000 shares of Leftwich Company common stock for $15 cash per share. On December 31, 2019, Leftwich announced net income of
The following transactions involve investments in marketable securities and are accounted for using the equity method.(1) Healy Co. purchases 15,000 common shares of Palepu Co. at $8 cash per share;
The following transactions involve investments in marketable securities and are accounted for using the equity method.(1) Purchased 12,000 common shares of Barth Co. at $9 cash per share; the shares
CNA Financial Corporation provides the following information from its 2018 10-K report:InvestmentsThe Company classifies its fixed maturity securities as either available-for-sale or trading, and as
Baylor Company purchased 75% of the common stock of Reed Company for $600,000 in cash when the stockholders' equity of Reed Company consisted of $500,000 in common stock and $300,000 in retained
Barclay, Inc., had the following transactions and adjustments related to a bond investment that is classified as a trading security.2018Nov. 1 Purchased $300,000 face value of Joos, Inc.'s 9% bonds
In its 2018 10-K annual report, Microsoft Corporation reported the following revenues:a. Calculate the yearly revenue growth for this period. Based on this trend, what revenue would you forecast for
For the following transactions involving investments in marketable securities, assume that:(1) Ohlson Co. purchases 5,000 common shares of Freeman Co. at $16 cash per share.(2) Ohlson Co. receives a
DeFond Company wishes to secure a reliable supply of a key component for its production processes, and its management is considering two alternative investments. Verduzco Company produces exactly the
Four transactions involving investments in marketable debt securities classified as trading follow.(1) On July 1, purchased US Treasury Bonds for $407,000 in cash. The bonds have a face value of
In its June 30, 2018, balance sheet, Microsoft Corporation reports an investment in available for-sale fixed- income (debt) securities with a value of $ 129,475. As available-for-sale securities,
On January 1 of the current year, Halen Company purchased all of the common shares of Jolson Company for $575,000 cash. On this date, the stockholders' equity of Halen Company consisted of $600,000
Blouin Company had the following transactions and adjustment related to a stock investment that is a trading security.2018Nov. 15 Purchased 10,000 shares of Lane, Inc.'s common stock at $17 per
Hartgraves Company had the following transactions and adjustments related to a bond investment that is a trading security.2018Oct.1 Purchased $500,000 face value of
Use the following year-end footnote information from Cisco Systems, Inc. 's I 0-K report to answer parts a and b.a. At what amount is its available-for-sale investments reported on Cisco's 2018
Benartzi Company purchased a 90% interest in Liang Company on January 1 of the current year. Benartzi Company had $600,000 net income for the current year before recognizing its share of Liang
Philipich Company purchases 80% of Hirst Company's common stock for $600,000 cash when Hirst Company has $300,000 of common stock and $450,000 of retained earnings, and the fair values of Hirst's
Kross Company purchases an equity investment in Penno Company at a purchase price of $5 million, representing 40% of the outstanding stock and book value of Penno. During the current year, Pen no
Stober Company purchases an investment in Lang Company at a purchase price of $1 million cash,representing 30% of the outstanding stock and book value of Lang. During the year, Lang reports net
Assume that Wasley Company purchases 6,000 common shares of Pincus Company for $12 cash per share. Shares of Pincus Company are actively traded. During the year, Wasley receives a cash dividend of
For each of the situation below, determine if the investment should be reported as a passive investment (P), an investment reflecting influence (SI), or a controlling interest (C).a. ___
What are some limitations of consolidated financial statements?
Bradshaw Company owns 100% of Dee Company. At year-end, Dee owes Bradshaw $75,000. If a consolidated balance sheet is prepared at year-end, how is the $75,000 handled? Explain.
What is the underlying objective of consolidated financial statements'!
The stockholders· equity section of Pillar Corporation ·s comparative balance sheet at the end of 2018 and 2019 is presented below. It is part of the financial data just reviewed at a stockholders'
Restaurant Brands International, Inc. reports the following in footnote 13 to their financial statements in their 2017 I 0-K related to redeemable preferred stock.Note 13Redeemable Preferred SharesOn
Finn Company purchases all of the common stock or Murray Company for $750.000 when Murray Company has $300,000 of common stock and $450,000 of retained earnings. Book values of the assets and
What accounting method is used when a stock investment represents more than 50% of the investee company's voting stock? Explain.
On January 1 of the current year, Yetman Company purchases 40% of the common stock of Livnat Company for $250.000 cash. During the year. Livnat reports $80.000 of net income and pays $60.000 in cash
What does significant influence imply regarding financial investments? Describe the accounting procedures used for such investments.
Where are unrealized holding gains and losses related to trading securities reported in the financial statements? Where are unrealized holding gains and losses related to available-for-sale
What is an unrealized holding gain (loss)? Explain. For passive investments in equity securities, how are unrealized holding gains (losses) treated?
The 2017 and 2018 statements of stockholders' equity for Alphabet Inc. are presented below along with portions on Notes 10 and 12 relating to stockholders' equity and equity-based compensation..Note
Following is the stockholders' equity section of the balance sheet for The Procter & Gamble Company along with selected earnings and dividend data. For simplicity, balances for noncontrolling
For investments in debt securities. what measure ( fair value or amortized cost) is used for the balance sheet to report (a) Trading securities.(b) Available-for-sale securities.(c)
Following is the stockholders' equity of Dennis Corporation at December 31, 20 18.The following transactions, among others, occurred during 2019.Jan. 15 Issued 1,000 shares of preferred stock
Liz Plummer, vice president and general counsel, chairs the Executive Compensation Committee for Sunlight Corporation. Four and one-half years ago, the compensation committee designed a performance
Ron King. chairperson of the board of directors and chief executive officer of Image. lnc.. is pondering a recommendation to make to the firm's board of directors in response to actions taken by Jack
The stockholders' equity of Sougiannis Company at December 31, 2018, follows.The following transactions, among others, occurred during 2019.Jan. 12 Announced a 3-for-1 common stock split,
Northrop Grumman Corporation reports the following in footnote 4 to its 2008 10-K related to its convertible preferred stock. Conversion of Preferred Stock-On February 20, 2008, the company's board
A portion of Note 2: Earnings per Share from Facebook, lnc.'s 10-K is as follows: a. Explain why employee stock options and restricted stock units are adjustments to the denominator for diluted
The stockholders' equity of Verrecchia Company at December 31, 2018, follows. Common stock, $5 par value, 350,000 shares authorized;150,000 shares issued and outstanding
Following is the stockholders' equity section of the Merck & Co., Inc., balance sheet.a. Explain the derivation of the $1,788 million in the common stock account.b. Using December 31, 2017,
Following is the stockholders' equity section of the Intuit Inc. balance sheet (dollars in millions, except par value; shares in thousands). Changes in the company's outstanding shares are due to (1)
The stockholders' equity section of Gupta Company at December 31, 2018, follows. 8% preferred stock, $25 par value, 50,000 shares authorized;6,800 shares issued and outstanding
On March 1 of the current year. Xie Company has 400,000 shares of $20 par value common stock that are issued and outstanding. Its balance sheet shows the following account balances relating to common
The stockholders' equity of Kinney Company at December 31, 2018. is shown below:5% preferred stock, $100 par value, 10,000 shares authorized;4,000 shares issued and outstanding
Alphabet Inc. reported the following in note 14 to its 2018 10-K report:Income from continuing operations before income taxes included income from domestic operations of $12.0 billion, $10.7 billion,
The following information is taken from Williams-Sonoma, lnc.'s 10-K .Note D: Income TaxesThe components of earnings before income taxes, by tax jurisdiction, are as follows:The provision for income
The following is the stockholders' equity section from Chipotle Mexican Grill, lnc.'s balance sheet (in thousands, except per share data).a. Show the computation to derive the $359 thousand for
Following is the stockholders' equity section from the The Coca-Cola Company 2017 balance sheet. (All amounts in millions except par value.).a. Compute the number of shares outstanding.b. At
Macy's, Inc., reported the following in its 2017 annual report:On December 22, 2017, H.R. 1 was enacted into law. This new tax legislation, among other things, reduced the U.S. federal corporate tax
Following is the stockholders' equity section from the Cisco Systems, Inc., balance sheet (in millions, except par value).For the $42,820 million reported as "common stock and additional paid-in
The stockholders' equity of Palepu Company at December 31, 2018. appears below.Common stock, $10 par value, 200,000 shares authorized;80,000 shares issued and
Chaney Company has outstanding 25,000 shares of $10 par value common stock. It also has $405.000 of retained earnings. Near the current year-end. the company declares and pays a cash dividend of
Skinner Company began business on June 30, 2018. At that time, it issued 18,000 shares of $50 par value, 6% cumulative preferred stock, and 90,000 shares of $10 par value common stock. Through the
Target Corporation disclosed the following in the notes to their 2018 10-K. Leases:We adopted ASU No. 2016-02-Leases (Topic 842), as amended, as of February 4, 2018, using the modified
DowDuPont Inc. provides the following footnote disclosures in its 10-K report relating to its pension plans.REQUIRED:a. How much pension expense (revenue) does Dow DuPont report in its 2018 income
Potter Company has outstanding 15,000 shares of $50 par value, 8% preferred stock, and 50,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no
Soliman Corporation began the year 2018 with 25,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May 1, an additional 9,000 shares of common stock were
Moser Company began business on March 1, 2018. At that time, it issued 20,000 shares of $60 par value, 7% cumulative preferred stock, and 100,000 shares of $5 par value common stock. Through the end
American Airlines Group, Inc., provides the following disclosures in the notes to their 2018 financial statements (excerpted for brevity):ASU 2016-02: Leases (Topic 842) (the New Lease Standard):The
YUM! Brands, Inc., reports the following pension footnote in its 10-K report.a. Describe what is meant by service cost and interest cost.b. What is the source of funds to make payments to retirees?c.
McNichols Corp. reports the following transactions relating to its stock accounts.Jan. 15 Issued 25,000 shares of $5 par value common stock at $17 cash per share.Jan. 20 Issued 6,000
YUM! Brands, Inc,, discloses the following pension footnote in its 10-K report:a. How much pension expense does Yum report in its 2017 income statement?b. What effect does its "expected return on
A corporation has total stockholders' equity of $4.628.000 and one class of $2 par value common stock. The corporation has 500,000 share???? authorized; 300.000 shares issued; 260.000 shares
The following information comes from recent DowDuPont Inc. income statements.REQUIRED:a. Identify the components in its statement that you would consider operating.b. Identify those components that
Bens' Corporation paid $12,000 on December 31, 2019, for equipment with a three-year useful life. The equipment will be depreciated in the amount of $4,000 each year. Bens' took the entire $12,000 as
The adjusted trial balance at December 31, 2018, for Smith Company includes the following selected accounts.a. Prepare entries to close these accounts in journal entry form.b. Set up T-accounts for
On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of$4,500. The first lease payment is due on September 30,
On January 3, 2020, Hanna Corporation signed a lease on a machine for its manufacturing operation and the lease commences on the same date. The lease requires Hanna to make six annual lease payments
Eskew, Inc., which closes its books on December 31, is authorized to issue $500,000 of 9%, 15- year bonds dated May 1, 2018, with interest payments on November 1 and May 1.REQUIRED:Assuming

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