Questions and Answers of Financial Accounting Tool

Mather sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Mather’s purchases of EZslide snowboards during September. During the same month, 102
a. Jeri Company sells three different categories of tools (small, medium and large). The cost and net realizable value of its inventory of tools are as follows. Determine the value of the
Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley, Inc.: ending inventory $155,377, beginning to inventory $119,035,
Sunnyside Marine Products began the year with 10 units of marine fl oats at a cost of $11 each. During the year, it made the following purchases: May 5, 30 unit at $16; July 16, 15 units at $19; and
The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s website.
Matilda Company reported the following amounts (in euros) in 2022: Net income, €150,000; Unrealized gain related to the revaluation of buildings, €10,000; and Unrealized loss on non-trading
Three years ago, Karen Suez and her brother-in-law Reece Jones opened Gigasales Department Store. For the first 2 years, business was good, but the following condensed income statement results for
The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Instructions a. Based on the
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions a. Based on the
The financial statements for Apple Inc. are presented in Appendix A. Instructions Answer these questions using the Statement of Operations. a. What was the percentage change in net
On November 1, 2022, IKonk, Inc. had the following account balances. The company uses the perpetual inventory method. During November, the following summary transactions were
On December 1, 2022, Devine Distributing Company had the following account balances. During December, the company completed the following summary transactions. Dec. 6 Paid $1,600 for
At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $2,500, Inventory $3,500, and Common Stock $6,000. The following transactions occurred during
Zhou Inc. operates a retail operation that purchases and sells snowmobiles, among other outdoor products. The company purchases all inventory on credit and uses a periodic inventory system. The
At the end of Oates Department Store’s fiscal year on November 30, 2022, these accounts appeared in its adjusted trial balance. Additional facts: 1. Inventory on November 30, 2022, is
The trial balance of People’s Choice Wholesale Company contained the following accounts shown at December 31, the end of the company’s fiscal year. Adjustment data: 1. Depreciation is
An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years. As an experienced, knowledgeable
Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city
At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $2,500, Inventory $3,500, and Common Stock $6,000. The following transactions were completed
Winters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Winters’ ledger showed Cash of $8,000 and Common Stock of $8,000. May 1
The following selected accounts from the Blue Door Corporation’s general ledger are presented below for the year ended December 31, 2022: InstructionsPrepare a multiple-step income statement.
At December 31, 2022, Highland Corporation estimates that goods with a selling price of $4,700 and a cost of $1,870 that were sold on account during the current period will be returned during the
Below is a series of cost of goods sold sections for companies B, M, O, and S. Instructions Fill in the lettered blanks to complete the cost of goods sold sections. Beginning inventory
The trial balance of Mendez Company at the end of its fiscal year, August 31, 2022, includes these accounts: Beginning Inventory $18,700, Purchases $154,000, Sales Revenue $190,000, Freight-In
In its income statement for the year ended December 31, 2022, Laine Inc. reported the following condensed data. Instructions a. Prepare a multiple-step income statement. b. Prepare a
Suppose in its income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions). Instructions a. Prepare a multiple-step
In its income statement for the year ended December 31, 2022, Darren Company reported the following condensed data.Instructions a. Prepare a multiple-step income statement. b. Calculate the
Presented below is information for Lieu Co. for the month of January 2022. Instructions a. Prepare an income statement using the format presented in Illustration 5.12.b. Prepare a
Jean Karns is the new owner of Jean’s Computer Services. At the end of July 2022, her first month of ownership, Jean is trying to prepare monthly financial statements. She has the following
The ledger of Umatilla, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries. An analysis of the accounts shows the following. 1. Insurance expires at
Using the data in BE4.15 , identify the accounts that would be included in a post closing trial balance. Data from BE 4. 15The following selected accounts appear in the adjusted trial balance
Partial adjusted trial balance data for Levin Corporation are presented in BE4.13. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year
The adjusted trial balance of Levin Corporation at December 31, 2022, includes the following accounts: Retained Earnings $17,200, Dividends $6,000, Service Revenue $32,000, Salaries and Wages Expense
At December 31 of the current year, Cullen Corporation had a number of items that were not reflected in its accounting records. Maintenance and repair costs of $770 were incurred but not paid.
The bookkeeper for Tran Company asks you to prepare the following accrual adjusting entries at December 31. Use these account titles: Service Revenue, Accounts Receivable, Interest Expense, Interest
The unadjusted trial balance of Northern Exposure Inc. had these balances for the following select accounts: Supplies $3,100, Unearned Service Revenue $8,200, and Prepaid Rent $1,200. At the end of
Using the data in BE4.7 , journalize and post the entry on July 1 and the adjusting entry on December 31 for Marsh Insurance Co. Marsh uses the accounts Unearned Service Revenue and Service
On July 1, 2022, Ling Co. pays $12,400 to Marsh Insurance Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. For Ling Co., journalize and post the entry on July
Lahey Advertising Company’s trial balance at December 31 shows Supplies $8,800 and Supplies Expense $0. On December 31, there are $1,100 of supplies on hand. Prepare the adjusting entry at December
This activity provides information about career opportunities for CPAs. Instructions Search the Internet for “start here go places” to access free accounting resources for future CPAs
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions.a. Based on the
The financial statements of Apple Inc. in Appendix A contain the following selected accounts, all in thousands of dollars. Instructions a. What is the increase and decrease side for each
On July 31, 2022, the general ledger of Hills Legal Services Inc. showed the following balances: Cash $4,000, Accounts Receivable $1,500, Supplies $500, Equipment $5,000, Accounts Payable $4,100,
Ayala Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred: Apr. 1 Stockholders
Bindy Crawford created a corporation providing legal services, Bindy Crawford Inc., on July 1, 2022. On July 31 the balance sheet showed Cash $4,000, Accounts Receivable $2,500, Supplies $500,
Nona Curry started her own consulting firm, Curry Consulting Inc., on May 1, 2022. The following transactions occurred during the month of May. May 1 Stockholders invested $15,000
The tabular analysis of transactions for Wolfe Company is presented in E3.4. Instructions Prepare an income statement and a retained earnings statement for August and a classified balance
A tabular analysis of the transactions made during August 2022 by Wolfe Company during its first month of operations is shown as follows. Each increase and decrease in stockholders’ equity is
During 2022, its first year of operations as a delivery service, Persimmon Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $100,000
Brady Company entered into these transactions during May 2022, its first month of operations. 1. Stockholders invested $40,000 in the business in exchange for common stock of the
The following accounts are taken from the ledger of Chillin’ Company at December 31, 2022. Prepare a trial balance in good form. Notes Payable Common Stock Equipment Cash $20,000 25,000 $6,000
Transactions made by Mickelson Co. for the month of March are shown below. Prepare a tabular analysis that shows the effects of these transactions on the expanded accounting equation, similar to that
An inexperienced bookkeeper prepared the following trial balance that does not balance. Prepare a correct trial balance, assuming all account balances are normal. Birellie Company Trial Balance
From the ledger balances below, prepare a trial balance for Peete Company at June 30, 2022. All account balances are normal. Accounts Payable Cash Common Stock Dividends Equipment Service
For each of the following accounts, indicate the effect of a debit or credit on the account and the normal balance. a. Bonds Payable. b. Unearned Service Revenue. c. Depreciation
During 2022, Rostock Company entered into the following transactions. 1. Purchased equipment for $286,176 cash. 2. Issued common stock to investors for $137,590 cash. 3. Purchased
During 2022, Manion Corp. entered into the following transactions. 1. Borrowed $60,000 by issuing bonds. 2. Paid $9,000 cash dividend to stockholders. 3. Received $13,000 cash from a
The following information is available for Lessila Bowling Alley at December 31, 2022. Prepare a classified statement of financial position. Assume that $13,900 of the notes payable will be paid
The following list of terms or phrases are discussed in this chapter.1. Free cash flow 2. Securities and Exchange Commission (SEC) 3. Solvency 4. Financial Accounting Standards Board
Micado Corporation was formed on January 1, 2022. At December 31, 2022, Miko Liu, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows. Miko
On June 1, 2022, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the
headquartered in San Francisco, is one of the nation’s largest financial institutions. Suppose it reported the following selected accounts (in millions) as of December 31, 2022. Retained
Grouper Company provides you with the following balance sheet information as of December 31, 2022 In addition, Grouper reported net income for 2022 of $16,000, income tax expense of $3,200, and
a. Smiley Corporation issues $300,000 of bonds for $315,000. (i) Prepare the journal entry to record the issuance of the bonds, and (ii) show how the bonds would be reported on the balance sheet at
Harvard Inc. issues $4 million, 5-year, 8% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium. a. Prepare the journal entry to record the
Alpine Company issues $2 million, 10-year, 7% bonds at 99, with interest payable on December 31. The straight-line method is used to amortize bond discount. a. Prepare the journal entry to
Suppose the 2022 adidas financial statements contain the following selected data (in millions). Compute the following values and provide a brief interpretation of each. a. Working
Presented here are liability items for O’Brian Inc. at December 31, 2022. Prepare the liabilities section of O’Brian’s balance sheet. FICA taxes payable Interest payable Notes payable
Presented here are long-term liability items for Stevens Inc. at December 31, 2022. Prepare the long-term liabilities section of the balance sheet for Stevens Inc. Bonds payable (due
The balance sheet for Gelher Company reports the following information on July 1, 2022. Gelher decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to
Clooney Corporation issued 3,000 7%, 5-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1. a. Prepare the journal entry to record the sale of these bonds on
Ravine Company issues $400,000, 20-year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2022.
Bridle Inc. issues $300,000, 10-year, 8% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2022.
The following words and phrases were discussed in this chapter. 1. Notes receivable. 2. Cash (net) realizable value. 3. Accounts receivable turnover. 4. Aging the accounts
The following ratios are available for Ming Inc. Instructions a. Is Ming’s short-term liquidity improving or deteriorating in 2022? Be specifi c in your answer, referring to relevant
Suppose the following information was taken from the 2022 financial statements of FedEx Corporation, a major global transportation/delivery company.Instructions Answer each of the following
Eileen Corp. had the following balances in receivable accounts at October 31, 2022 (in thousands): Allowance for Doubtful Accounts $52, Accounts Receivable $2,910, Other Receivables $189, and Notes
Vandiver Company had the following select transactions. Apr. 1, 2022 Accepted Goodwin Company’s 12-month, 6% note in settlement of a $30,000 account receivable. July 1, 2022 Loaned
These transactions took place for Bramson Co. 2021 May 1 Received a $5,000, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney.Dec. 31 Accrued interest
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,400, Dallas Co. estimates that 9% of its accounts receivable balance of $90,000 will become uncollectible and
Godfreid Company has accounts receivable of $95,400 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2,100 credit balance in Allowance for Doubtful Accounts prior to
Assume the following information for Larry Corp. Accounts receivable (beginning balance)...........$142,000 Allowance for doubtful accounts (beginning balance) ...........11,360 Net
In 2022, Bismark Company has net credit sales of $1,600,000 for the year. It had a beginning accounts receivable (net) balance of $108,000 and an ending accounts receivable (net) balance of
Suppose the 2022 financial statements of 3M Company report net sales of $23.1 billion. Accounts receivable (net) are $3.2 billion at the beginning of the year and $3.25 billion at the end of the
On January 10, 2022, Masterson Co. sold merchandise on account to Tompkins for $8,000, terms n/30. On February 9, Tompkins gave Masterson Co. a 7% promissory note in settlement of this account.
Consider these transactions: a. Tastee Restaurant accepted a Visa card in payment of a $200 lunch bill. The bank charges a 3% fee. What entry should Tastee make? b. Martin Company sold its
Assume the same information as BE8.3 and that on March 4, 2022, Safer Co. receives payment of $4,300 in full from Madonna Inc. Prepare the journal entries to record this transaction. Data From
The international accounting firm Ernst & Young performed a global survey on fraud. The results of that survey are summarized in a report titled Global Fraud Survey 2016. You can find this report
The bank portion of the bank reconciliation for Bogalusa Company at October 31, 2022, is shown below. The adjusted cash balance per bank agreed with the cash balance per books at October 31. The
Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices. 1. Once a
A local bank reported that it lost $150,000 as the result of employee fraud. Ray Fairburn is not clear on what is meant by “employee fraud.” Explain the meaning of fraud to Ray and give an
On December 1, 2022, Ravenwood Company had the following account balances.During December, the company completed the following transactions. Dec. 7 Received $3,600 cash from customers in payment
Albert Company discovers in 2022 that its ending inventory at December 31, 2021, was $5,000 understated. What eff ect will this error have on (a) 2021 net income, (b) 2022 net income, and (c) the
Jackson Music Center has five TVs on hand at the balance sheet date that cost $400 each. The net realizable value is $350 per unit. Under the lower-of-cost-or-net realizable value basis of
Fennick Company reports net income of $92,000 in 2022. However, ending inventory was understated by $7,000. What is the correct net income for 2022? What effect, if any, will this error have on total
In a period of rising prices, the inventory reported in Short Company’s balance sheet is close to the current cost of the inventory, whereas King Company’s inventory is considerably below its
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2022, of $46,850,000 under the LIFO inventory method. In the notes to
Wahlowitz Video Center accumulates the following cost and net realizable value data at December 31. Compute the lower-of-cost-or-net realizable value for the company’s inventory. Net
Bieber Inc. is a retailer operating in Calgary, Alberta. Bieber uses the perpetual inventory method. Assume that there are no credit transactions; all amounts are settled in cash. You are provided
Solar Electronics has enjoyed tremendous sales growth during the last 10 years. However, even though sales have steadily increased, the company’s CEO, Dana Byrnes, is concerned about certain

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