Questions and Answers of Financial Accounting Tool

Identify the liabilities classified by Apple as current.
a. Your roommate says, “Sales taxes are reported as an expense in the income statement.” Do you agree? Explain. b. Leiana’s Cafe has cash proceeds from sales of $8,550. This amount
The March 6, 2012, edition of the Wall Street Journal Online contains an article by David Kesmodel entitled “Air War: ‘Winglet’ Versus ‘Sharklet’.” This article demonstrates how a company
The March 29, 2012, edition of the Wall Street Journal Online contains an article by Miguel Bustillo entitled, “Best Buy Forced to Rethink Big Box.” The article explains how the 1,100 giant
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. The complete annual reports, including the
The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company’s
Aberkonkie Corporation prepares quarterly financial statements. The post-closing trial balance at December 31, 2021, is presented below. During the first quarter of 2022, the following
Milo Corporation’s unadjusted trial balance at December 1, 2022, is presented below The following transactions occurred during December. Dec. 2 Purchased equipment for $16,000, plus sales
Megan Corporation purchased machinery on January 1, 2022, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of
In recent years, Jayme Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Inland Corporation. 1. Inland developed a new
The intangible assets section of Amato Corporation’s balance sheet at December 31, 2022, is presented here. Patents ($60,000 cost less $6,000
At January 1, 2022, Youngstown Company reported the following property, plant, and equipment accounts: The company uses straight-line depreciation for buildings and equipment, its year-end is
Pine Company had the following assets on January 1, 2022. During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for
At December 31, 2022, Arnold Corporation reported the following plant assets. During 2023, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,200,000. May
Basic information relating to a new machine purchased by Gotham Company is presented in E9.5. Instructions Using the facts presented in E9.5, compute depreciation using the following
Whippet Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $100,000. Over its 4-year useful life, the bus is expected to be
The following is a list of words or phrases introduced in the chapter. 1. Capital expenditures. 2. Goodwill. 3. Plant assets. 4. Lessor. 5. Patent. 6. Copyright. 7.
Suppose during 2022 that Federal Express reported the following information (in millions): net sales of $35,497 and net income of $98. Its balance sheet also showed total assets at the beginning of
On January 1, 2022, Haley Company had a balance of $360,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life.
These are selected 2022 transactions for Wyle Corporation:Jan. 1 Purchased a copyright for $120,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years. Mar. 1
Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $5,000 and an estimated
Here are selected 2022 transactions of Akron Corporation. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $62,000 and had a useful life of 10 years
All assets are depreciated by the straight-line method. Santorini Company uses a calendar year in preparing annual fi nancial statements. After discussion, management has agreed to accept Victor’s
Victor Mineli, the new controller of Santorini Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his
Linton Company purchased a delivery truck for $34,000 on July 1, 2022. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of
Gotham Company purchased a new machine on October 1, 2022, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,100. The machine is expected to be used for 70,000
On March 1, 2022, Boyd Company acquired real estate, on which it planned to construct a small office building, by paying $80,000 in cash. An old warehouse on the property was demolished at a cost of
The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2022. 1. Paid $7,000 of accrued taxes at the time the plant site was acquired. 2.
For 2022, Sale Company reported beginning total assets of $300,000 and ending total assets of $340,000. Its net income for this period was $50,000, and its net sales were $400,000. Compute the
Hudson Corporation’s balance sheet at December 31, 2021, is presented below. During January 2022, the following transactions occurred. Hudson uses the perpetual inventory method. Jan. 1
The adjusted trial balance of Doqe Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2022: Sales Revenue $900,000, Freight-Out $14,000, Sales Returns and
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred. Sept. 6
This information relates to Rice Co. 1. On April 5, purchased merchandise on account from Jax Company for $28,000, terms 2/10, n/30. 2. On April 6, paid freight costs of $700 on merchandise
Owen Wise, Inc. reported the following in its 2022 and 2021 income statements. Determine the company’s gross profit rate and profit margin for both years. Discuss the cause for changes in the
Clean Lake Corporation’s accounting records show the following at year-end December 31, 2022: Assuming that Clean Lake Corporation uses the periodic system, compute (a) cost of goods purchased
The following information is available for Berlin Corp. for the year ended December 31, 2022: Prepare a multiple-step income statement for Berlin Corp. and comprehensive income statement. The
At December 31, 2022, Familla Corporation estimates that goods with a selling price of $1,400 and a cost of $650 that were sold on account during the current period will be returned during the next
Assume the same information as in BE5.11 and also that Spacey Company has beginning an inventory of $60,000, ending inventory of $90,000, and net sales of $612,000. Determine the amounts to be
The following information relates to Karen Weigel Inc. for the year 2022. After analyzing the data, (a) compute net income and (b) prepare a comprehensive income statement for the year ending
The following information is available for Rancid Corp. for the year ended December 31, 2022 Prepare a multiple-step income statement for Rancid Corp. The company has a tax rate of 25%. Other
Barto Company provides this information for the month ended October 31, 2022: sales on credit $300,000, cash sales $150,000, sales discounts $5,000, and sales returns and allowances $19,000. Prepare
From the information in BE5.4, prepare the journal entries to record these transactions on McLeena Company’s books under a perpetual inventory system. Data From BE 5.4Prepare the journal
Prepare the journal entries to record the following transactions on Borst Company’s books using a perpetual inventory system. a. On March 2, Borst Company sold $800,000 of merchandise to
Presented here are the components in Salas Company’s income statement. Determine the missing amounts. Cost of Goods Sold (a) Net Income Sales Revenue Operating Expenses (b) (d) Gross Profit $
What treatment do Allowance for Sales Returns and Allowances and the Estimated Inventory Returns receive in the financial statements?
What are the steps to record an end of period adjustment for credit sales with returns and allowances?
What title does Apple use for gross profit? By how much did its total gross profit change, and in what direction, for the year ended September 30, 2017?
In its year-end earnings announcement press release, Ransome Corp. announced that its earnings increased by $15 million relative to the previous year. This represented a 20% increase. Inspection of
Mai Company has always provided its customers with payment terms of 1/10, n/30. Members of its sale force have commented that competitors are offering customers 2/10, n/45. Explain what these terms
Maria Lopez, CEO of Sales Bin Stores, is considering a recommendation made by both the company’s purchasing manager and director of finance that the company should invest in a sophisticated new
If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Instructions Access the glossary (“Master Glossary”) to answer the
Abbey Park was organized on April 1, 2021, by Trudy Crawford. Trudy is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Trudy prepared the following
The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. a. Identify two accounts on Amazon’s
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C. Instructions a. Identify two
The financial statements of Apple Inc. are presented in Appendix A. Instructions a. Using the consolidated income statement and balance sheet, identify items that may result in adjusting
At June 30, 2022, the end of its most recent fiscal year, Green River Computer Consultants’ post-closing trial balance was as follows: The company underwent a major expansion in July. New
On August 1, 2022, the following were the account balances of B&B Repair Services. During August, the following summary transactions were completed. Aug. 1 Paid $400 cash for
Lars Linken opened Lars Cleaners on March 1, 2022. During March, the following transactions were completed. Mar. 1 Issued 10,000 shares of common stock for $15,000 cash. 1 Borrowed
Mike Greenberg opened Kleene Window Washing Inc. on July 1, 2022. During July, the following transactions were completed. July 1 Issued 12,000 shares of common stock for $12,000
Roadside Travel Court was organized on July 1, 2021, by Betty Johnson. Betty is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Betty prepared the
A review of the ledger of Lewis Company at December 31, 2022, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $15,200. The company has
Salt Creek Golf Inc. was organized on July 1, 2022. Quarterly financial statements are prepared. The trial balance and adjusted trial balance on September 30 are shown as
The Moto Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of
Len Kumar started his own consulting firm, Kumar Consulting, on June 1, 2022. The trial balance at June 30 is as follows. In addition to those accounts listed on the trial balance, the chart of
The following selected data are taken from the comparative financial statements of Yankee Curling Club. The club prepares its financial statements using the accrual basis of accounting. Dues
The adjusted trial balance for Ryan Company is given in E4.22. Instructions Prepare the closing entries for the temporary accounts at August 31. The following trial balances are before
The adjusted trial balance for Ryan Company is given in E4.22. Instructions Prepare the income and retained earnings statements for the year and the classified balance sheet at August
The following trial balances are before and after adjustment for Ryan Company at the end of its fiscal year. Instructions Prepare the adjusting entries that were made. Ryan Company Trial
Selected year-end account balances from the adjusted trial balance as of December 31, 2022, for Tippy Corporation is provided below.Instructions a. Prepare closing entries b. Determine the
A partial adjusted trial balance for Ramon Company is given in E4.15 . Instructions Prepare the closing entries at January 31, 2022. Data From E4.15This is a partial adjusted trial
The following is a list of terms and phrases discussed in the chapter. 1. Contra asset account 2. Permanent accounts 3. Depreciation 4. Adjusting entries 5. Prepaid expenses
Greenock Limited has the following information available for accruals for the year ended December 31, 2022. The company adjusts its accounts annually. 1. The December utility bill for $425 was
Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2022. 1. Purchased a 1-year insurance policy on June 1 for $1,800
On December 31, 2022, Waters Company prepared an income statement and balance sheet, but failed to take into account three adjusting entries. The balance sheet showed total assets $150,000, total
This is a partial adjusted trial balance of Ramon Company. Instructions Answer these questions, assuming the year begins January 1. a. If the amount in Supplies Expense is the January
The income statement of Norski Co. for the month of July shows net income of $2,000 based on Service Revenue $5,500, Salaries and Wages Expense $2,100, Supplies Expense $900, and Utilities Expense
The ledger of Armour Lake Lumber Supply on July 31, 2022, includes the selected accounts below before adjusting entries have been prepared. An analysis of the company’s accounts shows the
The unadjusted trial balance for Sierra Corp. is shown in Illustration 4.5 . Instead of the adjusting entries shown in the text at October 31, assume the following adjustment data. 1. Supplies
Al Medina, D.D.S., opened an incorporated dental practice on January 1, 2022. During the first month of operations, the following transactions occurred. 1. Performed services for patients who
Franken Company, a ski tuning and repair shop, opened on November 1, 2021. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the
In its first year of operations, Gomes Company recognized $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from
Your examination of the records of a company that follows the cash basis of accounting tells you that the company’s reported cash-basis earnings in 2022 are $33,640. If this firm had followed
These accounting concepts were discussed in this and previous chapters. 1. Economic entity assumption. 2. Expense recognition principle. 3. Monetary unit assumption. 4.
The following independent situations require professional judgment for determining when to recognize revenue from the transactions. a. Southwest Airlines sells you an advance-purchase airline
This information is for Williams Corporation for the year ended December 31, 2022. Instructions a. Prepare the 2022 statement of cash flows for Williams Corporation. b. Suppose you are
AP Kellogg Company is the world’s leading producer of ready-to-eat cereal and a leading producer of grain-based convenience foods such as frozen waffl es and cereal bars. Suppose the following
Otay Lakes Park is a private camping ground near the Mount Miguel Recreation Area. It has compiled the following fi nancial information as of December 31, 2022. Instructions a. Determine
The following items and amounts were taken from Lonyear Inc.’s 2022 income statement and balance sheet. Instructions a. In each, case, identify on the blank line whether the item is an
The following information is available for Randall Inc. Instructions Using the information above, prepare a balance sheet as of December 31, 2022. (Hint: Solve for the missing retained
Presented here is information for Zheng Inc. for 2022. Instructions Prepare the 2022 retained earnings statement for Zheng Inc. Retained earnings, January 1 Service revenue Total expenses
Suppose the following information was taken from the 2022 financial statements of pharmaceutical giant Merck and Co. (All dollar amounts are in millions.) Instructions a. After analyzing
This information relates to Benser Co. for the year 2022. Instructions. Prepare an income statement and a retained earnings statement for the year ending December 31, 2022 Retained
The following list of terms or phrases are discussed in this chapter. 1. Certifi ed public accountant (CPA) 2. Management discussion and analysis (MD&A) 3. Revenue4.
The accounts in the ledger of Rapid Delivery Service contain the following balances on July 31, 2022. Instructions a. Prepare a trial balance with the accounts arranged as illustrated in
Beyers Corporation provides security services. Selected transactions for Beyers are presented below. Oct. 1 Issued common stock in exchange for $66,000 cash from investors.
Here is the ledger for Kriscoe Co. Instructions a. Reproduce the journal entries for only the transactions that occurred on October 1, 10, and 20, and provide explanations for each. b.
Selected transactions from the journal of Baylee Inc. during its first month of operations are presented here. Instructions a. Post the transactions to T-accounts. b. Prepare a trial
The T-accounts below summarize the ledger of Salvador’s Gardening Company, Inc. at the end of the first month of operations. a. Prepare the journal entries (including explanations) that
Transaction data and journal entries for McCall Real Estate Agency are presented in E3.8 and E3.9. Instructions a. Post the transactions to T-accounts. b. Prepare a trial balance at October

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