Questions and Answers of Financial Accounting Tool

Waite Corporation issued a $50,000, 10%, 10-year installment note payable on eeereege of installment note —_J anuary 1, 2017. Payments of $8,137 are made each January 1, beginning January 1,
On January 1, 2017, the ledger of Romada Company contained these liability _ adjusting entries, and current accounts.liabilities section.Accounts Payable $42,500(LO 1, 4), AP Sales Taxes Payable
Ehler Corporation sells rock-climbing products and also operates an indoor transactions; show balance climbing facility for climbing enthusiasts. During the last part of 2017, Ehler had the folsheet
The following section is taken from Hardesty’s balance sheet at December 31, 2016.Interest is payable annually on January 1. The bonds are callable on any annual interest date.Instructions (a)
Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co., shown on the next page.Instructions(a) Calculate each of the following ratios
The following information is taken from Lassen Corp.’s balance sheet at Deceminterest payments, straight-line ber 31, 2016.Interest is payable annually on January 1. The bonds are callable on any
Fong Corporation sold $2,000,000, 7%, 5-year bonds on January 1, 2017. The issuance of bonds, interest, and bonds were dated January 1, 2017, and pay interest on January 1. Fong Corporation uses
Laverne purchased a new piece of equipment to be used in its new facility. The$370,000 piece of equipment was purchased with a $50,000 down payment and with cash received through the issuance of a
Refer to the financial statements of Apple Inc. in Appendix A. he idealInstructions Answer the following questions.(a) What were Apple's total current liabilities at September 27, 20142? What was the
Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Also, bond prices change when the risks associated with those
On January 1, 2015, Picard Corporation issued $3,000,000, 5-year, 8% bonds at 97. Analyst The bonds pay interest annually on January 1. By January 1, 2017, the market rate of interest for bonds of
For most U.S. families, medical costs are substantial and rising. But will medical costs be your most substantial expense over your lifetime? Not likely. Will it be housing or food? Again, not
If your school has a subscription to the FASB Codification, go to http://aaahq.org/asclogin.cfm to log in and prepare responses to the following.(a) What is the definition of current liabilities?(b)
Archer Company issued (in pounds) £4,000,000 par value, 7% convertible bonds at 99 for cash. The net present value of the debt without the conversion feature is£3,800,000. Prepare the journal entry
The following items are taken from the 1998 balance sheet of Yahoo, Inc. (in thousands).Instructions Prepare a balance sheet for Yahoo! Inc. as of December 31, 1998. Common stock Property and
These items are taken from the financial statements of Kidman Corporation for 2001:Instructions Prepare an income statement, a retained earnings statement, and a classified balance sheet for December
Comparative financial statement data for Fisher Corporation and Gisco Corpo ration, two competitors, appear below. All balance sheet data are as of December 31, 2001, and December 31, 2000.Additional
Here are the comparative statements of Eric Clapton Company:Additional information: The cash provided by operating activities for 2001 was $190,800.Instructions Compute these values and ratios for
Condensed balance sheet and income statement data for Smashing Pumpkins Corporation are presented here.Instructions Compute these values and ratios for 2000 and 2001:(a) Profit margin ratio.(b)
Selected financial data (in millions) of two intense competitors, Kmart and WalMart, for 1998 are presented here:Instructions For each company, compute these values and ratios:(a) Working capital.(b)
The financial statements of Tootsie Roll Industries, Inc., are presented in Appendix A at the end of this book.Instructions Answer the following questions using the Consolidated Balance Sheet and the
The financial statements of Hershey Foods are presented in Appendix B, following the financial statements for Tootsie Roll in Appendix A.Instructions(a) For each company calculate the following
Several commonly available indexes enable individuals to locate articles from numerous business publications and periodicals. Articles can generally be searched for by company name or by subject
The following information was reported by Ford Motor Company in its 1998 annual report.(a) Determine the overall percentage increase in Ford's total assets from 1992 to 1998.What was the average
Mo och Comsjo AB (MoDo) is one of Europe’s largest forest products companies. It has production facilities in Sweden, France, and Great Britain. Its headquarters is in Stockholm, Sweden. Its
Purpose: Identify summary liquidity, solvency, and profitability information about companies, and compare this information across companies in the same industry.Address: http://biz.yahoo.com/i (or go
As the accountant for J. Martinez Manufacturing Inc., you have been requested to develop some key ratios from the comparative financial statements. This information is to be used to convince
L.R. Stanton is the chief executive officer of Hi-Tech Electronics. Stanton is an expert engineer but a novice in accounting.Instructions Write a letter to L. R. Stanton that explains (a) the three
Analyze the effect of business transactions on the basic accounting equation.
Explain what an account is and how it helps in the recording process.
Define debits and credits and explain how they are used to record business transactions.
Identify the basic steps in the recording process.
Explain what a journal is and how it helps in the recording process.
Explain what a ledger is and how it helps in the recording process.
Explain what posting is and how it helps
Explain the purposes of a trial balance.
Describe the accounting information system and the steps in the recording process.
Journalize these accounting transactions.(a) Stockholders invested $9,000 in the business in exchange for common stock.(b) Insurance of $800 is paid for the year.(c) Supplies of $1,500 are purchased
J. A. Norris Corporation has the following transactions during August of the current year. Indicate (a) the basic analysis and (b) the debit-credit analysis illustrated on pages 114-119.Aug. 1 Issues
Selected transactions for Gonzales Company are presented in journal form (without explanations). Post the transactions to T accounts. Date Account Title Debit Credit May 5 Accounts Receivable 3,200
From the ledger balances below, prepare a trial balance for P. J. Carland Company at June 30, 2001. All account balances are normal. Accounts Payable $ 4,000 Service Revenue $6,000 Cash 3,800
Selected transactions for Speedy Lawn Care Company, Inc., are listed here:. Issued common stock to investors in exchange for cash received from investors.. Paid monthly rent.. Received cash from
Sidhu Computer Company entered into these transactions during May 2001:1. Purchased computer terminals for $29,000 from Digital Equipment on account.2. Paid $4,000 cash for May rent on storage
A tabular analysis of the transactions made during August, 2001 by Downtown Company during its first month of operations is shown below. Each increase and de-(SO 1) crease in stockholders’ equity
The tabular analysis of transactions for Downtown Company is presented in E3-3.Instructions Prepare an income statement and a retained earnings statement for August and a balance sheet at August 31,
Selected transactions for Expensive Designs, an interior decorator corporation, in its first month of business, are as follows:1. Issued stock to investors for $10,000 in cash.. Purchased used car
Data for Expensive Designs, interior decorator, are presented in E3-5.Instructions Journalize the transactions. Do not provide explanations.
This information relates to Verbos Real Estate Agency Corporation:Account Credited Specific Normal Account Effect Balance Common Increase _ Credit Stock Journalize transactions.Analyze transactions
Transaction data for Verbos Real Estate Agency are presented in E3-7.Instructions Journalize the transactions. Do not provide explanations.
Selected transactions from the journal of Red Hot Chili Peppers Inc. during its first month of operations are presented here:Instructions (a) Post the transactions to T accounts.(b) Prepare a trial
These T accounts summarize the ledger of Crabgrass Landscaping Company Inc. at the end of the first month of operations:Instructions (a) Prepare in the order they occurred the journal entries
Here is the ledger for Dave Matthews Co.:Instructions (a) Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20 and provide explanations for each.(b) Prepare a
Selected transactions for Dave Letterman Corporation during its first month in business are presented below:Issued common stock in exchange for $15,000 cash received from investors.Purchased
The bookkeeper for Rosenberger’s Equipment Repair Corporation made these errors in journalizing and posting:1. A credit posting of $400 to Accounts Receivable was omitted.2. A debit posting of $750
The accounts in the ledger of Rocket Delivery Service contain the following balances on July 31, 2001:Instructions Prepare a trial balance with the accounts arranged as illustrated in the chapter,
On April 1 Matrix Travel Be: Inc. was established. These transactions were completed during the month: e 1. Stockholders invested $20,000 cash in ihe company in exchange for common stock.. Paid $400
Jessica Bell started her own consulting firm, Bell Consulting Inc., on May 1, 2001. The following transactions occurred during the month of May:May 1. Stockholders invested $10,000 cash in the
Ivan Izo created a corporation providing legal services, Ivan Izo Inc., on July 1 2001. On July 31 the balance sheet showed: Cash $4,000; Accounts Receivable $1,500;Supplies $500; Office Equipment
Fantasy Miniature Golf and Driving Range Inc. was opened on March 1 by Jim Zarle. These selected events and transactions occurred during March:Mar. 1 Stockholders invested $60,000 cash in the
Chambers Architects incorporated as licensed architects on April 1, 2001. During the first month of the operation of the business, these events and transactions occurred:Apr. 1 Stockholders invested
This is the trial balance of Dirty Laundry Corporation on September 30:The October transactions were as follows:Oct. 5 Received $900 cash from customers on account.10 Billed customers for services
This trial balance of Salem Co. does not balance.Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors:1. Cash
The Oldies Theater Inc. was recently formed. It began operations in March 2001.The Oldies is unique in that it will show only triple features of sequential theme movies.As of February 28, the ledger
Rabbit Ears Repair Shop Inc. was started on May 1. Here is a summary of the May transactions:1. Stockholders invested $16,000 cash in the company in exchange for common stock.2. Purchased equipment
Peter Alex started his own delivery service, Alex Deliveries Inc., on June 1, 2001.prepare financial statements. | The following transactions occurred during the month of June:(SO 1) June 1
Donna Corso opened Corso Company, a veterinary business in Hills, Iowa, on prepare an income statement, August 1, 2001. On August 31 the balance sheet showed: Cash $9,000; Accounts Receivretained
Gold Rush Park was started on April 1 by Neil Young. These selected events and transactions occurred during April:Apr. 1 Stockholders invested $60,000 cash in the business in exchange for common
Roger Miller incorporated Skeptical Accountants, an accounting practice, on May 1, 2001. During the first month of operations of his business, these events and transactions occurred:May 1
The trial balance of Bellingham Dry Cleaners on June 30 is given here:The July transactions were as follows:July 8 Collected $4,936 in cash on June 30 accounts receivable.9 Paid employee salaries,
This trial balance of Eau Claire Company does not balance.Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:1. The totals of the debit
Lights Out Theater Inc. was recently formed. All facilities were completed on March 31. On April 1, the ledger showed: Cash $6,000; Land $10,000; Buildings (concession stand, projection room, ticket
The financial statements of Tootsie Roll in Appendix A at the back of this book contain the following selected accounts, all in thousands of dollars:Instructions (a) What is the increase and decrease
The financial statements of Hershey Foods are presented in Appendix B, fot lowing the financial statements for Tootsie Roll in Appendix A.Instructions(a) Based on the information contained in these
The North American Industry Classification System (NAICS), a new classification system for organizing economic data, has recently replaced the separate standard classification systems previously used
Doman Industries Ltd:, whose products are sold in 30 countries worldwide, is an integrated Canadian forest products company.Doman sells the majority of its lumber products in the United States, and a
Purpose: This exercise will familiarize you with skill requirements, job de-_ scriptions, and salaries for accounting careers.Address: http://www.cob.ohio-state.edu/dept/fin/jobs/account.htm (or go
Lucy Lars operates Lucy Riding Academy, Inc. The academy’s primary sources of revenue are riding fees and lesson fees, which are provided on a cash basis. Lucy also boards horses for owners, who
Milly Maid Company offers home cleaning service. Two recurring transactions for the company are billing customers for services provided and paying employee salaries.For example, on March 15 bills
Tony Robins is puzzled. His company had a profit margin ratio of 10% in 2001. He feels that this is an indication that the company is doing well. Joan Graham, his accountant, says that more
Which ratio or ratios from this chapter ae you think should be of greatest interest to:(a) a pension fund considering investing in a corporation’s 20-year bonds?(b) a bank contemplating a
Here are some qualitative characteristics of accounting information:1. Predictive value 3. Verifiable 2. Neutral 4. Timely Match each qualitative characteristic to one of the following statements.(a)
The Emelda Company uses these accounting practices:(a) Inventory is reported at cost when market value is lower.(b) Small tools are recorded as plant assets and depreciated.(c) The income statement
A list of financial statement items for Swann Company includes the following:accounts receivable $16,500; prepaid insurance $3,600; cash $18,400; supplies $5,200;and short-term investments $8,200.
The following information (in thousands of dollars) is available for The Limited for 1998: Sales revenue $9,346,911; cost of goods sold $6,348,945; net income $2,053,646;total stockholders’ equity
For each of the following events affecting the stockholders’ equity of Seek Corporation, indicate whether the event would: increase retained earnings (IRE), decrease retained earnings (DRE),
The following items were taken from the December 31, 1998, assets section of the Boeing Company balance sheet. (All dollars are in millions.)Instructions Prepare the assets section of a classified
These items are taken from the financial statements of Lumpy Lane Bowling Alley at December 31, 2001:Instructions Prepare a classified balance sheet; assume that $13,600 of the mortgage payable will
The following items were taken from the 1998 financial statements of Texas In-struments. (All dollars are in millions.)Instructions Prepare a classified balance sheet in good form as of December 31,
These financial statement items are for Stasik Corporation at year-end, July 31, 2001:Instructions (a) Prepare an income statement and a retained earnings statement for the year. Stasik Corporation
Selected comparative statement data for Mediocre Products Company are presented here. All balance sheet data are as of December 31.Instructions (a) What is the profit margin ratio for 2001?(b)
Nordstrom, Inc., operates department stores in numerous states. Selected financial statement data (in millions of dollars) for the year ended January 31, 1999, are as follows:For the year, net sales
The following data were taken from the 1997 and 1998 financial statements of Amazon.com. (All dollars in thousands.)Instructions Perform each of the following:(a) Calculate the debt to assets ratio
$\mathrm{O}=6$ Under what circumstances might inventory turnover be too high-that is, what possible negative consequences might occur?
Or- What is the LIFO reserve? What are the consequences of ignoring a large LIFO reserve when analyzing a company?
As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $\$ 180,000$ at December 31, 2017. This count did not take into consideration the following
O In periods of rising prices, LIFO will produce: $\square$(a) higher net income than FIFO.(b) the same net income as FIFO.(c) lower net income than FIFO.(d) higher net income than average-cost.
The lower-of-cost-or-market rule for inventory is an (lo example of the application of:(a) the conservatism convention.(b) the historical cost principle.(c) the materiality concept.(d) the economic
Carlos Company had beginning inventory of $\$ 80,000$, ending inventory of $\$ 110,000$, cost of goods sold of $\$ 285,000$, and sales of $\$ 475,000$. Carlos's days in inventory is:(a) 73
Norton Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a cost of $\$ 91$ each and a current replacement cost of $\$ 80$ each. The ending inventory under
Harold Company overstated its inventory by $\$ 15,000$ at December 31, 2016. It did not correct the error in 2016 or 2017. As a result, Harold's stockholders' equity was:(a) overstated at December

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