Questions and Answers of Financial Accounting Tool

Data for McLanie Company are presented in BE6-2. Compute the cost of the ending inventory under the average-cost method. (Round the cost per unit to three decimal places.)
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 inventory $119,035, cost
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2017, of $46,850,000 under the LIFO inventory method. In the notes to
Fennick Company reports net income of $92,000 in 2017. However, ending inventory was understated by $7,000. What is the correct net income for 2017? What effect, if any, will this error have on total
The accounting records of Ohm Electronics show the following data.Determine cost of goods sold during the period under a periodic inventory system using (a) the FIFO method, (b) the LIFO method, and
Jeri Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows.Determine the value of the company’s inventory
Early in 2017, Fedor Company switched to a just-in-time inventory system. Its sales and inventory amounts for 2016 and 2017 are shown below.Determine the inventory turnover and days in inventory for
Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017.Instructions (a) Calculate the inventory turnover for 2015, 2016, and 2017. (Round to one decimal place.)(b) Calculate
Deere & Company is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual
Inventory data for Jeters Company are presented in E6-7.Instructions(a) Calculate the cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual
Information about Mather is presented in E6-4. Additional data regarding the company’s sales of EZslide snowboards are provided below. Assume that Mather uses a perpetual inventory
Om-Internal control is concerned only with enhancing the accuracy of the accounting records." Do you agree? Explain.
Which of the following is not an element of the fraud triangle?(a) Rationalization(c) Segregation of duties.(b) Financial pressure.(d) Opportunity.
Orame The principles of internal control do not include:(a) establishment of responsibility.(b) documentation procedures(c) management responsibility.(d) independent internal verification.
Permitting only designated personnel such as cashiers to handle cash receipts is an application of the principle of:(a) segregation of duties(b) establishment of responsibility.(c) independent
The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor is:(a) outstanding checks. (c) a bank error(b) deposit in transit.(d) bank service charges.
A check is written to replenish a $\$ 100$ petty cash (L0 fund when the fund contains receipts of $\$ 94$ and $\$ 4$ in cash. In recording the check:(a) debit Cash Over and Short for \(\$
While examining cash receipts information, the accounting department detercount sheet. mined the following information: opening cash balance $150, cash on hand $1,125.74,(LO 2), AP and cash sales per
Tott Company has the following internal control procedures over cash disburseprinciples applicable to cash ments. Identify the internal control principle that is applicable to each
Luke Roye is uncertain about the control features of a bank account. Explain the bank account. control benefits of (a) a checking account and (b) a bank statement.
The following reconciling items are applicable to the bank reconciliation for Forde items in a bank reconciliation. Co. Indicate how each item should be shown on a bank reconciliation.{LO 3), ¢ (a)
Using the data in BE7-8, indicate (a) the items that will result in an adjustment to require adjusting entries. the depositor’s records and (b) why the other items do not require adjustment.
At July 31, Planter Company has this bank information: cash balance per bank reconciliation. $7,291, outstanding checks $762, deposits in transit $1,350, and a bank service charge $40.(LO 3), AP
Spahn Company has these cash balances: cash in bank $12,742, payroll bank presentation of cash balances. account $6,000, and plant expansion fund cash $25,000. Explain how each balance should(LO
The following information is available for Bonkers Company for the month of(LO 4), AP Ora January: expected cash receipts $59,000, expected cash disbursements $67,000, and cash balance on January 1,
On March 20, Harbor’s petty cash fund of $100 is replenished when the fund cash fund. contains $19 in cash and receipts for postage $40, supplies $26, and travel expense $15.(LO 5), AP Prepare the
Identify which control activity is violated in each of the following situations,» activities. and explain how the situation creates an opportunity for fraud or inappropriate accounting~ {10 1),¢
Stern Corporation’s management wants to maintain a minimum monthly cash balance of $8,000. At the beginning of September, the cash balance is $12,270, expected cash receipts for September are
$0=-\frac{1}{6}$ How might a company monitor the risk related to its accounts receivable?
-5 What is meant by a concentration of credit risk?
O-sics The president of Ericson announces her company's improved liquidity since its current ratio has increased substantially from one year to the next. Does an increase in the current ratio always
O-15e Coca-Cola Company's accounts receivable turnover was 9.05 in 2014, and its average amount of net receivables during the period was $\$ 3,424$ million. What is the amount of its net credit
Kersee Company on June 15 sells merchandise on account to Eng Co. for $\$ 1,000$, terms $2 / 10, \mathrm{n} / 30$. On June 20, Eng Co. returns merchandise worth $\$ 300$ to Kersee Company. On
Net credit sales for the month are $\$ 800,000$. The accounts receivable balance is $\$ 160,000$. The allowance is calculated as $7.5 \%$ of the receivables balance using the
. In 2017, Patterson Wholesale Company had net credit sales of $\$ 750,000$. On January 1, 2017, Allowance for Doubtful Accounts had a credit balance of $\$ 18,000$. During 2017, $\$ 30,000$ of
An analysis and aging of the accounts receivable of Raja Company at December 31 reveal these data:Accounts receivable$\$ 800,000$Allowance for doubtful accounts per books before adjustment
A company can accelerate its cash receipts by all of 1102 the following except:(a) offering discounts for early payment.(b) accepting national credit cards for customer purchases.(c) selling
Use the same information as in Question 11, except that (10? Hughes has a debit balance of $\$ 5,000$ in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year.
Michael Co. accepts a $\$ 1,000,3$-month, $12 \%$ promis- (t4 3 sory note in settlement of an account with Tani Co. The entry to record this transaction is: (a) Notes Receivable 1,030 Accounts
O Eddy Corporation had net credit sales during the year of $\$ 800,000$ and cost of goods sold of $\$ 500,000$. The balance in receivables at the beginning of the year was $\$ 100,000$ and at
Orall Corporation sells its goods on terms of $2 / 10, n / 30$. It has an accounts receivable turnover of 7.What is its average collection period (days)?(a) 2,555(c) 52(b) 30(d) 210
Presented below are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a(a) Advanced $10,000 to an
Record the following transactions on the books of Jarvis Co. (Omit cost of goods(a) On July 1, Jarvis Co. sold merchandise on account to Stacey Inc. for $23,000, terms(b) On July 8, Stacey Inc.
At the end of 2016, Safer Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2017, it is learned that the company’s receivable from Madonna
Assume the same information as BE8-3 and that on March 4, 2017, Safer Co.receives payment of $4,300 in full from Madonna Inc. Prepare the journal entries to record this transaction.
Mantle Company has been in business several years. At the end of the current year, the unadjusted trial balance shows:Accounts Receivable $ 310,000 Dr.Sales Revenue 2,200,000 Cr.Allowance for
The following is a list of activities that companies perform in relation to their receivables. 1.Selling receivables to a factor. 2.Reviewing company ratings in The Dun and Bradstreet Reference Book
Indicate in which part of the statement of cash flows each item would appear:operating activities (O), investing activities (I), or financing activities (F).(a) Cash received from customers.(b) Cash
Classify each of the following items as dividends (D), revenue (R), or expense(E).(a) Costs incurred for advertising.(b) Assets received for services performed.(c) Costs incurred for insurance.(d)
In alphabetical order below are balance sheet items for Gidget Company at December 31, 2001. Prepare a balance sheet following the format of Illustration 1-4. Accounts payable $90,000 Accounts
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet. In each
Indicate which statement you would examine to find each of the following items:income statement (I), balance sheet (B), retained earnings statement (R), or statement of cash flows (C).(a) Revenue
A company makes a credit sale of $\$ 750$ on June 13, terms $2 / 10, \mathrm{n} / 30$, on which it grants a return of $\$ 50$ on June 16.What amount is received as payment in full on June
If net sales are $\$ 400,000$, cost of goods sold is $\$ 310,000$, and operating expenses are $\$ 60,000$, what is the gross profit?(a) $\$ 30,000$.(c) $\$ 340,000$(b) $\$ 90,000$.(d)
The multiple-step income statement for a merchandising company shows each of these features except:(a) gross profit.(b) cost of goods sold.(c) a sales section.(d) an investing activities section.
Bufford Corporation had reported the following (LO) amounts at December 31, 2017: sales revenue $\$ 184,000$, ending inventory $\$ 11,600$, beginning inventory $\$ 17,200$, purchases \(\$
Or-cos the gross prote is equal to:(a) net income divided by sales.(b) cost of goods sold divided by sales.(c) net sales minus cost of goods sold, divided by net sales.(d) sales minus cost of goods
During the year ended December 31, 2017, Bjornstad (10 Corporation had the following results: net sales $\$ 267,000$, cost of goods sold $\$ 107,000$, net income $\$ 92,400$, operating expenses
A credit sale is made on July 10 for $\$ 900$, terms $1 / 15$, $\mathrm{n} / 30$. On July 12 , the purchaser returns $\$ 100$ of goods for credit. Give the journal entry on July 19 to record
What title does Apple use for gross profit? By how much did its total gross profit change, and in what direction, in 2014?
Qers What two ratios measure factors that affect 22.Qers What two ratios measure factors that affect profitability?
Or-mat factors affect a company's gross profit rate-that is, what can cause the gross profit rate to increase and what can cause it to decrease?
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 McLeena
From the information in BE5-3, prepare the journal entries to record these transactions on McLeena Company's books under a perpetual inventory system.
The following information relates to Karen Weigel Inc. for the year 2017.After analyzing the data, (a) compute net income and (b) prepare a comprehensive income statement for the year ending December
Assume the same information as in BE5-9 and also that Spacey Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $612,000.Determine the amounts to be reported
Indicate whether the following statements are true or false.merchandisers 1.A merchandising company reports gross profit but a service company does not. 2.Under a periodic inventory system, a company
On October 5, Iverson Company buys merchandise on account from Lasse purchasing company. Company. The selling price of the goods is $5,000, and the cost to Lasse Company is $3,000.(U0 2), ap On
Assume information similar to that in 5-2. That is: On October 5, Iverson company. Company buys merchandise on account from Lasse Company. The selling price of the defective goods with a selling
The following information is available for Berlin Corp. for the year ended statement and comprehensive December 31, 2017;Prepare a multiple-step income statement for Berlin Corp. and comprehensive
Clean Lake Corporation's accounting records show the following at year-end using periodic system. December 31, 2017:Assuming that Clean Lake Corporation uses the periodic system, compute (a) cost of
This information relates to Rice Co.transactions. 1.On April 5, purchased merchandise from Jax Company for $28,000, terms 2/10, n/30.(LO 2), ap 2.On April 6, paid freight costs of $700 on merchandise
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
Financial information is presented here for two companies.(a) Fill in the missing amounts. Show all computations.(b) Calculate the profit margin and the gross profit rate for each company.(c) Discuss
In its income statement for the year ended December 31, 2017, Darren Company reported the following condensed data.(a) Prepare a multiple-step income statement.(b) Calculate the profit margin and
Suppose in its income statement for the year ended June 30, 2017, The Clorox Company reported the following condensed data (dollars in millions).(a) Prepare a multiple-step income statement.(b)
In its income statement for the year ended December 31, 2017, Laine Inc. reported the following condensed data.Instructions (a) Prepare an income statement.(b) Prepare a comprehensive income
Below is a series of cost of goods sold sections for companies B, M, O, and S.Fill in the lettered blanks to complete the cost of goods sold sections. B M 0 S Beginning inventory Purchases Purchase
This information relates to Alfie Co 1.On April 5, purchased merchandise from Bach Company for $27,000, terms 2/10, n/30. 2.On April 6, paid freight costs of $1,200 on merchandise purchased from Bach
The financial statements of Apple Inc. in Appendix A at the back of this textbook contain the following selected accounts, all in thousands of dollars.Instructions (a) What is the increase and
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of VF Corporation are presented in Appendix C.Instructions(a) Based on the information
Amazon.com, Inc.'s financial statements are presented in Appendix D. Financial £statements of Wal-Mart Stores, Inc. are presented in Appendix E.Instructions(a) Based on the information contained in
Purpose: This activity provides information about career opportunities for CPAs.Address: www.startheregoplaces.com/why-accounting, or go to www.wiley.com/college/kimmel Instructions Go the address
Klean Sweep Company offers home cleaning service. Two recurring transactions §$for the company are billing customers for services performed and paying employee salaries.For example, on March 15
“The historical cost principle of accounting requires adjusting entries.” Do you agree? Explain.
Whistler Corp. performed services for a customer but has not received payment, nor has it recorded any entry related to the work. Which of the following types of accounts are involved in the
company makes an accrued revenue adjusting entry for $780 and an accrued expense adjusting entry for $510. How much was net income understated or overstated prior to these entries? Explain.
What items are disclosed on a post-closing trial balance. What is its purpose?
The ledger of Melmann Company includes the following accounts. Explain why each account may require adjustment. (a) Prepaid Insurance. (b) Depreciation Expense. (c) Unearned Service Revenue. (d)
Using the data in BE4-6, 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 Revenue.
The trial balance of Woods Company includes the following balance sheet accounts.Identify the accounts that might require adjustment. For each account that requires adjustment, indicate (1) the type
The following selected accounts appear in the adjusted trial balance for Deane Company. Indicate the financial statement on which each account would be reported.(a) Accumulated Depreciation. (e)
A list of concepts is provided below in the left column, with descriptions of the concepts in the right column. There are more descriptions provided than concepts. Match the description to the
Indicate in which financial statement each of the following adjusted trial balance accounts would be presented. Service Revenue Notes Payable Common Stock Accounts Receivable Accumulated Depreciation
Paloma Company shows the following balances in selected accounts of its adjusted trial balance.Prepare the remaining closing entries at December 31. Supplies $32,000 $32,000 Service Revenue $108,000
What is the periodicity assumption?(a) Companies should recognize revenue in the accounting period in which services are performed.(b) Companies should match expenses with revenues.(c) The economic
Which one of these statements about the accrual basis of accounting is false?(a) Companies record events that change their financial statements in the period in which events occur, even if cash was
Adjusting entries are made to ensure that: (LO(a) expenses are recognized in the period in which they are incurred.(b) revenues are recorded in the period in which the performance obligation is
Each of the following is a major type (or category) of (LO adjusting entry except:(a) prepaid expenses. (c) accrued expenses.(b) accrued revenues. (d) unearned expenses.
Queenan Company computes depreciation on deballivery equipment at $1,000 for the month of June. The adjusting entry to record this depreciation is as follows: (a) Depreciation Expense 1,000

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