Questions and Answers of Intermediate Accounting Volume 1

The following selected data are for Carducci Importers for its first three years of operations:InstructionsDetermine the missing amounts.Taking It FurtherWhat information does the owner of a company
The following selected data are for Alexei Imports for its first three years of operations.InstructionsDetermine the missing amounts.Taking It FurtherWhat information does the owner of a company need
Here are some terms from the chapter:1. Accounts payable2. Expenses3. Creditor4. International Financial Reporting5. Prepaid expense6. Profit7. Assets8. Corporation9. Unearned revenue10. Generally
An analysis of transactions for Star & Co. for July 2024 was presented in E1.13.Data from Exercise 13A tabular summary of the transactions for Star & Co., an accounting firm, for its first
A co-op student, working for Insidz Co., recorded the company’s transactions for the month. At the end of the month, the owner of Insidz Co. reviewed the student’s work and had some questions
Your examination of the records of Southlake Company shows the company collected $85,500 cash from customers and paid $48,400 cash for operating costs during 2024. If Southlake followed the accrual
Your examination of the records of Northland Co. shows the company collected $136,200 cash from customers and paid $108,700 cash for operating costs in 2024. If Northland followed the accrual basis
Rogers Communications Inc. is a diversified Canadian communications and media company engaged in three primary lines of business: Wireless, Cable, and Media. The following is part of Rogers’
Demello & Associates records adjusting entries on an annual basis. The company has the following information available on accruals that must be recorded for the year ended December 31, 2024:1.
Burke Bros. records adjusting entries on an annual basis. The company has the following information available on accruals that must be recorded for the year ended December 31, 2024:1. Burke Bros. has
The following independent items for Théâtre Dupuis during the year ended November 30, 2024, may require a transaction journal entry, an adjusting entry, or both. The company records all prepaid
Specific financial decisions often depend more on one type of accounting information than another. Consider the following independent, hypothetical situations:1. Pierson Industries is thinking about
Listed in alphabetical order, the following selected accounts (in thousands) were taken from Paradise Mountain Family Resort’s December 31, 2024, financial statements:Instructionsa. In each case,
Listed in alphabetical order, the following selected accounts (in thousands) were taken from Parker Information Technology Company’s December 31, 2024, financial statements:a. In each case,
Three independent situations follow:1. In preparing its financial statements, Karim Company estimated and recorded the impact of the recent death of its president.2. Because of a “flood sale,”
Four independent situations follow:1. Human Solutions Incorporated believes its people are its most significant asset. It estimates and records their value on its balance sheet.2. Sharon Barton,
Match each of the following terms with the best description below:1. Historical cost2. Revenue recognition3. Going concern assumption4. Reporting entity concept5. Monetary unit concepta. _______
Battistella Couture & Design Co. began operations in 2024. During January 2024, the company had the following transactions:Jan. 2 Paid January rent, $525.4 Finished sewing a suit, delivered it to
The financial statements of Aritzia Inc. are shown in Appendix A at the back of this textbook. They contain the following selected accounts:Instructionsa. Answer the following questions:1. In which
James is puzzled as he reads Aritzia Inc.’s financial statements. He notices that the numbers have all been rounded to the nearest thousand. He thought financial statements were supposed to be
Waterloo Brewing Limited, a Canadian producer and distributor of alcohol-based products, was profitable in fiscal 2020. The following list of accounts and amounts was taken from its January 31, 2020,
ND Paint Designs began operations on April 1, 2024. The company completed the following transactions in its first month:Apr. 1 The owner, Nazim Dhaliwal, invested $12,800 cash in the company.2
Calculate the account balances for the following accounts: Cash Dr. 500 800 8,920 5,355 10,435 Cr. 8,720 495 6,750 Service Revenue Dr. Cr. 9,500 3,200 4,500 1,050 Accounts Payable Dr. Cr. 1,720
Grete Rodewald formed a dog grooming and training business called Grete Kanines on September 1, 2024. After consulting with a friend who had taken introductory accounting, Grete created a chart of
Barbara Fair is a licensed architect. During the first month of operation of her business, the following events and transactions occurred.Apr. 1 Invested $45,000 cash.1 Hired a secretary-receptionist
You are presented with the following transactions for J. Green, a sole proprietorship established in the month of August:Aug. 2 The owner, Jason Green, invested $35,000 in the business.2 Purchased
The “All About You” feature shows the importance of good record keeping for small businesses and students. You are a first-year university student and very excited about moving away from home to
After researching the different forms of business organization, Natalie Koebel decides to operate Santé Smoothies as a proprietorship. She then starts the process of getting the business running.
Abramson Financial Services was formed on May 1, 2024. The following events and transactions are from its first month:May 1 Jacob Abramson invested $44,810 cash and equipment worth $10,690 in the
Thanh Nguyen started a business, Nguyen Import Services, on August 1, 2024. After consulting with a friend who had taken introductory accounting, Thanh created a chart of accounts for the business as
Kiersted Financial Services was formed on November 1, 2024. During the month of November, the following events and transactions occurred:Nov. 1 Haakon Kiersted, the owner, invested $35,000 cash in
Sequel Theatre, owned by Nadia Wood, is unique as it shows only movies that are part of a theme with sequels. As at April 30, 2024, the ledger of Sequel Theatre showed the following: Cash $18,900,
Selected transactions for Sophie’s Dog Care are as follows during the month of March:Mar. 1 Paid the monthly rent of $1,200.3 Performed dog grooming services for $160 on account.5 Performed dog
Highland Theatre is owned by Finnean Ferguson. At June 30, 2024, the ledger showed the following: Cash $6,000, Land $100,000, Buildings $80,000, Equipment $25,000, Accounts Payable $5,000, Mortgage
Aduke Zhawaki is a talented musician who runs a business teaching music and playing in gigs with a variety of other musicians. Her business is operated as a proprietorship, under the name A to Z
At the end of September 2024, total owner’s equity for Beaulieu Group Company was $8,050. During October, the following transactions occurred:1. Provided services to a client and received $1,820
Lena Kuznetsova provides coaching and mentoring services to individuals and companies. She operates the business as a proprietorship, under the name LVK Coaching Services, which has a December 31
The following is an alphabetical list of accounts and balances for J. Saggit, proprietorship, at June 30, 2024:InstructionsPrepare a trial balance at June 30, sorting each account into the debit or
The following is an alphabetical list of accounts and balances for the J. Nikko proprietorship at November 30, 2024:Instructionsa. Prepare a trial balance at November 30, sorting each account into
Oliver Nicholas, the owner of Nicholas Marketing Services, prepared the following trial balance at December 31, 2024.Instructionsa. Prepare an income statement for the year ended December 31.b.
The ledger of Super Delivery Service has the following account balances at the company’s year end, August 31, 2024:Instructionsa. Prepare a trial balance, with the accounts arranged in ledger
Refer to the trial balance that follows for Edden Electrical for the year ended April 30, 2024.InstructionsUse the trial balance to do the following:a. Prepare an income statement for the year ended
On September 1, Depot Company has the following accounts and account balances:Cash $17,400, Accounts Receivable $2,000, Supplies $1,900, Accounts Payable $1,000, Unearned Revenue $1,600, Owner’s
Ella Mendes prepared the following trial balance for her yoga studio, Mindful Meditation, for the year ended December 31, 2024.InstructionsUse the trial balance to do the following:a. Prepare an
The following is the trial balance prepared for Owen’s Art Supplies.Instructionsa. Prepare an income statement for the year ended December 31, 2024.b. Prepare a statement of owner’s equity for
Hobson Nolan is a human resources professional who operates a consulting practice under the name HN Consulting. The company had the following balances in its general ledger at February 29, 2024: Cash
Derek Scoffin owns and operates YH Curling School on evenings and weekends. The company had the following balances in its general ledger at January 31, 2024: Cash $2,100, Accounts Receivable $720,
On April 1, Adventures Travel Agency began operations. The following transactions were completed during the month.Apr. 1 The owner, A. Santos, invested $24,000 in the business.2 Paid $1,800 cash for
Transactions from the journal of June Feldman, investment broker, are presented below:Instructionsa. Post the transactions to T accounts.b. Prepare the trial balance at August 31, 2024. Date Aug.
The ledger of Lazdowski Marketing Services has the following account balances at the company’s year end, October 31, 2024:Instructionsa. Prepare a trial balance, with the accounts arranged in
On January 3, 2023, Ajax Argyle purchased a piece of equipment for $125,000. The equipment’s estimated useful life is either four years or 12,000 units, with a residual value of $18,000. The
Using the T accounts provided, post the following February journal entries to the general ledger and calculate the ending balances. Feb. 1 Feb. 1 Feb. 5 10,000 Service Revenue 4,550 Dr. Cr. Feb. 8
On July 31, 2024, Lee Meche, MD, had the following balances in the ledger for his medical practice: Cash $8,800, Accounts Receivable $2,750, Supplies $585, Equipment $15,550, Notes Payable $10,000,
The trial balance of Winter Co. does not balance:Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:1. Cash received from a customer on
Fortin Co.’s ledger is as follows:Instructionsa. Journalize the October transactions.b. Determine the October 31, 2024, balance for each account. Prepare a trial balance at October 31, 2024. Oct.
From the general ledger balances given below, prepare a trial balance for Amaro Company at June 30, 2024. All account balances are normal. Accounts Payable $8,100, Cash $5,800, Owner’s Capital
Ahuja Dental Services’ general ledger at June 30, 2024, included the following: Cash $5,820, Supplies $1,180, Equipment $64,990, Notes Payable $50,020, Accounts Payable $680, and S. Ahuja, Capital
Red Bridges Towing is owned by Ken Cordial. The company has a June 30 fiscal year end and prepares adjustments on an annual basis. The following is an alphabetical list of its accounts at June 30,
A review of the ledger of Hashmi Company at July 31, 2024, produces the following data for the preparation of annual adjusting entries:1. Prepaid Insurance, July 31, 2024, unadjusted balance,
You are asked to prepare the following adjusting entries for Susan’s Sewing at December 31, 2024:1. Supplies of $650, originally recorded as supplies, were used during the year.2. Prepaid insurance
A review of the ledger of Greenberg Company at December 31, 2024, produces the following important data for the preparation of annual adjusting entries:1. Prepaid Advertising, December 31, 2024,
During 2024, Alabaster Co. borrowed cash from Fuchsia Enterprises by issuing notes payable as follows:1. June 1, 2024, issued a seven-month, 4% note for $50,000. Interest and principal are payable at
During 2024, Cobalt Co. borrowed cash from Azores Enterprises by issuing notes payable as follows:1. March 31, 2024, issued a one-year, 3.8% note for $107,900. Interest is payable quarterly, on June
Zhang Company paid $27,000 to purchase equipment on January 1, 2024. Zhang Company has a December 31 fiscal year end and uses straight-line depreciation. The company estimates the equipment will have
On July 1, 2024, Masood Company purchases equipment for $30,000 cash. The company uses straight-line depreciation. It estimates the equipment will have a 10-year life. Masood Company has a December
At the end of its first year, the trial balance of Dallas Company shows Equipment of $40,000 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the
Evan Watts opened a dental practice on January 1, 2024. During the first month of operations, the following transactions occurred.1. Watts performed services for patients totalling $2,400. These
Best First Aid offers first aid training to individuals and groups across the city. The following information is available to be used in recording annual adjusting entries for the company’s October
Melody Lane Co. provides music lessons to many clients across the city. The following information is available to be used in recording annual adjusting entries at the company’s September 30, 2024,
Burke Bros. began operations on January 1, 2024. Its fiscal year end is December 31 and it prepares financial statements and adjusts its accounts annually. Selected transactions from 2024 follow:1.
Reyes Rides is owned by Jason Reyes. The company has an August 31 fiscal year end and prepares adjustments on an annual basis. The following is an alphabetical list of its accounts at August 31,
Nile Company had the following trial balance at June 30, 2024 (its year end):During the month of July, the following selected transactions took place:July 2 Paid $750 cash for rent for July, August,
On March 1, 2024, Big North Insurance received $4,800 cash from Forest Co. for a one-year insurance policy. Big North Insurance has an October 31 fiscal year end and adjusts accounts annually.
Mountain Best Lodge has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 monthly adjustments:Additional
On October 31, 2024, the account balances of Hamm Equipment Repair were as follows.During November, the following summary transactions were completed.Nov. 8 Paid $1,700 for salaries due employees, of
The ledger of Bourque Rental Agency on March 31, 2024, includes the following selected accounts before preparing quarterly adjusting entries:An analysis of the accounts shows the following:1. The
Highland Cove Resort has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 monthly
Vintage Clothing Co. is open for business six days a week. Weekly total salaries of $7,080 are paid every Monday morning to employees for salary earned during the previous six- day workweek (Monday
On October 31, 2024, the account balances of Pine Equipment Repair were as follows:During November, the following summary transactions were completed.Nov. 8 Paid $1,100 for salaries due employees, of
During 2024, Aubergine Co. borrowed cash from Chartreuse Company by issuing notes payable as follows:1. July 1, 2024, issued an eight-month, 4% note for $75,000. Interest and principal are payable at
Butternut Squash Company has the following two notes receivable at May 31, 2024, its fiscal year end:1. $50,000 six-month, 6% note issued January 1, 2024.2. $20,000 three-month, 5% note issued April
Refer to the data in BE8.5 for Gourdeau Co.Data from in BE8.5Gourdeau Co. uses an aging schedule to determine its estimated uncollectible accounts at December 31. Complete the following schedule and
On January 2, 2024, Durand Co. had a $20,000, five-month, 6% note receivable from Vincent Company dated October 31, 2023. Interest receivable of $200 was accrued on the note on December 31, 2023.
The adjusted trial balance for Unser Company, owned by J. Unser, is as follows:Instructionsa. Prepare closing entries.b. Use T accounts to post the closing entries and calculate the balance in each
Data for Olaf Company and DeVito Company are presented in E5.9.Data from Exercise E5.9The following transactions occurred in April and May. Both companies use a perpetual inventory system.Apr. 5 Olaf
Presented below is an aging schedule for Halleran Company at December 31, 2023:Instructionsa. Prepare T accounts for Accounts Receivable and Allowance for Doubtful Accounts and enter the 2023
Data for Stojanovic Distributing Company are presented in P5.5B. A physical inventory count shows the company has $5,570 of inventory on hand at September 30, 2024.Instructionsa. Record the
Data for Willingham Distributing Company are presented in P5.5A. A physical inventory count shows $5,498 of inventory on hand on June 30, 2024.Instructionsa. Record the transactions assuming
The adjusted trial balance for Thao Company, owned by D. Thao, is as follows:Instructionsa. Prepare closing entries.b. Use T accounts to post the closing entries and calculate the balance in each
Data for Leeland Company are presented in P5.3B.Data from P5.3BTransactions follow for Leeland Company during October and November of the current year. Leeland uses a perpetual inventory system and
Data for Phantom Book Warehouse are presented in P5.4B.InstructionsRecord the June transactions for Phantom Book Warehouse, assuming a periodic inventory system is used instead of a perpetual
Shek Enterprises is owned by Memphis Shek and has a December 31 fiscal year end. The company prepares adjusting entries on an annual basis. Some additional information follows:1. A one-year insurance
Fox Enterprises is owned by Edmund Fox and has a January 31 fiscal year end. The company prepares adjusting entries on an annual basis. The following trial balance was prepared before
During 2024, Royal Co. borrowed cash from Struck Company by issuing notes payable as follows:1. June 1, 2024, issued an eight-month, 6% note for $85,000. Interest and principal are payable at
The account balances (after adjustments) from the general ledger of Winterholt Company at September 30, 2024, follow in alphabetical order. All accounts have normal balances.a. Prepare an adjusted
An adjusting entry may affect two balance sheet or two income statement accounts.” Do you agree? Why or why not?
Selected accounts for Lee’s Salon at December 31, 2024, are presented below.Instructionsa. Prepare closing entries to close the accounts.b. Post the entries. A. Lee, Capital Dr. Salaries
The adjusted trial balance of Wildwood Company at December 31, 2024, includes the following accounts: D. Wood, Capital $15,600, D. Wood, Drawings $7,000, Service Revenue $39,000, Salaries Expense
Ray Wong’s Magic Company has a capital balance on January 1, 2024, of $25,600. Ray Wong has drawings of $12,000. Prepare a statement of owner’s equity for the year assuming that profit is $14,200
The financial statements and accompanying notes of Aritzia Inc. are presented in Appendix A at the end of this book.Instructionsa. What classifications does Aritzia use in its balance sheet?b. In

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