Questions and Answers of Introduction To Accounting

What are the top three digital ethics issues at the moment?
Which is more important, cybersecurity, information privacy, or digital ethics?
Which accounting role in information privacy and digital ethics is most important to an organization’s information privacy and digital ethics capability?
Which cybersecurity management related accounting competency is likely to have the greatest positive impact on an accountant’s career?
Which of the capabilities discussed in this chapter is the most important to succeeding at digital transformation and digital business?
What is the diference between traditional leadership, e-leadership, and digital leadership?
What is the diference between risk management and digital risk management?
What is the relationship between risk management and governance?
What is the relationship between information privacy and digital ethics?
What is the difference between change and transformation? How do accelerated change and accelerated transformation differ?
What are the three most dangerous risk exposures for organizations at the moment?
If you were a hacker or cybercriminal, which risk surface or attack point would you consider best to attack and why?
What are three ways digital technologies are being leveraged to enhance digital risk management?
Which accounting role in digital risk management and governance is most important to an organization’s risk management and governance effectiveness?
Which risk management and governance-related competency is likely to have the greatest positive impact on an accountant’s career?
Which of the capabilities discussed in this chapter is the most important to succeeding at digital transformation and digital business?
Gfeller Enterprises began fiscal 2019 with the following shareholders’ equity information:Common stock shares issued 39,598,900, $0.01 par value, paid-in capital in excess of par
Refer to E17.16. What is Gregson’s ending inventory using absorption costing?Data from E17.16Gregson Enterprises, in its first year of operations, reported the following information:What is
Refer to E17.17. What is Gregson’s ending inventory using variable costing?Data from E17.17Refer to E17.16. What is Gregson’s variable contribution margin and profit?Data from E17.16.Gregson
Refer to E17.18. What is Gregson’s ending inventory using throughput costing?Data from E17.18Refer to E17.16. What is Gregson’s throughput margin and profit?Data from E17.16.Gregson Enterprises,
Ethan Carlson, a sole proprietor, is budgeting for the coming year. He will start the year with a $50,000 balance in his capital account from money he saved to start this project. During the year
Klamm Company needs to borrow $100,000. It plans to sign an installment note with a 6 percent interest rate and make monthly payments for the next eight years. How much is the monthly payment
The following list of accounts was provided by Churyk Transportation Corporation, which has an April 30 fiscal year-end. Using these accounts, prepare a balance sheet for Churyk Transportation
The following list of accounts is from the general ledger of Mantzke Company. Prepare an income statement, the AOCI, and retained earnings portion of the statement of shareholders’ equity, and a
The following balance sheet of Bennett Company for fiscal 2019 contains several errors. Identify and determine how to correct each error. BENNETT COMPANY Statement of Finances For the Period Ending
Keys, Inc., compared the cost of its marketable securities to their market value at the end of 2019. This comparison follows:Management would like to classify these securities as available-for-sale
The cost of Carnes Enterprises available-for-sale securities are $500,000 and the market value is $750,000 at the end of fiscal 2019. Carnes’s tax rate is 20 percent. How would this information be
Refer to the annual report of a company you are interested in, and answer the following questions:A. What is the total amount of current assets, and what types of assets are classified as current?B.
Write a paper describing in detail how the income statement, comprehensive income statement, statement of shareholders’ equity, and balance sheet are related.
What are the three primary components of the statement of shareholders’ (owners’) equity and what information is disclosed in each component?
Bolling, Inc., has determined that the cost of its available-for-sale securities is greater than the market value by $80,000. If Bolling is subject to a 20 percent tax rate, what is the impact of
Prepare the long-term asset section of the balance sheet.Use the following information:Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has the
Prepare the long-term liability section of the balance sheet.Use the following information:Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has
Engstrom Company began fiscal 2019 with a $40,000 deficit balance in retained earnings. During 2019 its net income was $167,890 and it has declared but not paid dividends of $50,000. What is the
Prepare the current asset section of the balance sheet.Use the following information:Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has the
For each of the following accounts, determine its classification on the balance sheet using the following classifications. Use OOE for other owners’ equity items that are not contributed capital or
Refer to the annual report of Pepsico, Inc. (www.pepsico.com), and answer the following questions:A. What is the total amount of current assets, and what types of assets are classified as current?B.
What is a prior period adjustment and why is it shown net of taxes?
Explain the format of the retained earnings portion of the statement of shareholders’ equity.
Prepare the shareholders’ equity section of the balance sheet.Use the following information:Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has
Hendricks, Inc., has an ending balance in retained earnings on December 31, 2019, of $567,432. During 2019 it had declared dividends of $100,000 and incurred a net loss of $246,700. What was the
Refer to the annual report of Dell Computer (www.dell.com) and answer the following questions:A. What is the total amount of current assets, and what types of assets are classified as current?B. What
Refer to the annual report of Walt Disney Company (www.disney.com) and answer the following questions:A. What is the total amount of current assets, and what types of assets are classified as
In 2017 Kieso Enterprises failed to record depreciation expense of $30,000. The accountant discovered this error in 2019. Kieso is subject to a 20 percent tax rate. What is the effect of this error
Prepare the balance sheet.Use the following information:Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has the following accounts in the general
Prepare the statement of shareholders’ equity.Use the following information: Tidrick Manufacturing Company has just completed its first year of operation on December 31, 2019. It has the following
How is financial position related to profit potential?
In 2016 Cummings Company, which is subject to a 30 percent tax rate, recognized interest revenue of $15,000. In January 2019, the accountant discovered that the correct amount of interest revenue for
These are the financial statements of Watanabe, Inc:Required:A. Prepare Watanabe’s statement of cash flows using the indirect method.B. Prepare Watanabe’s operating section of the statement of
Refer to Of Interest, Valuation on the Balance Sheet. Using that diagram and explanation, describe how/why the following items are reported on the balance sheet.a. Cashb. Accounts receivablec.
Describe the types of long-term assets.
Explain when a long-term note is classified as a current liability.
What does the term valued mean as it relates to the asset accounts shown on the balance sheet?
These are the financial statements of Bauers, Inc.:Additional Information:1. A building with a cost of $8,286 (thousand) was sold at book value.2. No equipment was sold during the period.Required:A.
These are the financial statements of Copple, Inc.Required:A. Prepare Copples’s statement of cash flows using the indirect method.B. Prepare Copple’s operating section of the statement of cash
Why is a prepaid insurance policy with a three-year life often listed as a current asset?
How are intangible assets valued on the balance sheet? Why?
Devona Enterprises began fiscal 2019 on January 1 with 1 million shares of common stock authorized and 300,000 shares issued and outstanding. The par value of the common stock is $0.50 per share and
How are current liabilities valued on the balance sheet? Why?
Prior to the issuance of SFAS No. 95, companies commonly prepared a funds statement that reported the changes in working capital during the period. Analyze the following funds statement and describe
Sinason Company is authorized to issue 2 million shares of common stock. At the beginning of 2019 it had 450,000 shares of common stock issued and 400,000 shares outstanding. The Common Stock account
How are long-term liabilities such as bonds payable reported on the balance sheet? Why?
Refer to E19.4. Determine the cash flows from operations using the indirect method for Wang Company.Data from E19.4Stara Company reveals the following information for the past fiscal period:Use the
Phelan Enterprises has a building that cost $987,000 when it was purchased five years ago. This building is being depreciated using the straight-line depreciation method over its useful life of 20
Refer to E19.3. Determine the cash flows from operations using the indirect method for Anthony CompanyData from E19.3Balke Company reveals the following balances in selected accounts:Determine the
What are classified as “other long-term liabilities”? Give two examples.
Balke Company reveals the following balances in selected accounts:Determine the operating cash flows using the direct format. Accounts receivable Inventory Prepaid rent Accounts
What does accumulated other comprehensive income (loss) represent on the balance sheet, and how is it different from comprehensive income?
The financial statements of Martinez Enterprises follow:Additional Information:1. No property, plant, and equipment was sold during the year.2. Amortization of intangibles was $139.3 (million) for
Refer to an annual report of your choice and answer the following questions:A. Is this statement prepared on the direct or indirect basis? How can you tell?B. Are net cash flows from operating
M. Potter is the manager of Masson Company. Potter receives an annual salary plus a bonus of 15 percent of net income before bonus and taxes. Masson Company uses the LIFO inventory costing method.
The financial statements of Bella Corporation follow:Additional Information:1. No short-term investments were purchased during the year.2. Equipment costing $20,000,000 [$20,000 (thousand)] was sold
Explain how the cash flow statement, in conjunction with the other financial statements, is useful for external users.
Companies argue that the direct method of preparing the statement of cash flows is too burdensome; however, given computer technology, that argument doesn’t seem as valid today as it once did. Do
Refer to Dell, Inc. (www.dell.com), and examine the statement of cash flows to answer the following questions:A. Is this statement prepared on the direct or indirect basis? How can you tell?B. Are
Refer to Walt Disney Company (www.disney.com) and examine the statement of cash flows to answer the following questions:A. Is this statement prepared on the direct or indirect basis? How can you
For the year ended December 31, 2019, Brown, Inc., reported net income of $175,000 on the accrual basis of accounting. Using the following information, convert the accrualbased net income to the cash
Refer to PepsiCo (www.pepsico.com), Inc. and examine the statement of cash flows to answer the following questions:A. Is this statement prepared on the direct or indirect basis? How can you tell?B.
If accounts receivable increases during the period, which is greater, collections from customers or sales on account? Why?
During 2019, Chen Company generated a $65,000 net income. Using this information, determine the adjusted net income:A. Equipment was sold during the period at a loss of $5,000.B. Trading securities
During 2019, Allen Company recorded interest expense on bonds payable of $18,500 and decreased the premium on bonds payable by $200. If net income was $44,600 during 2019, what is Allen’s net
Assume your company purchased Allen’s bonds when issued and held them during 2019. If your net income is $34,500, what is the net income adjustment to your statement of cash flows?
Refer to PepsiCo, Inc. (www.pepsico.com), and calculate the cash flow per share. You will need to examine the income statement to determine the weighted average shares outstanding.
If the Subscriptions Received in Advance account decreases during the period, which is greater, cash received in advance from customers or subscription revenue? Why?
Lawrence Products had a beginning balance in Furniture and Fixtures, net of depreciation, of $192,000. The ending balance in that account was $196,500. Depreciation expense for that period was
Refer to Dell, Inc. (www.dell.com), and calculate the cash flow per share. You will need to examine the notes to determine the weighted average shares outstanding and preferred dividends, if
Ruchala had $54,900 in its Equipment account at the beginning of 2019. The beginning balance of Accumulated Depreciation—Equipment was $9,000 at that time. During 2019, Ruchala recorded
Refer to Disney (www.disney.com) and calculate the cash flow per share. You will need to examine the notes to determine the weighted average shares outstanding and preferred dividends, if applicable.
If the interest expense for the period is $1,500 and the Premium on Bonds Payable account decreases during the period by $50, how much is the cash paid for interest? Why?
Shoemaker Company purchased a machine on January 1, 2018, for $85,000 in cash. On June 30, 2019, Shoemaker sold the machine at a loss of $5,000. Depreciation on the machine for the first half of 2019
In the indirect method of presenting operating cash flows, why is net income adjusted for depreciation, depletion, and amortization?
On March 1, 2019, Price Incorporated issued 10-year bonds with a face value of $600,000 and a face interest rate of 8 percent that was paid semiannually on March 1 and September 1. The bonds were
If a bond payable is issued at a discount, is the resulting amortization added to, or deducted from, net income to determine cash flows from operations in the indirect method? Why?
Assuming this is Price’s only debt, what is the amount shown on the cash flow statement for the year ended December 31, 2019, as cash paid for interest using the direct method?
If a bond payable is issued at a premium, is the resulting amortization added to, or deducted from, net income to determine cash flows from operations in the indirect method? Why?
During 2019, Woodland Incorporated issued a long term note for $50,000. In this same time period, Woodland paid off another long-term note of $70,000. How would Woodland reflect these events on the
Where and how do gains and losses appear on the statement of cash flows on an indirect basis? Why?
Refer to E20.1 and perform a horizontal analysis showing the change from Year 1 to Year 2.Data from E20.1Using the data in these abbreviated income statements, prepare a vertical analysis. Sales Cost
During 2019, Cosgrove’s Common Stock and Additional Paid-in Capital accounts increased by $35,000 and $257,000, respectively. If no common stock was retired during 2019, what is the amount shown on
Milligan had a beginning balance in Retained Earnings of $64,970. During the year, it generated a net income of $53,600. At the end of the year, the Retained Earnings account had a balance of

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