I do not understand this. Please answer questions.

Description / Instructions: Complete the following Week 3 Assignment in WileyPLUS: *Problem 9-7A *Exercise 10-5 *Exercise 10-8 *Exercise 10-13 *Exercise 10-22 *Exercise 10-24 *BYP 10-1 *BYP 10-2 *Problem 10-9A *Problem 10-13A *IFRS 10-4 Question 1 During the month of March, Olinger Company's employees earned wages of $66,300. Withholdings related to these wages were $5,072 for Social Security (FICA), $7,770 for federal income tax, $3,211 for state income tax, and $414 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $725 for state unemployment tax. Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 31 Prepare the entry to record the company's payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 31 Question 2 On August 1, 2014, Ortega Corporation issued $930,000, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Ortega's year-end is December 31. Prepare journal entries to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 Prepare journal entries to record the accrual of interest on December 31, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Prepare journal entries to record the payment of interest on August 1, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 Question 3 Romine Company issued $520,300 of 9%, 15-year bonds on January 1, 2014, at face value. Interest is payable annually on January 1. Prepare the journal entries to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2014 Prepare the journal entries to record the accrual of interest on December 31, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 Prepare the journal entries to record the payment of interest on January 1, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2015 Prepare the journal entries to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2029 Question 4 Cole Corporation issued $454,000, 8%, 21-year bonds on January 1, 2014, for $375,470. This price resulted in an effectiveinterest rate of 10% on the bonds. Interest is payable annually on January 1. Cole uses the effective-interest method to amortize bond premium or discount. Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole Corporation. (Round answers to 0 decimal places, e.g. 150.) Interest Periods Interest to Be Paid Interest Expense to Be Recorded $ Issue date Discount Amortization $ Unamortized Discount $ Bond Carrying Value $ $ 1 2 Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2014 Prepare the journal entries to record the accrual of interest and the discount amortization on December 31, 2014. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Jan. 1, 2015 Account Titles and Explanation Debit Credit Question 5 Nance Co. receives $314,000 when it issues a $314,000, 7%, mortgage note payable to finance the construction of a building at December 31, 2014. The terms provide for semiannual installment payments of $17,073 on June 30 and December 31. Prepare the schedule using effective-interest method to amortize bond premium or discount of Nance Co. (Round answers to 0 decimal places, e.g. 125.) Semiannual Interest Period Issue date Cash Payment $ Interest Expense $ Reduction of Principal $ Principal Balance $ 6/30/15 12/31/15 Prepare the journal entries to record the mortgage loan. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 Prepare the journal entries to record the first two installment payments. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit First Installment Payment June 30, 2015 Second Installment Payment Dec. 31, 2015 Question 6 The financial statements of Tootsie Roll are presented below. TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue Product cost of goods sold Rental and royalty cost Total costs Product gross margin Rental and royalty gross margin Total gross margin Selling, marketing and administrative expenses Impairment charges Earnings from operations Other income (expense), net Earnings before income taxes Provision for income taxes Net earnings 532,505 365,225 1,038 366,263 163,144 3,098 166,242 108,276 57,966 2,946 60,912 16,974 $43,938 521,448 349,334 1,088 350,422 167,815 3,211 171,026 106,316 64,710 8,358 73,068 20,005 $53,063 499,331 319,775 852 320,627 175,817 2,887 178,704 103,755 14,000 60,949 2,100 63,049 9,892 $53,157 Net earnings Other comprehensive earnings (loss) Comprehensive earnings $43,938 (8,740) $35,198 $53,063 1,183 $54,246 $53,157 2,845 $56,002 $147,687 53,063 (18,078) (46,806) $135,866 $144,949 53,157 (17,790) (32,629) $147,687 Retained earnings at beginning of year. Net earnings Cash dividends Stock dividends Retained earnings at end of year Earnings per share $135,866 43,938 (18,360) (47,175) $114,269 $0.76 $0.90 $0.89 Average Common and Class B Common shares outstanding 57,892 58,685 (The accompanying notes are an integral part of these statements.) 59,425 CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments 10,895 7,996 Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394 Other receivables 3,391 9,961 Inventories: Finished goods and work-in-process 42,676 35,416 Raw materials and supplies 29,084 21,236 Prepaid expenses 5,070 6,499 Deferred income taxes 578 689 Total current assets 212,201 235,167 PROPERTY, PLANT AND EQUIPMENT, at cost: Land 21,939 21,696 Buildings 107,567 102,934 Machinery and equipment 322,993 307,178 Construction in progress 2,598 9,243 455,097 440,974 LessAccumulated depreciation 242,935 225,482 Net property, plant and equipment 212,162 215,492 OTHER ASSETS: Goodwill 73,237 73,237 Trademarks 175,024 175,024 Investments 96,161 64,461 Split dollar officer life insurance 74,209 74,441 Prepaid expenses 3,212 6,680 Equity method investment 3,935 4,254 Deferred income taxes 7,715 9,203 Total other assets 433,493 407,300 $857,856 $857,959 Total assets Liabilities and Shareholders' Equity December 31, 2011 2010 CURRENT LIABILITIES: Accounts payable Dividends payable Accrued liabilities Total current liabilities NONCURRENT LIABILITES: Deferred income taxes Postretirement health care and life insurance benefits Industrial development bonds Liability for uncertain tax positions Deferred compensation and other liabilities Total noncurrent liabilities SHAREHOLDERS' EQUITY: Common stock, $.69-4/9 par value120,000 shares authorized36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value40,000 shares authorized21,025 and 20,466 respectively, issued Capital in excess of par value Retained earnings, per accompanying statement Accumulated other comprehensive loss Treasury stock (at cost)71 shares and 69 shares, respectively Total shareholders' equity Total liabilities and shareholders' equity $10,683 4,603 43,069 58,355 $9,791 4,529 44,185 58,505 43,521 26,108 7,500 8,345 48,092 133,566 47,865 20,689 7,500 9,835 46,157 132,046 25,333 25,040 14,601 14,212 533,677 114,269 (19,953) (1,992) 665,935 $857,856 505,495 135,866 (11,213) (1,992) 667,408 $857,959 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $43,938 $53,063 $53,157 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 19,229 18,279 17,862 Impairment charges 14,000 Impairment of equity method investment 4,400 Loss from equity method investment 194 342 233 Amortization of marketable security premiums 1,267 522 320 Changes in operating assets and liabilities: Accounts receivable (5,448) 717 (5,899) Other receivables 3,963 (2,373) (2,088) Inventories (15,631) (1,447) 455 Prepaid expenses and other assets 5,106 4,936 5,203 Accounts payable and accrued liabilities 84 2,180 (2,755) Income taxes payable and deferred (5,772) 2,322 (12,543) Postretirement health care and life insurance benefits 2,022 1,429 1,384 Deferred compensation and other liabilities 2,146 2,525 2,960 Others (708) 310 305 Net cash provided by operating activities 50,390 82,805 76,994 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (16,351) (12,813) (20,831) Net purchase of trading securities (3,234) (2,902) (1,713) Purchase of available for sale securities (39,252) (9,301) (11,331) Sale and maturity of available for sale securities 7,680 8,208 17,511 Net cash used in investing activities (51,157) (16,808) (16,364) CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired (18,190) (22,881) (20,723) Dividends paid in cash (18,407) (18,130) (17,825) Net cash used in financing activities (36,597) (41,011) (38,548) Increase (decrease) in cash and cash equivalents (37,364) 24,986 22,082 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental cash flow information Income taxes paid Interest paid 115,976 $78,612 90,990 $115,976 68,908 $90,990 $16,906 $38 $20,586 $49 $22,364 $182 Stock dividend issued $47,053 (The accompanying notes are an integral part of these statements.) $46,683 $32,538 Answer the following questions. What were Tootsie Roll's total current liabilities at December 31, 2011? (Enter amount in thousands.) Current liabilities as at December 31, 2011 $ What was the increase/decrease in Tootsie Roll's total current liabilities from the prior year? (Enter amount in thousands.) Change in current liabilities $ How much were the accounts payable at December 31, 2011? (Enter amount in thousands.) Accounts payable $ Question 7 The financial statements of The Hershey Company and Tootsie Roll are presented below. THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2011 2010 2009 In thousands of dollars except per share amounts Net Sales $6,080,788 $5,671,009 $5,298,668 Costs and Expenses: Cost of sales 3,548,896 3,255,801 3,245,531 Selling, marketing and administrative 1,477,750 1,426,477 1,208,672 Business realignment and impairment (credits) charges, net (886) 83,433 82,875 Total costs and expenses 5,025,760 4,765,711 4,537,078 Income before Interest and Income Taxes 1,055,028 905,298 761,590 Interest expense, net 92,183 96,434 90,459 Income before Income Taxes 962,845 808,864 671,131 Provision for income taxes 333,883 299,065 235,137 $628,962 $509,799 $435,994 Net Income $2.58 $2.08 $1.77 Net Income Per ShareBasicClass B Common Stock $2.56 $2.07 $1.77 Net Income Per ShareDilutedClass B Common Stock $2.85 $2.29 $1.97 Net Income Per ShareBasicCommon Stock $2.74 $2.21 $1.90 Net Income Per ShareDilutedCommon Stock Cash Dividends Paid Per Share: Common Stock $1.3800 $1.2800 $1.1900 Class B Common Stock 1.2500 1.1600 1.0712 The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com. THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS December 31, In thousands of dollars ASSETS Current Assets: Cash and cash equivalents Accounts receivabletrade Inventories Deferred income taxes 2011 2010 $693,686 399,499 648,953 136,861 $884,642 390,061 533,622 55,760 Prepaid expenses and other Total current assets Property, Plant and Equipment, Net Goodwill Other Intangibles Deferred Income Taxes Other Assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable Accrued liabilities Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term Debt Other Long-term Liabilities Total liabilities Commitments and Contingencies Stockholders' Equity: The Hershey Company Stockholders' Equity Preferred Stock, shares issued: none in 2011 and 2010 Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010 Additional paid-in capital Retained earnings TreasuryCommon Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 Accumulated other comprehensive loss The Hershey Company stockholders' equity Noncontrolling interests in subsidiaries Total stockholders' equity Total liabilities and stockholders'equity 167,559 2,046,558 1,559,717 516,745 111,913 38,544 138,722 $4,412,199 141,132 2,005,217 1,437,702 524,134 123,080 21,387 161,212 $4,272,732 $420,017 612,186 1,899 42,080 97,593 1,173,775 1,748,500 617,276 3,539,551 $410,655 593,308 9,402 24,088 261,392 1,298,845 1,541,825 494,461 3,335,131 299,269 60,632 490,817 4,699,597 299,195 60,706 434,865 4,374,718 (4,258,962) (4,052,101) (442,331) 849,022 23,626 872,648 $4,412,199 (215,067) 902,316 35,285 937,601 $4,272,732 THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2011 In thousands of dollars Cash Flows Provided from (Used by) Operating Activities Net income $628,962 Adjustments to reconcile net income to net cash provided from operations: Depreciation and amortization 215,763 Stock-based compensation expense, net of tax of $15,127, $17,413 and 28,341 $19,223, respectively Excess tax benefits from stock-based compensation (13,997) Deferred income taxes 33,611 Gain on sale of trademark licensing rights, net of tax of $5,962 (11,072) Business realignment and impairment charges, net of tax of $18,333, $20,635 30,838 and $38,308, respectively Contributions to pension plans (8,861) Changes in assets and liabilities, net of effects from business acquisitions and divestitures: Accounts receivabletrade (9,438) Inventories (115,331) Accounts payable 7,860 Other assets and liabilities (205,809) Net Cash Provided from Operating Activities 580,867 Cash Flows Provided from (Used by) Investing Activities Capital additions (323,961) Capitalized software additions (23,606) Proceeds from sales of property, plant and equipment 312 Proceeds from sales of trademark licensing rights 20,000 Business acquisitions (5,750) Net Cash (Used by) Investing Activities (333,005) Cash Flows Provided from (Used by) Financing Activities Net change in short-term borrowings 10,834 2010 2009 $509,799 $435,994 197,116 182,411 32,055 34,927 (1,385) (18,654) (4,455) (40,578) 77,935 60,823 (6,073) 20,329 (13,910) 90,434 13,777 901,423 (179,538) (21,949) 2,201 (199,286) 1,156 (54,457) 46,584 74,000 37,228 293,272 1,065,749 (126,324) (19,146) 10,364 (15,220) (150,326) (458,047) Long-term borrowings Repayment of long-term debt Proceeds from lease financing agreement Cash dividends paid Exercise of stock options Excess tax benefits from stock-based compensation Contributions from noncontrolling interests in subsidiaries Repurchase of Common Stock Net Cash (Used by) Financing Activities (Decrease) Increase in Cash and Cash Equivalents Cash and Cash Equivalents as of January 1 Cash and Cash Equivalents as of December 31 Interest Paid Income Taxes Paid 249,126 (256,189) 47,601 (304,083) 184,411 13,997 (384,515) (438,818) (190,956) 884,642 $693,686 $97,892 292,315 348,208 (71,548) (283,434) 92,033 1,385 10,199 (169,099) (71,100) 631,037 253,605 $884,642 $97,932 350,948 (8,252) (263,403) 28,318 4,455 7,322 (9,314) (698,921) 216,502 37,103 $253,605 $91,623 252,230 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 $43,938 $53,063 $53,157 Net earnings Net earnings Other comprehensive earnings (loss) Comprehensive earnings Retained earnings at beginning of year. Net earnings Cash dividends Stock dividends Retained earnings at end of year Earnings per share $43,938 (8,740) $35,198 $135,866 43,938 (18,360) (47,175) $114,269 $0.76 $53,063 1,183 $54,246 $53,157 2,845 $56,002 $147,687 53,063 (18,078) (46,806) $135,866 $144,949 53,157 (17,790) (32,629) $147,687 $0.90 $0.89 Average Common and Class B Common shares outstanding 57,892 58,685 (The accompanying notes are an integral part of these statements.) 59,425 CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments 10,895 7,996 Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394 Other receivables 3,391 9,961 Inventories: Finished goods and work-in-process 42,676 35,416 Raw materials and supplies 29,084 21,236 Prepaid expenses 5,070 6,499 Deferred income taxes Total current assets PROPERTY, PLANT AND EQUIPMENT, at cost: Land Buildings Machinery and equipment Construction in progress LessAccumulated depreciation Net property, plant and equipment OTHER ASSETS: Goodwill Trademarks Investments Split dollar officer life insurance Prepaid expenses Equity method investment Deferred income taxes Total other assets Total assets Liabilities and Shareholders' Equity CURRENT LIABILITIES: Accounts payable Dividends payable Accrued liabilities Total current liabilities NONCURRENT LIABILITES: Deferred income taxes Postretirement health care and life insurance benefits Industrial development bonds Liability for uncertain tax positions Deferred compensation and other liabilities Total noncurrent liabilities SHAREHOLDERS' EQUITY: Common stock, $.69-4/9 par value120,000 shares authorized36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value40,000 shares authorized21,025 and 20,466 respectively, issued Capital in excess of par value Retained earnings, per accompanying statement Accumulated other comprehensive loss Treasury stock (at cost)71 shares and 69 shares, respectively Total shareholders' equity Total liabilities and shareholders' equity 578 212,201 689 235,167 21,939 107,567 322,993 2,598 455,097 242,935 212,162 21,696 102,934 307,178 9,243 440,974 225,482 215,492 73,237 73,237 175,024 175,024 96,161 64,461 74,209 74,441 3,212 6,680 3,935 4,254 7,715 9,203 433,493 407,300 $857,856 $857,959 December 31, 2011 2010 $10,683 4,603 43,069 58,355 $9,791 4,529 44,185 58,505 43,521 26,108 7,500 8,345 48,092 133,566 47,865 20,689 7,500 9,835 46,157 132,046 25,333 25,040 14,601 14,212 533,677 114,269 (19,953) (1,992) 665,935 $857,856 505,495 135,866 (11,213) (1,992) 667,408 $857,959 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $43,938 $53,063 $53,157 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 19,229 18,279 17,862 Impairment charges 14,000 Impairment of equity method investment 4,400 Loss from equity method investment 194 342 233 Amortization of marketable security premiums 1,267 522 320 Changes in operating assets and liabilities: Accounts receivable (5,448) 717 (5,899) Other receivables 3,963 (2,373) (2,088) Inventories (15,631) (1,447) 455 Prepaid expenses and other assets 5,106 4,936 5,203 Accounts payable and accrued liabilities 84 2,180 (2,755) Income taxes payable and deferred Postretirement health care and life insurance benefits Deferred compensation and other liabilities Others Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Net purchase of trading securities Purchase of available for sale securities Sale and maturity of available for sale securities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired Dividends paid in cash Net cash used in financing activities (5,772) 2,022 2,146 (708) 50,390 2,322 1,429 2,525 310 82,805 (12,543) 1,384 2,960 305 76,994 (16,351) (3,234) (39,252) 7,680 (51,157) (12,813) (2,902) (9,301) 8,208 (16,808) (20,831) (1,713) (11,331) 17,511 (16,364) (18,190) (18,407) (36,597) (22,881) (18,130) (41,011) (20,723) (17,825) (38,548) (37,364) 24,986 22,082 Cash and cash equivalents at beginning of year 115,976 $78,612 Cash and cash equivalents at end of year Supplemental cash flow information Income taxes paid $16,906 Interest paid $38 Stock dividend issued $47,053 (The accompanying notes are an integral part of these statements.) 90,990 $115,976 68,908 $90,990 $20,586 $49 $46,683 $22,364 $182 $32,538 Increase (decrease) in cash and cash equivalents NOTE 6OTHER INCOME (EXPENSE), NET: Other income (expense), net is comprised of the following: 2011 Interest and dividend income $1,087 Gains (losses) on trading securities relating to deferred compensation plans 2010 2009 $879 $1,439 3,364 4,524 (121) Interest expense 29 (142) (243) Impairment of equity method investment. _ _ (4,400) Equity method investment loss (194) (342) (233) Foreign exchange gains (losses) 2,098 4,090 951 Capital gains (losses) (277) (28) (38) 274 537 100 Miscellaneous, net $2,946 $8,358 $2,100 As of December 31, 2009, management determined that the carrying value of an equity method investment was impaired as a result of accumulated losses from operations and review of future expectations. The Company recorded a pre-tax impairment charge of $4,400 resulting in an adjusted carrying value of $4,961 as of December 31, 2009. The fair value was primarily assessed using the present value of estimated future cash flows. Based on the information contained in these financial statements, compute the current ratio for 2011 for each company. (Round answers to 2 decimal places, e.g. 15.25.) Hershey Current ratio Tootsie Roll :1 :1 Based on the information contained in these financial statements, compute the following 2011 ratios for each company. (Round answers to 1 decimal places, e.g. 15.2% or 15.2 times.) (1) Debt to assets. (2) Times interest earned. (Hershey's total interest expense for 2011 was $94,780,000. See Tootsie Roll's Note 6 for its interest expense.) Hershey Debt to assets Tootsie Roll % % Times interest earned times times Question 8 In recent years, Farr Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below. Salvage Value Cost Useful Life (in years) Depreciation Method Machine Acquired 1 Jan. 1, 2012 $135,000 $38,700 9 Straight-line 2 July 1, 2013 84,000 10,500 5 Declining-balance 3 Nov. 1, 2013 99,620 7,820 6 Units-of-activity For the declining-balance method, Farr Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 34,000. Actual hours of use in the first 3 years were: 2013, 680; 2014, 5,140; and 2015, 6,550. Compute the amount of accumulated depreciation on each machine at December 31, 2015. MACHINE 1 Accumulated Depreciation at December 31 $ MACHINE 2 $ MACHINE 3 $ If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2013? In 2014? 2013 Depreciation Expense $ 2014 $ Question 9 Wempe Co. sold $3,443,000, 9%, 10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually. Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 103 and (2) 97. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date 1. 1/1/14 2. 1/1/14 Account Titles and Explanation Debit Credit Prepare amortization tables for issuance of the bonds sold at 103 for the first three interest payments. Annual Interest Periods Interest to Be Paid Interest Expense to Be Recorded $ Issue date Premium Amortization $ Unamortized Premium $ Bond Carrying Value $ $ 1 2 3 Prepare amortization tables for issuance of the bonds sold at 97 for the first three interest payments. Annual Interest Periods Interest to Be Paid Interest Expense to Be Recorded $ Issue date Premium Amortization $ Unamortized Premium $ Bond Carrying Value $ 1 2 3 Prepare the journal entries to record interest expense for 2014 under both of the bond issuances assuming they sold at: (1) 103 and (2) 97. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date 1. Debit Credit 12/31/14 2. Account Titles and Explanation 12/31/14 Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 103 at December 31, 2014. WEMPE Co. Balance Sheet (Partial) December 31, 2014 $ : $ Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 97 at December 31, 2014. WEMPE Co. Balance Sheet (Partial) $ December 31, 2014 $ : $ Question 10 Grace Herron has just approached a venture capitalist for financing for her new business venture, the development of a local ski hill. On July 1, 2013, Grace was loaned $167,000 at an annual interest rate of 6%. The loan is repayable over 5 years in annual installments of $39,645, principal and interest, due each June 30. The first payment is due June 30, 2014. Grace uses the effective-interest method for amortizing debt. Her ski hill company's year-end will be June 30. Prepare an amortization schedule for the 5 years, 2013-2018. (Round answers to 0 decimal places, e.g. 125.) Cash Payment Period July 1, 2013 $ Interest Expense $ Principal Reduction $ Balance $ June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 * * Amount may be off due to rounding. Prepare all journal entries for Grace Herron for the first 2 fiscal years ended June 30, 2014, and June 30, 2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1/13 June 30/14 June 30/15 Show the balance sheet presentation of the note payable as of June 30, 2015. (Hint: Be sure to distinguish between the current and long-term portions of the note.) (Round answers to 0 decimal places, e.g. 125.) GRACE HERRON Balance Sheet (Partial) June 30, 2015 $ $ Question 11 Ratzlaff Company issues 2 million, 10-year, 8% bonds at 97, with interest payable on July 1 and January 1. Prepare the journal entry to record the sale of these bonds on January 1, 2014. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Assuming instead that the above bonds sold for 104, prepare the journal entry to record the sale of these bonds on January 1, 2014. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Jan. 1 Debit Credit