Presented below is selected information from the Greenville Company's current period accounting records (in $000s)

Presented below is selected information from the Greenville Company's current period accounting records (in $000s):

Sales $10,000
Raw Materials Used 2,500
Direct Labor Costs 1,000
Period Costs (Selling and Administrative) 2,500
Beginning Raw Material Inventory 300
Ending Raw Material Inventory 1,000
Net Income 200
Beginning Work-in-Process Inventory 0
Ending Work-in-Process Inventory 300
Beginning Finished Goods Inventory 700
Ending Finished Goods Inventory 400

* NOTE: All raw materials used were direct materials.

Question:
Determine the following (in dollars):
a. Raw Material Purchases
b. Gross Profit
c. Cost of Goods Manufactured
d. Manufacturing Overhead

Click here for the solution: Presented below is selected information from the Greenville Company's current period accounting records (in $000s)

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012:

(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(e) profit margin.
(f) return on total assets.

December 31 December 31
For the 2012 2011 Year 2012
Accounts receivable……………………. $ 27,000 $ 24,000
Merchandise inventory………………. 25,000 20,000
Total assets…………………………………. 296,000 244,000
Accounts payable………………………… 26,000 32,000
Salaries payable…………………………… 3,000 4,400
Sales (all on credit)………………………. $312,000
Cost of goods sold……………………….. 165,600
Salaries expenses………………………… 48,000
Other expenses…………………………… 75,000
Net income………………………………….. 24,000

Click here for the solution: Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012

Selected balances from a company's financial statements are shown below

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012:

(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(e) profit margin.
(f) return on total assets.

December 31 December 31
For the 2012 2011 Year 2012
Accounts receivable……………………. $ 27,000 $ 24,000
Merchandise inventory………………. 25,000 20,000
Total assets…………………………………. 296,000 244,000
Accounts payable………………………… 26,000 32,000
Salaries payable…………………………… 3,000 4,400
Sales (all on credit)………………………. $312,000
Cost of goods sold……………………….. 165,600
Salaries expenses………………………… 48,000
Other expenses…………………………… 75,000
Net income………………………………….. 24,000

Click here for the solution: Selected balances from a company's financial statements are shown below

Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows

E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows.

Jan. 2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend.

Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.

Post journal entries to standard form of account.

Use the following format, in which the January 2 transaction is given as an example.
Account Debited Account Credited
(a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Normal Basic Specific Normal
Date Type Account Effect Balance Type Account Effect Balance
Jan. 2 Asset Cash Increase Debit Stockholders' Stock Common Increase Credit

Click here for the solution: Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows

Selected sales and operating data for three divisions of three different companies are given below

Selected sales and operating data for three divisions of three different companies are given below:

Division X Division Y Division Z
Sales $900,000 $750,000 $600,000
Average operating assets $600,000 $150,000 $200,000
Net operating income $54,000 $30,000 $10,000
Minimum required rate of return 10% 16% 8%

a. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. Show computations
b. Compute the residual income for each division. Show computations
c. Under which of these methods would they accept an opportunity with a 15% return. Show computations and details

Click here for the solution: Selected sales and operating data for three divisions of three different companies are given below

Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009

P10-2 (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009, had the following balances.

Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000

During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.

Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)

(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)

Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009

Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)

Chapter 11 Comprehensive Problem 3 Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow:

Jan. 2. Issued a check to establish a petty cash fund of $2,000.
Mar. 4. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $789; miscellaneous selling expense, $256; miscellaneous administrative expense, $378.

AND SO ON

Click here for the solution: Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)

(Sandusky Company) The following were selected from among the transactions completed by Sandusky Company during December of the current year

PR 6-5A The following were selected from among the transactions completed by Sandusky Company during December of the current year:

Dec 3: Purchased merchandise n account from Hillsboro Co., list price $38,000, trade discount 24%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $900 added to the invoice.
Dec 5: Purchased merchandise on account from Deepwater Co., $18,750, terms FOB destination, 2/10,n/30.
Dec 7: Returned $3,000 of merchandise purchase on December 5 from Deepwater Co.
13. Paid Hillsboro Co. on account for purchase of Dec 3, less discount.
15. Paid Deepwater Co. on account for purchase of Dec 5, less return of December 7 and discount.
16. Received cash on account from sale of December 6 to Zion Co., less discount.
19. Sold merchandise on MasterCard, $58,000. The cost of the merchandise sold was $34,500.
22. Sold merchandise on account to Smith River Co., $15,400, terms 2/10,n/30. The cost of merchandise sold was $9,000.
23. Sold merchandise for cash, $33,600. The cost of merchandise sold was $20,000.
28. Received merchanfise returned by Smith River Co. from sale on December 22, $2,400. The cost of returned merchandise was $1,400.
31. Paid MasterCard service fee of $1,750.

Instructions: Journalize the transactions.

Click here for the solution: The following were selected from among the transactions completed by Sandusky Company during December of the current year

(Case-It Co) The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010

PR 6-1A The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010:

Cash $37,700 Sales Returns and Allowances $37,800
Accounts Receivable 111,600 Sale Discounts 19,800
Merchandise Inventory 180,000 Cost of Merchandise Sold 1,926,000
Office Supplies 5,000 Sales Salaries Expense 378,000
Prepaid Ins. 12,000 Advertising Expense 50,900
Office Equipment 115,200 Depreciation Exp - Store Equip 8,300
Accumulated Depreciation - Office Equip 49,500 Misc Selling Expense 2,000
Store Equipment 311,500 Office Salaries Expense 73,800
Accumulated Depreciation - Store Equip 87,500 Rent Expense 39,900
A/P 48,600 Insurance Expense 22,950
Salaries Payable 3,600 Depreciation Expense - Office Equip 16,200
Note Payable (final payment due 2025) 54,000 Office Supplies Expense 1,650
Gina Hennessy, Capital 454,800 Misc Admin Exp 1,900
Gina Hennessy, Drawing 45,000 Interest Expense 4,400
Sales 2,703,600

1. Prepare a multiple-step income statement.
2. Prepare a statement of owner's equity.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $8,000
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report form and account form balance sheets differ.

Click here for the solution: The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010

The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year

PR 11-1A The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year.

Jan 15. Purchased merchandise on account from hood Co., $200,000, terms n/30.
Feb 14. Issued 60-day, %6 note for $200,000 to Hood Co on account.
April 15. Paid Hood Co. the amount owed on the note of February 14.
June2. Borrowed $187,500 from Acme Bank, issuing a 60-day, 8% note.
July 10. Purchased tools by issuing a $190,000, 90-day note to Columbia supply Co., which discounted the note at the rate of 6%.
Aug 1. Paid Acme Bank the interest rate due on the note of June 2 and renewed the loan by issuing a new 60-day, 10% not for $187,500 (Journalize both the debit and credit to the notes payable account.)
Sept 30. Paid Acme Bank the amount due on the note of August 1.
Oct 8. Paid Columbia Supply co. the amount due on the note of July 10.
Dec 1. Purchased office equipment from Mountain Equipment co. for $120,000 paying $20,000 and issuing a series of ten 6% notes for $10,000 each coming due at 30-day intervals.
Dec 5. Settled a product liability lawsuit with a customer for $76,000, payable in January. Emerald Bay accrued the loss in litigation claims payable account.
Dec 31. paid the amount due Mountain Equipment co. on the first note in the series issued on December 1.

Instructions:
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year.
(a) Product warranty cost $16,400;
(b) Interest on the nine remaining notes owed to Mountain Equipment Co

Click here for the solution: The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year

Selected financial statement information and additional data for Johnston Enterprises is presented below

Selected financial statement information and additional data for Johnston Enterprises is presented below. Prepare a statement of cash flows for the year ending December 31, 2010

Johnston Enterprises
Balance Sheet and Income Statement Data
December 31, December 31,
2010 2009___
Current Assets:
Cash $153,000 $119,000
Accounts Receivable 238,000 306,000
Inventory 391,000 340,000
Total Current Assets 782,000 765,000

Property, Plant, and Equipment 1,241,000 1,122,000
Less: Accumulated Depreciation (476,000) (442,000)
Total Assets $1,547,000 $1,445,000

Current Liabilities:
Accounts Payable $187,000 $102,000
Notes Payable 51,000 68,000
Income Tax Payable 85,000 76,500
Total Current Liabilities 323,000 246,500

Bonds Payable 340,000 391,000
Total Liabilities 663,000 637,500

Stockholders' Equity:
Common Stock 510,000 467,500
Retained Earnings 374,000 340,000
Total Stockholders' Equity 884,000 807,500
Total Liabilities & Stockholders' Equity $1,547,000 $1,445,000

Sales 1,615,000 $1,513,000
Less Cost of Goods Sold 731,000 731,000
Gross Profit 884,000 782,000
Expenses:
Depreciation Expense 153,000 136,000
Salary Expense 391,000 357,000
Interest Expense 34,000 34,000
Loss on Sale of Equipment 17,000 0
Income Before Taxes 289,000 255,000
Less Income Tax Expense 119,000 102,000
Net Income $170,000 $153,000

Additional Information:
During the year, Johnston sold equipment with an original cost of $153,000 and accumulated depreciation of $119,000 and purchased new equipment for $272,000.

Click here for the solution: Selected financial statement information and additional data for Johnston Enterprises is presented below

Grider Company's chart of accounts includes the following selected accounts

Grider Company's chart of accounts includes the following selected accounts.

101 Cash 401 Sales
112 Accounts Receivable 414 Sales Discounts
120 Merchandise Inventory 505 Cost of Goods Sold
301 O. Grider, Capital

On April 1 the accounts receivable ledger of Grider Company showed the following balances: Ogden $1,550, Chelsea $1,200, Eggleston Co. $2,900, and Baez $1,800.The April transactions involving the receipt of cash were as follows.

Apr. 1 The owner, O. Grider, invested additional cash in the business $7,200.
4 Received check for payment of account from Baez less 2% cash discount.
5 Received check for $920 in payment of invoice no. 307 from Eggleston Co.
8 Made cash sales of merchandise totaling $7,245. The cost of the merchandise sold was $4,347.
10 Received check for $600 in payment of invoice no. 309 from Ogden.
11 Received cash refund from a supplier for damaged merchandise $740.
23 Received check for $1,500 in payment of invoice no. 310 from Eggleston Co.
29 Received check for payment of account from Chelsea.

Instructions
(a) Journalize the transactions above in a six-column cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Merchandise Inventory Cr. Foot and crossfoot the journal.
(b) Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.
(c) Prove the agreement of the control account and subsidiary account balances.


Click here for the solution: Grider Company's chart of accounts includes the following selected accounts

The following are selected 2011 transactions of Franco Corporation

ACC 291 Week 2 Assignment

E9-12 The following are selected 2011 transactions of Franco Corporation.

Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.

Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.


Click here for the solution: The following are selected 2011 transactions of Franco Corporation

Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows

Chapter 15, Comprehensive Problem 4, 24th EDITION

Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows:

AND SO ON


Click here for the solution: Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows

The following are selected portions of the report of management from a published annual report

Auditing P 6-21 The following are selected portions of the report of management from a published annual report.

Report of Management

Managements Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its President and Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management evaluates the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Management, under the supervision and with participation of the Company’s president and Chief Executive Officer and Chief Financial Officer assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 and concluded it is effective.

Management’s Responsibility for Consolidated Financial Statements
The management of Colgate-Palmolive Company is also responsible for the preparation and content of the accompanying consolidated financial statements as well as all other related information contained in this annual report. These financial statements have been prepared in conformity with accounting principles generally accepted in the United States, and necessarily include amounts which are based on management’s best estimates and judgments.

Required:
a. What are the purposes of the two parts of the report of management?
b. What is the auditors responsibility related to the report of management?


Click here for the solution: The following are selected portions of the report of management from a published annual report

Comprehensive Problem 3 Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows

Comprehensive Problem 3 Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows:

Jan. 2. Issued a check to establish a petty cash fund of $3,200.
Mar. 14. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,200; miscellaneous selling expense, $410; miscellaneous administrative expense, $620.
Apr. 21. Purchased $22,400 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory.
May 20. Paid the invoice of April 21 after the discount period had passed.
23. Received cash from daily cash sales for $15,120. The amount indicated by the cash register was $15,152.
June 15. Received a 60-day, 10% note for $127,500 on the Cady account.

AND SO ON

Check figures:
Current assets: 839,080
Total assets: 2,550,840
Current liabilities: 497,640

Click here for the solution: Comprehensive Problem 3 Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows

Following are selected balance sheet accounts for Third State Bank

5. Following are selected balance sheet accounts for Third State Bank: vault cash = $2 million; U.S. government securities = $5 million; demand deposits = $13 million; nontransactional accounts = $20 million; cash items in process of collection = $4 million; loans to individuals = $7 million; loans secured by real estate = $9 million; federal funds purchased = $4 million; and bank premises = $11 million.

a. From these accounts, select only the asset accounts and calculate the bank’s total assets.
b. Calculate the total liabilities for Third State Bank.
c. Based on the totals for assets and liabilities, determine the amount in the owners’ capital account.

Click here for the solution: Following are selected balance sheet accounts for Third State Bank

The following selected transactions were completed by Rayne Supplies Co

The following selected transactions were completed by Rayne Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:
Aug. 1. Sold merchandise on account to Tomahawk Co., $12,500, terms FOB shipping point, n/eom. The cost of merchandise sold was $7,500.
2. Sold merchandise for $20,000 plus 7% sales tax to retail cash customers. The cost of merchandise sold was $13,100.
5. Sold merchandise on account to Epworth Company, $30,000, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $19,500.
8. Sold merchandise for $11,500 plus 7% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $7,000.
13. Sold merchandise to customers who used MasterCard cards, $8,000. The cost of merchandise sold was $5,000.
Aug. 14. Sold merchandise on account to Osgood Co., $11,800, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $7,000.
15. Received check for amount due from Epworth Company for sale on August 5.
16. Issued credit memo for $1,800 to Osgood Co. for merchandise returned from sale on August 14. The cost of the merchandise returned was $1,000.
18. Sold merchandise on account to Horton Company, $6,850, terms FOB shipping point, 2/10, n/30. Paid $210 for freight and added it to the invoice. The cost of merchandise sold was $4,100.
24. Received check for amount due from Osgood Co. for sale on August 14 less credit memo of August 16 and discount.
28. Received check for amount due from Horton Company for sale of August 18.
31. Paid Piper Delivery Service $2,100 for merchandise delivered during August to customers under shipping terms of FOB destination.
31. Received check for amount due from Tomahawk Co. for sale of August 1.
Sept. 3. Paid First Federal Bank $980 for service fees for handling MasterCard and VISA sales during August.
10. Paid $1,750 to state sales tax division for taxes owed on sales.

Instructions
Journalize the entries to record the transactions of Rayne Supplies Co.

Click here for the solution: The following selected transactions were completed by Rayne Supplies Co

Presented below is selected information for Palmiero Company

E12-4 (Intangible Amortization) Presented below is selected information for Palmiero Company.

a) Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2010. During 2012, Palmeiro determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2012?

b) Palmiero bought a franchise from Dougherty Co. on January 1, 2011, for $350,000. The carrying amount of the franchise on Dougherty's books on January 1, 2011 was $500,000. The franchise agreement had an estimated useful life of 30 years. Because Palmiero must enter a competitive bidding at the end of 2020, it is unlikely that the franhchise will be retained beyond 2020. What amount should be amortized for the year ended December 31, 2012?

c) On January 1, 2010, Palmiero incurred organization costs of $275,000. What amount of organization expense should be reported in 2012?

d) Palmiero purchased the license for distribution of a popular consumer product on January 1, 2012, for $150,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Palmiero can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2012?

Click here for the solution: Presented below is selected information for Palmiero Company

The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012

Problem 6-1A Multiple-Step Income Statement and Report-Form of Balance Sheet

The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012:

AND SO ON

Instructions
1. Prepare a multiple-step income statement.
2. Prepare a statement of owner's equity.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $16,000.
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report form and account-form balance sheets differ.

Check: 1. Net Income: $775,000

Click here for the solution: The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012