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Students who are looking to score good in ACC 290 can visit the website http://www.acc290genius.com which helps you to score well in your exams.ACC 290 Week 1 Practice Connect Practice AssignmentComplete the Week 1 Practice in Connect.Note: You have unlimited attempts available to complete practice assignments1On July 1, Tommy Wrigley established Wrigley Home Appraisal Services, a firm that provides expert residential appraisals and represents clients in home appraisal hearings.TRANSACTIONS1.The owner invested $100,000 in cash to begin the business.2.Paid $20,250 in cash for the purchase of equipment.3.Purchased additional equipment for $15,200 on credit.4.Paid $12,500 in cash to creditors.5.The owner made an additional investment of $25,000 in cash.6.Performed services for $9,750 in cash.7.Performed services for $7,800 on account.8.Paid $6,000 for rent expense.9.Received $5,500 in cash from credit clients.10.Paid $7,550 in cash for office supplies.11.The owner withdrew $12,000 in cash for personal expenses.Record in equation form the changes that occur in assets, liabilities, and owner’s equity for the above transactions.Analyze:What is the ending balance of cash after all transactions have been recorded?2On December 1, Kate Holmes opened a speech and hearing clinic. During December, her firm had the following transactions involving revenue and expenses.Paid $3,100 for advertising.Provided services for $2,800 in cash.Paid $800 for telephone service.Paid salaries of $2,600 to employees.Provided services for $3,000 on credit.Paid $450 for office cleaning service.Did the firm earn a net income or incur a net loss for the period? What was the amount?3At the beginning of September, Selena Cantu started Cantu Wealth Management Consulting, a firm that offers financial planning and advice about investing and managing money. On September 30, the accounting records of the business showed the following information.Prepare an income statement for the month of September 2019.4The fundamental accounting equations for several businesses follow. Supply the missing amounts.5At the beginning of September, Selena Cantu started Cantu Wealth Management Consulting, a firm that offers financial planning and advice about investing and managing money. On September 30, the accounting records of the business showed the following information.Required:Prepare a statement of owner’s equity for the month of September and a balance sheet for Cantu Wealth Management Consulting as of September 30, 2019.6Taylor Equipment Repair Service is owned by Jason Taylor.Use the above figures to prepare a balance sheet dated February 28, 2019.Analyze:What is the net worth, or owner’s equity, at February 28, 2019, for Taylor Equipment Repair Service?ACC 290 Week 1 Apply Connect AssignmentComplete the Week 1 Assignment in Connect.Note: You have only 1 attempt available to complete assignments.1Harold Joseph is a painting contractor who specializes in painting commercial buildings. At the beginning of June, his firm’s financial records showed the following assets, liabilities, and owner’s equity.Cash $ 60,200Accounts Receivable 15,800Office Furniture 35,000Auto 22,700Accounts Payable 10,400Harold Joseph, Capital 90,700Revenue 56,200Expenses 23,600TRANSACTIONS1.Performed services for $6,600 on credit.2.Paid $1,620 in cash for new office chairs.3.Received $10,400 in cash from credit clients.4.Paid $800 in cash for telephone service.5.Sent a check for $2,900 in partial payment of the amount due creditors.6.Paid salaries of $8,900 in cash.7.Sent a check for $1,040 to pay electric bill.8.Performed services for $9,700 in cash.9.Paid $2,270 in cash for auto repairs.10.Performed services for $11,700 on account.Enter the above transactions in to the following accounting equations.Analyze:What is the amount of total assets after all transactions have been recorded?2The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton.Required:Analyze each transaction carefully. Prepare an income statement and a statement of owner’s equity for the month. Prepare a balance sheet for May 31, 2019.ACC 290 Week 2 Practice Connect Practice AssignmentACC 290 Week 2 Practice: Connect Practice AssignmentComplete the Week 2 Practice in Connect.Note: You have unlimited attempts available to complete practice assignments1The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local housing rentals. The entries for the first transaction are labeled with the letter (a), the entries for the second transaction with the letter (b), and so on.Cash(a) 95,000 (b) 23,000(d) 15,000 (e) 350(g) 1,500 (h) 5,500(i) 2,500Equipment(c) 40,000Accounts Receivable(f) 5,000 (g) 1,500Accounts Payable(c) 40,000Supplies(b) 23,000Wade Wilson, Capital(a) 95,000Fees Income(d) 15,000(f) 5,000Telephone Expense(e) 350Wade Wilson, Drawing(i) 2,500Salaries Expense(h) 5,500Determine the balance of each account.2Derrick Wells decided to start a dental practice. The first five transactions for the business follow.Derrick invested $45,000 cash in the business.Paid $15,000 in cash for equipment.Performed services for cash amounting to $4,500.Paid $1,900 in cash for advertising expense.Paid $1,500 in cash for supplies.(1) Select which two accounts are affected in each of the above transactions.(2&3) Post the above transactions into the appropriate T accounts.3The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019. The following transactions are for Randy Guttery, Landscape Consultant.Transactions:Guttery invested $80,000 in cash to start the business.Paid $3,000 for the current month’s rent.Bought office furniture for $8,360 in cash.Performed services for $4,100 in cash.Paid $625 for the monthly telephone bill.Performed services for $7,000 on credit.Purchased a computer and copier for $19,000; paid $6,500 in cash immediately with the balance due in 30 days.Received $3,500 from credit clients.Paid $2,000 in cash for office cleaning services for the month.Purchased additional office chairs for $2,900; received credit terms of 30 days.Purchased office equipment for $20,000 and paid half of this amount in cash immediately; the balance is due in 30 days.Issued a check for $4,700 to pay salaries.Performed services for $7,250 in cash.Performed services for $8,000 on credit.Collected $4,000 on accounts receivable from charge customers.Issued a check for $1,450 in partial payment of the amount owed for office chairs.Paid $350 to a duplicating company for photocopy work performed during the month.Paid $610 for the monthly electric bill.Guttery withdrew $4,500 in cash for personal expenses.Post the above transactions into the appropriate T accounts.Analyze:What liabilities does the business have after all transactions have been recorded? T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.4The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local Housing rentals.Cash(a) 95,000 (b) 23,000(d) 15,000 (e) 350(g) 1,500 (h) 5,500(i) 2,500Equipment(c) 40,000Accounts Receivable(f) 5,000 (g) 1,500Accounts Payable(c) 40,000Supplies(b) 23,000Wade Wilson, Capital(a) 95,000Fees Income(d) 15,000(f) 5,000Telephone Expense(e) 350Wade Wilson, Drawing(i) 2,500Salaries Expense(h) 5,500Required:Prepare a statement of owner’s equity and a balance sheet for Residential Relocators as of December 31, 2019.5The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local housing rentals.Cash(a) 95,000 (b) 23,000(d) 15,000 (e) 350(g) 1,500 (h) 5,500(i) 2,500Equipment(c) 40,000Accounts Receivable(f) 5,000 (g) 1,500Accounts Payable(c) 40,000Supplies(b) 23,000Wade Wilson, Capital(a) 95,000Fees Income(d) 15,000(f) 5,000Telephone Expense(e) 350Wade Wilson, Drawing(i) 2,500Salaries Expense(h) 5,500Required:Prepare a trial balance and an income statement for Residential Relocators. The trial balance is for December 31, 2019, and the income statement is for the month ended December 31, 2019.6The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019.Transactions:Guttery invested $80,000 in cash to start the business.Paid $3,000 for the current month’s rent.Bought office furniture for $8,360 in cash.Performed services for $4,100 in cash.Paid $625 for the monthly telephone bill.Performed services for $7,000 on credit.Purchased a computer and copier for $19,000; paid $6,500 in cash immediately with the balance due in 30 days.Received $3,500 from credit clients.Paid $2,000 in cash for office cleaning services for the month.Purchased additional office chairs for $2,900; received credit terms of 30 days.Purchased office equipment for $20,000 and paid half of this amount in cash immediately; the balance is due in 30 days.Issued a check for $4,700 to pay salaries.Performed services for $7,250 in cash.Performed services for $8,000 on credit.Collected $4,000 on accounts receivable from charge customers.Issued a check for $1,450 in partial payment of the amount owed for office chairs.Paid $350 to a duplicating company for photocopy work performed during the month.Paid $610 for the monthly electric bill.Guttery withdrew $4,500 in cash for personal expenses.Required:Prepare a trial balance, an income statement, a statement of owner’s equity, and a balance sheet. Assume that the transactions took place during the month ended June 30, 2019. Determine the account balances before you start work on the financial statements.Analyze:What is the change in owner’s equity for the month of June?ACC 290 Week 2 Apply Connect AssignmentACC 290 Week 2 Apply Connect AssignmentComplete the Week 2 Assignment in Connect.Note: You have only 1 attempt available to complete assignments1The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019. The following transactions are for Randy Guttery, Landscape Consultant.Transactions:Guttery invested $156,000 in cash to start the business.Paid $5,600 for the current month’s rent.Bought office furniture for $16,320 in cash.Performed services for $7,800 in cash.Paid $1,210 for the monthly telephone bill.Performed services for $13,600 on credit.Purchased a computer and copier for $37,200; paid $12,600 in cash immediately with the balance due in 30 days.Received $6,800 from credit clients.Paid $3,600 in cash for office cleaning services for the month.Purchased additional office chairs for $5,400; received credit terms of 30 days.Purchased office equipment for $36,000 and paid half of this amount in cash immediately; the balance is due in 30 days.Issued a check for $9,000 to pay salaries.Performed services for $14,100 in cash.Performed services for $15,600 on credit.Collected $7,600 on accounts receivable from charge customers.Issued a check for $2,700 in partial payment of the amount owed for office chairs.Paid $660 to a duplicating company for photocopy work performed during the month.Paid $1,180 for the monthly electric bill.Guttery withdrew $8,600 in cash for personal expenses.Post the above transactions into the appropriate T accounts.Analyze:What liabilities does the business have after all transactions have been recorded? T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.2The following occurred during June at Hicks Family Counseling.Post the following transactions into the appropriate T accounts.Transactions:Purchased office supplies for $1,900 in cash.Delivered monthly statements, collected fee income of $26,500.Paid the current month’s office rent of $3,900.Completed professional counseling, billed client for $4,100.Client paid fee of $2,100 for weekly counseling, previously billed.Paid office salaries of $3,500.Paid telephone bill of $470.Billed client for $3,100 fee for preparing a counseling evaluation.Purchased office supplies of $990 on account.Paid office salaries of $3,500.Collected $3,100 from client who was billed.Clients paid a total of $9,200 cash in fees.Analyze:How much cash did the business spend during the month? T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.ACC 290 Week 3 Practice Connect Practice AssignmentACC 290 Week 3 Practice Connect Practice AssignmentComplete the Week3 Practice in Connect.Note: You have unlimited attempts available to complete practice assignments1On October 1, 2019, Helen Kennedy opened an advertising agency.DATE TRANSACTIONSOct. 1 Helen Kennedy invested $70,000 cash in the business.2 Paid October office rent of $4,000; issued Check 1001.5 Purchased desks and other office furniture for $18,000 from Office Furniture Mart, Inc.; received Invoice 6704 payable in 60 days.6 Issued Check 1002 for $4,100 to purchase art equipment.7 Purchased supplies for $1,670; paid with Check 1003.10 Issued Check 1004 for $800 for office cleaning service.12 Performed services for $4,200 in cash and $1,800 on credit. (Use a compound entry.)15 Returned damaged supplies for a cash refund of $300.18 Purchased a computer for $3,000 from Office Furniture Mart, Inc., Invoice 7108; issued Check 1005 for a $1,750 down payment, with the balance payable in 30 days. (Use one compound entry.)20 Issued Check 1006 for $9,500 to Office Furniture Mart, Inc., as payment on account for Invoice 6704.26 Performed services for $4,800 on credit.27 Paid $375 for monthly telephone bill; issued Check 1007.30 Received $4,200 in cash from credit customers.30 Mailed Check 1008 to pay the monthly utility bill of $1,080.30 Issued Checks 1009–1011 for $9,000 for salaries.Required:Journalize the above transactions.Post the above transactions to the ledger accounts.Analyze:What is the balance of account 202 in the general ledger?2The transactions that follow took place at the Desoto Recreation and Sports Arena during September 2019. This firm has indoor courts where customers can play tennis for a fee. It also rents equipment and offers tennis lessons.DATE TRANSACTIONSSept. 1 Issued Check 1169 for $2,000 to pay the September rent.5 Performed services for $4,000 in cash.6 Performed services for $2,950 on credit.10 Paid $900 for monthly telephone bill; issued Check 1170.11 Paid for equipment repairs of $1,050 with Check 1171.12 Received $1,500 on account from credit clients.15 Issued Checks 1172–1177 for $5,200 for salaries.18 Issued Check 1178 for $2,700 to purchase supplies.19 Purchased new tennis rackets for $3,250 on credit from The Tennis Supply Shop; received Invoice 3108, payable in 30 days.20 Issued Check 1179 for $3,820 to purchase new nets. (Equip.)21 Received $500 on account from credit clients.21 Returned a damaged net and received a cash refund of $570.22 Performed services for $3,480 in cash.23 Performed services for $5,050 on credit.26 Issued Check 1180 for $620 to purchase supplies.28 Paid the monthly electric bill of $2,500 with Check 1181.30 Issued Checks 1182–1187 for $5,200 for salaries.30 Issued Check 1188 for $5,000 cash to Ellis Carter for personal expenses.Required:Record each of the above transactions in the general journal.Analyze:If the company paid a bill for supplies on October 1, what check number would be included in the journal entry description?3Selected activity of Mason Consulting Services follow.DATE TRANSACTIONS2019Sept. 1 Zack Mason invested $30,000 in cash to start the firm.4 Purchased office equipment for $3,250 on credit from Den, Inc.; received Invoice 9823, payable in 30 days.16 Purchased an automobile that will be used to visit clients; issued Check 1001 for $15,000 in full payment.20 Purchased supplies for $260; paid immediately with Check 1002.23 Returned damaged supplies for a cash refund of $85.30 Issued Check 1003 for $2,100 to Den, Inc., as payment on account for Invoice 9823.30 Withdrew $1,500 in cash for personal expenses.30 Issued Check 1004 for $3,500 to pay the rent for October.30 Performed services for $7,325 in cash.30 Paid $220 for monthly telephone bill, Check 1005.Post the above transactions into the appropriate Ledger accounts.4The following transactions took place at the Cook Employment Agency during November 2019.DATE TRANSACTIONSNov. 5 Performed services for Job Search, Inc., for $20,000; received $9,500 in cash and the client promised to pay the balance in 60 days.18 Purchased a graphing calculator for $450 and some supplies for $600 from Office Supply; issued Check 1008 for the total.23 Received Invoice 1602 for $2,500 from Automotive Technicians Repair for repairs to the firm’s automobile; issued Check 1009 for half the amount and arranged to pay the other half in 30 days.Prepare journal entries for the above transactions.5Selected activity of the Ray Shipping Service follow.TRANSACTIONSGave a cash refund of $750 to a customer because of a lost package. (The customer had previously paid in cash.)Sent a check for $1,050 to the utility company to pay the monthly bill.Provided services for $7,800 on credit.Purchased new equipment for $4,600 and paid for it immediately by check.Issued a check for $3,500 to pay a creditor on account.Performed services for $15,250 in cash.Collected $6,250 from credit customers.The owner made an additional investment of $25,000 in cash.Purchased supplies for $3,250 on credit.Issued a check for $3,750 to pay the monthly rent.Analyze the above transactions and record a journal entry for each transaction.6Selected activity of Mason Consulting Services follow.DATE TRANSACTIONS2019Sept. 1 Zack Mason invested $30,000 in cash to start the firm.4 Purchased office equipment for $3,250 on credit from Den, Inc.; received Invoice 9823, payable in 30 days.16 Purchased an automobile that will be used to visit clients; issued Check 1001 for $15,000 in full payment.20 Purchased supplies for $260; paid immediately with Check 1002.23 Returned damaged supplies for a cash refund of $85.30 Issued Check 1003 for $2,100 to Den, Inc., as payment on account for Invoice 9823.30 Withdrew $1,500 in cash for personal expenses.30 Issued Check 1004 for $3,500 to pay the rent for October.30 Performed services for $7,325 in cash.30 Paid $220 for monthly telephone bill, Check 1005.Prepare journal entries for the transactions incurred during September of 2019.ACC 290 Week 3 Apply Connect AssignmentACC 290 Week 3 Apply Connect AssignmentComplete the Week 3 Assignment in Connect.Note: You have only 1 attempt available to complete assignments1On October 1, 2019, Helen Kennedy opened an advertising agency.DATETRANSACTIONSOct. 1Helen Kennedy invested $61,000 cash in the business.2Paid October office rent of $3,050; issued Check 1001.5Purchased desks and other office furniture for $13,900 from Office Furniture Mart, Inc.; received Invoice 6704 payable in 60 days.6Issued Check 1002 for $3,250 to purchase art equipment.7Purchased supplies for $1,600; paid with Check 1003.10Issued Check 1004 for $490 for office cleaning service.12Performed services for $4,150 in cash and $1,950 on credit. (Use a compound entry.)15Returned damaged supplies for a cash refund of $290.18Purchased a computer for $3,050 from Office Furniture Mart, Inc., Invoice 7108; issued Check 1005 for a $1,775 down payment, with the balance payable in 30 days. (Use one compound entry.)20Issued Check 1006 for $6,950 to Office Furniture Mart, Inc., as payment on account for Invoice 6704.26Performed services for $4,450 on credit.27Paid $270 for monthly telephone bill; issued Check 1007.30Received $3,750 in cash from credit customers.30Mailed Check 1008 to pay the monthly utility bill of $345.30Issued Checks 1009–1011 for $8,050 for salaries.Required:1. Journalize the above transactions.2. Post the above transactions to the ledger accounts.Analyze:What is the balance of account 202 in the general ledger?2The transactions that follow took place at the Desoto Recreation and Sports Arena during September 2019. This firm has indoor courts where customers can play tennis for a fee. It also rents equipment and offers tennis lessons.DATETRANSACTIONSSept.1Issued Check 1169 for $1,200 to pay the September rent.5Performed services for $3,200 in cash.6Performed services for $2,050 on credit.10Paid $560 for monthly telephone bill; issued Check 1170.11Paid for equipment repairs of $800 with Check 1171.12Received $3,000 on account from credit clients.15Issued Checks 1172–1177 for $4,000 for salaries.18Issued Check 1178 for $1,800 to purchase supplies.19Purchased new tennis rackets for $2,050 on credit from The Tennis Supply Shop; received Invoice 3108, payable in 30 days.20Issued Check 1179 for $2,720 to purchase new nets. (Equip.)21Received $910 on account from credit clients.21Returned a damaged net and received a cash refund of $410.22Performed services for $3,400 in cash.23Performed services for $4,990 on credit.26Issued Check 1180 for $600 to purchase supplies.28Paid the monthly electric bill of $2,390 with Check 1181.30Issued Checks 1182–1187 for $4,000 for salaries.30Issued Check 1188 for $4,000 cash to Ellis Carter for personal expenses.Required:Record each of the above transactions in the general journal.Analyze:If the company paid a bill for supplies on October 1, what check number would be included in the journal entry description?ACC 290 Week 4 Practice Connect Practice AssignmentComplete the Week 4 Practice in Connect.Note: You have unlimited attempts available to complete practice assignments.attempt 11On June 1, 2019, Cain Company, a new firm, paid $8,400 rent in advance for a seven-month period. The $8,400 was debited to thePrepaid RentOn June 1, 2019, the firm bought supplies for $10,250. The $10,250 was debited to the Supplies An inventory of supplies at the end of June showed that items costing $5,960 were on hand.On June 1, 2019, the firm bought equipment costing $72,900. The equipment has an expected useful life of 9 years and no salvage value. The firm will use the straight-line method of depreciation.2The completed worksheet for Cantu Corporation as of December 31, 2019, after the company had completed the first month of operation, appears below.CANTU CORPORATIONWorksheetMonth Ended December 31, 2019Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance SheetAccount Name Debit Credit Debit Credit Debit Credit Debit Credit Debit CreditCash 39,100 39,100 39,100Accounts Receivable 6,500 6,500 6,500Supplies 6,050 3,500 6,050 2,550Prepaid Advertising 10,200 1,700 10,200 8,500Equipment 42,500 42,500 42,500Accumulated Depreciation—Equipment 850 850 850Accounts Payable 6,500 6,500 6,500Selena Cantu, Capital 54,500 54,500 54,500Selena Cantu, Drawing 4,100 4,100 4,100Fees Income 57,750 57,750 57,750Supplies Expense 3,500 3,500 3,500Advertising Expense 1,700 1,700 1,700Depreciation Expense-Equipment 850 850 850Salaries Expense 8,900 8,900 8,900Utilities Expense 1,400 1,400 1,400Totals 118,750 118,750 6,050 6,050 119,600 119,600 16,350 57,750 103,250 61,850Net Income 41,400 41,40057,750 57,750 103,250 103,250Required:Prepare an income statement.Prepare a statement of owner’s equity. The owner made no additional investments during the month.Prepare a balance sheet.Analyze:If the adjustment to Prepaid Advertising had been $3,400 instead of $1,700, what net income would have resulted?3Assume that a firm reports net income of $45,000 prior to making adjusting entries for the following items: expired rent, $3,500; depreciation expense, $4,100; and supplies used, $1,800.Assume that the required adjusting entries have not been made. What effect do these errors have on the reported net income?4Desoto Company must make three adjusting entries on December 31, 2019.Supplies used, $5,500 (supplies totaling $9,000 were purchased on December 1, 2019, and debited to the Suppliesaccount).Expired insurance, $4,100; on December 1, 2019, the firm paid $24,600 for six months’ insurance coverage in advance and debitedPrepaidInsurancefor this amount.Depreciation expense for equipment, $2,900.Required:Prepare the journal entries for these adjustments and post the entries to the general ledger accounts5The adjusted trial balance of University Book Store as of November 30, 2019, after the firm’s first month of operations, appears below.Appropriate adjustments have been made for the following items:Supplies used during the month, $2,900.Expired rent for the month, $3,500.Depreciation expense for the month, $950.UNIVERSITY BOOK STOREAdjusted Trial BalanceNovember 30, 2019Account Name Debit CreditCash $ 23,075Accounts Receivable 3,812Supplies 4,600Prepaid Rent 21,000Equipment 27,500Accumulated Depreciation-Equipment $ 950Accounts Payable 9,000Ruby Darbandi, Capital 41,837Ruby Darbandi, Drawing 4,000Fees Income 48,550Depreciation Expense-Equipment 950Rent Expense 3,500Salaries Expense 8,500Supplies Expense 2,900Utilities Expense 500Totals $ 100,337 $ 100,337Required:Record the adjusting entries in the Adjustments columns.Complete the Trial Balance columns of the worksheet prior to making the adjusting entries.Analyze:What was the balance of Prepaid Rent prior to the adjusting entry for expired rent?6On January 31, 2019, the general ledger of Palmer Company showed the following account balances.ACCOUNTSCash 31,500Accounts Receivable 11,250Supplies 4,500Prepaid Insurance 4,100Equipment 45,750Accum. Depr.—Equip. 0Accounts Payable 8,350Sadie Palmer, Capital 40,975Fees Income 58,500Depreciation Exp.—Equip. 0Insurance Expense 0Rent Expense 5,300Salaries Expense 5,425Supplies Expense 0Additional information:Supplies used during January totaled $2,850.Expired insurance totaled $1,025.Depreciation expense for the month was $925.Complete the worksheet through the Adjusted Trial Balance section. Assume that every account has the normal debit or credit balance. The worksheet covers the month of January.attempt 21On January 31, 2019, the general ledger of Palmer Company showed the following account balances.ACCOUNTSCash 31,500Accounts Receivable 11,250Supplies 4,500Prepaid Insurance 4,100Equipment 45,750Accum. Depr.—Equip. 0Accounts Payable 8,350Sadie Palmer, Capital 40,975Fees Income 58,500Depreciation Exp.—Equip. 0Insurance Expense 0Rent Expense 5,300Salaries Expense 5,425Supplies Expense 0Additional information:Supplies used during January totaled $2,850.Expired insurance totaled $1,025.Depreciation expense for the month was $925.Complete the worksheet through the Adjusted Trial Balance section. Assume that every account has the normal debit or credit balance. The worksheet covers the month of January.2Desoto Company must make three adjusting entries on December 31, 2019.Supplies used, $5,500 (supplies totaling $9,000 were purchased on December 1, 2019, and debited to the Suppliesaccount).Expired insurance, $4,100; on December 1, 2019, the firm paid $24,600 for six months’ insurance coverage in advance and debitedPrepaidInsurancefor this amount.Depreciation expense for equipment, $2,900.Required:Prepare the journal entries for these adjustments and post the entries to the general ledger accounts3Assume that a firm reports net income of $45,000 prior to making adjusting entries for the following items: expired rent, $3,500; depreciation expense, $4,100; and supplies used, $1,800.Assume that the required adjusting entries have not been made. What effect do these errors have on the reported net income?4On June 1, 2019, Cain Company, a new firm, paid $8,400 rent in advance for a seven-month period. The $8,400 was debited to thePrepaid RentOn June 1, 2019, the firm bought supplies for $10,250. The $10,250 was debited to the Supplies An inventory of supplies at the end of June showed that items costing $5,960 were on hand.On June 1, 2019, the firm bought equipment costing $72,900. The equipment has an expected useful life of 9 years and no salvage value. The firm will use the straight-line method of depreciation.Prepare end-of-June adjusting entries for Cain Company.5The completed worksheet for Cantu Corporation as of December 31, 2019, after the company had completed the first month of operation, appears below.CANTU CORPORATIONWorksheetMonth Ended December 31, 2019Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance SheetAccount Name Debit Credit Debit Credit Debit Credit Debit Credit Debit CreditCash 39,100 39,100 39,100Accounts Receivable 6,500 6,500 6,500Supplies 6,050 3,500 6,050 2,550Prepaid Advertising 10,200 1,700 10,200 8,500Equipment 42,500 42,500 42,500Accumulated Depreciation—Equipment 850 850 850Accounts Payable 6,500 6,500 6,500Selena Cantu, Capital 54,500 54,500 54,500Selena Cantu, Drawing 4,100 4,100 4,100Fees Income 57,750 57,750 57,750Supplies Expense 3,500 3,500 3,500Advertising Expense 1,700 1,700 1,700Depreciation Expense-Equipment 850 850 850Salaries Expense 8,900 8,900 8,900Utilities Expense 1,400 1,400 1,400Totals 118,750 118,750 6,050 6,050 119,600 119,600 16,350 57,750 103,250 61,850Net Income 41,400 41,40057,750 57,750 103,250 103,250Required:Prepare an income statement.Prepare a statement of owner’s equity. The owner made no additional investments during the month.Prepare a balance sheet.Analyze:If the adjustment to Prepaid Advertising had been $3,400 instead of $1,700, what net income would have resulted?6The adjusted trial balance of University Book Store as of November 30, 2019, after the firm’s first month of operations, appears below.Appropriate adjustments have been made for the following items:Supplies used during the month, $2,900.Expired rent for the month, $3,500.Depreciation expense for the month, $950.UNIVERSITY BOOK STOREAdjusted Trial BalanceNovember 30, 2019Account Name Debit CreditCash $ 23,075Accounts Receivable 3,812Supplies 4,600Prepaid Rent 21,000Equipment 27,500Accumulated Depreciation-Equipment $ 950Accounts Payable 9,000Ruby Darbandi, Capital 41,837Ruby Darbandi, Drawing 4,000Fees Income 48,550Depreciation Expense-Equipment 950Rent Expense 3,500Salaries Expense 8,500Supplies Expense 2,900Utilities Expense 500Totals $ 100,337 $ 100,337Required:Record the adjusting entries in the Adjustments columns.Complete the Trial Balance columns of the worksheet prior to making the adjusting entries.Analyze:What was the balance of Prepaid Rent prior to the adjusting entry for expired rent?ACC 290 Week 4 Apply Connect AssignmentACC 290 Week 4 Apply Connect AssignmentComplete the Week 4 Assignment in Connect.Note: You have only 1 attempt available to complete assignments1Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below.End-of-the-month adjustments must account for the following items:a. Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $1,500.b. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period.c. Rent of $2,000 expired during the month.d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value.Required:1. Complete the worksheet for the month.2. Prepare an income statement, statement of owner’s equity, and balance sheet. No additional investments were made by the owner during the month.3. Journalize and post the adjusting entries.AnalyzeIf the adjusting entries had not been made for the month, would net income be overstated or understated?2The trial balance of Neal Company as of January 31, 2019, after the company completed the first month of operations, is shown in the partial worksheet below.Required:2. Complete the worksheet by making the following adjustments: supplies on hand at the end of the month, $7,000; expired insurance, $6,900; depreciation expense for the period, $3,000.Analyze:How does the insurance adjustment affect Prepaid Insurance?ACC 290 Week 5 Practice Connect Practice AssignmentComplete the Week 5 Practice in Connect.Note: You have unlimited attempts available to complete practice assignments.attempt 11Consumer Research Associates, owned by Gloria Johnson, is retained by large companies to test consumer reaction to new products. On January 31, 2019, the firm’s worksheet showed the following adjustments data: (a) supplies used, $4,680; (b) expired rent, $26,000; and (c) depreciation on office equipment, $9,160. The balances of the revenue and expense accounts listed in the Income Statement section of the worksheet and the drawing account listed in the Balance Sheet section of the worksheet are given below:REVENUE AND EXPENSE ACCOUNTS401 Fees Income $ 200,000 Cr.511 Depr. Expense—Office Equipment 9,160 Dr.514 Rent Expense 26,000 Dr.517 Salaries Expense 99,000 Dr.520 Supplies Expense 4,680 Dr.523 Telephone Expense 2,700 Dr.526 Travel Expense 20,780 Dr.529 Utilities Expense 2,500 Dr.DRAWING ACCOUNT302 Gloria Johnson, Drawing 22,000 Dr.Required:Record the adjusting entries in the general journal (transactions 1-3).Record the closing entries in the general journal (transactions 4-7).2A partially completed worksheet for At Home Pet Grooming Service, a firm that grooms pets at the owner’s home, follows.Required:Complete the worksheet.Record the adjusting entries in the general journal (transactions 1-3).Record the closing entries in the general journal (transactions 4-7).Post the adjusting entries and the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.Prepare a post-closing trial balance.Analyze:What total debits were posted to the general ledger to complete all closing entries for the month of December?3On December 31, 2019, the ledger of Lopez Company contained the following account balances:Cash $ 66,000 Maria Lopez, Drawing $ 52,000Accounts Receivable 5,800 Fees Income 107,500Supplies 4,200 Depreciation Expense 5,500Equipment 52,000 Salaries Expense 34,000Accumulated Depreciation 5,000 Supplies Expense 6,000Accounts Payable 6,000 Telephone Expense 5,200Maria Lopez, Capital 121,500 Utilities Expense 9,3004The ledger accounts of AXX Internet Company appear as follows on March 31, 2019:ACCOUNT NO. ACCOUNT BALANCE101 Cash $ 40,000111 Accounts Receivable 29,910121 Supplies 5,300131 Prepaid Insurance 12,500141 Equipment 59,000142 Accumulated Depreciation—Equipment 20,660202 Accounts Payable 7,000301 Aretha Hinkle, Capital 65,000302 Aretha Hinkle, Drawing 6,500401 Fees Income 187,230510 Depreciation Expense—Equipment 10,580511 Insurance Expense 5,700514 Rent Expense 16,500517 Salaries Expense 83,000518 Supplies Expense 2,800519 Telephone Expense 3,400523 Utilities Expense 4,700All accounts have normal balances.Required:Prepare the closing entries.Post the transactions in to the appropriate ledger accounts. Hint: Be sure to enter beginning balances.5The Income Summary and Linda Carter, Capital accounts for Carter Production Company at the end of its accounting period follow.Income Summary Account No. 399BalanceDate Description Debit Credit Debit Credit2019Dec. 31 Closing 134,000 134,00031 Closing 71,800 62,20031 Closing 62,200 0Linda Carter, Capital Account No. 301BalanceDate Description Debit Credit Debit Credit2019Dec. 1 240,000 240,00031 Closing 62,200 302,20031 Closing 22,000 280,2006On December 31, the Income Summary account of Madison Company has a debit balance of $111,000 after revenue of $117,000 and expenses of $228,000 were closed to the account. Madison Wells, Drawing has a debit balance of $12,000 and Madison Wells, Capital has a credit balance of $174,000.Required:Record the journal entries necessary to complete closing the accounts.What is the new balance of Madison Wells, Capital?attempt 21The ledger accounts of AXX Internet Company appear as follows on March 31, 2019:ACCOUNT NO. ACCOUNT BALANCE101 Cash $ 40,000111 Accounts Receivable 29,910121 Supplies 5,300131 Prepaid Insurance 12,500141 Equipment 59,000142 Accumulated Depreciation—Equipment 20,660202 Accounts Payable 7,000301 Aretha Hinkle, Capital 65,000302 Aretha Hinkle, Drawing 6,500401 Fees Income 187,230510 Depreciation Expense—Equipment 10,580511 Insurance Expense 5,700514 Rent Expense 16,500517 Salaries Expense 83,000518 Supplies Expense 2,800519 Telephone Expense 3,400523 Utilities Expense 4,700All accounts have normal balances.Required:Prepare the closing entries.Post the transactions in to the appropriate ledger accounts. Hint: Be sure to enter beginning balances.2A partially completed worksheet for At Home Pet Grooming Service, a firm that grooms pets at the owner’s home, follows.Required:Complete the worksheet.Record the adjusting entries in the general journal (transactions 1-3).Record the closing entries in the general journal (transactions 4-7).Post the adjusting entries and the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.Prepare a post-closing trial balance.Analyze:What total debits were posted to the general ledger to complete all closing entries for the month of December?3The Income Summary and Linda Carter, Capital accounts for Carter Production Company at the end of its accounting period follow.Income Summary Account No. 399BalanceDate Description Debit Credit Debit Credit2019Dec. 31 Closing 134,000 134,00031 Closing 71,800 62,20031 Closing 62,200 0Linda Carter, Capital Account No. 301BalanceDate Description Debit Credit Debit Credit2019Dec. 1 240,000 240,00031 Closing 62,200 302,20031 Closing 22,000 280,2004On December 31, the Income Summary account of Madison Company has a debit balance of $111,000 after revenue of $117,000 and expenses of $228,000 were closed to the account. Madison Wells, Drawing has a debit balance of $12,000 and Madison Wells, Capital has a credit balance of $174,000.Required:Record the journal entries necessary to complete closing the accounts.What is the new balance of Madison Wells, Capital?5Consumer Research Associates, owned by Gloria Johnson, is retained by large companies to test consumer reaction to new products. On January 31, 2019, the firm’s worksheet showed the following adjustments data: (a) supplies used, $4,680; (b) expired rent, $26,000; and (c) depreciation on office equipment, $9,160. The balances of the revenue and expense accounts listed in the Income Statement section of the worksheet and the drawing account listed in the Balance Sheet section of the worksheet are given below:REVENUE AND EXPENSE ACCOUNTS401 Fees Income $ 200,000 Cr.511 Depr. Expense—Office Equipment 9,160 Dr.514 Rent Expense 26,000 Dr.517 Salaries Expense 99,000 Dr.520 Supplies Expense 4,680 Dr.523 Telephone Expense 2,700 Dr.526 Travel Expense 20,780 Dr.529 Utilities Expense 2,500 Dr.DRAWING ACCOUNT302 Gloria Johnson, Drawing 22,000 Dr.Required:Record the adjusting entries in the general journal (transactions 1-3).Record the closing entries in the general journal (transactions 4-7).6On December 31, 2019, the ledger of Lopez Company contained the following account balances:Cash $ 66,000 Maria Lopez, Drawing $ 52,000Accounts Receivable 5,800 Fees Income 107,500Supplies 4,200 Depreciation Expense 5,500Equipment 52,000 Salaries Expense 34,000Accumulated Depreciation 5,000 Supplies Expense 6,000Accounts Payable 6,000 Telephone Expense 5,200Maria Lopez, Capital 121,500 Utilities Expense 9,300ACC 290 Week 5 Apply Connect AssignmentComplete the Week 5 Assignment in Connect.Note: You have only 1 attempt available to complete assignments1On December 31, after adjustments, Gonzalez Company’s ledger contains the following account balances:101 Cash $ 30,200 Dr.111 Accounts Receivable 16,100 Dr.121 Supplies 2,300 Dr.131 Prepaid Rent 38,900 Dr.141 Equipment 47,000 Dr.142 Accumulated Depreciation—Equip. 1,150 Cr.202 Accounts Payable 6,800 Cr.301 Emilio Gonzalez, Capital (12/1/2019) 48,620 Cr.302 Emilio Gonzalez, Drawing 6,500 Dr.401 Fees Income 120,080 Cr.511 Advertising Expense 4,100 Dr.514 Depreciation Expense—Equip. 830 Dr.517 Rent Expense 2,900 Dr.519 Salaries Expense 21,800 Dr.523 Utilities Expense 6,020 Dr.Required:Journalize the closing entries in the general journal.Post the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.Analyze:What is the balance of the Salaries Expense account after closing entries are posted?2A partially completed worksheet for At Home Pet Grooming Service, a firm that grooms pets at the owner’s home, follows.Required:Complete the worksheet.Record the adjusting entries in the general journal (transactions 1-3).Record the closing entries in the general journal (transactions 4-7).Post the adjusting entries and the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.Prepare a post-closing trial balance.Analyze:What total debits were posted to the general ledger to complete all closing entries for the month of December?

The best study material for your courses can be found at http://www.snaptutorial.com which has many other courses which can help you to score good marks in your exams.ACC 422 Final Exam Guide (New 2018, With EXCEL FILE, Score 29/30)This Tutorial contains excel File which can be used to solve for any change in valuesBrief Exercise 7-1Brief Exercise 7-7Brief Exercise 7-14Brief Exercise 7-15Brief Exercise 8-4 (Part Level Submission)Brief Exercise 8-5Brief Exercise 8-6Multiple Choice Question 21Question 14Brief Exercise 9-4Exercise 9-4Brief Exercise 10-6Brief Exercise 10-8Exercise 10-1Question 9Brief Exercise 11-8Brief Exercise 12-2Brief Exercise 12-8Exercise 12-3Brief Exercise 13-2Brief Exercise 13-5Brief Exercise 13-10Brief Exercise 13-13Brief Exercise 14-3Brief Exercise 14-12Brief Exercise 14-14Brief Exercise 21-11Exercise 21-1Multiple Choice Question 99Multiple Choice Question 70Brief Exercise 7-1Your answer is correct.Vaughn Enterprises owns the following assets at December 31, 2017.Cash in bank—savings account69,000Checking account balance17,600Cash on hand9,030Postdated checks770Cash refund due from IRS35,600Certificates of deposit (180-day)94,570What amount should be reported as cash?Brief Exercise 7-7Larkspur Family Importers sold goods to Tung Decorators for $40,800 on November 1, 2017, accepting Tung’s $40,800, 6-month, 6% note.Prepare Larkspur’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest.Brief Exercise 7-14Recent financial statements of General Mills, Inc. report net sales of $12,442,000,000. Accounts receivable are $912,000,000 at the beginning of the year and $953,000,000 at the end of the year.Brief Exercise 7-15Indigo Company designated Jill Holland as petty cash custodian and established a petty cash fund of $290. The fund is reimbursed when the cash in the fund is at $26, which it is. Petty cash receipts indicate funds were disbursed for office supplies $92 and miscellaneous expense $169.Prepare journal entries for the establishment of the fund and the reimbursement.Brief Exercise 8-4 (Part Level Submission)Pharoah Company uses a periodic inventory system. For April, when the company sold 500 units, the following information is available.UnitsUnit CostTotal CostApril 1 inventory290$32$ 9,280April 15 purchase4303816,340April 23 purchase2804211,7601,000$37,380Brief Exercise 8-6Your answer is correct.Sandhill Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.UnitsUnit CostTotal CostApril 1 inventory270$30$ 8,100April 15 purchase4403615,840April 23 purchase2903911,3101,000$35,250Compute the April 30 inventory and the April cost of goods sold using the LIFO method.Multiple Choice Question 21Which of the following inventories carried by a manufacturer is similar to the merchandise inventory of a retailer?Question 14A fire destroys all of the merchandise of Shamrock Company on February 10, 2017. Presented below is information compiled up to the date of the fire.Inventory, January 1, 2017$432,200Sales revenue to February 10, 20171,935,200Purchases to February 10, 20171,104,580Freight-in to February 10, 201759,180Rate of gross profit on selling price35%What is the approximate inventory on February 10, 2017?Exercise 9-4Martinez Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below.CostNet Realizable Value12/31/17$322,170$299,52012/31/18409,250390,440(a) Prepare the journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method.Brief Exercise 10-6Waterway Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $327,600. The estimated fair values of the assets are land $62,400, building $228,800, and equipment $83,200. At what amounts should each of the three assets be recorded?Brief Exercise 10-8Pearl Corporation traded a used truck (cost $29,600, accumulated depreciation $26,640) for a small computer with a fair value of $4,884. Pearl also paid $740 in the transaction.Prepare the journal entry to record the exchange. (The exchange has commercial substance.)Exercise 10-1The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.(a)Money borrowed to pay building contractor (signed a note)$(285,400)(b)Payment for construction from note proceeds285,400(c)Cost of land fill and clearing11,790(d)Delinquent real estate taxes on property assumed by purchaser7,300(e)Premium on 6-month insurance policy during construction8,580(f)Refund of 1-month insurance premium because construction completed early(1,430)(g)Architect’s fee on building26,200(h)Cost of real estate purchased as a plant site (land $209,100 and building $52,900)262,000(i)Commission fee paid to real estate agency8,970(j)Installation of fences around property3,770(k)Cost of razing and removing building11,710(l)Proceeds from salvage of demolished building(4,550)(m)Interest paid during construction on money borrowed for construction13,150(n)Cost of parking lots and driveways20,050(o)Cost of trees and shrubbery planted (permanent in nature)14,440(p)Excavation costs for new building2,700Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title.Question 9Sage Company purchased machinery for $174,300 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $14,700, production of 81,900 units, and working hours of 44,000. During 2017, the company uses the machinery for 11,440 hours, and the machinery produces 9,009 units. Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years’-digits, and double-declining-balance methods.Brief Exercise 11-8Carla Company owns equipment that cost $1,008,000 and has accumulated depreciation of $425,600. The expected future net cash flows from the use of the asset are expected to be $560,000. The fair value of the equipment is $448,000.Prepare the journal entry, if any, to record the impairment loss.Brief Exercise 12-8Concord Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $330,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $700,000. The fair value of the division is estimated to be $668,000 and the implied goodwill is $298,000.Prepare Concord journal entry to record impairment of the goodwill.Exercise 12-3Joni Marin Inc. has the following amounts reported in its general ledger at the end of the current year.Organization costs$24,400Trademarks16,900Discount on bonds payable37,400Deposits with advertising agency for ads to promote goodwill of company12,400Excess of cost over fair value of net identifiable assets of acquired subsidiary77,400Cost of equipment acquired for research and development projects; theequipment has an alternative future use87,400Costs of developing a secret formula for a product that is expected tobe marketed for at least 20 years83,800(a)On the basis of this information, compute the total amount to be reported by Marin for intangible assets on its balance sheet at year-end.Brief Exercise 13-2Ivanhoe Company borrowed $30,000 on November 1, 2017, by signing a $30,000, 8%, 3-month note. Prepare Ivanhoe’s November 1, 2017, entry; the December 31, 2017, annual adjusting entry; and the February 1, 2018, entry.Brief Exercise 13-5Riverbed Corporation made credit sales of $19,800 which are subject to 7% sales tax. The corporation also made cash sales which totaled $28,462 including the 7% sales tax.Prepare the entry to record Riverbed’s credit sales.Brief Exercise 13-10Windsor Inc. is involved in a lawsuit at December 31, 2017.Prepare the December 31 entry assuming it is probable that Windsor will be liable for $862,200 as a result of this suit.Brief Exercise 13-13Martinez Factory provides a 2-year warranty with one of its products which was first sold in 2017. Martinez sold $930,400 of products subject to the warranty. Martinez expects $124,050 of warranty costs over the next 2 years. In that year, Martinez spent $70,460 servicing warranty claims. Prepare Martinez’s journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.Brief Exercise 14-3The Skysong Company issued $260,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 98.Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Skysong Company records straight-line amortization semiannually.Brief Exercise 14-12Vaughn Corporation issued a 4-year, $55,000, 5% note to Greenbush Company on January 1, 2017, and received a computer that normally sells for $44,762. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 11%.Prepare Vaughn’s journal entries for (a) the January 1 issuance and (b) the December 31 interest.Multiple Choice Question 99On June 30, 2018, Sheridan Co. sold equipment to an unaffiliated company for $2250000. The equipment had a book value of $1205000 and a remaining useful life of 10 years. That same day, Sheridan leased back the equipment at $12500 per month for 5 years with no option to renew the lease or repurchase the equipment. Sheridan’s rent expense for this equipment for the year ended December 31, 2018, should beACC 422 Final Exam Guide 11. Kraft Enterprises owns the following assets at December 31, 2012.Cash in bank–savings account67,516Checking account balance26,445Cash on hand9,478Postdated checks753Cash refund due from IRS40,324Certificates of deposit (180-day)94,754What amount should be reported as cash?Question 2Presented below is information related to Rembrandt Inc.’s inventory.(per unit) Skis Boots ParkasHistorical Cost 273.79 152.75 76.37Selling Price 312.70 208.95 106.27Cost to distribute 27.38 11.53 3.60Current replacement cost 292.52 151.31 73.49Normal profit margin 46.11 41.79 30.62Determine the following:Question 3Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 67 units that cost $40 each. During June, the company purchased 202 units at $40 each, returned 8 units for credit, and sold 168 units at $67 each. Journalize the June transactions.Question 4Amsterdam Company uses a periodic inventory system. For April, when the company sold 700 units, the following information is available.Compute the April 30 inventory and the April cost of goods sold using the average cost method.Question 5Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.Compute the April 30 inventory and the April cost of goods sold using the FIFO method.Question 6(FIFO, LIFO, Average Cost Inventory)Esplanade Company was formed on December 1, 2011. The following information is available from Esplanade’s inventory records for Product BAP.Purchases Units Unit CostJanuary 1, 2012(beginning inventory) 762 8.00January 5, 2012 1,524 9.00January 25, 2012 1,651 10.00February 16, 2012 1,061 11.00March 26, 2012 762 12.00A physical inventory on March 31, 2012, shows 2,032 units on hand. Prepare schedules to compute the ending inventory at March 31, 2012, under each of the following inventory methods. Assume Esplanade Company uses the periodic inventory method.Question 7Floyd Corporation has the following four items in its ending inventory. Determine the final lower of cost or market inventory value for each item.Question 8Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was $320,786 at both cost and market value. At December 31, 2013, the inventory was $428,714 at cost and $403,231 at market value. Prepare the necessary December 31 entry under:Question 9Boyne Inc. had beginning inventory of $15,000 at cost and $25,000 at retail. Net purchases were $150,000 at cost and $212,500 at retail. Net markups were $12,500; net markdowns were $8,750; and sales were $196,250. Compute ending inventory at cost using the conventional retail method.Question 10(Gross Profit Method)Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.Question 11Previn Brothers Inc. purchased land at a price of $30,400. Closing costs were $1,820. An old building was removed at a cost of $14,850. What amount should be recorded as the cost of the land?Question 12Garcia Corporation purchased a truck by issuing an $108,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.Question 13Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $352,800. The estimated fair values of the assets are land $67,200, building $246,400, and equipment $89,600. At what amounts should each of the three assets be recorded?Question 14Fielder Company obtained land by issuing 2,000 shares of its $12 par value common stock. The land was recently appraised at $103,700. The common stock is actively traded at $50 per share. Prepare the journal entry to record the acquisition of the land.Question 15Navajo Corporation traded a used truck (cost $23,600, accumulated depreciation $21,240) for a small computer worth $4,366. Navajo also paid $1,180 in the transaction. Prepare the journal entry to record the exchange.Question 16Mehta Company traded a used welding machine (cost $10,080, accumulated depreciation $3,360) for office equipment with an estimated fair value of $5,600. Mehta also paid $3,360 cash in the transaction. Prepare the journal entry to record the exchange.Question 17Depreciation is normally computed on the basis of the nearestA). full month and to the nearest dollar.B). day and to the nearest cent.C). day and to the nearest dollar.D). full month and to the nearest cent.Question 18Fernandez Corporation purchased a truck at the beginning of 2012 for $54,180. The truck is estimated to have a salvage value of $2,580 and a useful life of 206,400 miles. It was driven 29,670 miles in 2012 and 39,990 miles in 2013. Compute depreciation expense for 2012 and 2013.Question 19Lockhard Company purchased machinery on January 1, 2012, for $79,200. The machinery is estimated to have a salvage value of $7,920 after a useful life of 8 years.(a) Compute 2012 depreciation expense using the double-declining balance method.(b) Compute 2012 depreciation expense using the double-declining balance method assuming the machinery was purchased on October 1, 2012.Question 20Jurassic Company owns machinery that cost $1,145,700 and has accumulated depreciation of $458,280. The expected future net cash flows from the use of the asset are expected to be $636,500. The fair value of the equipment is $509,200. Prepare the journal entry, if any, to record the impairment loss.Question 21Everly Corporation acquires a coal mine at a cost of $501,600. Intangible development costs total $125,400. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $100,320), after which it can be sold for $200,640. Everly estimates that 5,016 tons of coal can be extracted. If 878 tons are extracted the first year, prepare the journal entry to record depletion.Question 22Francis Corporation purchased an asset at a cost of $58,200 on March 1, 2012. The asset has a useful life of 8 years and a salvage value of $5,820. For tax purposes, the MACRS class life is 5 years. Compute tax depreciation for each year 2012–2017.Question 23Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for $50,820. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion’s journal entries to record the purchase of the patent and 2012 amortization.Question 24Karen Austin Corporation has capitalized software costs of $768,500, and sales of this product the first year totaled $390,630. Karen Austin anticipates earning $911,470 in additional future revenues from this product, which is estimated to have an economic life of 4 years. Compute the amount of software cost amortization for the first year.(a) Compute the amount of software cost amortization for the first year using the percent of revenue approach.(b) Compute the amount of software cost amortization for the first year using the straight-line approach.Question 25Jeff Beck is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2012, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Beck had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Beck in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Beck appears inclined to accept the Railroad’s offer. The Railroad’s 2012 financial statements should include the following related to the incident:A). recognition of a loss only.B). creation of a liability only.C). disclosure in note form only.D). recognition of a loss and creation of a liability for the value of the land.Question 26Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $66,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,210. On July 3, Roley returned damaged goods and received credit of $6,600. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley.Question 27Takemoto Corporation borrowed $93,000 on November 1, 2012, by signing a $95,093, 3-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2012, entry; the December 31, 2012, annual adjusting entry; and the February 1, 2013, entry. (For multiple debit/credit en tries, list amounts from largest to smallest, e.g. 10, 8, 6. Round all answers to 0 decimal places, e.g. 11,150.)Question 28Whiteside Corporation issues $629,000 of 9% bonds, due in 14 years, with interest payable semiannually. At the time of issue, the annual market rate for such bonds is 10%. Compute the issue price of the bonds.(Use the present value tables in the text.Question 29Indiana Jones Company enters into a 6-year lease of equipment on January 1, 2012, which requires 6 annual payments of $37,560 each, beginning January 1, 2012. In addition, the lessee guarantees a residual value of $20,870 at lease-end. The equipment has a useful life of 6 years. Assume that for Lost Ark Company, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the carrying amount of the machinery is $191,722. Prepare Lost Ark’s January 1, 2012, journal entries.ACC 422 Final Exam Guide 21) Which of the following is considered cash?2) Bank overdrafts, if material, should be3) Which of the following is NOT considered cash for financial reporting purposes?4) If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as5) Which of the following methods of determining annual bad debt expense best achieves the matching concept?6) The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach7) The failure to record a purchase of mer¬chandise on account even though the goods are properly included in the physical inven¬tory results in8) Belle Co. received merchandise on consignment. As of March 31, Belle had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 319) Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in inventory, but did NOT record the transaction. The effect of this on its financial statements for January 3110) The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its11) Which method of inventory pricing best approximates specific identification of the actual flow of costs and units in most manufacturing situations?12) When using the periodic inventory system, which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?13) An item of inventory purchased this period for $15.00 has been incorrectly written down to its current replacement cost of $10.00. It sells during the following period for $30.00, its normal selling price, with disposal costs of $3.00 and normal profit of $12.00. Which of the following statements is NOT true?14) Designated market value15) In no case can "market" in the lower-of-cost-or-market rule be more than16) A major advantage of the retail inventory method is that it17) The gross profit method of inventory valuation is invalid when18) The retail inventory method is based on the assumption that the19) Which of the following is NOT a major characteristic of a plant asset?20) Cotton Hotel Corporation recently purchased Holiday Hotel and the land on which it is located with the plan to tear down the Holiday Hotel and build a new luxury hotel on the site. The cost of the Holiday Hotel should be21) If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on22) The period of time during which interest must be capitalized ends when23) To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be24) When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to25) The King-Kong Corporation exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is NOT expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will26) When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds NOT needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be27) Which of the following is NOT a condition that must be satisfied before interest capitalization can begin on a qualifying asset?28) Which of the following most accurately reflects the concept of depreciation as used in accounting?29) Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?30) The major difference between the service life of an asset and its physical life is that31) Starr Company purchased a depreciable asset for $150,000. The estimated salvage value is $10,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?32) Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?33) Harrison Company purchased a depreciable asset for $100,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?34) Costs incurred internally to create intangibles are35) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be36) Riser Corporation was granted a patent on a product on January 1, 1998. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. Because of its unique plant, Riser Corporation does NOT feel the competing patent can be used in producing a product. The cost of the competing patent should be37) Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December 31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2008?38) Fleming Corporation acquired Out-of-Sight Products on January 1, 2008 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2008, the Out-of-Sight Products Division had a fair value of $3,400,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $2,900,000 at that time. What amount of loss on impairment of goodwill should Fleming record in 2008?39) Malrom Manufacturing Company acquired a patent on a manufacturing process on January 1, 2006 for $10,000,000. It was expected to have a 10 year life and no residual value. Malrom uses straight-line amortization for patents. On December 31, 2007, the expected future cash flows expected from the patent were expected to be $800,000 per year for the next eight years. The present value of these cash flows, discounted at Malrom’s market interest rate, is $4,800,000. At what amount should the patent be carried on the December 31, 2007 balance sheet?40) Goodwill41) Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some "negative goodwill." Proper accounting treatment by Easton is to report the amount as42) The reason goodwill is sometimes referred to as a master valuation account is because43) Which of the following items is a current liability?44) Which of the following statements is false?45) Stock dividends distributable should be classified on the46) Simson Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2006 the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2006 may first be taken on January 1, 2007. Information relative to these employees is as follows:Year Hourly Wages Vacation Days Earned by Each Employee Vacation Dayse Used by Each Employee2006 $28.50 10 02007 $27.00 10 82008 $28.50 10 10What is the amount of expense relative to compensated absences that should be reported on Simson’s income statement for 2006?47) A company buys an oil rig for $1,000,000 on January 1, 2007. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $200,000 (present value at 10% is $77,110). 10% is an appropriate interest rate for this company. What expense should be recorded for 2007 as a result of these events?48) A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?49) A contingency can be accrued when50) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles?51) Mark Ward is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2007, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad's offer. The Railroad's 2007 financial statements should include the following related to the incident:52) An example of an item which is NOT a liability is53) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the54) Bonds for which the owners' names are NOT registered with the issuing corporation are called55) Minimum lease payments may include a56) What impact does a bargain purchase option have on the present value of the minimum lease payments computed by the lessee?57) Which of the following is a correct statement of one of the capitalization criteria?58) In order to properly record a direct-financing lease, the lessor needs to know how to calculate the lease receivable. The lease receivable in a direct-financing lease is best defined as59) In the earlier years of a lease, from the lessee's perspective, the use of the60) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned incomeACC 422 Final Exam Guide 31) Which of the following is NOT considered cash for financial reporting purposes?2) What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet?3) Which of the following items should NOT be included in the Cash caption on the balance sheet?4) The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach5) Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense?6) Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does NOT make the balance sheet misleading because7) Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in inventory, but did NOT record the transaction. The effect of this on its financial statements for January 31 would be8) If the beginning inventory for 2006 is overstated, the effects of this error on cost of goods sold for 2006, net income for 2006, and assets at December 31, 2007, respectively, are9) The accountant for the Orion Sales Company is preparing the income statement for 2007 and the balance sheet at December 31, 2007. Orion uses the periodic inventory system. The January 1, 2007 merchandise inventory balance will appear10) The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its11) When using the periodic inventory system, which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?12) The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its13) In no case can "market" in the lower-of-cost-or-market rule be more than14) When the direct method is used to record inventory at market15) Designated market value16) The retail inventory method is based on the assumption that the17) In 2006, Lucas Manufacturing signed a contract with a supplier to purchase raw materials in 2007 for $700,000. Before the December 31, 2006 balance sheet date, the market price for these materials dropped to $510,000. The journal entry to record this situation at December 31, 2006 will result in a credit that should be reported18) The gross profit method of inventory valuation is invalid when19) Which of the following is NOT a major characteristic of a plant asset?20) The cost of land does NOT include21) If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on22) To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be23) When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to24) The period of time during which interest must be capitalized ends when25) Construction of a qualifying asset is started on April 1 and finished on December 1. The fraction used to multiply an expenditure made on April 1 to find weighted-average accumulated expenditures is26) When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds NOT needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be27) When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the28) If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will29) The term "depreciable cost," or "depreciable base," as it is used in accounting, refers to30) Which of the following most accurately reflects the concept of depreciation as used in accounting?31) Prentice Company purchased a depreciable asset for $200,000. The estimated salvage value is $20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?32) Pine Company purchased a depreciable asset for $360,000. The estimated salvage value is $24,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?33) Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?34) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be35) Riser Corporation was granted a patent on a product on January 1, 1998. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. Because of its unique plant, Riser Corporation does NOT feel the competing patent can be used in producing a product. The cost of the competing patent should be36) Which of the following methods of amortization is normally used for intangible assets?37) General Products Company bought Special Products Division in 2006 and appropriately booked $250,000 of goodwill related to the purchase. On December 31, 2007, the fair value of Special Products Division is $2,000,000 and it is carried on General Product’s books for a total of $1,700,000, including the goodwill. An analysis of Special Products Division’s assets indicates that goodwill of $200,000 exists on December 31, 2007. What goodwill impairment should be recognized by General Products in 2007?38) Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December 31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2008?39) Fleming Corporation acquired Out-of-Sight Products on January 1, 2008 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2008, the Out-of-Sight Products Division had a fair value of $3,400,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $2,900,000 at that time. What amount of loss on impairment of goodwill should Fleming record in 2008?40) When a patent is amortized, the credit is usually made to41) The reason goodwill is sometimes referred to as a master valuation account is because42) Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some "negative goodwill." Proper accounting treatment by Easton is to report the amount as43) Stock dividends distributable should be classified on the44) Which of the following statements is false?45) Which of the following items is a current liability?46) Simson Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2006 the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2006 may first be taken on January 1, 2007. Information relative to these employees is as follows:What is the amount of expense relative to compensated absences that should be reported on Simson’s income statement for 2006?47) A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?48) A company offers a cash rebate of $1 on each $4 package of light bulbs sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 4,000,000 packages of light bulbs are sold, and 140,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?49) A contingency can be accrued when50) Mark Ward is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2007, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad's offer. The Railroad's 2007 financial statements should include the following related to the incident:51) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles?52) If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be53) An example of an item which is NOT a liability is54) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the55) Which of the following is a correct statement of one of the capitalization criteria?56) Which of the following best describes current practice in accounting for leases?57) While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that58) The amount to be recorded as the cost of an asset under capital lease is equal to the59) In the earlier years of a lease, from the lessee's perspective, the use of the60) If the residual value of a leased asset is guaranteed by a third partyACC 422 Final Exam Guide All 3 Sets1. Kraft Enterprises owns the following assets at December 31, 2012.Cash in bank–savings account 67,516 Checking account balance 26,445Cash on hand 9,478 Postdated checks 753Cash refund due from IRS 40,324 Certificates of deposit (180-day) 94,754What amount should be reported as cash?Question 2Presented below is information related to Rembrandt Inc.’s inventory.(per unit) Skis Boots ParkasHistorical Cost 273.79 152.75 76.37Selling Price 312.70 208.95 106.27Cost to distribute 27.38 11.53 3.60Current replacement cost 292.52 151.31 73.49Normal profit margin 46.11 41.79 30.62Determine the following:Question 3Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 67 units that cost $40 each. During June, the company purchased 202 units at $40 each, returned 8 units for credit, and sold 168 units at $67 each. Journalize the June transactions.Question 4Amsterdam Company uses a periodic inventory system. For April, when the company sold 700 units, the following information is available.Compute the April 30 inventory and the April cost of goods sold using the average cost method.Question 5Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available.Compute the April 30 inventory and the April cost of goods sold using the FIFO method.Question 6(FIFO, LIFO, Average Cost Inventory)Esplanade Company was formed on December 1, 2011. The following information is available from Esplanade’s inventory records for Product BAP.Purchases Units Unit CostJanuary 1, 2012(beginning inventory) 762 8.00January 5, 2012 1,524 9.00January 25, 2012 1,651 10.00February 16, 2012 1,061 11.00March 26, 2012 762 12.00A physical inventory on March 31, 2012, shows 2,032 units on hand. Prepare schedules to compute the ending inventory at March 31, 2012, under each of the following inventory methods. Assume Esplanade Company uses the periodic inventory method.Question 7Floyd Corporation has the following four items in its ending inventory. Determine the final lower of cost or market inventory value for each item.Question 8Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was $320,786 at both cost and market value. At December 31, 2013, the inventory was $428,714 at cost and $403,231 at market value. Prepare the necessary December 31 entry under:Question 9Boyne Inc. had beginning inventory of $15,000 at cost and $25,000 at retail. Net purchases were $150,000 at cost and $212,500 at retail. Net markups were $12,500; net markdowns were $8,750; and sales were $196,250. Compute ending inventory at cost using the conventional retail method.Question 10(Gross Profit Method)Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.Question 11Previn Brothers Inc. purchased land at a price of $30,400. Closing costs were $1,820. An old building was removed at a cost of $14,850. What amount should be recorded as the cost of the land?Question 12Garcia Corporation purchased a truck by issuing an $108,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.Question 13Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $352,800. The estimated fair values of the assets are land $67,200, building $246,400, and equipment $89,600. At what amounts should each of the three assets be recorded?Question 14Fielder Company obtained land by issuing 2,000 shares of its $12 par value common stock. The land was recently appraised at $103,700. The common stock is actively traded at $50 per share. Prepare the journal entry to record the acquisition of the land.Question 15Navajo Corporation traded a used truck (cost $23,600, accumulated depreciation $21,240) for a small computer worth $4,366. Navajo also paid $1,180 in the transaction. Prepare the journal entry to record the exchange.Question 16Mehta Company traded a used welding machine (cost $10,080, accumulated depreciation $3,360) for office equipment with an estimated fair value of $5,600. Mehta also paid $3,360 cash in the transaction. Prepare the journal entry to record the exchange.Question 17Depreciation is normally computed on the basis of the nearestA). full month and to the nearest dollar.B). day and to the nearest cent.C). day and to the nearest dollar.D). full month and to the nearest cent.Question 18Fernandez Corporation purchased a truck at the beginning of 2012 for $54,180. The truck is estimated to have a salvage value of $2,580 and a useful life of 206,400 miles. It was driven 29,670 miles in 2012 and 39,990 miles in 2013. Compute depreciation expense for 2012 and 2013.Question 19Lockhard Company purchased machinery on January 1, 2012, for $79,200. The machinery is estimated to have a salvage value of $7,920 after a useful life of 8 years.(a) Compute 2012 depreciation expense using the double-declining balance method.(b) Compute 2012 depreciation expense using the double-declining balance method assuming the machinery was purchased on October 1, 2012.Question 20Jurassic Company owns machinery that cost $1,145,700 and has accumulated depreciation of $458,280. The expected future net cash flows from the use of the asset are expected to be $636,500. The fair value of the equipment is $509,200. Prepare the journal entry, if any, to record the impairment loss.Question 21Everly Corporation acquires a coal mine at a cost of $501,600. Intangible development costs total $125,400. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $100,320), after which it can be sold for $200,640. Everly estimates that 5,016 tons of coal can be extracted. If 878 tons are extracted the first year, prepare the journal entry to record depletion.Question 22Francis Corporation purchased an asset at a cost of $58,200 on March 1, 2012. The asset has a useful life of 8 years and a salvage value of $5,820. For tax purposes, the MACRS class life is 5 years. Compute tax depreciation for each year 2012–2017.Question 23Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2012, for $50,820. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Prepare Celine Dion’s journal entries to record the purchase of the patent and 2012 amortization.Question 24Karen Austin Corporation has capitalized software costs of $768,500, and sales of this product the first year totaled $390,630. Karen Austin anticipates earning $911,470 in additional future revenues from this product, which is estimated to have an economic life of 4 years. Compute the amount of software cost amortization for the first year.(a) Compute the amount of software cost amortization for the first year using the percent of revenue approach.(b) Compute the amount of software cost amortization for the first year using the straight-line approach.Question 25Jeff Beck is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2012, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Beck had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Beck in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Beck appears inclined to accept the Railroad’s offer. The Railroad’s 2012 financial statements should include the following related to the incident:A). recognition of a loss only.B). creation of a liability only.C). disclosure in note form only.D). recognition of a loss and creation of a liability for the value of the land.Question 26Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $66,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,210. On July 3, Roley returned damaged goods and received credit of $6,600. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley.Question 27Takemoto Corporation borrowed $93,000 on November 1, 2012, by signing a $95,093, 3-month, zero-interest-bearing note. Prepare Takemoto’s November 1, 2012, entry; the December 31, 2012, annual adjusting entry; and the February 1, 2013, entry. (For multiple debit/credit en tries, list amounts from largest to smallest, e.g. 10, 8, 6. Round all answers to 0 decimal places, e.g. 11,150.)Question 28Whiteside Corporation issues $629,000 of 9% bonds, due in 14 years, with interest payable semiannually. At the time of issue, the annual market rate for such bonds is 10%. Compute the issue price of the bonds.(Use the present value tables in the text.Question 29Indiana Jones Company enters into a 6-year lease of equipment on January 1, 2012, which requires 6 annual payments of $37,560 each, beginning January 1, 2012. In addition, the lessee guarantees a residual value of $20,870 at lease-end. The equipment has a useful life of 6 years. Assume that for Lost Ark Company, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the carrying amount of the machinery is $191,722. Prepare Lost Ark’s January 1, 2012, journal entries.Question 30On January 1, 2012, Irwin Animation sold a truck to Peete Finance for $26,050 and immediately leased it back. The truck was carried on Irwin’s books at $20,800. The term of the lease is 5 years, and title transfers to Irwin at lease-end. The lease requires five equal rental payments of $7,048 at the end of each year. The appropriate rate of interest is 11%, and the truck has a useful life of 5 years with no salvage value. Prepare Irwin’s 2012 journal entries.SET 21) Which of the following is considered cash?2) Bank overdrafts, if material, should be3) Which of the following is NOT considered cash for financial reporting purposes?4) If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as5) Which of the following methods of determining annual bad debt expense best achieves the matching concept?6) The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach7) The failure to record a purchase of mer¬chandise on account even though the goods are properly included in the physical inven¬tory results in8) Belle Co. received merchandise on consignment. As of March 31, Belle had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 319) Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in inventory, but did NOT record the transaction. The effect of this on its financial statements for January 3110) The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its11) Which method of inventory pricing best approximates specific identification of the actual flow of costs and units in most manufacturing situations?12) When using the periodic inventory system, which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?13) An item of inventory purchased this period for $15.00 has been incorrectly written down to its current replacement cost of $10.00. It sells during the following period for $30.00, its normal selling price, with disposal costs of $3.00 and normal profit of $12.00. Which of the following statements is NOT true?14) Designated market value15) In no case can "market" in the lower-of-cost-or-market rule be more than16) A major advantage of the retail inventory method is that it17) The gross profit method of inventory valuation is invalid when18) The retail inventory method is based on the assumption that the19) Which of the following is NOT a major characteristic of a plant asset?20) Cotton Hotel Corporation recently purchased Holiday Hotel and the land on which it is located with the plan to tear down the Holiday Hotel and build a new luxury hotel on the site. The cost of the Holiday Hotel should be21) If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on22) The period of time during which interest must be capitalized ends when23) To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be24) When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to25) The King-Kong Corporation exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is NOT expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will26) When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds NOT needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be27) Which of the following is NOT a condition that must be satisfied before interest capitalization can begin on a qualifying asset?28) Which of the following most accurately reflects the concept of depreciation as used in accounting?29) Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?30) The major difference between the service life of an asset and its physical life is that31) Starr Company purchased a depreciable asset for $150,000. The estimated salvage value is $10,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?32) Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?33) Harrison Company purchased a depreciable asset for $100,000. The estimated salvage value is $10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?34) Costs incurred internally to create intangibles are35) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be36) Riser Corporation was granted a patent on a product on January 1, 1998. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. Because of its unique plant, Riser Corporation does NOT feel the competing patent can be used in producing a product. The cost of the competing patent should be37) Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December 31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2008?38) Fleming Corporation acquired Out-of-Sight Products on January 1, 2008 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2008, the Out-of-Sight Products Division had a fair value of $3,400,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $2,900,000 at that time. What amount of loss on impairment of goodwill should Fleming record in 2008?39) Malrom Manufacturing Company acquired a patent on a manufacturing process on January 1, 2006 for $10,000,000. It was expected to have a 10 year life and no residual value. Malrom uses straight-line amortization for patents. On December 31, 2007, the expected future cash flows expected from the patent were expected to be $800,000 per year for the next eight years. The present value of these cash flows, discounted at Malrom’s market interest rate, is $4,800,000. At what amount should the patent be carried on the December 31, 2007 balance sheet?40) Goodwill41) Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some "negative goodwill." Proper accounting treatment by Easton is to report the amount as42) The reason goodwill is sometimes referred to as a master valuation account is because43) Which of the following items is a current liability?44) Which of the following statements is false?45) Stock dividends distributable should be classified on the46) Simson Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2006 the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2006 may first be taken on January 1, 2007. Information relative to these employees is as follows:Year Hourly Wages Vacation Days Earned by Each Employee Vacation Dayse Used by Each Employee2006 $28.50 10 02007 $27.00 10 82008 $28.50 10 10What is the amount of expense relative to compensated absences that should be reported on Simson’s income statement for 2006?47) A company buys an oil rig for $1,000,000 on January 1, 2007. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $200,000 (present value at 10% is $77,110). 10% is an appropriate interest rate for this company. What expense should be recorded for 2007 as a result of these events?48) A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?49) A contingency can be accrued when50) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles?51) Mark Ward is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2007, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad's offer. The Railroad's 2007 financial statements should include the following related to the incident:52) An example of an item which is NOT a liability is53) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the54) Bonds for which the owners' names are NOT registered with the issuing corporation are called55) Minimum lease payments may include a56) What impact does a bargain purchase option have on the present value of the minimum lease payments computed by the lessee?57) Which of the following is a correct statement of one of the capitalization criteria?58) In order to properly record a direct-financing lease, the lessor needs to know how to calculate the lease receivable. The lease receivable in a direct-financing lease is best defined as59) In the earlier years of a lease, from the lessee's perspective, the use of the60) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned incomeSET 31) Which of the following is NOT considered cash for financial reporting purposes?2) What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet?3) Which of the following items should NOT be included in the Cash caption on the balance sheet?4) The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach5) Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense?6) Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does NOT make the balance sheet misleading because7) Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in inventory, but did NOT record the transaction. The effect of this on its financial statements for January 31 would be8) If the beginning inventory for 2006 is overstated, the effects of this error on cost of goods sold for 2006, net income for 2006, and assets at December 31, 2007, respectively, are9) The accountant for the Orion Sales Company is preparing the income statement for 2007 and the balance sheet at December 31, 2007. Orion uses the periodic inventory system. The January 1, 2007 merchandise inventory balance will appear10) The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its11) When using the periodic inventory system, which of the following generally would NOT be separately accounted for in the computation of cost of goods sold?12) The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its13) In no case can "market" in the lower-of-cost-or-market rule be more than14) When the direct method is used to record inventory at market15) Designated market value16) The retail inventory method is based on the assumption that the17) In 2006, Lucas Manufacturing signed a contract with a supplier to purchase raw materials in 2007 for $700,000. Before the December 31, 2006 balance sheet date, the market price for these materials dropped to $510,000. The journal entry to record this situation at December 31, 2006 will result in a credit that should be reported18) The gross profit method of inventory valuation is invalid when19) Which of the following is NOT a major characteristic of a plant asset?20) The cost of land does NOT include21) If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on22) To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be23) When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to24) The period of time during which interest must be capitalized ends when25) Construction of a qualifying asset is started on April 1 and finished on December 1. The fraction used to multiply an expenditure made on April 1 to find weighted-average accumulated expenditures is26) When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds NOT needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be27) When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the28) If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will29) The term "depreciable cost," or "depreciable base," as it is used in accounting, refers to30) Which of the following most accurately reflects the concept of depreciation as used in accounting?31) Prentice Company purchased a depreciable asset for $200,000. The estimated salvage value is $20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?32) Pine Company purchased a depreciable asset for $360,000. The estimated salvage value is $24,000, and the estimated useful life is 8 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset?33) Bigbie Company purchased a depreciable asset for $600,000. The estimated salvage value is $30,000, and the estimated useful life is 10,000 hours. Bigbie used the asset for 1,100 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset?34) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be35) Riser Corporation was granted a patent on a product on January 1, 1998. To protect its patent, the corporation purchased on January 1, 2007 a patent on a competing product which was originally issued on January 10, 2003. Because of its unique plant, Riser Corporation does NOT feel the competing patent can be used in producing a product. The cost of the competing patent should be36) Which of the following methods of amortization is normally used for intangible assets?37) General Products Company bought Special Products Division in 2006 and appropriately booked $250,000 of goodwill related to the purchase. On December 31, 2007, the fair value of Special Products Division is $2,000,000 and it is carried on General Product’s books for a total of $1,700,000, including the goodwill. An analysis of Special Products Division’s assets indicates that goodwill of $200,000 exists on December 31, 2007. What goodwill impairment should be recognized by General Products in 2007?38) Twilight Corporation acquired End-of-the-World Products on January 1, 2008 for $2,000,000, and recorded goodwill of $375,000 as a result of that purchase. At December 31, 2008, the End-of-the-World Products Division had a fair value of $1,700,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $1,450,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2008?39) Fleming Corporation acquired Out-of-Sight Products on January 1, 2008 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2008, the Out-of-Sight Products Division had a fair value of $3,400,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $2,900,000 at that time. What amount of loss on impairment of goodwill should Fleming record in 2008?40) When a patent is amortized, the credit is usually made to41) The reason goodwill is sometimes referred to as a master valuation account is because42) Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some "negative goodwill." Proper accounting treatment by Easton is to report the amount as43) Stock dividends distributable should be classified on the44) Which of the following statements is false?45) Which of the following items is a current liability?46) Simson Company has 35 employees who work 8-hour days and are paid hourly. On January 1, 2006 the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2006 may first be taken on January 1, 2007. Information relative to these employees is as follows:What is the amount of expense relative to compensated absences that should be reported on Simson’s income statement for 2006?47) A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?48) A company offers a cash rebate of $1 on each $4 package of light bulbs sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 4,000,000 packages of light bulbs are sold, and 140,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?49) A contingency can be accrued when50) Mark Ward is a farmer who owns land which borders on the right-of-way of the Northern Railroad. On August 10, 2007, due to the admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad's offer. The Railroad's 2007 financial statements should include the following related to the incident:51) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles?52) If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be53) An example of an item which is NOT a liability is54) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the55) Which of the following is a correct statement of one of the capitalization criteria?56) Which of the following best describes current practice in accounting for leases?57) While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that58) The amount to be recorded as the cost of an asset under capital lease is equal to the59) In the earlier years of a lease, from the lessee's perspective, the use of the60) If the residual value of a leased asset is guaranteed by a third partyACC 422 Week 1 Individual Assignment Disclosure Analysis Paper (2 Papers)Resource: InternetSelect a publicly held company to use as the basis for this assignment.Research your selected company and acquire the company’s most recent financial statements using the Internet.Prepare a 700- to 1,050-word paper analyzing the disclosures contained within the notes to the financial statements related to cash and cash equivalents, receivables, and inventories. Include a list identifying the components of the organization’s cash and cash equivalents.Format your paper consistent with APA guidelines.ACC 422 Week 1 Team Assignment Audited Financial Statements (Nordstrom Inc.)Each team is assigned a publically traded company that they will use to answer the questions in the Financial Scavenger Hunt assigned each week.Team A: Nordstrom Inc.Team B: Macy's Inc.Locate your assigned company's latest audited financial statements and post them on the assignment tab.Review the financial statements, including any notes and supplemental information, and answer the following questions. Indicate where you found the answer to the questions. If calculations are required, show your work. Post your answers to the assignment tab.Who are the auditors and have the auditors changed in the past 2 years? If yes, who were the previous auditors and why was there a change?What kind of opinion did the auditors issue onThe company as a wholeThe internal control systemWhat is the date of the audit opinion? This is the date that fixes the auditor's liability.Have the financials been restated in the past 2 years?Have there been any changes in the following positions in the past 2 years?Chief Executive OfficerChief Financial OfficerACC 422 Week 1 Wileyplus BE 7-1, BE 7-7, Ex 7-4, Ex 7-9, Ex 7-22, Ex 7-24, CA 7-2, Pr 7-4 (with Excel File)This Tutorial contains Excel File which can be used to solve for any valuesComplete the following assignments in WileyPLUS:· Brief Exercise 7-1· Brief Exercise 7-7· Exercise 7-4· Exercise 7-9· Exercise 7-22· Exercise 7-24 (Part Level Submission)· Concept for Analysis 7-2 (Essay)· Problem 7-4 (Part Level Submission)Brief Exercise 7-1Marin Enterprises owns the following assets at December 31, 2017.Cash in bank—savings account 65,800 Checking account balance 23,800Cash on hand 8,920 Postdated checks 900Cash refund due from IRS 36,000 Certificates of deposit (180-day) 90,240What amount should be reported as cash?Cash to be reportedBrief Exercise 7-7Your answer is partially correct. Try again.Blossom Family Importers sold goods to Tung Decorators for $34,200 on November 1, 2017, accepting Tung’s $34,200, 6-month, 5% note.Prepare Blossom’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)Exercise 7-4Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $3,255 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $177,940 as shown in the ledger.The following information is available for your first year in business.(1) Collections from customers $429,660(2) Merchandise purchased 694,400(3) Ending merchandise inventory 195,300(4) Goods are marked to sell at 40% above costCompute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.Exercise 7-9The trial balance before adjustment of Buffalo Inc. shows the following balances.Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 5% of gross accounts receivable and (b) 6% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,731 credit balance. Exercise 7-22Sheridan, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.1. On April 1, it established a petty cash fund in the amount of $249.2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows.Delivery charges paid on merchandise purchased $73Supplies purchased and used 38Postage expense 46I.O.U. from employees 30Miscellaneous expense 49The petty cash fund was replenished on April 10. The balance in the fund was $7.3. The petty cash fund balance was increased by $113 to $362 on April 20.Prepare the journal entries to record transactions related to petty cash for the month of April.Exercise 7-24 (Part Level Submission)Swifty Lansbury Company deposits all receipts and makes all payments by check. The following information is available from the cash records.Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance. Concept for Analysis 7-2 (Essay)Kimmel Company uses the net method of accounting for sales discounts. Kimmel also offers trade discounts to various groups of buyers.On August 1, 2017, Kimmel sold some accounts receivable on a without recourse basis. Kimmel incurred a finance charge.Kimmel also has some notes receivable bearing an appropriate rate of interest. The principal and total interest are due at maturity. The notes were received on October 1, 2017, and mature on September 30, 2019. Kimmel’s operating cycle is less than one year.Using the net method, how should Kimmel account for the sales discounts at the date of sale? What is the rationale for the amount recorded as sales under the net method?Using the net method, what is the effect on Kimmel’s sales revenues and net income when customers do not take the sales discounts?What is the effect of trade discounts on sales revenues and accounts receivable? Why?How should Kimmel account for the accounts receivable factored on August 1, 2017? Why?How should Kimmel account for the note receivable and the related interest on December 31, 2017? Why?Problem 7-4 (Part Level Submission) (2 parts)From inception of operations to December 31, 2017, Vaughn Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allowance account were made. Vaughn’s usual credit terms are net 30 days.The balance in Allowance for Doubtful Accounts was $147,500 at January 1, 2017. During 2017, credit sales totaled $9,175,300, the provision for doubtful accounts was determined to be $183,506, $91,753 of bad debts were written off, and recoveries of accounts previously written off amounted to $19,230. Vaughn installed a computer system in November 2017, and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows.Based on the review of collectibility of the account balances in the “prior to 1/1/17” aging category, additional receivables totaling $63,700 were written off as of December 31, 2017. The 81% uncollectible estimate applies to the remaining $97,700 in the category. Effective with the year ended December 31, 2017, Vaughn adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.ACC 422 Week 2 Learning Team Assignment (New Syllabus)Complete the following three deliverables for this assignment as a team:1. The Financial Reporting, Procter & Gamble Company, p. 379.2. The Financial Statement Analysis Cases, Case 1: Occidental Petroleum Corporation, p. 379.3. Problem 7-6, p. 374Compile all team member’s input.Click the Assignment Files tab to submit your assignment.Financial ReportingThe Procter & Gamble Company (P&G)The financial statements of P&G are presented in Appendix B. The company’s complete annual report, including the notes to the financial statements, is available online.InstructionsRefer to P&G’s financial statements and the accompanying notes to answer the following questions.(a) What criteria does P&G use to classify “Cash and cash equivalents” as reported in its balance sheet?(b) As of June 30, 2014, what balances did P&G have in cash and cash equivalents? What were the major uses of cash during the year?(c) P&G reports no allowance for doubtful accounts, suggesting that bad debt expense is not material for this company. Is it reasonable that a company like P&G would not have material bad debt expense? Explain.P7-6 (LO2,3) (Journalize Various Accounts Receivable Transactions) The balance sheet of Starsky Company at December 31, 2016, includes the following.Notes receivable$ 36,000Accounts receivable182,100Less: Allowance for doubtful accounts17,300$200,800Transactions in 2017 include the following.1. Accounts receivable of $138,000 were collected including accounts of $60,000 on which 2% sales discounts were allowed.2. $5,300 was received in payment of an account which was written off the books as worthless in 2016.3. Customer accounts of $17,500 were written off during the year.4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.Financial Statement Analysis CasesCase 1: Occidental Petroleum CorporationOccidental Petroleum Corporation reported the following information in a recent annual report.What items other than coin and currency may be included in “cash”?(b) What items may be included in “cash equivalents”?(c) What are compensating balance arrangements, and how should they be reported in financial statements?(d) What are the possible differences between cash equivalents and short-term (temporary) investments?(e) Assuming that the sale agreement meets the criteria for sale accounting, cash proceeds were $345 million, the carrying value of the receivables sold was $360 million, and the fair value of the recourse liability was $15 million, what was the effect on income from the sale of receivables?(f) Briefly discuss the impact of the transaction in (e) on Occidental’s liquidity.ACC 422 Week 2 Wileyplus Ex 8-2, Ex 8-9, Ex 8-12, Ex 9-2, Ex 9-7, Ex 9-17, Ex 9-18, Ex 9-20, Ex 9-22 (with Excel File)This Tutorial contains Excel File which can be used to solve for any valuesComplete the following assignments i• Exercise 8-2• Exercise 8-9 (Part Level Submission)• Exercise 8-12 (Part Level Submission)• Exercise 9-2• Exercise 9-7• Exercise 9-17• Exercise 9-18• Exercise 9-20• Exercise 9-22Exercise 8-2In your audit of Leon Company, you find that a physical inventory on December 31, 2017, showed merchandise with a cost of $400,500 was on hand at that date. You also discover the following items were all excluded from the $400,500.Based on the above information, calculate the amount that should appear on Leon’s balance sheet at December 31, 2017, for inventory.Exercise 8-9 (Part Level Submission)Cullumber Company sells one product. Presented below is information for January for Cullumber Company.Cullumber uses the FIFO cost flow assumption. All purchases and sales are on account.(a) – (this has 4 parts)Assume Cullumber uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 107 units.Exercise 8-12 (Part Level Submission)Marigold Company was formed on December 1, 2016. The following information is available from Marigold’s inventory records for Product BAP.A physical inventory on March 31, 2017, shows 1,808 units on hand.Prepare schedule to compute the ending inventory at March 31, 2017, under FIFO inventory method.Exercise 9-2Coronado Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.Exercise 9-7Blue Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.From the information above, determine the amount of Blue Company inventory.Exercise 9-17You are called by Tim Duncan of Ivanhoe Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately. The following data are available.Your client reports that the goods on hand on July 16 cost $32,800, but you determine that this figure includes goods of $6,000 received on a consignment basis. Your past records show that sales are made at approximately 25% over cost. Duncan’s insurance covers only goods owned.Compute the claim against the insurance company.Exercise 9-18Marigold Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost.On August 18, a fire destroyed the office, lumber shed, and a considerable portion of the lumber stacked in the yard. To file a report of loss for insurance purposes, the company must know what the inventories were immediately preceding the fire. No detail or perpetual inventory records of any kind were maintained. The only pertinent information you are able to obtain are the following facts from the general ledger, which was kept in a fireproof vault and thus escaped destruction.Submit your estimate of the inventory amounts immediately preceding the fire.Exercise 9-22The records of Grouper’s Boutique report the following data for the month of April.Compute the ending inventory by the conventional retail inventory method.Exercise 9-20Presented below is information related to Marigold Company.Compute the ending inventory at retail.Which of the methods in (b) above does the following?Compute ending inventory at lower-of-cost-or-marketCompute cost of goods sold based on (d).Compute gross margin based on (d).ACC 422 Week 3 Team Assignment (Case 3, CA 8-10, Problem 9-3, Problem 9-13)Complete the following four deliverables for this assignment as a team:1. Case 3: The Kroger Company, p. 440Complete the following individually and discuss your individual answers as a team:1. CA 8-10, p. 4372. Problem 9-3, p. 4833. Problem 9-13, p. 487After discussing your answers, compile each into a team response.Click the Assignment Files tab to submit your assignment.The Kroger Company reported the following data in its annual report (in millions).(a) Compute Kroger’s inventory turnovers for fiscal years ending January 31, 2015, and February 1, 2014, using:(1) Cost of sales and LIFO inventory.(2) Cost of sales and FIFO inventory.(b) Some firms calculate inventory turnover using sales rather than cost of goods sold in the numerator. Calculate Kroger’s fiscal years ending January 31, 2015, and February 1, 2014, turnover, using:(1) Sales and LIFO inventory.(2) Sales and FIFO inventory.(c) State which method you would choose to evaluate Kroger’s performance. Justify your choice.CA8-10 WRITING (FIFO and LIFO) Harrisburg Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all of the effects on the company, including its reported performance, before making the final decision.The inventory account, currently valued on the FIFO basis, consists of 1,000,000 units at $8 per unit on January 1, 2017. There are 1,000,000 shares of common stock outstanding as of January 1, 2017, and the cash balance is $400,000.The company has made the following forecasts for the period 2017–2019.Instructions(a) Prepare a schedule that illustrates and compares the following data for Harrisburg Company under the FIFO and the LIFO inventory method for 2017–2019. Assume the company would begin LIFO at the beginning of 2017.(1) Year-end inventory balances.(2) Annual net income after taxes.(3) Earnings per share.(4) Cash balance.Assume all sales are collected in the year of sale and all purchases, operating expenses, and taxes are paid during the year incurred.(b) Using the data above, your answer to (a), and any additional issues you believe need to be considered, prepare a report that recommends whether or not Harrisburg Company should change to the LIFO inventory method. Support your conclusions with appropriate arguments.P9-3 (LO1) (LCNRV--Cost-of-Goods-Sold and Loss) Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2017, December 31, 2018, and December 31, 2019, as shown below.(a)Prepare the journal entries required at December 31, 2018, and at December 31, 2019, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV is used.(b)Prepare the journal entries required at December 31, 2018, and at December 31, 2019, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.P9-13 (LO7) GROUPWORK (Retail, LIFO Retail, and Inventory Shortage) Late in 2014, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Becker Department Stores, is in the process of preparing the year-end financial statements. Based on the preliminary financial statements, Seceda has expressed concern over inventory shortages, and she has asked Selig to determine whether an abnormal amount of theft and breakage has occurred. The accounting records of Becker Department Stores contain the following amounts on November 30, 2017, the end of the fiscal year.(a)Describe the circumstances under which the retail inventory method would be applied and the advantages of using the retail inventory method(b) Assuming that prices have been stable, calculate the value, at cost, of Becker Department Stores' ending inventory using the last-in, first-out (LIFO) retail method. Be sure to furnish supporting calculations.(c) Estimate the amount of shortage, at retail, that has occurred at Becker Department Stores during the year ended November 30, 2017.(d) Complications in the retail method can be caused by such items as (1) freight-in costs, (2) purchase returns and allowances, (3) sales returns and allowances, and (4) employee discounts. Explain how each of these four special items is handled in the retail inventory method.ACC 422 Week 3 Wileyplus BE 10-10, Ex 10-3, Ex 10-13, Ex 11-6 Ex 11-15, Ex 11-24, Ex 12-1, Ex 12-4, Ex 12-14 (with Excel File)Complete the following assignments in WileyPLUS:• Brief Exercise 10-10• Exercise 10-3• Exercise 10-13• Exercise 11-6• Exercise 11-15• Exercise 11-15 (Essay)• Exercise 11-24• Exercise 12-1• Exercise 12-4• Exercise 12-14 (Part Level Submission)Brief Exercise 10-10Larkspur Company traded a used welding machine (cost $10,620, accumulated depreciation $3,540) for office equipment with an estimated fair value of $5,900. Larkspur also paid $3,540 cash in the transaction.Prepare the journal entry to record the exchange. (The exchange has commercial substance.)Exercise 10-3Whispering Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described below.1. Truck #1 has a list price of $31,350 and is acquired for a cash payment of $29,051.2. Truck #2 has a list price of $33,440 and is acquired for a down payment of $4,180 cash and a zero-interest-bearing note with a face amount of $29,260. The note is due April 1, 2018. Whispering would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.3. Truck #3 has a list price of $33,440. It is acquired in exchange for a computer system that Whispering carries in inventory. The computer system cost $25,080 and is normally sold by Whispering for $31,768. Whispering uses a perpetual inventory system.4. Truck #4 has a list price of $29,260. It is acquired in exchange for 1,030 shares of common stock in Whispering Corporation. The stock has a par value per share of $10 and a market price of $13 per share.Prepare the appropriate journal entries for the above transactions for Whispering Corporation.Exercise 10-13Presented below is information related to Pronghorn Company.1. On July 6, Pronghorn Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:Land $419,000Buildings 1,257,000Equipment 838,000Total $2,514,000Pronghorn Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $205 per share on the date of the purchase of the property.2. Pronghorn Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)Repairs to building $114,890Construction of bases for equipment to be installed later 141,980Driveways and parking lots 124,400Remodeling of office space in building, including new partitions and walls 147,440Special assessment by city on land 17,5403. On December 20, the company paid cash for equipment, $305,900, subject to a 2% cash discount, and freight on equipment of $10,100.Exercise 11-6Sage Company purchased equipment for $231,080 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $13,080. Estimated production is 40,000 units and estimated working hours are 20,300. During 2017, Sage uses the equipment for 520 hours and the equipment produces 1,000 units.Compute depreciation expense under each of the following methods. Sage is on a calendar-year basis ending December 31.Exercise 11-15Compute the depreciation charge on this equipment for 2012, for 2019, and the total charge for the period from 2013 to 2018, inclusive, under each of the six following assumptions with respect to partial periods.Your answer has been saved and sent to the instructor. See Gradebook for score details.On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straightline method of depreciation.Following are the assumptions with respect to partial periods:(1) Depreciation is computed for the exact period of time during which the asset is owned. (Use 365 days for the base and record depreciation through March 9, 2019.)(2) Depreciation is computed for the full year on the January 1 balance in the asset account.(3) Depreciation is computed for the full year on the December 31 balance in the asset account.(4) Depreciation for one-half year is charged on plant assets acquired or disposed of during the year.(5) Depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the beginning of the month following disposal.(6) Depreciation is computed for a full period on all assets in use for over one-half year, and no depreciation is charged on assets in use for less than one-half year. (Use 365 days for base.)Briefly evaluate the methods above, considering them from the point of view of basic accounting theory as well as simplicity of application.Exercise 11-24The 2014 Annual Report of Tootsie Roll Industries contains the following information.(in millions)December 31, 2014December 31, 2013Total assets $910.4$888.4Total liabilities 219.3208.1Net sales 539.9539.6Net income 63.260.8Compute the following ratios for Tootsie Roll for 2014.Exercise 12-4Presented below is selected information for Cullumber Company.Answer the questions asked about each of the factual situations.1. Cullumber purchased a patent from Vania Co. for $1,230,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Cullumber 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, 2017?2. Cullumber bought a franchise from Alexander Co. on January 1, 2016, for $365,000. The carrying amount of the franchise on Alexander’s books on January 1, 2016, was $515,000. The franchise agreement had an estimated useful life of 30 years. Because Cullumber must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017?3. On January 1, 2017, Cullumber incurred organization costs of $282,500. What amount of organization expense should be reported in 2017?4. Cullumber purchased the license for distribution of a popular consumer product on January 1, 2017, for $153,000. 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, Cullumber can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2017?Exercise 12-14 (Part Level Submission)Presented below is net asset information related to the Skysong Division of Santana, Inc.The purpose of the Skysong Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $425 million. Management has also received an offer to purchase the division for $330 million. All identifiable assets’ and liabilities’ book and fair value amounts are the same.ACC 422 Week 4 Team Assignment Problem 10-4, Problem 10-6, CA 11-5, Problem 12-2Complete the following individually and discuss your individual answers as a team:• Problem 10-4, p. 543• Problem 10-6, p. 544• CA 11-5, p. 597• Problem 12-2, p. 644After discussing your answers, compile each into a team response.Click the Assignment Files tab to submit your assignment.Problem 10-4-Problem 10-4, p. 543P10-4 (LO1,4,6) GROUPWORK (Dispositions, Including Condemnation, Demolition, and Trade-In) Presented below is a schedule of property dispositions for Hollerith Co.Schedule of Property DispositionsCost Accumulated Depreciation Cash Proceeds Fair Value Nature of DispositionLand $40,000 -- $31,000 $31,000 CondemnationBuilding 15,000 -- 3,600   -- DemolitionWarehouse 70,000 $16,000 74,000  74,000  Destruction by fireMachine 8,000 2,800   900     7,200   Trade-inFurniture 10,000 7,850   -- 3,100   ContributionAutomobile 9,000 3,460   2,960   2,960   SaleThe following additional information is available.Land: On February 15, a condemnation award was received as consideration for unimproved land held primarily as an investment, and on March 31, another parcel of unimproved land to be held as an investment was purchased at a cost of $35,000.Building: On April 2, land and building were purchased at a total cost of $75,000, of which 20% was allocated to the building on the corporate books. The real estate was acquired with the intention of demolishing the building, and this was accomplished during the month of November. Cash proceeds received in November represent the net proceeds from demolition of the building.Warehouse: On June 30, the warehouse was destroyed by fire. The warehouse was purchased January 2, 2014, and had depreciated $16,000. On December 27, the insurance proceeds and other funds were used to purchase a replacement warehouse at a cost of $90,000.Machine: On December 26, the machine was exchanged for another machine having a fair value of $6,300 and cash of $900 was received. (The exchange lacks commercial substance.)Furniture: On August 15, furniture was contributed to a qualified charitable organization. No other contributions were made or pledged during the year.Automobile: On November 3, the automobile was sold to Jared Winger, a stockholder.InstructionsP10-6 (LO1,3) (Interest During Construction) Grieg Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $139,000 in cash. In addition, it paid $2,000 in surveying costs and $4,000 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,000, with $1,000 being received from the sale of materials. Architectural plans were also formalized on December 1, 2017, when the architect was paid $30,000. The necessary building permits costing $3,000 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.CA 11-5Jerry Prior, Beeler Corporation’s controller, is concerned that net income may be lower this year. He is afraid upper-level management might recommend cost reductions by laying off accounting staff, including him.Prior knows that depreciation is a major expense for Beeler. The company currently uses the double-declining-balance method for both financial reporting and tax purposes, and he’s thinking of selling equipment that, given its age, is primarily used when there are periodic spikes in demand. The equipment has a carrying value of $2,000,000 and a fair value of $2,180,000. The gain on the sale would be reported in the income statement. He doesn’t want to highlight this method of increasing income. He thinks, “Why don’t I increase the estimated useful lives and the salvage values? That will decrease depreciation expense and require less extensive disclosure, since the changes are accounted for prospectively. I may be able to save my job and those of my staff.”Instructions:a. Who are the stakeholders in this situation?b. What are the ethical issues involved?c. What should Prior do?Problem 12-2§ P12-2 (LO1,2,4,5) EXCEL (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.Compute the carrying value of patent No. 758-6002-1A on each of the following dates:(a)December 31, 2011.(b)December 31, 2015.ACC 422 Week 4 WileyPlus Ex 13-2, Ex 13-7, Ex 13-16, Ex 14-4, Ex 14-6, Ex 14-9, Problem 14-2 (With Excel File)Complete the following assignments in WileyPLUS:• Exercise 13-2 (Part Level Submission)• Exercise 13-7 (Part Level Submission)• Exercise 13-16• Exercise 14-4• Exercise 14-6• Exercise 14-9 (Part Level Submission)• Problem 14-2 (Part Level submission)Exercise 13-2 (Part Level Submission)The following are selected 2017 transactions of Riverbed Corporation.Sept. 1 Purchased inventory from Encino Company on account for $43,600. Riverbed records purchases gross and uses a periodic inventory system.Oct. 1 Issued a $43,600, 12-month, 8% note to Encino in payment of account.Oct. 1 Borrowed $43,600 from the Shore Bank by signing a 12-month, zero-interest-bearing $48,600 note.Prepare journal entries for the selected transactions above.Prepare adjusting entries at December 31.Compute the total net liability to be reported on the December 31 balance sheet for:Exercise 13-7 (Part Level Submission)Pharoah Hardware Company’s payroll for November 2017 is summarized below.At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $118,500 and 1.45% in excess of $118,500. Of the $194,300 wages subject to FICA tax, $21,300 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,800 for factory, $7,700 for sales, and $6,800 for administrative.Exercise 13-16Presented below is a list of possible transactions.Analyze the effect of the 18 transactions on the financial statement categories indicated.1. Purchased inventory for $80,000 on account (assume perpetual system is used).2. Issued an $80,000 note payable in payment on account (see item 1 above).3. Recorded accrued interest on the note from item 2 above.4. Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note.5. Recognized 4 months’ interest expense on the note from item 4 above.6. Recorded cash sales of $75,260, which includes 6% sales tax.7. Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld.8. Recorded employer’s payroll taxes.9. Accrued accumulated vacation pay.10. Recorded an asset retirement obligation.11. Recorded bonuses due to employees.12. Recorded a contingent loss on a lawsuit that the company will probably lose.13. Accrued warranty expense (assume expense warranty approach).14. Paid warranty costs that were accrued in item 13 above.15. Recorded sales of product and related service-type warranties.16. Paid warranty costs under contracts from item 15 above.17. Recognized warranty revenue (see item 15 above).18. Recorded estimated liability for premium claims outstanding.Exercise 14-4Ivanhoe Company issued $444,000 of 10%, 20-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and January 1. Ivanhoe Company uses the straight-line method of amortization for bond premium or discount.Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)(a) The issuance of the bonds.(b) The payment of interest and the related amortization on July 1, 2017.(c) The accrual of interest and the related amortization on December 31, 2017.Exercise 14-6Culver Company sells 9% bonds having a maturity value of $2,050,000 for $1,828,314. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.Prepare the journal entries to record the following transactions. (Round answer to 0 decimalExercise 14-9 (Part Level Submission)On June 30, 2017, Monty Company issued $3,200,000 face value of 13%, 20-year bonds at $3,440,734, a yield of 12%. Monty uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.(Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)(1) The issuance of the bonds on June 30, 2017.(2) The payment of interest and the amortization of the premium on December 31, 2017.(3) The payment of interest and the amortization of the premium on June 30, 2018.(4) The payment of interest and the amortization of the premium on December 31, 2018.Set up a schedule of interest expense and discount amortization under the straight-line method.(b)Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet.(1) What amount of interest expense is reported for 2018? (Round answer to 0 decimal places, e.g. 38,548.)Interest expense reported for 2018(2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?The bond interest expense reported in 2018 will be(3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.)Total cost of borrowing over the life of the bond(4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used?The total bond interest expense for the life of the bond will beProblem 14-2 (Part Level Submission)Swifty Co. is building a new hockey arena at a cost of $2,310,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $1,820,000 to complete the project. It therefore decides to issue $1,820,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 11%.(a)Prepare the journal entry to record the issuance of the bonds on January 1, 2016.ACC 422 week 5 Learning Team Problem PresentationCollaborate as a team to provide written responses to a facilitator-assigned problem.Prepare a 5- to 10-minute oral presentation accompanied by a 7- to 9-slide Microsoft® PowerPoint® presentation illustrating your team’s solution to the assigned problem.Note. Each week, the facilitator assigns one Learning Team a problem to present that the team must complete during the succeeding Learning Team Meeting.ACC 422 Week 5 Signature Assignment Presentation (Procter and Gamble)Create a 5- to 10-slide presentation and use the same publicly traded company selected in Week 2 to address the following:• Be sure to use the most recent SEC 10-k or Annual report.• Identify the Company's current liabilities for the past two years?• Compare the current portion of long-term debt for the past two years?• Discuss some of the items found in the current liability section.• Describe any lease obligations the Company disclosed.• Explain what contingency liabilities are disclosed in the financial statements?• Recommend, from the perspective of a bank, whether or not you would support this company.• Compute the Debt ratio and Debt to Equity ratio.Click the Assignment Files tab to submit your assignment.ACC 422 Week 5 Team Assignment Problem 13-7, 13-11, CA 13-3, CA 14-1, CA 14-4, CA 21-4Complete the following individually and discuss your individual answers as a team:• Problem 13-7, p. 700• Problem 13-11, p. 701• CA 13-3, p. 703• CA 14-1, p. 763• CA 14-4, p. 765• CA 21-4, p. 1252After discussing your answers, compile each into a team response.Click the Assignment Files tab to submit your assignment.P13-7 (LO3) (Warranties) Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 600 machines in 2017 (warranty expense is incurred half in 2017 and half in 2018). As a result of product testing, the company estimates that the warranty cost is $390 per machine ($170 parts and $220 labor).InstructionsAssuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts?(a)Sale of machinery and warranty expense incurred in 2017.(b)Warranty accrual on December 31, 2017.(c)Warranty costs incurred in 2018.(d)What amount, if any, is disclosed in the balance sheet as a liability for future warranty costs as of December 31, 2017?P13-11 (LO3) WRITING (Loss Contingencies: Entries and Essays) Polska Corporation, in preparation of its December 31, 2017, financial statements, is attempting to determine the proper accounting treatment for each of the following situations.1. As a result of uninsured accidents during the year, personal injury suits for $350,000 and $60,000 have been filed against the company. It is the judgment of Polska's legal counsel that an unfavorable outcome is unlikely in the $60,000 case but that an unfavorable verdict approximating $250,000 will probably result in the $350,000 case.2.Polska owns a subsidiary in a foreign country that has a book value of $5,725,000 and an estimated fair value of $9,500,000. The foreign government has communicated to Polska its intention to expropriate the assets and business of all foreign investors. On the basis of settlements other firms have received from this same country, Polska expects to receive 40% of the fair value of its properties as final settlement.3.Polska's chemical product division consisting of five plants is uninsurable because of the special risk of injury to employees and losses due to fire and explosion. The year 2017 is considered one of the safest (luckiest) in the division's history because no loss due to injury or casualty was suffered. Having suffered an average of three casualties a year during the rest of the past decade (ranging from $60,000 to $700,000), management is certain that next year the company will probably not be so fortunate.Instructions(a)Prepare the journal entries that should be recorded as of December 31, 2017, to recognize each of the situations above.(b)Indicate what should be reported relative to each situation in the financial statements and accompanying notes. Explain why.CA13-3 WRITING (Refinancing of Short-Term Debt) DumarsCorporation reports in the current liability section of its balance sheet at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% long-term debt in the amount of $10,000,000 (matures in March 2018). Management has stated its intention to refinance the 12% debt whereby no portion of it will mature during 2018. The date of issuance of the financial statements is March 25, 2018.(a)Is management's intent enough to support long-term classification of the obligation in this situation?(b)Assume that Dumars Corporation issues $13,000,000 of 10-year debentures to the public in January 2018 and that management intends to use the proceeds to liquidate the $10,000,000 debt maturing in March 2018. Furthermore, assume that the debt maturing in March 2018 is paid from these proceeds prior to the issuance of the financial statements. Will this have any impact on the balance sheet classification at December 31, 2017? Explain your answer.(c)Assume that Dumars Corporation issues common stock to the public in January and that management intends to entirely liquidate the $10,000,000 debt maturing in March 2018 with the proceeds of this equity securities issue. In light of these events, should the $10,000,000 debt maturing in March 2018 be included in current liabilities at December 31, 2017?CA14-1 (Bond Theory: Balance Sheet Presentations, Interest Rate, Premium) On January 1, 2017, Nichols Company issued for $1,085,800 its 20-year, 11% bonds that have a maturity value of $1,000,000 and pay interest semiannually on January 1 and July 1. The following are three presentations of the long-term liability section of the balance sheet that might be used for these bonds at the issue date.Instructions(a)Discuss the conceptual merit(s) of each of the date-of-issue balance sheet presentations shown above for these bonds.(b)Explain why investors would pay $1,085,800 for bonds that have a maturity value of only $1,000,000.(c)Assuming that a discount rate is needed to compute the carrying value of the obligations arising from a bond issue at any date during the life of the bonds, discuss the conceptual merit(s) of using for this purpose:CA14-4 WRITING (Off-Balance-Sheet Financing) Matt Ryan Corporation is interested in building its own soda can manufacturing plant adjacent to its existing plant in Partyville, Kansas. The objective would be to ensure a steady supply of cans at a stable price and to minimize transportation costs. However, the company has been experiencing some financial problems and has been reluctant to borrow any additional cash to fund the project. The company is not concerned with the cash flow problems of making payments, but rather with the impact of adding additional long-term debt to its balance sheet.The president of Ryan, Andy Newlin, approached the president of the Aluminum Can Company (ACC), its major supplier, to see if some agreement could be reached. ACC was anxious to work out an arrangement, since it seemed inevitable that Ryan would begin its own can production. The Aluminum Can Company could not afford to lose the account.After some discussion, a two-part plan was worked out. First, ACC was to construct the plant on Ryan’s land adjacent to the existing plant. Second, Ryan would sign a 20-year purchase agreement. Under the purchase agreement, Ryan would express its intention to buy all of its cans from ACC, paying a unit price which at normal capacity would cover labor and material, an operating management fee, and the debt service requirements on the plant. The expected unit price, if transportation costs are taken into consideration, is lower than current market. If Ryan did not take enough production in any one year and if the excess cans could not be sold at a high enough prices on the open market, Ryan agrees to make up any cash shortfall so that ACC could make the payments on its debt. The bank will be willing to make a 20-year loan for the plant, taking the plant and the purchase agreement as collateral. At the end of 20 years, the plant is to become the property of Ryan.Instructions(a)What are project financing arrangements using special-purpose entities?(b)What are take-or-pay contracts?(c)Should Ryan record the plant as an asset together with the related obligation?(d)If not, should Ryan record an asset relating to the future commitment?(e)What is meant by off-balance-sheet financing?CA21-4 (Comparison of Different Types of Accounting by Lessee and Lessor)Part 1: Capital leases and operating leases are the two classifications of leases described in FASB pronouncements from the standpoint of the lessee.Instructions(a)Describe how a capital lease would be accounted for by the lessee both at the inception of the lease and during the first year of the lease, assuming the lease transfers ownership of the property to the lessee by the end of the lease(b)Describe how an operating lease would be accounted for by the lessee both at the inception of the lease and during the first year of the lease, assuming equal monthly payments are made by the lessee at the beginning of each month of the lease. Describe the change in accounting, if any, when rental payments are not made on a straight-line basis.Part 2: Sales-type leases and direct-financing leases are two of the classifications of leases described in FASB pronouncements from the standpoint of the lessor.InstructionsCompare and contrast a sales-type lease with a direct-financing lease as follows.(a)Lease receivable.(b)Recognition of interest revenue.(c)Manufacturer's or dealer's profit.