Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 4, Problem 17P
To determine
Identify the appropriate answer for the given statement from the given choices.
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Selected data for the Rubio Company follow:Current assets.............. $ 31,200 Current liabilities ............ $ 26,000Long-term assets ......... 185,000 Long-term liabilities........ 110,000Total revenues............. 199,000 Total expenses................. 160,000Based on these facts, what are Rubio’s current ratio and debt ratio?Current ratio Debt ratioa. 1.200 0.629b. 1.590 0.629c. 8.315 0.833d. 1.244 0.236
On May 1, Donovan Company reported the following account balances:Current assets . . . . . . . . . . . . $ 90,000Buildings & equipment (net) . 220,000Total assets . . . . . . . . . . . .. . $310,000Liabilities . . . . . . . . . . . . . . . . $ 60,000Common stock . . . . . . . . . . . . . 150,000Retained earnings . . . . . . . . . 100,000Total liabilities and equities . $310,000On May 1, Beasley paid $400,000 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $15,000 in accounts payable for legal and accounting fees.Beasley also agreed to pay $75,000 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $20,000. In determining its offer, Beasley noted the following:∙ Donovan holds a building with a fair value…
Boscia Corporation's balance sheet appears below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents......................... $ 44 $ 38 Accounts receivable .................................. 82 69 Inventory ................................................... 71 69 Plant and equipment .................................. 537 500 Accumulated depreciation......................... ( 240) ( 201) Total assets................................................ $494 $475 Liabilities and stockholders’ equity: Accounts payable ...................................... $ 70 $ 60 Wages payable........................................... 24 21 Taxes payable ............................................ 19 22 Bonds payable ........................................... 226 300 Deferred taxes............................................ 19 18 Common stock........................................... 22 20 Retained earnings...................................... 114 34 Total…
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Advanced Accounting
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- The following data were abstracted from the records of Ballistic Corporation for the year: Sales ................................................. $900,000 Bond interest expense ................................. 50,000 Income taxes .......................................... 200,000 Net income ............................................ 300,000 How many times was bond interest earned? a. 18.0 b. 15.0 c. 11.0 d. 10.0 could you please show me how to calculatearrow_forwardThe following account balances are available for Pincus, Inc. as of 12/31/19: Common Stock ………………………………………………… $500,000 Additional Paid-In Capital ……………………………… 40,000 Retained Earnings ……………………………………………… 190,000 Treasury Stock …………………………………………………. 20,000 What is the total stockholders’ equity? $____________________arrow_forwardRoswell Corporation reported the following data:Dividends.................. $ 5,000Purchase returns........ 6,000Sales revenue ............. 440,000Ending inventory....... 45,000Freight in..................... $ 22,000Purchases .................... 206,000Beginning inventory .... 51,000Purchase discounts...... 4,500Roswell’s gross profit percentage isa. 49.2.b. 50.8.c. 56.0.d. 48.2.arrow_forward
- Changes in various accounts and gains and losses on the sale of assets during the year for Argon Companyare given below:Item AmountAccounts receivable ............................... $90,000 decreaseAccrued interest receivable ................... $4,000 increaseInventory ................................................ $120,000 increasePrepaid expenses .................................. $3,000 decreaseAccounts payable ................................... $65,000 decreaseAccrued liabilities ................................... $8,000 increaseDeferred income taxes payable ............. $12,000 increaseSale of equipment .................................. $7,000 gainSale of long-term investments ............... $10,000 lossRequired:Prepare an answer sheet using the following column headings:Item Amount Add DeductFor each item, place an X in the Add or Deduct column to indicate whether the dollar amount should beadded to or deducted from net income under the indirect method when computing the…arrow_forwardFollowing are data from the statements of two companies selling comparable products: Current Year-End Balance Sheets SunCompany ZengCompany Cash......................................................................................... 119.00 180.00 Notes receivable....................................................................... 77.00 32.00 Accounts receivable, net........................................................... 420.00 640.00 Merchandise inventory.............................................................. 588.00 877.00 Prepaid expenses...................................................................... 16.00 55.00 Plant and equipment, net........................................................... 2,321.00 2,744.00 Total assets...............................................................................…arrow_forwardThe comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:Dec. 31, 20Y2 Dec. 31, 20Y1AssetsCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 918,000 $ 964,800Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828,900 761,940Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,268,460 1,162,980Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,340 35,100Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315,900 479,700Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,462,500 900,900Accumulated depreciation—buildings . . . . . . . . . . . . . . . . . . . . . . . . . . .…arrow_forward
- Listed below are items reported on the financial statements of the Huntington Company as of June 30: Cash flow provided by operating activities .. . Cash, beginning-of-year ................ . Cash, end-of-year ..................... . Inventory ............................ . Accounts receivable ................... . Cash flow from investing activities ........ . Other current assets ................... . Property, plant and equipment ........... . REQUIRED $21,000 9,000 16,000 5,500 12,200 (15,300) 1,500 40,000 Other long-term assets ............ $17,500 Cash flow from financing activities . . . 1,300 Current liabilities. . . . . . . . . . . . . . . . . 22,000 Long-term liabilities......... . ..... 18,250 Intangible assets. . . . . . . . . . . . . . . . . 9,500 Common stock ............ . ..... 51,000 Retained earnings . . . . . . . . . . . . . . . ? Prepare a classified balance sheet as of June 30 and statement of cash flows for the current year.arrow_forwardArrange the following items in proper balance sheet presentation (Prepare a formal Balance Sheet review page 31 for example). Accumulated depreciation................................................ $200,000 Retained earnings............................................................. 110,000 Cash................................................................................. .... 5,000 Bonds payable................................................................. 142,000 Accounts receivable..................................................................38,000 Plant and equipment—original cost.................................. 720,000 Accounts payable........................................................................35,000 Allowance for bad debts.............................................................6,000 Common stock, $1 par, 150,000 shares outstanding...150,000…arrow_forwardThe following information came from a recent balance sheet of Apple Computer, Inc.:End of Year Beginning of YearAssets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.9 billion $39.6 billionLiabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.0 billion ?Owners’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? $21.0 billiona. Determine the amount of total liabilities reported in Apple Computer ’s balance sheet at thebeginning of the year.b. Determine the amount of total owners’ equity reported in Apple Computer ’s balance sheet atthe end of the year.c. Retained earnings was reported in Apple Computer ’s year-end balance sheet at $19.5 billion.If retained earnings was $13.8 billion at the beginning of the year, determine net income forthe year if no dividends were declared.arrow_forward
- Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2.5 on June 30 of the current year. Onthat date, the company’s assets were:Cash ..................................................... Kr 90,000Accounts receivable, net ...................... 260,000Inventory ............................................... 490,000Prepaid expenses ................................. 10,000Plant and equipment, net ...................... 800,000Total assets .......................................... Kr1,650,000The Norwegian currency is the krone, denoted here by the symbol Kr.Required:1. What was the company’s working capital on June 30?2. What was the company’s acid-test ratio on June 30?3. The company paid an account payable of Kr40,000 immediately after June 30.a. What effect did this transaction have on working capital? Show computations.b. What effect did this transaction have on the current ratio? Show computations.arrow_forwardThe data (in thousands of dollars) were extracted from Larop Corporation's financial reports for the previous fiscal year.Sales ........................................................................................ $870 Purchases of raw materials..................................................... $190 Direct labor.............................................................................. $200 Manufacturing overhead ........................................................ $230 Administrative expenses......................................................... $150 Selling expenses...................................................................... $140 Raw materials inventory, beginning ....................................... $10 Raw materials inventory, ending ............................................ $40 Work in process inventory, beginning .................................... $20 Work in process inventory, ending ......................................... $50 Finished goods…arrow_forwardThe following annual income statement and statement of retained earnings are prepared for Diaz Corporation. Diaz CORPORATION Profit Statement December 31, 2010 Sales income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $123,000 Service income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,000 Cost of sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,000 Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,000 Costs Salaries, wages, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,000 Depreciation and write‑offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 Taxes, property . . . . . . . . . . .…arrow_forward
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