Connect Access Card for Financial Accounting
9th Edition
ISBN: 9781259738678
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 4, Problem 4.15E
Inferring Transactions
Deere & Company is the world's leading producer of agricultural equipment; a leading supplier of a broad range of industrial equipment for construction, forestry, and public works: a producer and marketer of a broad line of law n and grounds care equipment; and a provider of credit, managed health care plans, and insurance products for businesses and the general public. The following information is from a recent annual report (in millions of dollars):
| Income Taxes Payable | Dividends Payable | Interest Payable | |||||||||||
| (a) | ? | 8eg. bal. (b) | 154 1,424 |
(c) | ? | Beg. bal. (d) |
127 634 |
(e) | 759 | Beg. bal. (f) |
190 ? |
||
| End. bal. | 166 | End. bal. | 168 | End. bal. | 191 | ||||||||
Required:
- 1. Identify the nature of each of the transactions (a) through (f). Specifically, what activities cause the accounts to increase and decrease?
- 2. For transactions (a), (c). and (f). compute the amount.
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Deere & Company manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division loans money to customers to finance the purchase of their farm and construction equipment.The following information is available for three recent years (in millions except pershare amounts):
Please see the attachment for details:
1. Calculate the following ratios for each year, rounding ratios and percentages to one decimal place, except for per-share amounts:a. Return on total assetsb. Return on stockholders’ equityc. Earnings per shared. Dividend yielde. Price-earnings ratio2. Based on these data, evaluate Deere’s profitability.
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Sales to outside parties
Intersegment transfers
Interest income from outside parties
Interest income from intersegment loans
Operating expenses
Interest expense
Tangible assets
Intangible assets
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$6,870
a. Revenue test:
163
0
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1,567
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151
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Ecru does not allocate its $1,360,000 in common expenses to the various segments. "
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Paper Finance
$ 457 $0
163
0
0
689
20
836
70
0
0
49
214
38
109
214
0
719
Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance.
It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each
segment (in thousands) follows:
Sales to outside parties
Intersegment transfers
Interest income from outside parties
Interest income from intersegment loans
Operating expenses
Interest expense
Tangible assets
Intangible assets
Intersegment loans (debt)
Plastics
$6,855
163
a. Revenue test:
b. Profit or loss test:
c. Asset test:
0
0
4,334
82
1,577
93
0
Metals
$2,414
185
40
0
1,822
37
3,256
415
0
Lumber
$ 741
150
27
0
1, 126
72
584
0
0
Ecru does not allocate its $1,400,000 in common expenses to the various segments.
Perform testing procedures to determine Ecru's reportable operating segments.
Paper Finance
$ 452
162
0
0
684
22
831
69
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0
48
213
37
108
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718
Chapter 4 Solutions
Connect Access Card for Financial Accounting
Ch. 4 - What is the purpose of recording adjusting...Ch. 4 - List the four types of adjusting entries, and give...Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain how the financial statements relate to...Ch. 4 - What is the equation for each of the following...Ch. 4 - Explain the effect of adjusting entries on cash.Ch. 4 - How is earnings per share computed and...Ch. 4 - Prob. 8QCh. 4 - What are the purposes for closing the books?Ch. 4 - Differentiate among (a) permanent, (b) temporary,...
Ch. 4 - Explain why the income statement accounts are...Ch. 4 - Prob. 12QCh. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - Prob. 3MCQCh. 4 - On June 1, 2016, Oakcrest Company signed a...Ch. 4 - Prob. 5MCQCh. 4 - An adjusted trial balance a. Shows the ending...Ch. 4 - JJ Company owns a building. Which of the following...Ch. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - If a company is successful in acquiring several...Ch. 4 - Preparing a Trial Balance Hagadorn Company has the...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Recording Adjusting Entries (Deferred Accounts) In...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Adjusting Entries (Accrued Accounts) In...Ch. 4 - Prob. 4.7MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.9MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.11MECh. 4 - Recording Closing Entries Refer to the adjusted...Ch. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Recording Adjusting Entries Diane Company...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Recording Adjusting Entries and Reporting Balances...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Seven Typical Adjusting Entries...Ch. 4 - Prob. 4.9ECh. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Prob. 4.13ECh. 4 - Determining Financial Statement Effects of...Ch. 4 - Inferring Transactions Deere Company is the...Ch. 4 - Analyzing the Effects of Errors on Financial...Ch. 4 - Prob. 4.17ECh. 4 - Recording the Effects of Adjusting Entries and...Ch. 4 - Reporting a Correct Income Statement with Earnings...Ch. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.21ECh. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.1PCh. 4 - Prob. 4.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Prob. 4.6PCh. 4 - Prob. 4.7PCh. 4 - Prob. 4.1APCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.4APCh. 4 - Determining Financial Statement Effects of...Ch. 4 - Prob. 4.6APCh. 4 - Prob. 4.7APCh. 4 - Prob. 4.1CONCh. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Comparing Companies within an Industry and Over...Ch. 4 - Prob. 4.4CPCh. 4 - Prob. 4.5CPCh. 4 - Prob. 4.6CPCh. 4 - Prob. 4.7CPCh. 4 - Prob. 4.8CPCh. 4 - Prob. 4.9CP
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