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Some problems from wiley
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Assignment 1:
Brief Exercise 1-1Match each of the following forms of business organization with a set of characteristics: sole proprietorship, partnership, corporation.(a)Shared control, tax advantages, increased skills and resources.
(b)Simple to set up and maintains control with owner.
(c)Easier to transfer ownership and raise funds, no personal liability.
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Brief Exercise 1-8Use the basic accounting equation to answer these questions.
(a) The liabilities of Jantz Company are $93,040and the stockholders equity is $252,500. What is the amount of Jantz Companys total assets?Total assets$
(b) The total assets of Foley Company are $175,200and its stockholders equity is $89,600. What is the amount of its total liabilities?Total liabilities$
(c) The total assets of Sundberg Co. are $888,500and its liabilities are equal to one-fourth of its total assets. What is the amount of Sundberg Co.s stockholders equity?Stockholders equity$
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Exercise 1-5Suppose the following information was taken from the 2014 financial statements of pharmaceutical giantMerck and Co.(All dollar amounts are in millions.)Retained earnings, January 1, 2014$47,930.8
Cost of goods sold8,546.8
Selling and administrative expenses8,284.0
Dividends3,059.4
Sales revenue37,709
Research and development expense5,258
Income tax expense2,428.4
After analyzing the data, prepare an income statement for the year ending December 31, 2014.(Enter amounts in millions upto 1 decimal place, e.g. 45.5 million.)MERCK AND CO.Income StatementFor the Year Ended December 31, 2014(in millions)
$
$
$
SHOW LIST OF ACCOUNTS
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After analyzing the data, prepare a retained earnings statement for the year ending December 31, 2014.(List items that increase retained earnings first. Enter amounts in millions upto 1 decimal place, e.g. 45.5 million.)MERCK AND CO.Retained Earnings StatementFor the Year Ended December 31, 2014(in millions)
$
:
:
$
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Exercise 1-8The following items and amounts were taken from Motte Inc.s 2014 income statement and balance sheet.
In each case, identify on the item is an asset, liability, stockholders' equity, revenue, or expense item.Cash$85,929
Retained earnings123,640
Cost of goods sold437,528
Salaries and wages expense114,689
Prepaid insurance8,088
Inventory64,121
Accounts receivable90,426
Sales revenue583,427
Notes payable6,443
Accounts payable58,244
Service revenue5,410
Interest expense1,786
Prepare an income statement for Motte Inc. for the year ended December 31, 2014.MOTTE INC.Income StatementFor the Year Ended December 31, 2014
$
$
$
SHOW LIST OF ACCOUNTS
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Exercise 1-9Here are incomplete financial statements for Riedy, Inc. Calculate the missing amounts.REIDY, INC.Balance Sheet
Assets
Cash$12,650
Inventory15,650
Buildings39,350
Total assets$67,650
Liabilities and Stockholders' Equity
Liabilities
Accounts payable$5,070
Stockholders' Equity
Common stock(a)
Retained earnings(b)
Total liabilities and stockholders' equity$67,650
RIEDY, INC.Income Statement
Revenues$84,800
Cost of goods sold(c)
Salaries and wages expense10,330
Net Income$(d)
RIEDY, INC.Retained Earnings Statement
Beginning retained earnings$17,650
Add: Net income(e)
Less: Dividends4,830
Ending retained earnings$32,650
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Assignment 2:
Brief Exercise 2-2A list of financial statement items for Morales Company includes the following: accounts receivable $16,356; prepaid insurance $3,038; cash $12,150; supplies $4,440; and debt investments (short-term) $9,580.
Prepare the current assets section of the balance sheet listing the items in the proper sequence.(List current assets in order of liquidity.)MORALES COMPANYPartial Balance Sheet
$
$
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Brief Exercise 2-5These selected condensed data are taken from a recent balance sheet ofBob Evans Farms(in millions of dollars).Cash$29.3
Accounts receivable20.5
Inventory28.7
Other current assets24.0
Total current assets$102.5
Total current liabilities$201.2
Compute working capital and the current ratio.(If answer is negative enter it with a negative sign preceding the number e.g. -15,000 or in parentheses e.g. (15,000). Round Current Ratio to 2 decimal places, e.g. 0.78 : 1.)Working capital (in millions)$
Current ratio:1
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Exercise 2-1Classify each of the following financial statement items taken from Mordica Corporations balance sheet.Accounts payable
Accounts receivable
Accumulated depreciationequipment
Buildings
Cash
Interest payable
Goodwill
Income taxes payable
Inventory
Stock investments (to be sold in 7 months)
Land (in use)
Mortgage payable
Supplies
Equipment
Prepaid rent
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Exercise 2-3Suppose the following items were taken from the December 31, 2014, assets section of theBoeing Companybalance sheet. (All dollars are in millions.)Inventory$16,295Patents$13,035
Notes receivabledue after December 31, 20154,784Buildings21,582
Notes receivabledue before December 31, 2015370Cash9,199
Accumulated depreciationbuildings12,312Accounts receivable5,597
Debt investments (short-term)2,243
Prepare the assets section of a classified balance sheet.(List the current assets in order of liquidity.)THE BOEING COMPANYPartial Balance SheetDecember 31, 2014(in millions)
Assets
$
$
:
$
SHOW LIST OF ACCOUNTS
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Exercise 2-6Suppose the following items were taken from the 2014 financial statements ofTexas Instruments, Inc.(All dollars are in millions.)Common stock$2,065Accumulated depreciationequipment$4,086
Prepaid rent159Accounts payable1,519
Equipment6,276Patents2,260
Stock investments (long-term)644Notes payable (long-term)820
Debt investments (short-term)1,746Retained earnings6,894
Income taxes payable177Accounts receivable1,957
Cash1,449Inventory1,070
Prepare a classified balance sheet in good form as of December 31, 2014.(List current assets in order of liquidity.)TEXAS INSTRUMENTS, INC.Balance SheetDecember 31, 2014(in millions)
Assets
$
$
:
$
Liabilities and Stockholders' Equity
$
$
$
SHOW LIST OF ACCOUNTS
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Copyright 2000-2014 by John Wiley & Sons, Inc. or related companies. All rights reserved.
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Assignment 3:
Step 1: Analyze each transaction in terms of its effect on the accounts.In this first step, you are gathering the transactions to analyze. These transactions can come from a source document such as a sales slip, check or bill.
Step 2: Enter the transaction information in a journalIn step 2, you are entering the analyzed information in a journal.
Step 3: Transfer the journal information to the appropriate accounts in the ledger.In the last step, step 3, you are transferring the journal entries into their designated accounts in the ledger.
Assignment 4:
360x8=2880460x10=4600560x11=6160Total=13640Unit total: 360+460+560=1380Average unit cost: 13640/1380=9.884
Cost of ending inventory: 9.884x260=2570 rounded
230x6=1380330x7=2310270x8=2160Total=5850
300x8=2400
230+330+270=830830-300=530230x6=1380300x8=2400total=3780