AppliedCase2.pdf - ACCT 607 Applied Case Assignment#2(Chapters 2 and 3 Name Refer to the financial statements included in McCormick Company

AppliedCase2.pdf - ACCT 607 Applied Case...

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Unformatted text preview: ACCT 607 Applied Case Assignment #2 (Chapters 2 and 3) Name_____________________ Refer to the financial statements included in McCormick & Company, Incorporated’s (NYSE: MKC; Sparks, MD; hereafter, “McCormick” or “the Company”) 2014 Annual Report to answer the following questions. This document is available online at: 1. (a) Did the Company’s “Inventories” increase or decrease over the last year? Increased to $713.8 million. (b) Were there more debits or credits to the Company’s inventory accounts during 2014? There was a debits because the assets increased. 2. (a) Did the Company’s “Prepaid expenses and other current assets” increase or decrease over the last year? Decreased to $131.5 million (b) Were there more debits or credits to the Company’s prepaid expense and other current asset accounts during 2014? There was credit which caused the assets to decrease. 3. Decreased to $372.1 million (b) Were there more debits or credits to the Company’s trade accounts payable during 2014? There were debits to the accounts because the liabilities has decreased. (a) Did the Company’s “Trade accounts payable” increase or decrease over the last year? 4. (a) Did the Company’s “Net sales” increase or decrease over the last year? Increased to $437.9 million (b) Were there more debits or credits to the Company’s net sales accounts during 2014? The revenue were higher thus Shareholder’s equity increased. So, there were more credit 5. (a) Did the Company’s “Interest Expense” increase or decrease over the last year? Decreased to $603.0 million (b) Were there more debits or credits to the Company’s interest expense accounts during 2014? The expenses were lower, thus the Shareholder’s equity increase. So, there were more credit. Page 1 of 2 ACCT 607 Applied Case Assignment #2 (Chapters 2 and 3) Continued 6. Assume that, during 2014, the Company purchased an additional $38.3 million in raw materials inventory for cash. Write the journal entry necessary to record this transaction. Accounts (in millions) Inventory Cash Debit $38.3 Credit $38.3 7. Assume that interest of $49.7 million was due and paid for by the Company during 2014. Write the Debit Credit (in millions) journal entry necessary to record these transactions. Interest $49.7 Cash $49.7 8. Assume that all of the Company’s net sales are “on account.” Write the journal entry necessary to record total net sales for 2014. Debit Credit (in millions) Account Receivable $4,243.2 Cash $4,243.2 9. Write the journal entry necessary to record the Company’s “Selling, general, and administrative expenses” for 2014, assuming that 90 percent of the expense was paid for with cash while 10 percent was paid for on credit to regular suppliers. (2 pts) Debit Credit (in millions) Selling, general, and administrative expenses Cash Accounts payable $1122 $1009.80 $112.20 Page 2 of 2 ...
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  • Spring '14
  • Adhikari,A
  • Accounting, Balance Sheet, Generally Accepted Accounting Principles, Double-entry bookkeeping system, McCormick & Company

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