After operating for several months, architect Paul Marciano completed the following
transactions during the latter part of October:
Journalize the transactions of Paul Marciano, Architect. Include an explanation with each
Sandy Lyle, MD, opened a medical practice. The business completed the following
After these transactions, how much cash does the business have to work with? Use a Taccount to show your answer.
Date Posting Reference
Hourglass Software began with cash of $10,000. Hourglass then bought supplies for $2,000
on account. Separately, Hourglass paid $5,000 for a computer. Answer these questions.
a. How much in total assets does Hourglass have?
b. How much in liabilities does
Lou Ann Staas opened a software consulting firm that immediately paid $9,000 for a
computer. Was Staass payment an expense of the business? Explain your answer.
A software consulting firm would be having assets and equipment such as comput
Assume that an equity-oriented deferred compensation plan involves cash or a
subsequent election of either cash or stock. Describe the presentation of this plan on the
Accounting standards consider equity oriented deferred compensa
Why is minority share of earnings deducted before arriving at net income?
The net income belongs to common shareholders only. That is why after deducting
minority share of earnings all the remainder earnings are available for distribution among
Why review notes to financial statements?
Many Items of the financial statements are not explained on the face of the financial
statements that is why notes are for enhancing the understandability of readers by
additional financial information ab
a. Construct the balance sheet similar to a balance sheet presented under U.S. GAAP.
b. Does the IFRS balance sheet emphasize liquidity?
Presented below is an outline of a balance sheet that conforms to IFRSs at December 31,
a. Balance shee
Why are unusual or infrequent items disclosed before tax?
Certain pay proclamation things are either abnormal or happen occasionally. They may
incorporate such things as an addition on special of securities, compose downs of
receivables, or compo
Refer to Short Exercise S2-3. Which of the transactions of Sandy Lyle, MD, increased the
total assets of the business? For each transaction, identify the asset that was increased.
In Short Exercise S2-3
Sandy Lyle, MD, opened a medical practice.
a. What type of special item would be Costs on Early Extinguishment of Debt?
b. Does it appear that there is a 100% ownership in all consolidated subsidiaries?
c. What type of year-end is being used?
a. An expense that a moneylender may
a. Financial statements should aid the user of the statements in making decisions. In your
opinion, would the user of the statements be aided if there were a distinction between
financial reporting standards for public vs. nonpublic companies? Between lit
a. Describe the following accounts:
1. Shareholders' Equity
2. Common Stock, $.10 par value
3. Additional Paid-In Capital
4. Minority Interests (balance sheet account)
b. Determine the number of shares of:
1. Common stock authorized at March 3, 2007.
a. Time, laws, regulation, and professional standards have restricted accounting practices
to those that are moral, ethical, fair, and precise. Comment.
b. Most managers surveyed had a conservative, strict interpretation of what is moral or
ethical in fin
a. The United States Congress is well qualified to debate and set generally accepted
accounting principles. Comment.
b. Speculate on why these bills were directed to amend the Securities Exchange Act of
Section 14 of the Securities Exchange Act of 1
a. Comment on Amortization of NBA Franchise and Other Intangible Assets.
b. Would the discontinued operations be included in projecting the future? Comment.
c. The costs and expenses include team costs and expenses. Speculate on the major
reason for the i
a. Demand for financial reports exists because users believe that the reports help them in
decision making. In your opinion, will forward-looking statements as provided by the
Private Securities Litigation Reform Act aid users of financial reports in deci
Describe the following items:
a. Minority share of earnings
b. Equity in earnings of nonconsolidated subsidiaries
a. When consolidating subsidiaries that are not wholly owned, the aggregate
incomes and costs of the backups are incorporated with t
A quasi-reorganization is an accounting procedure equivalent to an accounting new start.
A company with a negative balance in retained earnings starts over with a zero balance
rather than a deficit by removing the r
The NYSE has trouble competing with many foreign exchanges in the listing of foreign
The foreign registrants are required by SEC to conform to U.S. GAAPs to be registered
on New York Stock Exchange (NYSE). This places a pressure o
Brazos Medical, Inc., ended 2009 with cash of $24,000. During 2010, Brazos earned net
income of $80,000 and had adjustments to reconcile net income to net cash provided by
operations totaling $20,000 (this is a negative amount).
Brazos paid $40,000 to pur
Groovy, Inc., began 2008 with $95,000 in cash. During 2008, Groovy earned net income of
$300,000, and adjustments to reconcile net income to net cash provided by operations
totaled $60,000, a positive amount. Investing activities used cash of $400,000, an
Krispy Kreme Doughnuts has current assets of $147 million; property, plant, and equipment
of $206 million; and other assets totaling $58 million. Current liabilities are $154 million
and long-term liabilities total $148 million.
1. Use these
Assume that the Kinkos Division of FedEx Corporation experienced the following
transactions during the year ended December 31, 20X5:
a. Suppose Kinkos provided copy services for Microsoft for the discounted price of
$250,000. Under normal conditions Kinko
Suppose you are analyzing the financial statements of Martin Audiology, Inc. Identify each
item with its appropriate financial statement, using the following abbreviations: Income
statement (IS), Statement of retained earnings (SRE), Balance sheet (BS), a
Consider Wal-Mart, the worlds largest retailer. Classify the following items as an Asset (A),
a Liability (L), or an Owners Equity (E) for Wal-Mart (pp. 1011):
_ a. Accounts payable
_ b. Common stock
_ c. Supplies
_ d. Retained earnings
_ e. Land
_ f. Pre
Answer these questions about 2 companies.
1. Peru, Inc., began the year with total liabilities of $140,000 and total stockholders equity
of $300,000. During the year, total assets increased by 20%. How much are total assets at
the end of the year?
Amounts of the assets and liabilities of Maxwell Banking Company, as of December 31,
2008, are given as follows. Also included are revenue and expense figures for the year ended
on that date (amounts in millions):
Prepare the balance sheet of Max
At December 31, 2008, Womack Travel Services has cash of $13,000, receivables of $2,000,
and ticket inventory of $40,000. The companys equipment totals $85,000. Womack owes
accounts payable of $10,000, and long-term notes payable of $80,000. Common stock
Store Front, Inc.s, comparative balance sheet at January 31, 2009, and 2008, reports (in
Three situations about Store Fronts issuance of stock and payment of dividends during the
year ended January 31, 2009, follow. For each situation, use the