Week 3 exercises | Accounting homework help

Week 3 exercises | Accounting homework help


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WEEK 3 EXERCISES Brief Exercise 5-2 Koch Corporation’sExercise 5-1 Deep Blue Something, IncExercise 5-4  Denis Savard IncExercise 5-7 Yasunari Kawabata CompanyExercise 5-12 Scott Butler CorporationExercise 24-2 For each of the following subsequentExercise 24-3 Carlton CompanyExercise 24-4 As loan analyst for Utrillo Bank Brief Exercise 5-2Koch Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2014: Cash $7,000; Land $40,000; Patents $12,500; Accounts Receivable $90,000; Prepaid Insurance $5,200; Inventory $30,000; Allowance for Doubtful Accounts $4,000; Equity Investments (trading) $11,000.Prepare the current assets section of the balance sheet. (List Current Assets in order of liquidity.)Brief Exercise 5-6Patrick Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2014: Prepaid Rent $12,000; Goodwill $50,000; Franchise Fees Receivable $2,000; Franchises $47,000; Patents $33,000; Trademarks $10,000.  Prepare the intangible assets section of the balance sheet Exercise 5-1Presented below are a number of balance sheet accounts of Deep Blue Something, Inc. For each of the accounts below, indicate the proper balance sheet classification.            Balance Sheet Accounts Balance Sheet Classification(a) Investment in Preferred Stock.  (b) Treasury Stock.  (c) Common Stock.  (d) Dividends Payable.  (e) Accumulated Depreciation-Equipment.  (f)(1) Construction in Process (Constructed for another party).  (f)(2) Construction in Process (Constructed for the use of Deep Blue Something, Inc.).  (g) Petty Cash.  (h) Interest Payable.  (i) Deficit.  (j) Equity Investments (trading).  (k) Income Taxes Payable.  (l) Unearned Subscription Revenue.  (m) Work in Process.  (n) Salaries and Wages Payable.             Exercise 5-4Assume that Denis Savard Inc. has the following accounts at the end of the current year.1. Common Stock 14. Accumulated Depreciation-Buildings.2. Discount on Bonds Payable. 15. Cash Restricted for Plant Expansion.3. Treasury Stock (at cost). 16. Land Held for Future Plant Site.4. Notes Payable (short-term). 17. Allowance for Doubtful Accounts.5. Raw Materials 18. Retained Earnings.6. Preferred Stock (Equity) Investments (long-term). 19. Paid-in Capital in Excess of Par-Common Stock.7. Unearned Rent Revenue. 20. Unearned Subscriptions Revenue.8. Work in Process. 21. Receivables-Officers (due in one year).9. Copyrights. 22. Inventory (finished goods).10. Buildings. 23. Accounts Receivable.11. Notes Receivable (short-term). 24. Bonds Payable (due in 4 years).12. Cash. 25. Noncontrolling Interest.13. Salaries and Wages Payable.     Prepare a classified balance sheet in good form. (List Current Assets in order of liquidity. For Land, Treasury Stock, Notes Payable, Preferred Stock Investments, Notes Receivable, Receivables-Officers, Inventory, Bonds Payable, and Restricted Cash, enter the account name only and do not provide the descriptive information provided in the question.) Exercise 5-7Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014.Inventory (finished goods) $ 52,000 Cost of Goods Sold $2,100,000Unearned Service Revenue 90,000 Notes Receivable 40,000Equipment 253,000 Accounts Receivable 161,000Inventory (work in process) 34,000 Inventory (raw materials) 207,000Cash 37,000 Supplies Expense 60,000Equity Investments (short-term) 31,000 Allowance for Doubtful Accounts 12,000Customer Advances 36,000 Licenses 18,000Restricted Cash for Plant Expansion 50,000 Additional Paid-in Capital 88,000    Treasury Stock 22,000 The following additional information is available1. Inventories are valued at lower-of-cost-or-market using LIFO.2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600.3. The short-term investments have a fair value of $29,000. (Assume they are trading securities.)4. The notes receivable are due April 30, 2016, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrued interest due on December 31, 2014.)5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan.6. Licenses are recorded net of accumulated amortization of $14,000.7. Treasury stock is recorded at cost.. Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures. (List Current Assets in order of liquidity. Enter account name only and do not provide the descriptive information provided in the question.) Exercise 5-12Presented below is the trial balance of Scott Butler Corporation at December 31, 2014.  Debit CreditCash $   197,000  Sales   $ 8,100,000Debt Investments (trading) (cost, $145,000) 153,000  Cost of Goods Sold 4,800,000  Debt Investments (long-term) 299,000  Equity Investments (long-term) 277,000  Notes Payable (short-term)   90,000Accounts Payable   455,000Selling Expenses 2,000,000  Investment Revenue   63,000Land 260,000  Buildings 1,040,000  Dividends Payable   136,000Accrued Liabilities   96,000Accounts Receivable 435,000  Accumulated Depreciation-Buildings   152,000Allowance for Doubtful Accounts   25,000Administrative Expenses 900,000  Interest Expense 211,000  Inventory 597,000  Gain (extraordinary)   80,000Notes Payable (long-term)   900,000Equipment 600,000  Bonds Payable   1,000,000Accumulated Depreciation-Equipment   60,000Franchises 160,000  Common Stock ($5 par)   1,000,000Treasury Stock 191,000  Patents 195,000  Retained Earnings   78,000Paid-in Capital in Excess of Par   80,000        Totals $12,315,000 $12,315,000 Prepare a balance sheet at December 31, 2014, for Scott Butler Corporation. (Ignore income taxes). (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)Exercise 24-2For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.Sr. No. Subsequent (Post-Balance-Sheet) Events  1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.  2. Introduction of a new product line.  3. Loss of assembly plant due to fire.  4. Sale of a significant portion of the company’s assets.  5. Retirement of the company president.  6. Prolonged employee strike.  7. Loss of a significant customer.  8. Issuance of a significant number of shares of common stock.  9. Material loss on a year-end receivable because of a customer’s bankruptcy.  10. Hiring of a new president.  11. Settlement of prior year’s litigation against the company (no loss was accrued).  12. Merger with another company of comparable size.   Exercise 24-3Carlton Company is involved in four separate industries. The following information is available for each of the four industries.Operating Segment Total Revenue Operating Profit (Loss)  Identifiable AssetsW $60,000 $15,000  $167,000X 10,000 3,000  83,000Y 23,000 (2,000) 21,000Z 9,000 1,000  19,000  $102,000 $17,000  $290,000 Determine which of the operating segments are reportable based on the:    Reportable Segments(a) Revenue test.  (b) Operating profit (loss) test.  (c) Identifiable assets test.    Exercise 24-4As loan analyst for Utrillo Bank, you have been presented the following information.  Toulouse Co. Lautrec Co.Assets      Cash $120,000  $320,000 Receivables 220,000  302,000 Inventories 570,000  518,000    Total current assets 910,000  1,140,000 Other assets 500,000  612,000    Total assets $1,410,000  $1,752,000        Liabilities and Stockholders’ Equity      Current liabilities $305,000  $350,000 Long-term liabilities 400,000  500,000 Capital stock and retained earnings 705,000  902,000    Total liabilities and stockholders’ equity $1,410,000  $1,752,000 Annual sales $930,000  $1,500,000 Rate of gross profit on sales 30% 40% Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted.Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)  Toulouse Co. Lautrec Co.Current ratio   : 1   : 1Acid-test ratio   : 1   : 1Accounts receivable turnover   times   timesInventory turnover   times   timesCash to current liabilities   : 1   : 1  

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