A comparative balance sheet for Rocker Company appears below:
Additional information:
1> Net income for the year ending December 31, 2015 was $35,000.
2> Cash dividends of $15,000 were declared and paid during the year.
3> Long-term investments that had a cost of $17,000 were sold for $14,000.
4> Sales for 2015 were $120,000.
Instructions
Prepare a statement of cash flows for the year ended December 31, 2015, using the
indirect method.
Answer:
Allowance for Doubtful Accounts is debited under the direct write-off method when an
account is determined to be uncollectible.
Answer:
Compute the maturity date and the maturity value associated with each of the following
notes receivables.
1> A $15,000, 6%, 3-month note dated April 20.
Maturity date ___________, Maturity value $____________.
2> A $25,000, 8%, 72-day note dated June 10.
Maturity date ___________, Maturity value $____________.
3> An $8,000, 9%, 30-day note dated September 20.
Maturity date ___________, Maturity value $____________.
Answer:
aReversing entries are an optional bookkeeping procedure.
Answer:
The following information is available for Gaynor Corporation:
Instructions
Based on the preceding information, calculate return on common stockholders’ equity.
Answer:
The first-in, first-out (FIFO) inventory method results in an ending inventory valued at
the most recent cost.
Answer:
External transactions involve economic events between the company and some other
enterprise or party.
Answer:
Ryan Corporation entered into the following transactions:
1> Hewitt Car Rental leased a car to Ryan Corporation for one year. Terms of the
operating lease call for monthly payments of $750.
2> On January 1, 2015, Ryan Corporation entered into an agreement to lease 20
machines from Meeks Corporation. The terms of the lease agreement require an initial
payment of $210,000 and then three annual rental payments of $210,000 beginning on
December 31, 2015. The present value of the three rental payments is $522,238. The
lease is a capital lease.
Instructions
Prepare the appropriate journal entries to be made by Ryan Corporation in January
related to the lease transactions.
Answer:
The stockholders’ equity section of Maria Corporation at December 31, 2014, included
the following:
Dividends were not declared on the preferred stock in 2014 and are in arrears.
On September 15, 2015, the board of directors of Maria Corporation declared dividends
on the preferred stock for 2014 and 2015, to stockholders of record on October 1, 2015,
payable on October 15, 2015.
On November 1, 2015, the board of directors declared a $.50 per share dividend on the
common stock, payable November 30, 2015, to stockholders of record on November
15, 2015.
Instructions
Prepare the journal entries that should be made by Maria Corporation on the dates
indicated below:
Answer:
