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ACCT 382 - Week 3 - Chapter 3 Homework

ACCT 382 - Week 3 - Chapter 3 Homework
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ACCT 382 - Week 3 - Chapter 3 Homework

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Question 1

The following December 31, 2013, fiscal year-end account balance information is available for the Stonebridge Corporation:

 

 

 

 

  Cash and cash equivalents

$

5,000

 

  Accounts receivable (net)

 

20,000

 

  Inventories

 

60,000

 

  Property, plant, and equipment (net)

 

120,000

 

  Accounts payable

 

44,000

 

  Wages payable

 

15,000

 

  Paid-in-capital

 

100,000

 


     The only asset not listed is short-term investments. The only liabilities not listed are a $30,000 note payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.5:1.

 

Question 2

The following are the typical classifications used in a balance sheet:


 


 


 


 

  a.

 Current assets

  f.

 Current liabilities

  b.

 Investments and funds

  g.

 Long-term liabilities

  c.

 Property, plant, and equipment.

  h.

 Paid-in-capital

  d.

 Intangible assets

  i.

 Retained earnings

  e.

 Other assets

 

 


 

 

 

Question 3

The following is a December 31, 2013, post-closing trial balance for the Jackson Corporation

  Account Title

Debits

Credits

  Cash

40,000

 

 

 

  Accounts receivable

34,000

 

 

 

  Inventories

75,000

 

 

 

  Prepaid rent

16,000

 

 

 

  Marketable securities (short term)

10,000

 

 

 

  Machinery

145,000

 

 

 

  Accumulated depreciation—machinery

 

 

11,000

 

  Patent (net of amortization)

83,000

 

 

 

  Accounts payable

 

 

8,000

 

  Wages payable

 

 

4,000

 

  Taxes payable

 

 

32,000

 

  Bonds payable (due in 10 years)

 

 

200,000

 

  Common stock

 

 

100,000

 

  Retained earnings

 

 

48,000

 

  





      Totals

403,000

 

403,000

 

  










     

 

Question 4

Cone Corporation is in the process of preparing its December 31, 2013, balance sheet. There are some questions as to the proper classification of the following items:

 a.

$50,000 in cash set aside in a savings account to pay bonds payable. The bonds mature in 2017.

 b.

Prepaid rent of $24,000, covering the period January 1, 2014, through December 31, 2015. [Prepaid expenses for a period extending beyond the coming year, a portion of the prepayment is classified as an other asset, a noncurrent asset.]

 c.

Note payable of $200,000. The note is payable in annual installments of $20,000 each, with the first installment payable on March 1, 2014.

 d.

Accrued interest payable of $12,000 related to the note payable.

 e.

Investment in marketable securities of other corporations, $80,000. Cone intends to sell one-half of the securities in 2014.

 

Question 5

Parkman Sporting Goods is preparing its annual report for its 2013 fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items:

Required:

Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet.

 


 

 

1.

A related-party transaction

 

2.

Depreciation method

 

3.

Allowance for uncollectible accounts

 

4.

Composition of investments

 

5.

Composition of long-term debt

 

6.

Inventory costing method

 

7.

Number of shares of common stock authorized, issued, and outstanding

 

8.

Employee benefit plans

 

 

 

Question 6

Listed below are several terms and phrases associated with the balance sheet and financial disclosures. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.

 

Question 7

The 2013 balance sheet for Hallbrook Industries, Inc., is shown below.

HALLBROOK INDUSTRIES, INC.

Balance Sheet

December 31, 2013

($ in 000s)

  Assets

 

 

 

  Cash

$

200

 

  Short-term investments

 

150

 

  Accounts receivable

 

200

 

  Inventories

 

350

 

  Property, plant, and equipment (net)

 

1,000

 

 




     Total assets

$

1,900

 

 







  Liabilities and Shareholders’ Equity

 

 

 

  Current liabilities

$

400

 

  Long-term liabilities

 

350

 

  Paid-in capital

 

750

 

  Retained earnings

 

400

 

 




     Total liabilities and shareholders’ equity

$

1,900

 

 








  

The company’s 2013 income statement reported the following amounts ($ in 000s):

 

 

 

 

  Net sales

$

4,600

 

  Interest expense

 

40

 

  Income tax expense

 

100

 

  Net income

 

160