Monthly Archives: February 2012

Beta Industries has net income of $2,000,000, and it has 1,000,000 shares of common stock outstanding

Beta Industries has net income of $2,000,000, and it has 1,000,000 shares of common stock outstanding. The company‚Äôs stock currently trades at $32 a share. Beta is considering a plan which it will use available cash to repurchase 20% of … Continue reading

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PR 5-4A Green Mountain Water Testing Service was established on November 16, 2012

PR 5-4A (Purchases and cash payments journals; accounts payable and general ledgers) Green Mountain Water Testing Service was established on November 16, 2012. Green Mountain uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe … Continue reading

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E20-1 (Pension Expense, Journal Entries) The following information is available for the pension plan of Radcliffe Company for the year 2012

E20-1 (Pension Expense, Journal Entries) The following information is available for the pension plan of Radcliffe Company for the year 2012. Actual and expected return on plan assets $15,000 Benefits paid to retirees $40,000 Contributions (funding) $90,000 Interest/discount rate 10% … Continue reading

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E21-3 (Lessee Entries, Capital Lease with Executory Costs and Un-guaranteed Residual Value) Assume that on January 1, 2012, Kimberly-Clark Corp

E21-3 (Lessee Entries, Capital Lease with Executory Costs and Un-guaranteed Residual Value) Assume that on January 1, 2012, Kimberly-Clark Corp. signs a 10-year non-cancelable lease agreement to lease a storage building from Trevino Storage Company. The following information pertains to … Continue reading

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E22-7 (Change in Estimate and Error; Financial Statements) Presented below are the comparative income statements for Pannebecker Inc. for the years 2011 and 2012

E22-7 (Change in Estimate and Error; Financial Statements) Presented below are the comparative income statements for Pannebecker Inc. for the years 2011 and 2012. 2012 2011 Sales $340,000 $270,000 Cost of sales $200,000 $142,000 Gross profit $140,000 $128,000 Expenses $88,000 … Continue reading

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E23-3 (Preparation of Operating Activities Section – Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below

E23-3 (Preparation of Operating Activities Section – Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below. RODRIQUEZ COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012 Sales $6,900,000 Cost of goods sold Beginning inventory $1,900,000 … Continue reading

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E 8-22 On January 1, 2011, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool

E 8-22 On January 1, 2011, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $660,000. The 2011 and 2012 ending inventory valued at year-end costs were $690,000 and … Continue reading

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E 8-7 The December 31, 2011, year-end inventory balance of the Raymond Corporation is $210,000

E 8-7 Goods in transit; consignment The December 31, 2011, year-end inventory balance of the Raymond Corporation is $210,000. You have been asked to review the following transactions to determine if they have been correctly recorded. 1. Goods shipped to … Continue reading

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The following selected transactions were completed by Rayne Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers

The following selected transactions were completed by Rayne Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers: Aug. 1. Sold merchandise on account to Tomahawk Co., $12,500, terms FOB shipping point, n/eom. The cost of … Continue reading

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Firm A has $10,000 in assets entirely financed with equity

Firm A has $10,000 in assets entirely financed with equity. Firm B also has $10,000 in assets, but these assets are financed by $5,000 in debt (with a 10 percent rate of interest) and $5,000 in equity. Both firms sell … Continue reading

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