Author Archives: winged_envoy

E2-7 (Accounting Principles—Comprehensive) Presented below are a number of business transactions that occurred during the current year for Gonzales, Inc

E2-7 (Accounting Principles—Comprehensive) Presented below are a number of business transactions that occurred during the current year for Gonzales, Inc. Instructions In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. … Continue reading

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E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter

E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter. 1. Economic entity assumption 2. Going concern assumption 3. Monetary unit assumption 4. Periodicity assumption 5. Historical cost principle 6. Fair value principle … Continue reading

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E24-4 (Ratio Computation and Analysis; Liquidity) As loan analyst for Madison Bank, you have been presented the following information

E24-4 (Ratio Computation and Analysis; Liquidity) As loan analyst for Madison Bank, you have been presented the following information. Plunkett Co. Herring 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 … Continue reading

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E24-2 (Post-Balance-Sheet Events) For 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

E24-2 (Post-Balance-Sheet Events) For 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. ______ 1. Settlement of federal … Continue reading

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P18-7 (Long-Term Contract with an Overall Loss) On July 1, 2010, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,900,000

P18-7 (Long-Term Contract with an Overall Loss) On July 1, 2010, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,900,000. On July 1, Torvill estimated that it would take … Continue reading

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E18-15 (Installment-Sales Method and Cost-Recovery Method) Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis, uses the installment sales method of profit recognition in accounting for all its sales

E18-15 (Installment-Sales Method and Cost-Recovery Method) Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis, uses the installment sales method of profit recognition in accounting for all its sales. The … Continue reading

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E5-15 (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31

E5-15 (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31. 2010 2009 Cash $157,000 $ 78,000 Accounts receivable 180,000 185,000 … Continue reading

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E5-12 (Preparation of a Balance Sheet) Presented below is the trial balance of Vivaldi Corporation at December 31, 2010

E5-12 (Preparation of a Balance Sheet) Presented below is the trial balance of Vivaldi Corporation at December 31, 2010. Debits Credits Cash $ 197,000 Sales $ 7,900,000 Trading Securities (at cost, $145,000) 153,000 Cost of Goods Sold 4,800,000 Long-term Investments … Continue reading

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E5-5 (Preparation of a Corrected Balance Sheet) Bruno Company has decided to expand its operations

E5-5 (Preparation of a Corrected Balance Sheet) Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented on the next page in order to obtain additional funds for expansion. BRUNO COMPANY BALANCE SHEET DECEMBER … Continue reading

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P4-3 (Irregular Items) Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000

P4-3 (Irregular Items) Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000. Additional transactions occurring in 2010 but not considered in the $790,000 are as follows. 1. The corporation experienced an uninsured flood loss (extraordinary) in … Continue reading

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