Info

Which of the following is a false statement regarding the statement of stockholders' equity a. It lists changes in contributed capital and retained earnings for a fiscal period. b. It contains information about net income and dividends for a fiscal period. c. It reports the net change in stockholders' equity for a fiscal period. d. It reports increases or decreases in stocks and bonds for a fiscal period. 4. The following assets appear on the balance sheet for Astroid Company Accumulated...

Stock Splits and Stock Dividends

The Carpelli Corporation manufactures solar panels that provide electricity for businesses and homes. The company has been doing well for several years and so the board of directors has decided to declare a stock split in the amount of two shares for every share of stock held by shareholders. The split will be effective as of February 15, 2005. Below is the stockholders' equity section of the Carpelli Corporation's balance sheet at December 31, 2004. Common stock, 4 par, 250,000 shares...

Q215

Joan Hoyt is considering opening a small retail store to sell knives and other kitchen utensils. She has a small amount of money to invest and wants to maintain as much control over the business as she can. She has asked you to help her decide how to finance her business. Describe the primary issues you would suggest Joan to consider. Hardly Moving and Storage Corporation needs an additional 1,000,000 in financing to build new facilities. How might Hardly get the money What issues should...

Food For Thought

Suppose you were in Maria and Stan's position. What would you want to know in order to start a business What goals would you have for the business, and how would you plan to reach those goals What resources would you need in your business, and how would you finance those resources How would you organize your company Who would your customers be How would you know whether you are reaching your goals or not These are issues Ellen poses to Maria and Stan. Creating a successful business is not an...

Thinking Beyond the Question

Financial decisions are critical for a company. It is important for a company to create value for its owners by earning a high return and by controlling its risk. Higher financial leverage can result in both high returns and high risk. Consequently, managers must examine the tradeoff and choose an amount of financial leverage that is appropriate for their company. That amount will be different for different companies. When is it appropriate for a company to have a large amount of financial...

E54

Disposal of plant assets Northport Bottling Company has the following information available for the first six months of 2004. Cash collected from customers 268,000 Cash received from disposal of equipment 18,500 Determine the cash flow from operating activities for the six-month period. Bay View Company reported the following information at the end of its most recent fiscal year. Determine each of the following amounts. Show your work neatly and clearly. a. Net...

E44

Write a short definition for each of the terms listed in the Terms and Concepts Defined in this Chapter section. A list of information contained in financial statements is provided below. For each item, indicate which financial statement provides the information. a. Changes in a corporation's stockholders' equity for a fiscal period b. The dollar amount of resources available at a particular date c. The amount of credit sales not yet collected d. Accrual-based operating results for a fiscal...

The Purpose of Accounting Regulation

Decision makers who are not managers of a business have limited access to information about the business. These external users rely on financial reports for much of the information they need to make decisions. Stockholders and creditors use accounting accounting regulation. information to decide whether to purchase or sell stock and whether to make loans to a company. Suppliers also make decisions about whether to sell goods and provide services to a business on credit. Government authorities...

Using Spreadsheet Functions in a Car Buying Decision

Ricardo recently received a major promotion at work and a significant raise. He is shopping for a new car. He really likes large sport utility vehicles and has his eye on one priced at 35,000. He is not sure how to finance the vehicle, however. He has three choices. 1. The dealer has offered to finance the vehicle with zero down on a six-year, 14 loan. 2. A local bank will finance the vehicle for five years at 10 if he makes a 15 down payment. 3. His credit union will finance the vehicle for...

Questions

Q9-1 Why is it useful to report short-term liabilities separately from long-term liabilities when Obj. 1 preparing the balance sheet Q9-2 What are the differences among debentures, serial bonds, and callable bonds Obj. 1 Q9-3 Distinguish between the stated rate and the effective rate. Under what circumstances are these Obj. 1 rates the same Under what circumstances are these rates different Q9-4 While studying for an accounting exam, a friend observes that a capital lease is merely a means Obj....

Spreadsheet

Spreadsheet programs also are commonly used for future value calculations. The future value of 500 that earns interest at 8 compounded for three years can be calculated by entering the following formula in a cell 500 1.08A3 . The caret symbol A is used in Excel for exponents. The amount appearing in the cell is the future value 629.86 in this example . Tables also are available to assist with these calculations. Table 1 at the back of this text can be used for this purpose. This table contains...

P74

Dora Company uses a client-server network for its accounting system. The company's database servers are kept at a central computer center. Users of the system access the company's database through workstations on their desks. Data are updated continuously throughout the day based on sales, production, billing, and other transactions recorded by users. Dora is a large company and its network connects offices in several states. Required Identify four threats to the accounting system and...

Combining Single Amounts and Annuities

In some cases an investment involves both a single amount and an annuity. For example, suppose you could purchase an investment that offered to pay 100 at the end of each year for 10 years and 1,000 at the end of the 10-year period. If you expect the investment to earn 8 interest, how much would you pay for the investment at the beginning of the 10-year period To answer this question, compute the present value of the annuity and add the present value of the single amount. PVA A X IF Table 4...

Recording Transactions and Preparing Financial Statements

Assume that you began a small business in May 2004 by 1 investing 10,000 and 2 borrowing 30,000 from a bank. You 3 purchased equipment for 25,000 cash and 4 purchased merchandise for 12,000 using cash. During the first month of operations, your company 5 sold merchandise for 27,000 in cash. 6 The cost of merchandise sold during the month was 10,000. You 7 repaid 300 of the amount borrowed from the bank. You 8 withdrew 800 from the business for personal use. The name of your business is Sand...

C42 The Financial Statements of General Mills

Objs. 22, 33, 4 The General Mills 2002 Annual Report is reproduced in Appendix B at the end of the text. A. Answer the following questions about the General Mills Consolidated Statements of Earnings 1. General Mills recorded sales of almost 8 billion. Is this the amount of cash collected Explain. 2. Sales increased each year from 2000 to 2002. Compute the percentage increase for each year. 3. What is the largest expense for General Mills Compute this expense as a percentage of sales for each of...

Ethical Issues in Financial Reporting

Flower Childs is a regional sales manager for Green-Grow, Inc., a producer of garden supplies. The company's fiscal year ends on April 30. In mid-April, Flower is contacted by the president of Green-Grow. He indicates that the company is facing a financial problem. Two years ago, the company borrowed heavily from several banks to buy a competing company and to increase production of its primary products insecticides and fertilizers. As a part of the loan agreement, Green-Grow must maintain a...

Objective

Describe how financial reports summarize business activities and provide information for business decisions. The purpose of measuring and recording business activities is to provide useful information to those who need to make decisions. Accounting reports information to decision makers in the form of financial statements. Financial statements are reports that summarize the results of a company's accounting transactions for a fiscal period. Exhibit 11 lists all of Mom's Cookie Company's...

P27 Recording Transactions

Randi had a hard time finding a summer job when she went home from college, so she decided to go into business for herself mowing lawns. She had the following business activities during the month of June. June 1 Used 200 of her own money and borrowed 450 from her father to start the business. 2 Rented a used pickup truck from an uncle for 85 per month. Paid for the first month's use. 3 Rented a lawnmower 75 per month , an edger 50 per month , and a wheelbarrow 10 per month at an equipment...

Disadvantages of Corporations

There are several disadvantages to the corporate form of ownership. Most corporations must pay taxes on their incomes. Corporate taxes are separate from the taxes paid by shareholders on dividends received from the company. Some corporations, however, especially smaller ones, are not taxed separately. Another disadvantage is that corporations are regulated by various state and federal government agencies. These regulations require corporations to comply with many state and federal rules...