Acc 291 acc291

ACC 291 The Latest Version A+ Study Guide

Entire Course

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ACC 291 WileyPLUS Assignment: Week 1 Assignment

Resource: WileyPLUS

Click Assignment: Week 1 Assignment within WileyPLUS to complete the following exercises:

Exercise 8-4

Exercise 8-11

BYP 8-1

BYP 8-2

Exercise 8-4

Answer

The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $87,000;

Credit Sales $820,000; and Sales Returns and Allowances $52,600. (Credit account titles are

automatically indented when amount is entered. Do not indent manually.)

(a)

If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the

adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,100 balance is

uncollectible.

(b)

If Allowance for Doubtful Accounts has a credit balance of $850 in the trial balance, journalize the adjusting

entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

Exercise 8-11

Suppose the following information was taken from the 2014 financial statements of FedEx Corporation,

a major global transportation/delivery company.

(in millions)

2014

2013

Accounts receivable (gross)

$ 3,490

$ 4,420

https://uopcourses.com/category/acc-291/

Accounts receivable (net)

3,335

4,296

Allowance for doubtful accounts

155

124

Sales revenue

35,898

38,861

Total current assets

7,011

7,189

Answer each of the following questions.

Broadening Your Perspective 8-1

Your answer is correct.

The financial statements of Tootsie Roll are presented below.

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)

For the year ended December 31,

2011

2010

2009

Net product sales

$528,369

$517,149

$495,592

Rental and royalty revenue

4,136

4,299

3,739

Total revenue

532,505

521,448

499,331

Product cost of goods sold

365,225

349,334

319,775

Rental and royalty cost

1,038

1,088

852

Total costs

366,263

350,422

320,627

Product gross margin

163,144

167,815

175,817

Rental and royalty gross margin

3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704

Selling, marketing and administrative expenses

108,276

106,316

103,755

Impairment charges

—

—

14,000

Earnings from operations

57,966

64,710

60,949

Other income (expense), net

2,946

8,358

2,100

Earnings before income taxes

60,912

73,068

63,049

Provision for income taxes

16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157

Other comprehensive earnings (loss)

(8,740 )

1,183

2,845

Comprehensive earnings

$35,198

$54,246

$56,002

Retained earnings at beginning of year.

$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )

Retained earnings at end of year

$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89

Average Common and Class B Common shares outstanding

57,892

58,685

59,425

(The accompanying notes are an integral part of these statements.)


Financial Position

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)

Assets

December 31,

2011

2010

CURRENT ASSETS:

Cash and cash equivalents

$78,612

$115,976

Investments

10,895

7,996

Accounts receivable trade, less allowances of $1,731 and $1,531

41,895

37,394

Other receivables

3,391

9,961

Inventories:

Finished goods and work-in-process

42,676

35,416

Raw materials and supplies

29,084

21,236

Prepaid expenses

5,070

6,499

Deferred income taxes

578

689


212,201

235,167

PROPERTY, PLANT AND EQUIPMENT, at cost:

Land

21,939

21,696

Buildings

107,567

102,934

Machinery and equipment

322,993

307,178

Construction in progress

2,598

9,243

455,097

440,974

Less—Accumulated depreciation

242,935

225,482

Net property, plant and equipment

212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461

Split dollar officer life insurance

74,209

74,441

Prepaid expenses

3,212

6,680

Equity method investment

3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959

Liabilities and Shareholders’ Equity

December 31,

2011

2010

CURRENT LIABILITIES:

Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185

Total current liabilities

58,355

58,505

NONCURRENT LIABILITES:


43,521

47,865

Postretirement health care and life insurance benefits

26,108

20,689

Industrial development bonds

7,500

7,500

Liability for uncertain tax positions

8,345

9,835

Deferred compensation and other liabilities

48,092

46,157

Total noncurrent liabilities

133,566

132,046

SHAREHOLDERS’ EQUITY:

Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and

36,057 respectively, issued 25,333

25,040

Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025

and 20,466 respectively, issued 14,601

14,212

Capital in excess of par value

533,677

505,495

Retained earnings, per accompanying statement

114,269

135,866

Accumulated other comprehensive loss

(19,953 )

(11,213 )

Treasury stock (at cost)—71 shares and 69 shares, respectively

(1,992 )

(1,992 )

Total shareholders’ equity

665,935

667,408

Total liabilities and shareholders’ equity

$857,856

$857,959



Cash Flows (in thousands)


2011

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$43,938

$53,063

$53,157

Adjustments to reconcile net earnings to net cash provided by

operating activities:

Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000

Impairment of equity method investment

—

—

4,400

Loss from equity method investment

194

342

233

Amortization of marketable security premiums

1,267

522

320

Changes in operating assets and liabilities:

Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455

Prepaid expenses and other assets

5,106

4,936

5,203

Accounts payable and accrued liabilities

84

2,180

(2,755 )

Income taxes payable and deferred

(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305

Net cash provided by operating activities

50,390

82,805

76,994

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(16,351 )

(12,813 )

(20,831 )

Net purchase of trading securities

(3,234 )

(2,902 )

(1,713 )

Purchase of available for sale securities

(39,252 )

(9,301 )

(11,331 )

Sale and maturity of available for sale securities

7,680

8,208

17,511

Net cash used in investing activities

(51,157 )

(16,808 )

(16,364 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Shares repurchased and retired

(18,190 )

(22,881 )

(20,723 )

Dividends paid in cash

(18,407 )

(18,130 )

(17,825 )

Net cash used in financing activities

(36,597 )

(41,011 )

(38,548 )

Increase (decrease) in cash and cash equivalents

(37,364 )

24,986

22,082

Cash and cash equivalents at beginning of year

115,976

90,990

68,908

Cash and cash equivalents at end of year

$78,612

$115,976

$90,990

Supplemental cash flow information

Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182

Stock dividend issued

$47,053

$46,683

$32,538


Five Year Summary of Earning and Financial Hightlights

TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES

(Thousands of dollars except per share, percentage and ratio figures)

2011

2010

2009

2008

2007

Sales and Earnings Data

Net product sales

$528,369

$517,149

$495,592

$492,051

$492,742


163,144

167,815

175,817

158,055

165,456

Interest expenses

121

142

243

378

535


16,974

20,005

9,892

16,347

25,401

Net earnings

43,938

53,063

53,157

38,880

52,175

% of net product sales

8.3 %

10.3 %

10.7 %

7.9 %

10.6 %

% of shareholders' equity

6.6 %

8.0 %

8.1 %

6.1 %

8.1 %

Per Common Share Data

Net earnings

$0.76

$0.90

$0.89

$0.65

$0.85

Cash dvidends declared

0.32

0.32

0.32

0.32

0.32

Stock dividends

3 %

3 %

3 %

3 %

3 %

Additional Financial Data

Working capital

$153,846

$176,662

$154,409

$129,694

$142,163

Net cash provided by opreating

activities 50,390

82,805

76,994

57,333

90,148

Net cash provided by (used by)

investing activities (51,157 )

(16,808 )

(16,364 )

(7,565 )

(43,429 )

Net cash used in financing

activities (36,597 )

(41,011 )

(38,548 )

(38,666 )

(44,842 )

Property, plant & equipment

additions 16,351

12,813

20,831

34,355

14,767

Net property, plant & equipment

212,162

215,492

220,721

217,628

201,401

Total assets

857,856

857,959

836,844

813,252

813,134

Long-term debt

7,500

7,500

7,500

7,500

7,500

Shareholders' equity

665,935

667,408

654,244

636,847

640,204

Average shares outstanding

57,892

58,685

59,425

60,152

61,580

Notes to Consolidated Financial Statements ($ in thousands)

Revenue recognition:

Products are sold to customers based on accepted purchase orders which include quantity, sales price

and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns,

allowances and certain advertising and promotional costs, is recognized when products are delivered

to customers and collectability is reasonably assured. Shipping and handling costs of $45,850,

$43,034, and $38,628 in 2011, 2010 and 2009, respectively, are included in selling, marketing and

administrative expenses. Accounts receivable are unsecured. Revenues from a major customer

aggregated approximately 23.3%, 21.4% and 22.9% of net product sales during the years ended

December 31, 2011, 2010 and 2009, respectively.

SEGMENT AND GEOGRAPHIC INFORMATION:

The Company operates as a single reportable segments encompassing the manufacturing and sale of

confectionery products. Its principal manufacturing operations are located in the United States and Canada, and

its principal market is in the United States. The Company also manufactures and sells confectionery products in

Mexico, and exports products to Canada and countries worldwide.

The following geographic data includes net product sales summarized on the basis of the customer location and

long-lived assets based on their location:

2011

2010

2009

Net product sales:

United states

$487,185

$471,714

$455,517

Foreign

41,184

45,435

40,075

$528,369

$517,149

$495,592

Long-lived assets:

United states

$170,173

$172,087

$176,044

Foreign

41,989

43,405

44,677

$212,162

$215,492

$220,721



The financial statements of The Hershey Company and Tootsie Roll are presented below.

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31,

2011

2010

2009

In thousands of dollars except per share amounts

Net Sales

$6,080,788

$5,671,009

$5,298,668

Costs and Expenses:

Cost of sales

3,548,896

3,255,801

3,245,531

Selling, marketing and administrative

1,477,750

1,426,477

1,208,672

Business realignment and impairment (credits) charges, net

(886 )

83,433

82,875

Total costs and expenses

5,025,760

4,765,711

4,537,078

Income before Interest and Income Taxes

1,055,028

905,298

761,590

Interest expense, net

92,183

96,434

90,459

Income before Income Taxes

962,845

808,864

671,131


333,883

299,065

235,137

Net Income

$628,962

$509,799

$435,994

Net Income Per Share—Basic—Class B Common Stock

$2.58

$2.08

$1.77

Net Income Per Share—Diluted—Class B Common Stock

$2.56

$2.07

$1.77

Net Income Per Share—Basic—Common Stock

$2.85

$2.29

$1.97

Net Income Per Share—Diluted—Common Stock

$2.74

$2.21

$1.90

Cash Dividends Paid Per Share:

Common Stock

$1.3800

$1.2800

$1.1900

Class B Common Stock

1.2500

1.1600

1.0712

The notes to consolidated financial statements are an integral part of these statements and are included in the

Hershey's 2011 Annual Report, available at www.thehersheycompany.com.

THE HERSHEY COMPANY

CONSOLIDATED BALANCE SHEETS

December 31,

2011

2010

In thousands of dollars

ASSETS

Current Assets:


$693,686

$884,642

Accounts receivable—trade

399,499

390,061

Inventories

648,953

533,622


136,861

55,760

Prepaid expenses and other

167,559

141,132


2,046,558

2,005,217

Property, Plant and Equipment, Net

1,559,717

1,437,702

Goodwill

516,745

524,134

Other Intangibles

111,913

123,080

Deferred Income Taxes

38,544

21,387

Other Assets

138,722

161,212

Total assets

$4,412,199

$4,272,732

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

$420,017

$410,655

Accrued liabilities

612,186

593,308

Accrued income taxes

1,899

9,402

Short-term debt

42,080

24,088

Current portion of long-term debt

97,593

261,392


1,173,775

1,298,845

Long-term Debt

1,748,500

1,541,825

Other Long-term Liabilities

617,276

494,461

Total liabilities

3,539,551

3,335,131

Commitments and Contingencies

—

—

Stockholders’ Equity:

The Hershey Company Stockholders’ Equity

Preferred Stock, shares issued: none in 2011 and 2010

—

—

Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in

2010 299,269

299,195

Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419

in 2010 60,632

60,706

Additional paid-in capital

490,817

434,865

Retained earnings

4,699,597

4,374,718

Treasury—Common Stock shares, at cost: 134,695,826 in 2011 and

132,871,512 in 2010 (4,258,962 )

(4,052,101 )


(442,331 )

(215,067 )

The Hershey Company stockholders’ equity

849,022

902,316

Noncontrolling interests in subsidiaries

23,626

35,285

Total stockholders’ equity

872,648

937,601

Total liabilities and stockholders’equity

$4,412,199

$4,272,732

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS


2011

2010

2009


Cash Flows Provided from (Used by) Operating Activities

Net income

$628,962

$509,799

$435,994

Adjustments to reconcile net income to net cash provided from

operations:

Depreciation and amortization

215,763

197,116

182,411

Stock-based compensation expense, net of tax of $15,127,

$17,413 and $19,223, respectively 28,341

32,055

34,927

Excess tax benefits from stock-based compensation

(13,997 )

(1,385 )

(4,455 )


33,611

(18,654 )

(40,578 )

Gain on sale of trademark licensing rights, net of tax of $5,962

(11,072 )

—

—

Business realignment and impairment charges, net of tax of

$18,333, $20,635 and $38,308, respectively 30,838

77,935

60,823

Contributions to pension plans

(8,861 )

(6,073 )

(54,457 )

Changes in assets and liabilities, net of effects from business

acquisitions and divestitures:


(9,438 )

20,329

46,584

Inventories

(115,331 )

(13,910 )

74,000

Accounts payable

7,860

90,434

37,228

Other assets and liabilities

(205,809 )

13,777

293,272

Net Cash Provided from Operating Activities

580,867

901,423

1,065,749

Cash Flows Provided from (Used by) Investing Activities

Capital additions

(323,961 )

(179,538 )

(126,324 )

Capitalized software additions

(23,606 )

(21,949 )

(19,146 )

Proceeds from sales of property, plant and equipment

312

2,201

10,364

Proceeds from sales of trademark licensing rights

20,000

—

—

Business acquisitions

(5,750 )

—

(15,220 )

Net Cash (Used by) Investing Activities

(333,005 )

(199,286 )

(150,326 )

Cash Flows Provided from (Used by) Financing Activities

Net change in short-term borrowings

10,834

1,156

(458,047 )

Long-term borrowings

249,126

348,208

—

Repayment of long-term debt

(256,189 )

(71,548 )

(8,252 )

Proceeds from lease financing agreement

47,601

—

—

Cash dividends paid

(304,083 )

(283,434 )

(263,403 )

Exercise of stock options

184,411

92,033

28,318


13,997

1,385

4,455

Contributions from noncontrolling interests in subsidiaries

—

10,199

7,322

Repurchase of Common Stock

(384,515 )

(169,099 )

(9,314 )

Net Cash (Used by) Financing Activities

(438,818 )

(71,100 )

(698,921 )

(Decrease) Increase in Cash and Cash Equivalents

(190,956 )

631,037

216,502

Cash and Cash Equivalents as of January 1

884,642

253,605

37,103

Cash and Cash Equivalents as of December 31

$693,686

$884,642

$253,605

Interest Paid

$97,892

$97,932

$91,623

Income Taxes Paid

292,315

350,948

252,230





2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


Based on the information contained in these financial statements, compute the following 2011 values

for each company. (Round answers to 1 decimal place, e.g. 15.2.)

(1) Accounts receivable turnover. (For Tootsie Roll, use “Net product sales.” Assume all sales were credit

sales.)

(2) Average collection period for accounts receivable.

Tootsie Roll

Hershey Company

Accounts receivable turnover

times

times

Average collection period

days

days


Resource: WileyPLUS

Complete the following Week 2 Assignment in WileyPLUS:

Problem 8-3A

Brief Exercise 9-11

DO IT! 9-5

Exercise 9-7

Exercise 9-8

BYP 9-1

BYP 9.2

Problem 9-2A

Brief Exercise 9-11

Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended

May 31, 2014 (in millions): other plant assets $937.7; land $241.9; patents and trademarks (at cost)

$537.8; machinery and equipment $2,185.8; buildings $958; goodwill (at cost) $175.6;

accumulated amortization $53.2; and accumulated depreciation $2,195.

Prepare a partial balance sheet for Nike for these items. (List Property, Plant and Equipment in

order of Land, Buildings and Equipment.)

NIKE, INC.

Partial Balance Sheet

As of May 31, 2014

(in millions)

$

$

:

$

:

Do It! Review 9-5


Match the statement with the term most directly associated with it.

1.

Rights, privileges, and competitive advantages that

result from the ownership of long-lived assets that do

not possess physical substance.

2. The allocation of the cost of an intangible asset to

expense in a rational and systematic manner.

3.

A right to sell certain products or services, or use

certain trademarks or trade names within a

designated geographic area.

4.

Costs incurred by a company that often lead to

patents or new products. These costs must be

expensed as incurred.

5.

The excess of the cost of a company over the fair

value of the net assets required.

Exercise 9-7


Wang Co. has delivery equipment that cost $56,840 and has been depreciated $23,520.

Record entries for the disposal under the following assumptions. (Credit account titles are automatically

indented when amount is entered. Do not indent manually.)

(a)

It was scrapped as having no value.

(b)

It was sold for $37,330.

(c)

It was sold for $18,850.

Exercise 9-8


Here are selected 2014 transactions of Cleland Corporation.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost

$61,550 and had a useful life of 10 years with no salvage value.

June 30 Sold a computer that was purchased on January 1, 2012. The computer cost $36,600 and had a

useful life of 4 years with no salvage value. The computer was sold for $4,460 cash.

Dec. 31 Sold a delivery truck for $9,170 cash. The truck cost $23,710 when it was purchased on January 1,

2011, and was depreciated based on a 5-year useful life with a $3,550 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation on assets disposed

of, where applicable. Cleland Corporation uses straight-line depreciation. (Record entries in the order

displayed in the problem statement. Credit account titles are automatically indented when amount

is entered. Do not indent manually.)





Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share

data)


2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046


Common stock, $.69-4/9 par value—120,000 shares authorized—36,479


25,040

Class B common stock, $.69-4/9 par value—40,000 shares

authorized—21,025 and 20,466 respectively, issued 14,601

14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157

Adjustments to reconcile net earnings to net cash provided

by operating activities:

Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


Notes to Consolidated Financial Statements ($ in thousands)

PROPERTY, PLANT AND EQUIPMENT:

Depreciation is computed for financial reporting purposes by use of the straight-line method based on the

useful lives of 20 to 35 years for building and 5 to 25 years for machinery and equipment. Depreciation

expenses was $19,229, $18,279 and $17,862 in 2011, 2010 and 2009, respectively.

Goodwill and intangible assets:

In accordance with authoritative guidance, goodwill and intangible assets with indefinite lives are not

amortized, but rather tested for impairment at least annually unless certain interim triggering events or

circumstances require more frequent testing. All trademarks have been assessed by management to have

indefinite lives because they are expected to generate cash flows indefinitely. The Company has

completed its annual impairment testing of its goodwill and trademarks at December 31 of each of the

years presented. As of December 31, 2009, management ascertained that certain trademarks were

impaired, and recorded a pre-tax charge of $14,000. No impairments of intangibles were recorded in 2011

and 2010. This determination is made by comparing the carrying value of the asset with its estimated fair

value, which is calculated using estimates including discounted projected future cash flows. If the carrying

value of goodwill exceeds the fair value, a second step would measure the carrying value and implied fair

value of goodwill. Management believes that all assumptions used for the impairment tests are consistent

with those utilized by market participants performing similar valuations.

Answer the following questions.




THE HERSHEY COMPANY



2011

2010

2009


Net Sales

$6,080,788

$5,671,009

$5,298,668

Costs and Expenses:

Cost of sales

3,548,896

3,255,801

3,245,531


1,477,750

1,426,477

1,208,672


(886 )

83,433

82,875


5,025,760

4,765,711

4,537,078


1,055,028

905,298

761,590


92,183

96,434

90,459


962,845

808,864

671,131


333,883

299,065

235,137

Net Income

$628,962

$509,799

$435,994


$2.58

$2.08

$1.77


$2.56

$2.07

$1.77


$2.85

$2.29

$1.97


$2.74

$2.21

$1.90


Common Stock

$1.3800

$1.2800

$1.1900


1.2500

1.1600

1.0712



THE HERSHEY COMPANY


December 31,

2011

2010


ASSETS

Current Assets:


$693,686

$884,642


399,499

390,061

Inventories

648,953

533,622


136,861

55,760


167,559

141,132


2,046,558

2,005,217


1,559,717

1,437,702

Goodwill

516,745

524,134

Other Intangibles

111,913

123,080


38,544

21,387

Other Assets

138,722

161,212

Total assets

$4,412,199

$4,272,732



Accounts payable

$420,017

$410,655

Accrued liabilities

612,186

593,308


1,899

9,402

Short-term debt

42,080

24,088


97,593

261,392


1,173,775

1,298,845

Long-term Debt

1,748,500

1,541,825


617,276

494,461

Total liabilities

3,539,551

3,335,131


—

—




—

—


2010 299,269

299,195


in 2010 60,632

60,706


490,817

434,865

Retained earnings

4,699,597

4,374,718


132,871,512 in 2010 (4,258,962 )

(4,052,101 )


(442,331 )

(215,067 )


849,022

902,316


23,626

35,285


872,648

937,601


$4,412,199

$4,272,732

THE HERSHEY COMPANY



2011

2010

2009



Net income

$628,962

$509,799

$435,994


operations:


215,763

197,116

182,411



32,055

34,927


(13,997 )

(1,385 )

(4,455 )


33,611

(18,654 )

(40,578 )


(11,072 )

—

—



77,935

60,823


(8,861 )

(6,073 )

(54,457 )




(9,438 )

20,329

46,584

Inventories

(115,331 )

(13,910 )

74,000

Accounts payable

7,860

90,434

37,228


(205,809 )

13,777

293,272


580,867

901,423

1,065,749


Capital additions

(323,961 )

(179,538 )

(126,324 )


(23,606 )

(21,949 )

(19,146 )


312

2,201

10,364


20,000

—

—


(5,750 )

—

(15,220 )


(333,005 )

(199,286 )

(150,326 )



10,834

1,156

(458,047 )


249,126

348,208

—


(256,189 )

(71,548 )

(8,252 )


47,601

—

—

Cash dividends paid

(304,083 )

(283,434 )

(263,403 )


184,411

92,033

28,318


13,997

1,385

4,455


—

10,199

7,322


(384,515 )

(169,099 )

(9,314 )


(438,818 )

(71,100 )

(698,921 )


(190,956 )

631,037

216,502


884,642

253,605

37,103


$693,686

$884,642

$253,605

Interest Paid

$97,892

$97,932

$91,623

Income Taxes Paid

292,315

350,948

252,230





2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


Based on the information in these financial statements and the accompanying notes and schedules, compute

the following values for each company in 2011. (Round all percentages to 1 decimal places, e.g. 15.1%

and asset turnover ratio to 2 decimal places, e.g. 15.21.)

(1) Return on assets.

Return on assets

Tootsie Roll

%

Hershey Company

%

(2) Profit margin (use “Total Revenue”).

Profit margin

Tootsie Roll

%

Hershey Company

%

(3) Asset turnover.

Asset turnover

Tootsie Roll

times

Hershey Company

times

Problem 9-2A

At December 31, 2014, Navaro Corporation reported the following plant assets.

Land

$ 3,036,000

Buildings

$35,400,000

Less: Accumulated depreciation—buildings

12,068,100

23,331,900

Equipment

40,480,000

Less: Accumulated depreciation—equipment

5,060,000

35,420,000

Total plant assets

$61,787,900

During 2015, the following selected cash transactions occurred.

Apr. 1 Purchased land for $2,226,400.

May 1 Sold equipment that cost $607,200 when purchased on January 1, 2008. The equipment was

sold for $172,040.

June 1 Sold land for $1,619,200. The land cost $1,012,000.

July 1 Purchased equipment for $1,113,200.

Dec. 31 Retired equipment that cost $708,400 when purchased on December 31, 2005. No salvage

value was received.


Journalize the transactions. Navaro uses straight-line depreciation for buildings and equipment. The

buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to

have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of

sale or retirement. (Record entries in the order displayed in the problem statement. Credit

account titles are automatically indented when amount is entered. Do not indent manually.)

Solution

Problem 9-2A

May 1:

Accumulated Depreciation—Equipment = ($607,200 x 1/10 x 4/12) = $20,240

Cost

$607,200

Accum. depr.—Equipment [($607,200 x 1/10) x 7 + $20,240)]

(445,280 )

Book value

161,920

Cash proceeds

172,040

Gain on disposal

$ 10,120

Dec. 31

Accumulated Depreciation—Equipment = ($708,400 x 1/10) = $70,840

Cost

$708,400

Accum. depr.—Equipment ($708,400 x 1/10 x 10)

(708,400 )

Book value

$ 0

Record adjusting entries for depreciation for 2015. (Credit account titles are automatically indented

when amount is entered. Do not indent manually.)

Problem 8-3A

Presented below is an aging schedule for Bosworth Company.

Customer

Total

Not Yet Due

Number of Days Past Due

1–30

31–60

61–90

Over 90

Aneesh

$ 24,100

$ 9,100

$15,000

Bird

45,700

$ 45,700

Cope

59,600

8,500

8,900

$42,200

DeSpears

48,600

$48,600

Others 156,700 88,600 43,000 25,100

$334,700 $142,800 $61,000 $40,100 $42,200 $48,600

Estimated percentage uncollectible 5% 7% 14% 24% 59%

Total estimated bad debts $ 55,826 $ 7,140 $4,270 $5,614 $ 10,128 $28,674

At December 31, 2013, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $6,200.

Journalize the adjusting entry for bad debts at December 31, 2013. (Credit account titles are automatically


Problem 8-3A

Post the adjusting entry for bad debts at December 31, 2013.

Bad Debts Expense

Allowance for Doubtful Accounts

Journalize the 2014 transactions: (Credit account titles are automatically indented when amount is

entered. Do not indent manually.)

1. March 1, a $810 customer balance originating in 2013 is judged uncollectible.

2. May 1, a check for $810 is received from the customer whose account was written off as uncollectible on

March 1.

Post to the allowance account these 2014 events. (Post entries in the order of journal entries posted in

the previous part.)

Journalize the adjusting entry for bad debts at December 31, 2014, assuming that the unadjusted balance in

Allowance for Doubtful Accounts is a debit of $1,400 and the aging schedule indicates that total estimated bad

debts will be $36,000. (Credit account titles are automatically indented when amount is entered. Do

not indent manually.)


Resource: WileyPLUS


Problem 9-7A

Exercise 10-5

Exercise 10-8

Exercise 10-13

Exercise 10-22

Exercise 10-24

BYP 10-1

BYP 10-2

Problem 10-9A

Problem 10-13A

IFRS 10-4

Exercise 10-5

During the month of March, Olinger Company’s employees earned wages of $73,700. Withholdings

related to these wages were $5,638 for Social Security (FICA), $8,637 for federal income tax, $3,570 for

state income tax, and $461 for union dues. The company incurred no cost related to these earnings for

federal unemployment tax but incurred $806 for state unemployment tax.


Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and

wages payable. Assume that wages earned during March will be paid during April. (Credit account

titles are automatically indented when amount is entered. Do not indent manually.)


Prepare the entry to record the company’s payroll tax expense. (Credit account titles are


Exercise 10-8

On August 1, 2014, Ortega Corporation issued $980,400, 6%, 10-year bonds at face value. Interest is payable

annually on August 1. Ortega’s year-end is December 31.

Prepare journal entries to record the issuance of the bonds. (Credit account titles are automatically


Prepare journal entries to record the accrual of interest on December 31, 2014. (Credit account titles are


Prepare journal entries to record the payment of interest on August 1, 2015. (Credit account titles are


Exercise 10-13

Romine Company issued $531,000 of 9%, 10-year bonds on January 1, 2014, at face value. Interest is

payable annually on January 1.


Prepare the journal entries to record the issuance of the bonds. (Credit account titles are



Prepare the journal entries to record the accrual of interest on December 31, 2014. (Credit account



Prepare the journal entries to record the payment of interest on January 1, 2015. (Credit account



Prepare the journal entries to record the redemption of the bonds at maturity, assuming interest for the

last interest period has been paid and recorded. (Credit account titles are automatically indented


Exercise 10-22

Cole Corporation issued $445,000, 7%, 22-year bonds on January 1, 2014, for $360,961. This price

resulted in an effective-interest rate of 9% on the bonds. Interest is payable annually on January 1. Cole

uses the effective-interest method to amortize bond premium or discount.


Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole

Corporation. (Round answers to 0 decimal places, e.g. 125.)


Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal

places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do



Prepare the journal entries to record the accrual of interest and the discount amortization on December

31, 2014. (Round answers to 0 decimal places, e.g. 125. Credit account titles are



Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0

decimal places, e.g. 125. Credit account titles are automatically indented when amount is


Exercise 10-24

Nance Co. receives $327,800 when it issues a $327,800, 5%, mortgage note payable to finance the

construction of a building at December 31, 2014. The terms provide for semiannual installment payments

of $15,662 on June 30 and December 31.


Prepare the schedule using effective-interest method to amortize bond premium or discount of Nance

Co. (Round answers to 0 decimal places, e.g. 125.)

Semiannua

l

Interest

Period

Cash

Payment

Interest

Expense

Reduction

of Principal

Principal

Balance

Issue date

$

$

$

$

6/30/15

12/31/15

Semiannual

Interest

Period

(A)

Cash

Payment

(B)

Interest

Expense

(D x 2.50%)

(C)

Reduction

of Principal

(A) – (B)

(D)

Principal

Balance

(D) – (C)

Issue date

6/30/15

12/31/15


Prepare the journal entries to record the mortgage loan. (Round answers to 0 decimal places, e.g.

125. Credit account titles are automatically indented when amount is entered. Do not indent

manually.)

Date Account Titles and Explanation Debit Credit

Dec. 31, 2014


Prepare the journal entries to record the first two installment payments. (Round answers to 0 decimal

places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do



First Installment Payment

June 30, 2015

Second Installment Payment

Dec. 31, 2015







2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538



What were Tootsie Roll’s total current liabilities at December 31, 2011? (Enter amount in thousands.)

Current liabilities as at December 31, 2011 $

What was the increase/decrease in Tootsie Roll’s total current liabilities from the prior year? (Enter amount in

thousands.)

Change in current liabilities $

How much were the accounts payable at December 31, 2011? (Enter amount in thousands.)

Accounts payable $



THE HERSHEY COMPANY



2011

2010

2009


Net Sales

$6,080,788

$5,671,009

$5,298,668

Costs and Expenses:

Cost of sales

3,548,896

3,255,801

3,245,531


1,477,750

1,426,477

1,208,672


(886 )

83,433

82,875


5,025,760

4,765,711

4,537,078


1,055,028

905,298

761,590


92,183

96,434

90,459


962,845

808,864

671,131


333,883

299,065

235,137

Net Income

$628,962

$509,799

$435,994


$2.58

$2.08

$1.77


$2.56

$2.07

$1.77


$2.85

$2.29

$1.97


$2.74

$2.21

$1.90


Common Stock

$1.3800

$1.2800

$1.1900


1.2500

1.1600

1.0712



THE HERSHEY COMPANY


December 31,

2011

2010


ASSETS

Current Assets:


$693,686

$884,642


399,499

390,061

Inventories

648,953

533,622


136,861

55,760


167,559

141,132


2,046,558

2,005,217


1,559,717

1,437,702

Goodwill

516,745

524,134

Other Intangibles

111,913

123,080


38,544

21,387

Other Assets

138,722

161,212

Total assets

$4,412,199

$4,272,732



Accounts payable

$420,017

$410,655

Accrued liabilities

612,186

593,308


1,899

9,402

Short-term debt

42,080

24,088


97,593

261,392


1,173,775

1,298,845

Long-term Debt

1,748,500

1,541,825


617,276

494,461

Total liabilities

3,539,551

3,335,131


—

—




—

—


2010 299,269

299,195


in 2010 60,632

60,706


490,817

434,865

Retained earnings

4,699,597

4,374,718


132,871,512 in 2010 (4,258,962 )

(4,052,101 )


(442,331 )

(215,067 )


849,022

902,316


23,626

35,285


872,648

937,601


$4,412,199

$4,272,732

THE HERSHEY COMPANY



2011

2010

2009



Net income

$628,962

$509,799

$435,994


operations:


215,763

197,116

182,411



32,055

34,927


(13,997 )

(1,385 )

(4,455 )


33,611

(18,654 )

(40,578 )


(11,072 )

—

—



77,935

60,823


(8,861 )

(6,073 )

(54,457 )




(9,438 )

20,329

46,584

Inventories

(115,331 )

(13,910 )

74,000

Accounts payable

7,860

90,434

37,228


(205,809 )

13,777

293,272


580,867

901,423

1,065,749


Capital additions

(323,961 )

(179,538 )

(126,324 )


(23,606 )

(21,949 )

(19,146 )


312

2,201

10,364


20,000

—

—


(5,750 )

—

(15,220 )


(333,005 )

(199,286 )

(150,326 )



10,834

1,156

(458,047 )


249,126

348,208

—


(256,189 )

(71,548 )

(8,252 )


47,601

—

—

Cash dividends paid

(304,083 )

(283,434 )

(263,403 )


184,411

92,033

28,318


13,997

1,385

4,455


—

10,199

7,322


(384,515 )

(169,099 )

(9,314 )


(438,818 )

(71,100 )

(698,921 )


(190,956 )

631,037

216,502


884,642

253,605

37,103


$693,686

$884,642

$253,605

Interest Paid

$97,892

$97,932

$91,623

Income Taxes Paid

292,315

350,948

252,230





2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


NOTE 6—OTHER INCOME (EXPENSE), NET:

Other income (expense), net is comprised of the following:

2011

2010

2009

Interest and dividend income $1,087

$879

$1,439

Gains (losses) on trading securities relating to deferred compensation plans

29

3,364

4,524

Interest expense

(121)

(142)

(243)

Impairment of equity method investment.

_

_ (4,400)

Equity method investment loss

(194)

(342)

(233)

Foreign exchange gains (losses)

2,098

4,090

951

Capital gains (losses)

(277)

(28)

(38)

Miscellaneous, net

274

537

100

$2,946

$8,358

$2,100

As of December 31, 2009, management determined that the carrying value of an equity method investment was

impaired as a result of accumulated losses from operations and review of future expectations. The Company

recorded a pre-tax impairment charge of $4,400 resulting in an adjusted carrying value of $4,961 as of

December 31, 2009. The fair value was primarily assessed using the present value of estimated future cash

flows.

Based on the information contained in these financial statements, compute the current ratio for 2011 for each

company. (Round answers to 2 decimal places, e.g. 15.25.)

Hershey

Tootsie Roll

Current ratio

: 1

:1

Based on the information contained in these financial statements, compute

the following 2011 ratios for each company. (Round answers to 1 decimal places, e.g. 15.2% or 15.2 times.)

(1) Debt to assets.

(2) Times interest earned. (Hershey’s total interest expense for 2011 was $94,780,000. See Tootsie Roll’s Note

6 for its interest expense.)

Hershey

Tootsie Roll

Debt to assets

%

%

Times interest earned

times

times

Problem 9-7A

In recent years, Farr Company has purchased three machines. Because of frequent employee turnover in

the accounting department, a different accountant was in charge of selecting the depreciation method for

each machine, and various methods have been used. Information concerning the machines is summarized

in the table below.

Machine

Acquired

Cost

Salvage

Value

Useful Life

(in years)

Depreciation

Method

1

Jan. 1, 2012

$126,000

$39,600

8

Straight-line

2

July 1, 2013

89,000

11,800

5

Declining-balance

3

Nov. 1, 2013

101,610

7,110

7

Units-of-activity

For the declining-balance method, Farr Company uses the double-declining rate. For the units-of-activity

method, total machine hours are expected to be 35,000. Actual hours of use in the first 3 years were:

2013, 800; 2014, 3,950; and 2015, 5,500.


Compute the amount of accumulated depreciation on each machine at December 31, 2015.

MACHINE 1

MACHINE 2

MACHINE 3

Accumulated Depreciation

at December 31

$

$

$

Solution CLOSE

Problem 9-7A

Year

Computation

Accumulated

Depreciation 12/31

MACHINE 1

2012

$86,400a x 1/8 = $10,800

$10,800

2013

$86,400 x 1/8 = $10,800

21,600

2014

$86,400 x 1/8 = $10,800

32,400

2015

$86,400 X 1/8 = $10,800

43,200

MACHINE 2

2013

$89,000 x 40%b x 6/12 = $17,800

$17,800

2014

$71,200 x 40% = $28,480

46,280

2015

$42,720 x 40% = $17,088

63,368

MACHINE 3

2013

800 x $2.70c = $ 2,160

$ 2,160

2014

3,950 x $2.70 = 10,665

12,825

2015

5,500 x $2.70 = 14,850

27,675

a($126,000 – $39,600) = $86,400

b(1/5) x 2 = 40%

c($101,610 – $7,110) ÷ 35,000 = $2.70


If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this

machine in 2013? In 2014?

2013

2014

Depreciation Expense $ $

Problem 10-9A

Wempe Co. sold $3,012,000, 8%, 10-year bonds on January 1, 2014. The bonds were dated January 1,

2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and

discounts. Financial statements are prepared annually.


Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 104 and

(2) 96. (Credit account titles are automatically indented when amount is entered. Do not

indent manually.)

No. Date Account Titles and Explanation Debit Credit

1. 1/1/14

2. 1/1/14

Prepare amortization tables for issuance of the bonds sold at 104 for the first three interest payments.

Annual

Interes

t

Period

s

Interest to

Be Paid

Interest Expense

to Be Recorded

Premium

Amortization

Unamortized

Premium

Bond

Carrying Value

Issue

date

$

$

$

$

$

1

2

3

Prepare amortization tables for issuance of the bonds sold at 96 for the first three interest payments.

Annual

Interes

t

Period

s

Interest to

Be Paid

Interest Expense

to Be Recorded

Premium

Amortization

Unamortized

Premium

Bond

Carrying Value

Issue

date

$

$

$

$

$

2891520

1

240960

253008

12048

108432

2903568

2

240960

253008

12048

96384

2915616

3

240960

253008

12048

84336

2927664

Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 104 at December 31,

2014.

WEMPE Co.

Balance Sheet (Partial)

December 31, 2014

$

:

$

Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 96 at December 31,

2014.

WEMPE Co.


December 31, 2014

$

:

$

Problem 10-13A

Grace Herron has just approached a venture capitalist for financing for her new business venture, the

development of a local ski hill. On July 1, 2013, Grace was loaned $168,000 at an annual interest rate

of 5%. The loan is repayable over 5 years in annual installments of $38,804, principal and interest, due

each June 30. The first payment is due June 30, 2014. Grace uses the effective-interest method for

amortizing debt. Her ski hill company’s year-end will be June 30.


Prepare an amortization schedule for the 5 years, 2013–2018. (Round answers to 0 decimal places,

e.g. 125.)

Period

Cash

Payment

Interest

Expense

Principal

Reduction Balance

July 1,

2013

$

$

$

$

June

30,

2014

June

30,

2015

June

30,

2016

June

30,

2017

June

30,

2018

-1

*

Prepare all journal entries for Grace Herron for the first 2 fiscal years ended June 30, 2014, and June 30,

2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented


Show the balance sheet presentation of the note payable as of June 30, 2015. (Hint: Be sure to distinguish

between the current and long-term portions of the note.) (Round answers to 0 decimal places, e.g. 125.)

GRACE HERRON


June 30, 2015

$

$

IFRS 10-4

Ratzlaff Company issues €2 million, 10-year, 8% bonds at 97, with interest payable on July 1 and January

1.


Prepare the journal entry to record the sale of these bonds on January 1, 2014. (Credit account titles

are automatically indented when the amount is entered. Do not indent manually.)


Jan. 1


Assuming instead that the above bonds sold for 104, prepare the journal entry to record the sale of these

bonds on January 1, 2014. (Credit account titles are automatically indented when the amount is



Jan. 1


Resource: WileyPLUS


Do It! 11-1

Exercise 11-5

Exercise 11-07

BYP 11-1

BYP 11-2

Problem 11-5A

Problem 11-8A

Do It! Review 11-1


Indicate whether each of the following statements is true or false.

1.

The corporation is an entity separate and distinct from its owners.

2.

The liability of stockholders is normally limited to their investment in the corporation.

3.

The relative lack of government regulation is an advantage of the corporate form of

business.

4.

There is no journal entry to record the authorization of capital stock.

5.

No-par value stock is quite rare today.

Exercise 11-5


Garcia Corporation recently hired a new accountant with extensive experience in accounting for partnerships.

Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about

corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.

May 2

Cash

113,680

Capital Stock

113,680

(Issued 8,120 shares of $11 par value common stock at $14 per share)

10

Cash

637,740

Capital Stock

637,740

(Issued 11,810 shares of $19 par value preferred stock at $54 per share)

15

Capital Stock

7,670

Cash

7,670

(Purchased 590 shares of common stock for the treasury at $13 per share)

On the basis of the explanation for each entry, prepare the entries that should have been made for the capital

stock transactions. (Record entries in the order displayed in the problem statement. Credit account


CLOSE

Exercise 11-7


On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock

$377,200 and retained earnings $438,500.

Pele is considering the following two courses of action:

(1)

Declaring a 7% stock dividend on the 94,300 $4 par value shares outstanding

(2)

Effecting a 2-for-1 stock split that will reduce par value to $2 per share.

The current market price is $16 per share.

Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and

outstanding shares.


The stockholders’ equity section of Tootsie Roll Industries’ balance sheet is shown in the Consolidated

Statement of Financial Position. (Note that Tootsie Roll has two classes of common stock. To answer

the following questions, add the two classes of stock together.)





2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538



What is the par or stated value per share of Tootsie Roll’s common stock? (Round answer to 4 decimal

places, e.g. 1.2531.)

Par or stated value per share $

The common stock has a par value of $0.69-4/9 or $0.6944 per share.

What percentage of Tootsie Roll’s authorized common stock was issued at December 31, 2011?(Round to 0

decimal places, e.g. 17%)

Percentage of common stock issued %

There are 160 million shares authorized (120 million class A and 40 million class B) of which 57,504,000

(36,479,000 + 21,025,000) are issued. The percentage is 36% (57,504,000 ÷ 160,000,000).

How many shares of common stock were outstanding at December 31, 2010, and at December 31,

2011? (Enter the answers in thousands.)

2011

2010

Number of shares outstanding

Calculate the payout ratio, earnings per share, and return on common stockholders’ equity for 2011. (Round

earnings per share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal places, e.g.

12.5%.)


The financial statements of The Hershey Company and Tootsie Roll are

presented below.

THE HERSHEY COMPANY



2011

2010

2009


Net Sales

$6,080,788

$5,671,009

$5,298,668

Costs and Expenses:

Cost of sales

3,548,896

3,255,801

3,245,531


1,477,750

1,426,477

1,208,672


(886 )

83,433

82,875


5,025,760

4,765,711

4,537,078


1,055,028

905,298

761,590


92,183

96,434

90,459


962,845

808,864

671,131


333,883

299,065

235,137

Net Income

$628,962

$509,799

$435,994


$2.58

$2.08

$1.77


$2.56

$2.07

$1.77


$2.85

$2.29

$1.97


$2.74

$2.21

$1.90


Common Stock

$1.3800

$1.2800

$1.1900


1.2500

1.1600

1.0712



THE HERSHEY COMPANY


December 31,

2011

2010


ASSETS

Current Assets:


$693,686

$884,642


399,499

390,061

Inventories

648,953

533,622


136,861

55,760


167,559

141,132


2,046,558

2,005,217


1,559,717

1,437,702

Goodwill

516,745

524,134

Other Intangibles

111,913

123,080


38,544

21,387

Other Assets

138,722

161,212

Total assets

$4,412,199

$4,272,732



Accounts payable

$420,017

$410,655

Accrued liabilities

612,186

593,308


1,899

9,402

Short-term debt

42,080

24,088


97,593

261,392


1,173,775

1,298,845

Long-term Debt

1,748,500

1,541,825


617,276

494,461

Total liabilities

3,539,551

3,335,131


—

—




—

—


2010 299,269

299,195


in 2010 60,632

60,706


490,817

434,865

Retained earnings

4,699,597

4,374,718


132,871,512 in 2010 (4,258,962 )

(4,052,101 )


(442,331 )

(215,067 )


849,022

902,316


23,626

35,285


872,648

937,601


$4,412,199

$4,272,732

THE HERSHEY COMPANY



2011

2010

2009



Net income

$628,962

$509,799

$435,994


operations:


215,763

197,116

182,411



32,055

34,927


(13,997 )

(1,385 )

(4,455 )


33,611

(18,654 )

(40,578 )


(11,072 )

—

—



77,935

60,823


(8,861 )

(6,073 )

(54,457 )




(9,438 )

20,329

46,584

Inventories

(115,331 )

(13,910 )

74,000

Accounts payable

7,860

90,434

37,228


(205,809 )

13,777

293,272


580,867

901,423

1,065,749


Capital additions

(323,961 )

(179,538 )

(126,324 )


(23,606 )

(21,949 )

(19,146 )


312

2,201

10,364


20,000

—

—


(5,750 )

—

(15,220 )


(333,005 )

(199,286 )

(150,326 )



10,834

1,156

(458,047 )


249,126

348,208

—


(256,189 )

(71,548 )

(8,252 )


47,601

—

—

Cash dividends paid

(304,083 )

(283,434 )

(263,403 )


184,411

92,033

28,318


13,997

1,385

4,455


—

10,199

7,322


(384,515 )

(169,099 )

(9,314 )


(438,818 )

(71,100 )

(698,921 )


(190,956 )

631,037

216,502


884,642

253,605

37,103


$693,686

$884,642

$253,605

Interest Paid

$97,892

$97,932

$91,623

Income Taxes Paid

292,315

350,948

252,230





2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046




25,040



14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157



Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


Based on the information in these financial statements, compute the 2011 return on common stockholders’

equity, debt to assets ratio, and return on assets for each company. (Round answers to 1 decimal places,

e.g. 15.2%.)

Compute the payout ratio for each company. Which pays out a higher

percentage of its earnings? (Round answers to 1 decimal places, e.g. 15.2%.)

Hershey Company

Tootsie Roll

Payout ratio

%

%

Which pays out a higher percentage of its earnings?

pays out a higher percentage of its earnings.

Problem 11-5A

Pringle Corporation has been authorized to issue 22,900 shares of $100 par value, 8%, noncumulative

preferred stock and 1,162,100 shares of no-par common stock.

The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger

contained the following balances pertaining to stockholders’ equity.

Preferred Stock

$152,900

Paid-in Capital in Excess of Par Value—Preferred Stock

20,340

Common Stock

2,270,000

Paid-in Capital in Excess of Stated Value—Common Stock

1,617,000

Treasury Stock— (5,480 common shares)

65,760

Retained Earnings

82,300

The preferred stock was issued for $173,240 cash. All common stock issued was for cash. In

November 5,480 shares of common stock were purchased for the treasury at a per share cost of $12. No

dividends were declared in 2014.


Prepare the journal entries for the following. (Credit account titles are automatically indented when

amount is entered. Do not indent manually.)

(1)

Issuance of preferred stock for cash.

(2)

Issuance of common stock for cash.

(3)

Purchase of common treasury stock for cash.

Problem 11-8A

On January 1, 2014, Everett Corporation had these stockholders’ equity accounts.

Common Stock ($10 par value, 69,700 shares issued and outstanding) $697,000

Paid-in Capital in Excess of Par Value 484,300

Retained Earnings 684,900

During the year, the following transactions occurred.

Jan. 15 Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable

February 15.

Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On

April 15, the market price of the stock was $13 per share.

May 15 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable

January 10, 2015.

Dec. 31

Determined that net income for the year was $401,800.

ACC 291 Week 4 Comparing IFRS to GAAP Essay

Write a 700- to 1,050-word summary of the team's discussion about IFRS versus GAAP, based on your

team collaborative discussions. The summary should be structured in a subject-by-subject format. An

introduction and a conclusion are needed. Your essay should include the answers to the following:

IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value

measurement for financial instruments? In what ways have some of the approaches differed?

IFRS 9-1: What is component depreciation, and when must it be used?

IFRS 9-2: What is revaluation of plant assets? When should revaluation be applied?

IFRS 9-3: Some product development expenditures are recorded as development expenses

and others as development costs. Explain the difference between these accounts and how a

company decides which classification is appropriate.

IFRS 10-2: Explain how IFRS defines a contingent liability and provide an example.

IFRS10-3: Briefly describe some similarities and differences between GAAP and IFRS with

respect to the accounting for liabilities.

Format your essay consistent with APA guidelines.

Use the Financial Accounting text and at least two additional scholarly-reviewed references.

Click the Assignment Files tab to submit your assignment.


Resource: WileyPLUS


Exercise 7-3

Exercise 12-1

Problem 12-9A

Problem 12-10A

IFRS 13-1

Problem 13-2A

BYP 13-2

Exercise 12-1

Putnam Corporation had these transactions during 2014.

Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating activities,

investing activities, financing activities, or noncash investing and financing activities.

(a)

Purchased a machine for $30,000,

giving a long-term note in

exchange.

(b)

Issued $50,000 par value common

stock for cash.

(c)

Issued $200,000 par value common

stock upon conversion of bonds

having a face value of $200,000.

(d)

Declared and paid a cash dividend

of $13,000.

(e)

Sold a long-term investment with a

cost of $15,000 for $15,000 cash.

(f)

Collected $16,000 of accounts

receivable.

(g)

Paid $18,000 on accounts payable.

IFRS 13-1


Ling Company reports the following information for the year ended December

31, 2014: sales revenue $1,000,000, cost of goods sold $700,000, operating

expenses $200,000, and an unrealized gain on non-trading securities of

$75,000. Prepare a statement of comprehensive income using the

one-statement approach.

Problem 12-9A


Condensed financial data of Odgers Inc. follow.

ODGERS INC.

Comparative Balance Sheets

December 31

Assets

2014

2013

Cash

$ 167,256

$ 100,188

Accounts receivable

181,746

78,660

Inventory

232,875

212,900

Prepaid expenses

58,788

53,820

Long-term investments

285,660

225,630

Plant assets

589,950

501,975

Accumulated depreciation

(103,500 )

(107,640 )

Total

$1,412,775

$1,065,533

Liabilities and Stockholders’ Equity

Accounts payable

$ 211,140

$ 139,311

Accrued expenses payable

34,155

43,470

Bonds payable

227,700

302,220

Common stock

455,400

362,250

Retained earnings

484,380

218,282

Total

$1,412,775

$1,065,533

ODGERS INC.

Income Statement Data

For the Year Ended December 31, 2014

Sales revenue

$804,112

Less:

Cost of goods sold

$280,402

Operating expenses, excluding depreciation

25,689

Depreciation expense

96,255

Income tax expense

56,470

Interest expense

9,791

Loss on disposal of plant assets

15,525

484,132

Net income

$ 319,980

Additional information:

1. New plant assets costing $207,000 were purchased for cash during the year.

2.

Old plant assets having an original cost of $119,025 and accumulated depreciation of $100,395 were sold

for $3,105 cash.

3.

Bonds payable matured and were paid off at face value for cash.

4.

A cash dividend of $53,882 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with

either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Problem 12-10A

Condensed financial data of Odgers Inc. follow.

ODGERS INC.

Comparative Balance Sheets

December 31

Assets

2014

2013

Cash

$ 186,648

$ 111,804

Accounts receivable

202,818

87,780

Inventory

259,875

237,584

Prepaid expenses

65,604

60,060

Long-term investments

318,780

251,790

Plant assets

658,350

560,175

Accumulated depreciation

(115,500 )

(120,120 )

Total

$1,576,575

$1,189,073


Accounts payable

$ 235,620

$ 155,463

Accrued expenses payable

38,115

48,510

Bonds payable

254,100

337,260

Common stock

508,200

404,250

Retained earnings

540,540

243,590

Total

$1,576,575

$1,189,073

ODGERS INC.

Income Statement Data

For the Year Ended December 31, 2014

Sales revenue

$897,343

Less:

Cost of goods sold

$312,913

Operating expenses, excluding depreciation

28,667

Depreciation expense

107,415

Income taxes

63,017

Interest expense

10,926

Loss on disposal of plant assets

17,325

540,263

Net income

$ 357,080

Additional information:

1. New plant assets costing $231,000 were purchased for cash during the year.

2.

Old plant assets having an original cost of $132,825 and accumulated depreciation of $112,035 were sold

for $3,465 cash.

3.

Bonds payable matured and were paid off at face value for cash.

4.

A cash dividend of $60,130 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors.

Prepare a statement of cash flows for Odgers Inc. using the direct method. (Show amounts that decrease

cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Problem 13-2A

The comparative statements of Osborne Company are presented here.

OSBORNE COMPANY

Income Statements

For the Years Ended December 31

2014

2013

Net sales

$1,898,996

$1,758,956

Cost of goods sold

1,066,996

1,014,456

Gross profit

832,000

744,500

Selling and administrative expenses

508,456

487,456

Income from operations

323,544

257,044

Other expenses and losses

Interest expense

23,377

21,377

Income before income taxes

300,167

235,667

Income tax expense

93,377

74,377

Net income

$ 206,790

$ 161,290

OSBORNE COMPANY

Balance Sheets

December 31

Assets

2014

2013

Current assets

Cash

$ 60,100

$ 64,200

Debt investments (short-term)

74,000

50,000

Accounts receivable

126,256

111,256

Inventory

127,377

116,877


387,733

342,333

Plant assets (net)

660,464

531,764

Total assets

$1,048,197

$874,097


Current liabilities

Accounts payable

$ 168,456

$153,856

Income taxes payable

44,877

43,377


213,333

197,233

Bonds payable

231,464

211,464

Total liabilities

444,797

408,697

Stockholders’ equity

Common stock ($5 par)

290,000

300,000

Retained earnings

313,400

165,400


603,400

465,400

Total liabilities and stockholders’ equity

$1,048,197

$874,097

All sales were on account. Net cash provided by operating activities for

2014 was $250,780. Capital expenditures were $136,700, and cash dividends

were $58,790.

Compute the following ratios for 2014. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%.)

Exercise 7-3


The following control procedures are used in Kelton Company for over-the-counter cash receipts.

(a) For each procedure, explain the weakness in internal control and identify the control principle that is

violated.

Procedure Weakness

Principle Violated

1

.

Each store

manager

is

responsibl

e for

interviewi

ng

applicants

for cashier

Human resource controls

jobs. They

are hired if

they seem

honest

and

trustworth

y.

2

.

All

over-the-c

ounter

receipts

are

registered

by three

clerks who

share a

cash

register

with a

single

cash

drawer.

Establishment of responsibility

3

.

To

minimize

the risk of

robbery,

cash in

excess of

$100 is

stored in

an

unlocked

attaché

case in the

stock

room until

it is

deposited

in the

bank.

Physical controls

4 At the end

. of each

day the

total

receipts

are

counted

by the

cashier on

duty and

reconciled

to the

cash

register

total.

Independent internal verification

5

.

The

company

accountan

t makes

the bank

deposit

and then

records

the day’s

receipts.

Segregation of duties



THE HERSHEY COMPANY



2011

2010

2009


Net Sales

$6,080,788

$5,671,009

$5,298,668

Costs and Expenses:

Cost of sales

3,548,896

3,255,801

3,245,531


1,477,750

1,426,477

1,208,672

Business realignment and impairment (credits)

charges, net (886 )

83,433

82,875


5,025,760

4,765,711

4,537,078


1,055,028

905,298

761,590


92,183

96,434

90,459


962,845

808,864

671,131


333,883

299,065

235,137

Net Income

$628,962

$509,799

$435,994

Net Income Per Share—Basic—Class B Common

Stock $2.58

$2.08

$1.77

Net Income Per Share—Diluted—Class B Common

Stock $2.56

$2.07

$1.77


$2.85

$2.29

$1.97


$2.74

$2.21

$1.90


Common Stock

$1.3800

$1.2800

$1.1900


1.2500

1.1600

1.0712

The notes to consolidated financial statements are an integral part of these statements and are included

in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com.

THE HERSHEY COMPANY


December 31,

2011

2010


ASSETS

Current Assets:


$693,686

$884,642


399,499

390,061

Inventories

648,953

533,622


136,861

55,760


167,559

141,132


2,046,558

2,005,217


1,559,717

1,437,702

Goodwill

516,745

524,134

Other Intangibles

111,913

123,080


38,544

21,387

Other Assets

138,722

161,212

Total assets

$4,412,199

$4,272,732



Accounts payable

$420,017

$410,655

Accrued liabilities

612,186

593,308


1,899

9,402

Short-term debt

42,080

24,088


97,593

261,392


1,173,775

1,298,845

Long-term Debt

1,748,500

1,541,825


617,276

494,461

Total liabilities

3,539,551

3,335,131


—

—




—

—

Common Stock, shares issued: 299,269,702 in 2011 and

299,195,325 in 2010 299,269

299,195

Class B Common Stock, shares issued: 60,632,042 in 2011 and

60,706,419 in 2010 60,632

60,706


490,817

434,865

Retained earnings

4,699,597

4,374,718


132,871,512 in 2010 (4,258,962 )

(4,052,101 )


(442,331 )

(215,067 )


849,022

902,316


23,626

35,285


872,648

937,601


$4,412,199

$4,272,732

THE HERSHEY COMPANY



2011

2010

2009


Cash Flows Provided from (Used by) Operating

Activities

Net income

$628,962

$509,799

$435,994

Adjustments to reconcile net income to net cash provided

from operations:


215,763

197,116

182,411



32,055

34,927


(13,997 )

(1,385 )

(4,455 )


33,611

(18,654 )

(40,578 )

Gain on sale of trademark licensing rights, net of tax of

$5,962 (11,072 )

—

—



77,935

60,823


(8,861 )

(6,073 )

(54,457 )




(9,438 )

20,329

46,584

Inventories

(115,331 )

(13,910 )

74,000

Accounts payable

7,860

90,434

37,228


(205,809 )

13,777

293,272


580,867

901,423

1,065,749

Cash Flows Provided from (Used by) Investing

Activities

Capital additions

(323,961 )

(179,538 )

(126,324 )


(23,606 )

(21,949 )

(19,146 )


312

2,201

10,364


20,000

—

—


(5,750 )

—

(15,220 )


(333,005 )

(199,286 )

(150,326 )

Cash Flows Provided from (Used by) Financing

Activities


10,834

1,156

(458,047 )


249,126

348,208

—


(256,189 )

(71,548 )

(8,252 )


47,601

—

—

Cash dividends paid

(304,083 )

(283,434 )

(263,403 )


184,411

92,033

28,318


13,997

1,385

4,455


—

10,199

7,322


(384,515 )

(169,099 )

(9,314 )


(438,818 )

(71,100 )

(698,921 )


(190,956 )

631,037

216,502


884,642

253,605

37,103


$693,686

$884,642

$253,605

Interest Paid

$97,892

$97,932

$91,623

Income Taxes Paid

292,315

350,948

252,230



Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share

data)


2011

2010

2009

Net product sales

$528,369

$517,149

$495,592


4,136

4,299

3,739

Total revenue

532,505

521,448

499,331


365,225

349,334

319,775


1,038

1,088

852

Total costs

366,263

350,422

320,627


163,144

167,815

175,817


3,098

3,211

2,887

Total gross margin

166,242

171,026

178,704


108,276

106,316

103,755

Impairment charges

—

—

14,000


57,966

64,710

60,949


2,946

8,358

2,100


60,912

73,068

63,049


16,974

20,005

9,892

Net earnings

$43,938

$53,063

$53,157

Net earnings

$43,938

$53,063

$53,157


(8,740 )

1,183

2,845


$35,198

$54,246

$56,002


$135,866

$147,687

$144,949

Net earnings

43,938

53,063

53,157

Cash dividends

(18,360 )

(18,078 )

(17,790 )

Stock dividends

(47,175 )

(46,806 )

(32,629 )


$114,269

$135,866

$147,687

Earnings per share

$0.76

$0.90

$0.89


57,892

58,685

59,425



Financial Position


Assets

December 31,

2011

2010

CURRENT ASSETS:


$78,612

$115,976

Investments

10,895

7,996


41,895

37,394

Other receivables

3,391

9,961

Inventories:


42,676

35,416


29,084

21,236

Prepaid expenses

5,070

6,499


578

689


212,201

235,167


Land

21,939

21,696

Buildings

107,567

102,934


322,993

307,178


2,598

9,243

455,097

440,974


242,935

225,482


212,162

215,492

OTHER ASSETS:

Goodwill

73,237

73,237

Trademarks

175,024

175,024

Investments

96,161

64,461


74,209

74,441

Prepaid expenses

3,212

6,680


3,935

4,254


7,715

9,203

Total other assets

433,493

407,300

Total assets

$857,856

$857,959


December 31,

2011

2010


Accounts payable

$10,683

$9,791

Dividends payable

4,603

4,529

Accrued liabilities

43,069

44,185


58,355

58,505



43,521

47,865


26,108

20,689


7,500

7,500


8,345

9,835


48,092

46,157


133,566

132,046


Common stock, $.69-4/9 par value—120,000 shares authorized—36,479


25,040

Class B common stock, $.69-4/9 par value—40,000 shares

authorized—21,025 and 20,466 respectively, issued 14,601

14,212


533,677

505,495


114,269

135,866


(19,953 )

(11,213 )


(1,992 )

(1,992 )


665,935

667,408


$857,856

$857,959





2011

2010

2009


Net earnings

$43,938

$53,063

$53,157

Adjustments to reconcile net earnings to net cash provided

by operating activities:

Depreciation

19,229

18,279

17,862

Impairment charges

—

—

14,000


—

—

4,400


194

342

233


1,267

522

320


Accounts receivable

(5,448 )

717

(5,899 )

Other receivables

3,963

(2,373 )

(2,088 )

Inventories

(15,631 )

(1,447 )

455


5,106

4,936

5,203


84

2,180

(2,755 )


(5,772 )

2,322

(12,543 )


2,022

1,429

1,384


2,146

2,525

2,960

Others

(708 )

310

305


50,390

82,805

76,994



(16,351 )

(12,813 )

(20,831 )


(3,234 )

(2,902 )

(1,713 )


(39,252 )

(9,301 )

(11,331 )


7,680

8,208

17,511


(51,157 )

(16,808 )

(16,364 )



(18,190 )

(22,881 )

(20,723 )


(18,407 )

(18,130 )

(17,825 )


(36,597 )

(41,011 )

(38,548 )


(37,364 )

24,986

22,082


115,976

90,990

68,908


$78,612

$115,976

$90,990


Income taxes paid

$16,906

$20,586

$22,364

Interest paid

$38

$49

$182


$47,053

$46,683

$32,538


Based on the information in the financial statements, determine each of the following for each company:

ACC 291 Week 5 Final Examination

Multiple Choice Question 86

An aging of a company's accounts receivable indicates that $4,500 are estimated to be

uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to

record bad debts for the period will require a

debit to Allowance for Doubtful Accounts for $3,300.

debit to Bad Debt Expense for $4,500.

debit to Bad Debt Expense for $3,300.

credit to Allowance for Doubtful Accounts for $4,500.


Correct.

The financial statements of the Melton Manufacturing Company reports net sales of $300,000

and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year,

respectively. What is the average collection period for accounts receivable in days?

36.5

60.8

96.1

48.7


Correct.

Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount

by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that

the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses

straight-line depreciation, annual depreciation will be

$3,760.

$4,072.

$4,100.

$6,100.


Correct.

On January 1, a machine with a useful life of five years and a residual value of $40,000 was

purchased for $120,000. What is the depreciation expense for year 2 under the

double-declining-balance method of depreciation?

$48,000.

$23,040.

$38,400.

$28,800.

IFRS Multiple Choice Question 01

Correct.

As a recent graduate of State University you're aware that IFRS requires component depreciation

for plant assets. A friend has asked you to succinctly explain what component depreciation

means. Which of the following correctly describes component depreciation?

The method used to prorate annual depreciation on a time basis.

The method that requires that significant parts of a plant asset with different useful lives be

depreciated separately.

The method used to ensure that the depreciation rate remains constant from year to year.

The method of depreciation recommended for an asset that is expected to be significantly more

productive in the first half of its useful life.


Correct.

Given the following account balances at year end, compute the total intangible assets on the

balance sheet of Janssen Enterprises.

Cash $1,500,000

Accounts Receivable 4,000,000

Trademarks 1,000,000

Goodwill 2,500,000

Research & Development Costs 2,000,000

$5,500,000.

$7,500,000.

$3,500,000.

$9,500,000.


Correct.

Bonds with a face value of $300,000 and a quoted price of 97¼ have a selling price of

$292,500.

$291,750.

$291,006.

$291,075.


Correct.

Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013.

The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call

price of 102. Sparks uses the straight-line method of amortization. What is the carrying value of

the bonds on January 1, 2015?

$381,600

$418,400

$400,000

$420,700


Correct.

S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was

reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $15,000 by issuing

8,000 shares of its common stock (par $1). The stock trades on a daily basis and the market price

of the stock on the day the debt was settled is $1.80 per share. Given this information, the best

journal entry for E. Corp. to record for this transaction is

Legal Expense 14,400

Common Stock 14,400


Common Stock 15,000


Common Stock 8,000

Paid-in Capital in Excess of Par - Common 7,000


Common Stock 8,000

Paid-in Capital in Excess of Par - Common 6,400


Correct.

Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share.

The entry to record the transaction will consist of a debit to Cash for $3,000,000 and a credit or

credits to

Preferred Stock for $2,500,000 and Paid-in Capital in Excess of Par Value—Preferred Stock for

$500,000.

Preferred Stock for $2,500,000 and Retained Earnings for $500,000.

Preferred Stock for $3,000,000.

Paid-in Capital from Preferred Stock for $3,000,000.


Correct.

Jahnke Corporation issued 8,000 shares of €2 par value ordinary shares for €11 per share. The

journal entry to record the sale will include

a debit to Cash for €16,000.

a credit to Share Premium–Ordinary for €72,000.

a credit to Share Capital–Ordinary for €88,000.

a debit to Retained Earnings for €72,000.


Zoum Corporation had the following transactions during 2014:

1. Issued $125,000 of par value common stock for cash.

2. Recorded and paid wages expense of $60,000.

3. Acquired land by issuing common stock of par value $50,000.

4. Declared and paid a cash dividend of $10,000.

5. Sold a long-term investment (cost $3,000) for cash of $3,000.

6. Recorded cash sales of $400,000.

7. Bought inventory for cash of $160,000.

8. Acquired an investment in Zynga stock for cash of $21,000.

9. Converted bonds payable to common stock in the amount of $500,000.

10. Repaid a 6 year note payable in the amount of $220,000.

What is the net cash provided by financing activities?

$395,000.

$<605,000>.

$<105,000>.

$115,000.


Correct.

Colie Company had an increase in inventory of $120,000. The cost of goods sold was $490,000.

There was a $30,000 decrease in accounts payable from the prior period. Using the direct

method of reporting cash flows from operating activities, what were Colie's cash payments to

suppliers?

$640,000.

$310,000.

$580,000.

$370,000.


Each of the following items may be classified as operating or financing activities under IFRS

except

dividends paid.

interest paid.

all of these answer choices may be classified as such.

dividends received.


Correct.

The current assets of Orangatte Company are $227,500. The current liabilities are $130,000. The

current ratio expressed as a proportion is

$210,000 ÷ $120,000.

1.75:1.

175%.

.57:1.



All of the following requirements about internal controls were enacted under the Sarbanes Oxley

Act of 2002 except:

companies must continually assess the functionality of internal controls.

independent outside auditors must eliminate redundant internal control.

independent outside auditors must attest to the level of internal control.

companies must develop sound internal controls over financial reporting.



Which of the following is not an internal control activity for cash?

The functions of record keeping and maintaining custody of cash should be combined.

The number of persons who have access to cash should be limited.

Surprise audits of cash on hand should be made occasionally.

All cash receipts should be recorded promptly.



Before a check authorization is issued, the following documents must be in agreement, except for

the

receiving report.

purchase order.

invoice.

remittance advice.


Correct.

Mitchell Corporation bought equipment on January 1, 2014 .The equipment cost $180,000 and

had an expected salvage value of $30,000. The life of the equipment was estimated to be 6 years.

The book value of the equipment at the beginning of the third year would be

$130,000.

$50,000.

$180,000.

$150,000.


Correct.

Brevard Corporation purchased a taxicab on January 1, 2013 for $25,500 to use for its shuttle

business. The cab is expected to have a five-year useful life and no salvage value. During 2014, it

retouched the cab's paint at a cost of $1,200, replaced the transmission for $3,000 (which

extended its life by an additional 2 years), and tuned-up the motor for $150. If Brevard

Corporation uses straight-line depreciation, what annual depreciation will Brevard report for

2014?

$4,100.

$4,125.

$3,900.

$5,100.


Correct.

If a plant asset is retired and is fully depreciated

phantom depreciation must be taken as though the asset were still on the books.

a loss on disposal will be recorded.

no gain or loss on disposal will be recorded.

a gain on disposal will be recorded.


On July 1, 2014, Linden Company purchased the copyright to Norman Computer Tutorials for

$140,000. It is estimated that the copyright will have a useful life of 5 years. The amount of

Amortization Expense recognized for the year 2014 would be

$28,000.

$13,125.

$25,900.

$14,000.


Correct.

The following totals for the month of April were taken from the payroll records of Metz Company.

Salaries $30,000

FICA taxes withheld 2,295

Income taxes withheld 6,600

Medical insurance deductions 1,200

Federal unemployment taxes 240

State unemployment taxes 1,500

The entry to record accrual of employer’s payroll taxes would include a

credit to FICA Taxes Payable for $1,740.

debit to Payroll Tax Expense for $4,035.

credit to Payroll Tax Expense for $4,035.

credit to Payroll Tax Expense for $1,740.


Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage

with monthly payments of $23,100. The mortgage carries an interest rate of 10 percent. The

amount owed on the mortgage after the first payment will be

$2,517,900.

$2,499,000.

$2,496,900.

$2,520,000.


The following data is available for BOX Corporation at December 31, 2014:

Common stock, par $10 (authorized 30,000 shares) $250,000

Treasury stock (at cost $15 per share) $1,200

Based on the data, how many shares of common stock are outstanding?

25,000.

24,920.

30,000.

29,920.


Correct.

Indicate the respective effects of the declaration of a cash dividend on the following balance

sheet sections:

Total Assets Total Liabilities Total Stockholders' Equity

Increase Decrease No change

Decrease Increase Decrease

No change Increase Decrease

Decrease No change Increase


Correct.

Assume the following cost of goods sold data for a company:

2015 $1,300,000

2014 1,200,000

2013 1,000,000

If 2013 is the base year, what is the percentage increase in cost of goods sold from 2013 to 2015?

70%

30%

20%

130%


Correct.

A company has an average inventory on hand of $75,000 and its average days in inventory is 36.5

days. What is the cost of goods sold?

$876,000

$750,000

$1,680,000

$1,752,000


Correct.

The following information is available for Patterson Company:

2014 2013

Accounts receivable $ 360,000 $ 340,000

Inventory 280,000 320,000

Net credit sales 3,000,000 2,600,000

Cost of goods sold 1,500,000 840,000

Net income 300,000 170,000

The accounts receivable turnover for 2014 is

7.6 times.

8.6 times.

8.3 times.

4.3 times.


Correct.

All of the following situtations below might indicate a company has a low quality of earnings

except

Revenue is recognized when earned.

Adoption of a different inventory method for each of the last three years.

A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual

report.

Maintenance costs are capitalized and then depreciated.


IFRS

requires that receivables with different characteristics should be reported separately.

implies that receivables with different characteristics should be reported as one unsegregated

amount.

requires that receivables with different characteristics should be reported as one unsegregated

amount.

implies that receivables with different characteristics should be reported separately.

Education

Acc 291 acc291