GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 2, Problem 2.5E
Determining Financial Statement Effects of Several Transactions
Nike. Inc., with headquarters in Beaverton. Oregon, is one of the world’s leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions.
- a. Purchased additional buildings for $172 and equipment for $270: paid $432 in cash and signed a longterm note for the rest.
- b. Issued 100 shares of $2 par value common stock for $345 cash.
- c. Declared $145 in dividends to be paid in the following year.
- d. Purchased additional short-term investments for $7,616 cash.
- e. Several Nike investors sold their own stock to other investors on the stock exchange for $84.
- f. Sold $4,313 in short-term investments for $4,313 in cash.
Required:
- 1. For each of the events (a) through (f). perform transaction analysis and indicate the account, amount, and direction of the effect on the
accounting equation . Check that the accounting equation remains in balance after each transaction. Use the following headings: - 2. Explain your response to event (e).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Wolverine World Wide, Incorporated, designs, markets, and licenses casual, industrial, performance outdoor, and athletic footwear and
apparel under a variety of brand names, such as Hush Puppies, Wolverine, Merrell, Sperry, and Saucony, to a global market. The
following transactions occurred during a recent year. Dollars are in millions.
a. Issued common stock to investors for $21.4 cash (example).
b. Purchased $1,647.6 of additional inventory on account.
c. Paid $49.1 on long-term debt principal and $4.6 in interest on the debt.
d. Sold $2,371 of products to customers on account.
e. Cost of the products sold was $1,402.6.
f. Paid cash dividends of $29 to shareholders.
g. Purchased for cash $29.4 in additional property, plant, and equipment.
h. Incurred $707.6 in selling expenses, paying three-fourths in cash and owing the rest on account.
i. Earned $1 of interest on investments, receiving 80 percent in cash.
j. Incurred $32 in interest expense to be paid at the beginning of next year.…
Wolverine World Wide, Incorporated, designs, markets, and licenses casual, industrial, performance outdoor, and athletic footwear and
apparel under a variety of brand names, such as Hush Puppies, Wolverine, Merrell, Sperry, and Saucony, to a global market. The
following transactions occurred during a recent year. Dollars are in millions.
a. Issued common stock to investors for $15.4 cash (example).
b. Purchased $1,601.6 of additional inventory on account.
c. Paid $65.1 on long-term debt principal and $5.6 in interest on the debt.
d. Sold $2,372 of products to customers on account.
e. Cost of the products sold was $1,419.6.
f. Paid cash dividends of $23 to shareholders.
g. Purchased for cash $36.4 in additional property, plant, and equipment.
h. Incurred $705.6 in selling expenses, paying three-fourths in cash and owing the rest on account.
i. Earned $1 of interest on investments, receiving 80 percent in cash.
j. Incurred $30 in interest expense to be paid at the beginning of next year.…
Subject: accounting
Chapter 2 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 2 - Prob. 1QCh. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Explain what the following accounting terms mean:...Ch. 2 - Why are accounting assumptions necessary?Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the fundamental accounting model?Ch. 2 - Prob. 7QCh. 2 - Explain what debit and credit mean.Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - How is the current ratio computed and interpreted?Ch. 2 - Prob. 14QCh. 2 - Prob. 1MCQCh. 2 - Which of the following is not an asset? a....Ch. 2 - Total liabilities on a balance sheet at the end of...Ch. 2 - The dual effects concept can best be described as...Ch. 2 - The T-account is a tool commonly used for...Ch. 2 - Prob. 6MCQCh. 2 - The Cash T-account has a beginning balance of...Ch. 2 - Prob. 8MCQCh. 2 - At the end of a recent year, The Gap, Inc.,...Ch. 2 - Prob. 10MCQCh. 2 - Matching Definitions with Terms Match each...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Events as Accounting Transactions...Ch. 2 - Classifying Accounts on a Balance Sheet The...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Prob. 2.6MECh. 2 - Prob. 2.7MECh. 2 - Prob. 2.8MECh. 2 - Prob. 2.9MECh. 2 - Prob. 2.10MECh. 2 - Prob. 2.11MECh. 2 - Computing and Interpreting the Current Ratio...Ch. 2 - Identifying Transactions as Investing or Financing...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Account Titles The following are...Ch. 2 - Classifying Accounts and Their Usual Balances As...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Recording Investing and Financing Activities Refer...Ch. 2 - Prob. 2.7ECh. 2 - Recording Investing and Financing Activities...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Prob. 2.11ECh. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Recording Journal Entries Nathanson Corporation...Ch. 2 - Prob. 2.14ECh. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Prob. 2.18ECh. 2 - Inferring Typical Investing and Financing...Ch. 2 - Prob. 2.20ECh. 2 - Identifying the Investing and Financing Activities...Ch. 2 - Prob. 2.22ECh. 2 - Identifying Accounts on a Classified Balance Sheet...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.1APCh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions in T-Accounts, Preparing...Ch. 2 - Prob. 2.4APCh. 2 - Accounting for the Establishment of a New Business...Ch. 2 - Prob. 2.1CPCh. 2 - Prob. 2.2CPCh. 2 - Prob. 2.3CPCh. 2 - Prob. 2.4CPCh. 2 - Prob. 2.5CPCh. 2 - Prob. 2.6CPCh. 2 - Prob. 2.7CPCh. 2 - Prob. 2.8CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Statement of Cash Flows Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. The company immediately purchased an office building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends. Required Prepare a statement of cash flows for the year. What does this statement tell you that an income statement does not?arrow_forwardSubject: accountingarrow_forwardUse the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 100,000 shares of $5-par-value common stock for $500,000 in cash. Borrowed $250,000 from Oglesby National Bank and signed a 12% note due in three years. Incurred and paid $190,000 in salaries for the year. Purchased $320,000 of merchandise inventory on account during the year. Sold inventory costing $290,000 for a total of $455,000, all on credit. Paid rent of $55,000 on the sales facilities during the first 11 months of the year. Purchased $75,000 of store equipment, paying $25,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $50,000 owed for store equipment and $310,000 of the amount due to suppliers for credit purchases previously recorded. Incurred and paid utilities expense of $18,000 during the year. Collected $412,000 in cash from customers during the year for credit…arrow_forward
- Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 210,000 shares of $6-par-value common stock for $1,260,000 in cash. Borrowed $540,000 from Oglesby National Bank and signed a 13% note due in two years. Incurred and paid $420,000 in salaries for the year. Purchased $650,000 of merchandise inventory on account during the year. Sold inventory costing $630,000 for a total of $980,000, all on credit. Paid rent of $110,000 on the sales facilities during the first 11 months of the year. Purchased $170,000 of store equipment, paying $50,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $120,000 owed for store equipment and $610,000 of the amount due to suppliers for credit purchases previously recorded. Incurred and paid utilities expense of $44,000 during the year. Collected $845,000 in cash from customers during…arrow_forwardUse the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 220,000 shares of $5-par-value common stock for $1,100,000 in cash. Borrowed $540,000 from Oglesby National Bank and signed a 13% note due in two years. Incurred and paid $400,000 in salaries for the year. Purchased $700,000 of merchandise inventory on account during the year. Sold inventory costing $620,000 for a total of $960,000, all on credit. Paid rent of $330,000 on the sales facilities during the first 11 months of the year. Purchased $140,000 of store equipment, paying $53,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $87,000 owed for store equipment and $590,000 of the amount due to suppliers for credit purchases previously recorded. Incurred and paid utilities expense of $37,000 during the year. Collected $875,000 in cash from customers during the year for credit…arrow_forwardCurrent Position Analysis Pepsico, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Current Year Previous Year (in millions) (in millions) Cash and cash equivalents $2,794 $2,659 Short-term investments, at cost 1,985 4,937 Accounts and notes receivable, net 6,309 5,064 Inventories 1,386 924 Prepaid expenses and other current assets 462 342 Short-term obligations 370 3,925 Accounts pavable 8,870 8,735 a. Determine the (1) current ratio and (2) quick ratio for both years. Round answers to one decimal place. Current Year Previous Year 1. Current ratio 2. Quick ratioarrow_forward
- Six Measures of Solvency or Profitability The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year. Property, plant, and equipment (net) $1,405,900 Liabilities: Current liabilities $166,000 Note payable, 6%, due in 15 years 827,000 Total liabilities $993,000 Stockholders' equity: $1,489,500 Preferred $2 stock, $100 par (no change during year) Common stock, $10 par (no change during year) 1,489,500 Retained earnings: Balance, beginning of year Net income Preferred dividends Common dividends Balance, end of year 1,986,000 Total stockholders' equity $4,965,000 Sales $34,854,000 Interest expense $49,620 $1,588,000 576,000 $2,164,000 $29,790 148,210 178,000arrow_forwardSeven metrics The following data were taken from the financial statements of Woodwork Enterprises Inc. for the current fiscal year. Assuming that there are no intangible assets. Property, plant, and equipment (net) $1,680,000 Liabilities: Current liabilities $168,000 Mortgage note payable, 10%, ten-year note issued two years ago 840,000 Total liabilities $1,008,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $1,008,000 Common stock, $10 par (no change during year) 1,008,000 Retained earnings: Balance, beginning of year $1,076,000 Net income 385,000 $1,461,000 Preferred dividends $40,320 Common dividends 76,680 117,000 Balance, end of year 1,344,000 Total stockholders' equity $3,360,000 Sales $12,242,500 Interest expense $96,267 Beginning-of-the-year amounts:…arrow_forwardSix Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. $1,202,600 Property, plant, and equipment (net) Liabilities: Current liabilities $173,000 Note payable, 6%, due in 15 years 859,000 $1,032,000 Total liabilities Stockholders' equity $619,200 Preferred $4 stock, $100 par (no change during year) Common stock, $10 par (no change during year) 619,200 Retained earnings: Balance, beginning of year $660,000 Net income 314,000 $974,000 Preferred dividends $24,768 123,632 148,400 Common dividends Balance, end of year 825,600 Total stockholders' equity $2,064,000 $19,922,100 Sales Interest expense $51,540arrow_forward
- Current Position Analysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year(in millions) Previous Year(in millions) Cash and cash equivalents $4,417 $4,604 Short-term investments, at cost 3,137 8,550 Accounts and notes receivable, net 9,972 8,770 Inventories 1,143 762 Prepaid expenses and other current assets 381 282 Short-term obligations 305 3,236 Accounts payable 7,315 7,204 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio fill in the blank 1 fill in the blank 2 2. Quick ratio fill in the blank 3 fill in the blank 4 b. The liquidity of Sherwood has some over this time period. Both the current and quick ratios have . Sherwood is a company with resources for meeting short-term…arrow_forwardStock transactions for corporate expansion On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor: At the annual stockholders meeting on March 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately 11,000,000. The plan provided (a) that a building, valued at 3,375,000, and the land on which it is located, valued at 1,500,000, be acquired in accordance with preliminary negotiations by the issuance of 125,000 shares of common stock, (b) that 40,000 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow 4,000,000. The plan was approved by the stockholders and accomplished by the following transactions: Instructions Journalize the entries to record the May transactions.arrow_forwardCurrent Position Analysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year(in millions) Previous Year(in millions) Cash and cash equivalents $2,419 $2,589 Short-term investments, at cost 1,718 4,809 Accounts and notes receivable, net 5,463 4,932 Inventories 2,250 2,400 Prepaid expenses and other current assets 750 888 Short-term obligations 240 2,548 Accounts payable 5,760 5,672 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio fill in the blank 1 fill in the blank 2 2. Quick ratio fill in the blank 3 fill in the blank 4 b. The liquidity of Sherwood has increased some over this time period. Both the current and quick ratios have increased . Sherwood is a strong company with ample resources…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY