1) Thomas Company receives information that requires the company to increase its expectations of uncollectible accounts receivable.

Which of the following does not occur on the company’s financial statements?

Group of answer choices

A) Bad debt expense is increased

B) Accounts receivables (gross) is reduced

C) Net income is reduced

D) The allowance account is increased

E) None of the above

2)

On its 2016 income statement, Abbott Laboratories reported research and development expense of $1,422,000,000.

Which of the following statements must be true?

Group of answer choices

A) Abbott Laboratories spent $1,422,000,000 in cash to develop new products and improve old products.

B) Research and development expense reduced Abbott Laboratories 2016 pre-tax income by $1,422,000,000.

C) Abbott Laboratories capitalized at least $1,422,000,000 of research and development costs in 2016.

D) The $1,422,000,000 included amortized research and development costs from prior years that were not previously expensed, because Abbott Laboratories incurs such expenses each year.

3.

The 2016 financial statements of Willamette Valley Vineyards, Inc. include the following footnote:

The average useful life of Willamette’s depreciable assets at the end of fiscal 2016 is:

A) 14.2 years

B) 19.6 years

C) 2.4 years

D) 21.7 years

E) None of the above

3.2 Problem you will be responsible for completing the accounting cycle from adjusting entries to post-closing trial balance. Below is the unadjusted trial balance for Walton Anvils as of December 31, 2016, and the data for the adjustments. There is also an Excel Template for this problem that you may download and use (or you may use your own). Walton Anvils Unadjusted Trial Balance December 31, 2016 Balance Account Title Debt Credit Cash $ 16,900.00 Accounts Receivable 17,500 Prepaid Rent 2,500 Office Supplies 1,900 Equipment 23,000 Accumulated Depreciation - Equipment $ 7,000.00 Accounts Payable 6,200.00 Salaries Payable Unearned Revenue 5,600.00 Common Stock 28,000.00 Retained Earnings 1,600.00 Dividends 4,500 Service Revenue 20,800.00 Salaries Expense 2,900 Rent Expense Depreciation Expense - Equipment Supplies Expense Total $ 69,200.00 $ 69,200.00 Adjustment Data a. Unearned revenue still unearned at December 31, 2016 $1,800 b. Prepaid rent still in force at December 31, 2016 $2,300 c. Office supplies used $1,400 d. Depreciation $380 e. Accrued Salaries Expense at December 31, 2016 $210 Requirements Open T-accounts using the balances in the unadjusted trial balance. Complete the worksheet for the year ended December 31, 2016. Prepare the adjusting entries and post to the T-accounts. Prepare the adjusted trial balance. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. Prepare the closing entries and post to the T-accounts. Prepare a post-closing trial balance. Calculate the current ratio for the company

The following trial balance before adjustments is for Snowcrest Ltd. on December 31, 2016:

Data for adjusting entries:

1.As at December 31, 2016, 80% of the wages that had been paid in advance to the salespeople had been earned.

2.A count of the supplies at year end revealed that $600 of supplies were still on hand.

3.Depreciation on the equipment for 2016 was $1,000.

4.The unearned revenue was advance receipts for future deliveries of goods. By December 31, 2016, two thirds of these deliveries had been made.

5.The bank loan was a six-month loan taken out on October 1, 2016. The interest rate on the loan is 9%, but the interest is not due to be paid until the note is repaid on April 1, 2017.

6.Salaries owed at year end and not yet recorded were $500.

7.The rent expense figure includes $600 paid in advance for January 2017.

8.Income tax for the year should be calculated using a tax rate of 25%. (Hint: After you finish the other adjusting entries, determine the income before income tax and then calculate the tax as 25% of this amount.)

Required

Prepare the adjusting entries for the year 2016.

(Comparing Cash versus Accrual Reports) The Professional Persons Association of Middleton is a nonprofit organization that is subject to the provisions of Audits of Certain Nonprofit Organizations. That dues for members are $40 per year; the fiscal year ends on August 31. Prior to September 1, 2015, 410 members had paid their dues for the year ended August 31, 2016. Prior to September 1, 2016, 457 members had paid their dues for the year ended August 31, 2017; one of these died suddenly on August 30, 2016, and the governing board decided to return his check to his widow. During the fiscal year ended on August 31, 2016, 36 other members died; 15 members were dropped for nonpayment of dues; and 1 member was expelled – no dues refunds were made to the estates of the 36 decedents; a $20 refund was made to the person expelled. Offsetting these membership decreases, 123 new members joined in fiscal 2016; membership as of September 1, 2015, had been 2,980 persons. Members admitted during a year are charged dues for the full year.

The association has reported membership dues revenue on the cash basis in prior years. You bring to the attention of the governing board the requirement that financial statements should be on the accrual basis, unless cash basis statements are not materially different. Since you are so knowledgeable, the board asks you to compute membership dues revenue for fiscal 2016 on both the cash basis and the accrual basis and to report to them the amount on each basis and your conclusion as to whether the difference between the two is material.

(457 memebers are other than 2,980 persons.)

(Comparing Cash versus Accrual Reports) The Professional Persons Association of Middleton is a nonprofit organization that is subject to the provisions of Audits of Certain Nonprofit Organizations. That dues for members are $40 per year; the fiscal year ends on August 31. Prior to September 1, 2015, 410 members had paid their dues for the year ended August 31, 2016. Prior to September 1, 2016, 457 members had paid their dues for the year ended August 31, 2017; one of these died suddenly on August 30, 2016, and the governing board decided to return his check to his widow. During the fiscal year ended on August 31, 2016, 36 other members died; 15 members were dropped for nonpayment of dues; and 1 member was expelled – no dues refunds were made to the estates of the 36 decedents; a $20 refund was made to the person expelled. Offsetting these membership decreases, 123 new members joined in fiscal 2016; membership as of September 1, 2015, had been 2,980 persons. (457 members are included). Members admitted during a year are charged dues for the full year.

The association has reported membership dues revenue on the cash basis in prior years. You bring to the attention of the governing board the requirement that financial statements should be on the accrual basis, unless cash basis statements are not materially different. Since you are so knowledgeable, the board asks you to compute membership dues revenue for fiscal 2016 on both the cash basis and the accrual basis and to report to them the amount on each basis and your conclusion as to whether the difference between the two is material.

Part B

The following details are for questions 16–20. Each individual question will appear below the details.

Caterpillar Inc (CAT) has the following excerpts from their financial statements:

Inventories are stated at the lower of cost or market. Cost is principally determined using the last-in, first-out (LIFO) method. The value of inventories on the LIFO basis represented about 60 percent of total inventories at December 31, 2016 and 2015.

If the FIFO (first-in, first-out) method had been in use, inventories would have been $1,639 million and $2,498 million higher than reported at December 31, 2016 and 2015, respectively.

Assume a corporate tax rate of 35%.

Question

If CAT had used FIFO method instead of LIFO method...

The amount CAT’s 2016 net cash from operations would change by (rounded to the nearest million):

Group of answer choices

$301 Million increase

$126 Million increase

$76 Million decrease

No change in cash from operations

If CAT had used FIFO method instead of LIFO method...

Net profit (loss) CAT would report in 2016 (rounded to the nearest million) is:

− $300 Million (loss)

+ $359 Million (profit)

+ $200 Million (profit)

− $625 Million (loss)

The cumulative amount of income tax savings that CAT generated through 2016 by using LIFO instead of FIFO (rounded to the nearest million) is:

PLEASE answer number 2 (worksheet) I am really struggling with it.

Below is the unadjusted trial balance for Walton Anvils as of December 31, 2016, and the data for the adjustments. There is also an Excel Template for this problem that you may download and use (or you may use your own).

Adjustment Data

Requirements

1.Open T-accounts using the balances in the unadjusted trial balance.

2.Complete the worksheet for the year ended December 31, 2016.

3.Prepare the adjusting entries and post to the T-accounts.

4.Prepare the adjusted trial balance.

5.Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form.

6.Prepare the closing entries and post to the T-accounts.

7.Prepare a post-closing trial balance.

8.Calculate the current ratio for the company.

Identifiable Intangibles and Goodwill, U.S. GAAP

International Foods, a U.S. company, acquired two companies in 2016. As a result, its consolidated financial statements include the following acquired intangibles:

Goodwill was assigned to the following reporting units:

It is now December 31, 2017, the end of International Foods' accounting year. No impairment losses were reported on any intangibles in 2016. Assume that International Foods bypasses the qualitative option for impairment testing of goodwill and indefiite life intangibles.

Required

Compute 2017 amortization expense and impairment losses on the above intangibles, following U.S. GAAP.

P 19–12 EPS; nonconvertible preferred stock; treasury shares; shares sold; stock dividend; options LO19–4 through LO19–8, LO19–10 (Note: This is a variation of P19–12, modified to include stock options.) On December 31, 2015, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2016. On February 28, 2016, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow’s net income for the year ended December 31, 2016, was $2,100,000. The income tax rate is 40%. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: The market price of the common stock averaged $32 per share during 2016.

Date Granted Options Granted Share Price

(Adjusted for the stock dividend)

December 31, 2014 8,000 $24

December 31, 2015 3,000 $33

December 31, 2016 6,500 $32

Required: Compute Dow’s earnings per share for the year ended December 31, 2016.

Compare the financial reports from Disney, Hilton Worldwide, Starwood, Intercontinental, Marriott International, and Marriott Vacations.

Disney Company:

Hilton Worldwide:

Starwood Hotels:

Key Financials

(In USD as of 06/30/2016)

Marriott International:

Marriott Vacations: