The accountant for Bellows Corp. was preparing a bank reconciliation as of April 30. The following items were identified:

Particulars	Amount
Bellows’ book balance	$28,750
Outstanding checks	900
Interest earned on checking account	75
Customer’s NSF check returned by the bank	380

In addition, Bellows made an error in recording a customer’s check; the amount was recorded in cash receipts as$370; the bank recorded the amount correctly as $730.

Required:

What amount will Bellows report as its adjusted cash balance at April 30, 2019?

Basque Inc. maintains a petty cash fund with a balance of $800. On December 31, Basque’s petty cash account has a balance of$60. Basque replenishes the petty cash account, as it does at the end of every month, but also decides to increase the fund balance to $1,000. Basque classifies all petty cash transactions as miscellaneous expense.

Required:

What entry is made to record this activity?

Kingery Inc. maintains a balance of $3,000 in its petty cash fund for routine purchases such as supplies. During the year, Kingery’s employees paid for various office supplies and food purchases for office birthdays. As a result, Kingery’s petty cash account has a balance of$374 on December 31, 2019. At the end of each year, Kingery replenishes the petty cash in full. Kingery classifies all petty cash transactions as miscellaneous expense.

Required:

What entry is made to record the replenishment of the petty cash fund?

Use the following information for Cornerstone Exercises 3-24 through 3-27:

Sparrow Company had the following adjusted trial balance at December 31, 2019.

$$\begin{array}{c} \textbf{Sparrow Company}\\ \textbf{Adjusted Trial Balance}\\ \textbf{December 31, 2019} \end{array}$$

$$\begin{array}{lrr} &\underline{\textbf{Debit}}&\underline{\textbf{Credit}}\\ \text{Cash}&\$~~3,150\\ \text{Accounts payable}&5,650\\ \text{Prepaid Insurance}&4,480\\ \text{Equipment}&42,000\\ \text{Accumulated Depreciation (Equipment)}&&24,000\\ \text{Accounts Payable}&&2,800\\ \text{Salaries Payable}&&4,450\\ \text{Unearned Service Revenue}&&3,875\\ \text{Common Stock}&&8,000\\ \text{Retained Earnings}&&2,255\\ \text{Dividends}&10,500\\ \text{Service Revenue}&&99,600\\ \text{Salaries Expense}&49,400\\ \text{Rent Expense}&17,250\\ \text{Insurance Expense}&2,200\\ \text{Depreciation Expense}&4,950\\ \text{Income Taxes Expense}&\underline{~~~~5,400}&\underline{~~~~~~~~900}\\ &\underline{\underline{\$144,980}}&\underline{\underline{\$144,980}} \end{array}$$

Required:

Prepare a classified balance sheet for Sparrow at December 31, 2019.

Use the following information for Cornerstone Exercises 3-24 through 3-27:

Sparrow Company had the following adjusted trial balance at December 31, 2019.

$$\begin{array}{c} \textbf{Sparrow Company}\\ \textbf{Adjusted Trial Balance}\\ \textbf{December 31, 2019} \end{array}$$

$$\begin{array}{lrr} &\underline{\textbf{Debit}}&\underline{\textbf{Credit}}\\ \text{Cash}&\$~~3,150\\ \text{Accounts payable}&5,650\\ \text{Prepaid Insurance}&4,480\\ \text{Equipment}&42,000\\ \text{Accumulated Depreciation (Equipment)}&&24,000\\ \text{Accounts Payable}&&2,800\\ \text{Salaries Payable}&&4,450\\ \text{Unearned Service Revenue}&&3,875\\ \text{Common Stock}&&8,000\\ \text{Retained Earnings}&&2,255\\ \text{Dividends}&10,500\\ \text{Service Revenue}&&99,600\\ \text{Salaries Expense}&49,400\\ \text{Rent Expense}&17,250\\ \text{Insurance Expense}&2,200\\ \text{Depreciation Expense}&4,950\\ \text{Income Taxes Expense}&\underline{~~~~5,400}&\underline{~~~~~~~~900}\\ &\underline{\underline{\$144,980}}&\underline{\underline{\$144,980}} \end{array}$$

Required:

1. Prepare the closing entries for Sparrow at December 31, 2019.

2. How does the closing process affect retained earnings?

Olney Cleaning Company had the following items that require adjustment at year end.

a. For one cleaning contract, $14,520 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year end,$1,210 of the service revenue was still unearned.

b. For another cleaning contract, $9,840 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year end,$3,280 of the services had been provided.

Required:

1. Prepare the adjusting journal entries needed at December 31.

2. What is the effect on the financial statements if these adjusting entries are not made?

3. What is the balance in Unearned Service Revenue at December 31 related to the two cleaning contracts?

Obtain Apple’s 2016 10-K (filed October 28, 2016) either through the ‘‘Investor Relations’’ portion of its website (do a web search for ‘‘Apple Investor Relations’’) or go to www.sec.gov and click ‘‘Company Filings Search’’ under ‘‘Filings.’’

Required:

Using Apple’s 10-K, answer the following questions (Hint: It may be easier to use the Word or PDF file and use the search feature within the program):

Calculate Apple’s debt to equity, long-term debt to equity, and times interest earned (accrual basis) for 2015 and 2016. The industry averages for these ratios for 2016 were 52.42%, 36.41%, and 13.83, respectively. You will need to read Note 3 to find the amount of interest expense. Comment on Apple’s mix of debt and equity and long-term solvency.

Obtain Apple’s fiscal 2016 10-K (filed October 26, 2016) either through the ‘‘Investor Relations’’ portion of its website (do a web search for ‘‘Apple Investor Relations’’) or go to www.sec.gov and click ‘‘Company Filings Search’’ under ‘‘Forms.’’

Required:

Looking at Note 1 (Summary of Significant Accounting Policies), what method of depreciation does Apple use? What is the range of useful life for internally used software? Do you think this useful life is appropriate?

Write a program that prompts the user to enter two characters and displays the major and status represented in the characters. The first character indicates the major and the second is number character 1, 2, 3, 4, which indicates whether a student is a freshman, sophomore, junior, or senior. Suppose the following chracters are used to denote the majors:

M: Mathematics
C: Computer Science
I: Information Technology

Here is a sample run:

Enter two characters: M1 <enter>
Mathematics Freshman

Enter two characters: C3 <enter>
Computer Science Junior

Enter two characters: T3 <enter>
Invalid input

The adjusted trial balance for Giovanni Co. as of December 31, 2011 is shown below:

J. Giovanni invested $30,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Giovanni, Capital account was$61,800). Giovanni Company is required to make a $6,400 payment on its long-term notes payable during 2012.

Required
1. Prepare the income statement and the statement of owner’s equity for the calendar year 2011 and the classified balance sheet at December 31, 2011.
2. Prepare the necessary closing entries at December 31, 2011.
3. Use the information in the financial statements to compute these ratios: (a) return on assets (total assets at December 31, 2010, was$150,000), (b) debt ratio, (c ) profit margin ratio (use total revenues as the denominator), and (d) current ratio.

Selected financial statement numbers for Rutherford Company follow.

Required:

1. Using this information, calculate Rutherford’s receivable turnover ratio (rounded to two decimal places.)

2. Using this information, calculate Rutherford’s asset turnover ratio (rounded to two decimal places) and also convert the ratio into days (rounded to the nearest whole day)

Financial ratio analysis is often divided into five areas: liquidity, activity, debt, profitability, and market ratios. Differentiate each of these areas of analysis from the others. Which is of the greatest concern to creditors?

What two aspects of a company’s profitability are measured by profitability ratios?

Prepare journal entries under the cost method to record the following treasury stock transactions of Danos Corporation. c. Purchases 7,000 shares of its own common stock for $38 per share.