The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2014:

$$\begin{array}{lrlrlrlrlrlrlrlrlrlrlrlr} \text{Merchandise inventory, May 1, 2013}&\$\hspace{5pt}380,000\\ \text{Merchandise inventory, April 30, 2014}&415,000&\\ \text{Purchases}&\hspace{10pt}3,800,000&\\ \text{Purchases returns and allowances}&\hspace{10pt}150,000&\\ \text{Purchases discounts}&\hspace{10pt}80,000&\\ \text{Sales}&\hspace{10pt}5,850,000&\\ \text{Freight in}&\hspace{10pt}16,600&\\ \end{array}$$

b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2014.

The income statement and additional data of Value World, Inc., follow:

Value World, Inc. Income Statement Year Ended June 30, 2016

$$\begin{aligned} &\begin{array}{|l|r|r|} \hline \text { Revenues: }\\ \hline \text { Sales revenue } & \$ 275,000 & \\ \hline \text { Dividend revenue } & 8,500 & \$ 283,500 \\ \hline \text { Expenses: } & & \\ \hline \text { Cost of goods sold } & 110,000 & \\ \hline \text { Salary expense } & 60,000 & \\ \hline \text { Depreciation expense } & 22,000 & \\ \hline \text { Advertising expense } & 13,000 & \\ \hline \text { Interest expense } & 2,200 & \\ \hline \text { Income tax expense } & 8,000 & 215,200 \\ \hline \text { Net income } & & \$ 8,300 \\ \hline \end{array} \end{aligned}$$

Additional data:

a. Collections from customers are $12,000 less than sales.
b. Payments to suppliers are$2,300 less than the sum of cost of goods sold plus advertising expense.
c. Payments to employees are $1,500 more than salary expense.
d. Dividend revenue, interest expense, and income tax expense equal their cash amounts.
e. Acquisition of plant assets is$210,000. Of this amount, $110,000 is paid in cash and$100,000 by signing a long-term note payable.
f. Proceeds from sale of land total $29,000.
g. Proceeds from issuance of common stock total$31,000.
h. Payment of a long-term note payable is $17,000.
i. Payment of dividends is$12,500.
j. Cash balance, June 30, 2015, was $25,000.

1. Prepare Value World, Inc.’s, statement of cash flows and accompanying schedule of noncash investing and financing activities. Report operating activities by the direct method.

2. Evaluate Value World’s cash flows for the year. In your evaluation, mention all three categories of cash flows and give the reason for your evaluation.

The income statement and additional data of Nyman Travel Products, Inc., follow:

$$\begin{aligned} &\begin{array}{l|r|r} \text { Revenues: }\\ \hline \text { Service revenue } & \$ 234,000 & \\ \hline \text { Dividend revenue } & 8,300 & \$ 242,300 \\ \hline \text { Expenses: } & & \\ \hline \text { Cost of goods sold } & 103,000 & \\ \hline \text { Salary expense } & 62,000 & \\ \hline \text { Depreciation expense } & 33,000 & \\ \hline \text { Advertising expense } & 4,300 & \\ \hline \text { Interest expense } & 2,100 & \\ \hline \text { Income tax expense } & 8,000 & 212,400 \\ \hline \text { Net income } & & \$ 29,900 \\ \hline \end{array} \end{aligned}$$

Additional data:

a. Acquisition of plant assets was $134,000. Of this amount,$90,000 was paid in ca sh and $44,000 by signing a note payable.
b. Proceeds from sale of land totaled$34,000.
c. Proceeds from issuance of common stock totaled $60,000.
d. Payment of long-term note payable was$14,000.
e. Payment of dividends was $12,000.
f. From the balance sheets:

$$\begin{array}{|l|r|r|} \hline &\mathbf{2 0 1 6} &\mathbf{2 0 1 5} \\ \hline \text { Current assets: } & & \\ \hline \text { Cash } & \$ 165,000 & \$ 68,000 \\ \hline \text { Accounts receivable } & 42,000 & 56,000 \\ \hline \text { Inventory } & 48,000 & 61,000 \\ \hline \text { Prepaid expenses } & 9,600 & 8,700 \\ \hline & & \\ \hline \text { Current liabilities: } & & \\ \hline \text { Accounts payable } & \$ 38,000 & \$ 25,000 \\ \hline \text { Accrued liabilities } & 99,000 & 82,000 \\ \hline & & \\ \hline \end{array}$$

1. Prepare Nyman’s statement of cash flows for the year ended December 31, 2016, using the indirect method.

2. Evaluate Nyman’s cash flows for the year. In your evaluation, mention all three categories of cash flows and give the reason for your evaluation.

The following income statement does not reflect intraperiod tax allocation.

Recast the income statement to reflect intraperiod tax allocation.

$$\begin{array}{lr} \textbf{INCOME STATEMENT}\\ \textbf{For the Fiscal Year Ended March 31, 2021}\\ \text{(\$ in millions)}\\ \text{Sales revenue}& \$830\\ \text{Cost of goods sold} &(350)\\ \text{Gross profit}& 480\\ \text{Operating expenses}& (180)\\ \text{Income tax expense}& (54)\\ \text{Income before discontinued operations} &246\\ \text{Loss from discontinued operations} &(84)\\ \text{Net income} &\$162\\ \end{array}$$

The company’s tax rate is 25%.

How many weeks can a movie run and still make a reasonable profit? The data that follow show the number of weeks in release (x) and the gross to date (y) for the top 12 movies during a recent week.

Movie, Gross to Date ($millions), Weeks in Release

1. The Town, 33.1, 1
2. Easy A, 22.1, 1
3. Resident Evil: Afterlife 3D, 47.1, 2
4. Devom, 15.3, 1
5. Alpha and Omega 3D, 10.4, 1
6. The American, 33.7, 3
7. Takers, 53.3, 4
8. Eat Pray Love, 78.3, 6
9. Inception, 285.8, 10
10. Machete, 25.1, 3
11. The other Guys, 116.0, 7
12. Going the Distance, 17.3, 3

a. Plot the points in a scatterplot. Does it appear that the relationship between x and y is linear? How would you describe the direction and strength of the relationship? b. Calculate the value of$r^2$. What percentage of overall variation is explained by using the linear model rather than$$$\overline{y}$ to predict the response variable y. c. What is the regression equation? Do the data provide evidence to indicate that x and y are linearly related? Test using a 5% significance level. d. Given the results of parts b and c, is it appropriate to use the regression line for estimation and prediction? Explain your answer.

"All measurements were made twice. If two staff members were present, the duplicate measurements were made by different people. In order to minimize gross errors, discrepancies greater than certain arbitrary limits were measured a third time, and if necessary a fourth, until two measurements were obtained which agreed within the set limits. In cases of discrepancy, the measurers decided which of the three or four results was most 'representative' and designated it for inclusion in the statistical record. In cases of satisfactory agreement, the statistical record was based routinely on the first measurement recorded." Comment briefly.

Helmkamp Products sells golf clubs and accessories to pro shops. Gross sales in 2019 were $2,850,700 (Helmkamp’s list price) on terms 2/15, n/45. Customers paid for$2,000,000 (Helmkamp’s list price) of the merchandise within the discount period and the remaining $850,700 after the end of the discount period. Helmkamp expects its customers to pay within the discount period.

Required:

1. Determine how much cash was collected from sales.

2. Assuming all payments were received before year end, how much sales revenue will be reported on the income statement?

Claypool Hardware is the only hardware store in a remote area of northern Minnesota. Some of Claypool's transactions during the current year are as follows:

Nov. 5 Sold lumber on account to Bemidji Construction, $\$ 13,390$. The inventory subsidiary ledger shows the cost of this merchandise was $\$ 9,105$.
Nov. 9 Purchased tools on account from Owatonna Tool Company, $\$ 3,800$.
Dec. 5 Collected in cash the $\$ 13,390$ account receivable from Bemidji Construction.
Dec. 9 Paid the $\$ 3,800$ owed to Owatonna Tool Company.
Dec. 31 Claypool's personnel counted the inventory on hand and determined its cost to be $\$ 182,080$. The accounting records, however, indicate inventory of $\$ 183,790$ and a cost of goods sold of $\$ 695,222$. The physical count of the inventory was observed by the company's auditors and is considered correct.
Instructions
b. Prepare a partial income statement showing the company's gross profit for the year. (Net sales for the year amount to $\$ 1,024,900$.)
Assume that an index of key business ratios in your library shows hardware stores of Claypool's approximate size (in total assets) average net sales of $\$ 1$ million per year and a gross profit margin of 25 percent.

Is Claypool able to pass its extra transportation costs on to its customers? Does the business appear to suffer or benefit financially from its remote location? Explain your reasoning and support your conclusions with specific accounting data comparing the operations of Claypool Hardware with the industry averages.

Extend the income statement for Miss Muffins' Bakery to include a vertical analysis for $2012$ and for $2013$.

$$\begin{array}{} \text{Miss Muffins' Bakery}\\ \text{Vertical Analysis of Income Statement for the Months Ending}\\ \text{July 31, 2012 and July 31, 2013}\end{array}$$

$$\begin{array}{} &2013& \begin{array}{}\text{Percent of}\\\text{Net Sales}\end{array}& 2012& \begin{array}{}\text{Percent of}\\\text{Net Sales}\end{array}\end{array}$$

$$\begin{aligned} &\text{Gross sales} \\ &\text{Returns and allowances} \\ &\text{Net Sales} &\qquad \underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\ &&\quad \underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\ &\text{Cost of beginning inventory}\\ &\text{Cost of purchases}\\ &\text{Cost of ending inventory} &\underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\ &\text{Cost of goods sold}&\underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\ &\text{Gross Proft}\\ &\text{Total perating Expenses}&\quad \underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\ &\text{Net income}&\quad \underline{\qquad\qquad} \qquad\qquad\quad \underline{\qquad\qquad} \\\\ \end{aligned}$$

Key figures for Apple and Google follow.

Required

1. Compute common-size percents for each of the companies using the data provided. Round percents to one decimal.
2. If Google decided to pay a dividend, would retained earnings as a percent of total assets increase or decrease?
3. Which company has a higher gross margin ratio on sales?

Suppose the Internal Revenue Service is studying the category of charitable contributions. A sample of 25 returns is selected from young couples between the ages of 20 and 35 who had an adjusted gross income of more than $100,000. Of these 25 returns, five had charitable contributions of more than$1,000. Suppose four of these returns are selected for a comprehensive audit. a. Explain why the hypergeometric distribution is appropriate. b. What is the probability exactly one of the four audited had a charitable deduction of more than $1,000? c. What is the probability at least one of the audited returns had a charitable contribution of more than$1,000?

Presented below is information from Perez Computers Incorporated.

Prepare the necessary journal entries for Perez Computers.

The Playa Company has the following information in its records. Certain data have been intentionally omitted ($in thousands).$

$$\begin{array}{lrrr} & 2021 & 2022 & 2023 \\ \hline \text { Beginning inventory } & ? & ? & 225 \\ \text { Cost of goods sold } & 627 & 621 & ? \\ \text { Ending inventory } & ? & 225 & 216 \\ \text { Cost of goods available for sale } & 876 & ? & 800 \\ \text { Purchases (gross) } & 630 & ? & 585 \\ \text { Purchase discounts } & 18 & 15 & ? \\ \text { Purchase returns } & 24 & 30 & 14 \\ \text { Freight-in } & 13 & 32 & 16 \end{array}$$

$

Determine the missing numbers. Show computations where appropriate.

Lucy Rose works at the College of Fort Worth and is paid $12 per hour for a 40-hour work-week and time-and-a-half for hours above 40.

Requirements

1. Compute Rose's gross pay for working 60 hours during the first week of February.
2. Rose is single, and her income tax withholding is 15% of total pay. Rose's only payroll deductions are payroll taxes. Compute Rose's net (take-home) pay for the week. Assume Rose's earnings to date are less than the OASDI limit.
3. Journalize the accrual of wages expense and the payment related to the employment of Lucy Rose.