Accounting II Homework// Univ of Phoenix

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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 $952.3; land $225.3; patents and trademarks (at cost) $534.9; machinery and equipment $2,066.4; buildings $921; goodwill (at cost) $164.1; accumulated amortization $44.5; and accumulated depreciation $2,229. 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.

(Goodwill, amortization, Research and development cost, Intangible assets, Franchise)

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 $50,740 and has been depreciated $23,190. 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 $37,380.
(c)		It was sold for $18,000.

No.	Account Titles and Explanation	Debit	Credit
(a)


(b)



(c)

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 $61,370 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 $37,000 and had a useful life of 4 years with no salvage value. The computer was sold for $5,700 cash.
Dec. 31		Sold a delivery truck for $9,370 cash. The truck cost $25,050 when it was purchased on January 1, 2011, and was depreciated based on a 5-year useful life with a $3,670 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.)

Date	Account Titles and Explanation	Debit	Credit




	(To record depreciation expense for the first 6 months of 2014)






	(To record depreciation expense for the year 2014)

Broadening Your Perspective 9-1

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.)

CONSOLIDATED STATEMENTS OF 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
	Total current assets		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
	Deferred income taxes		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:
	Deferred income taxes		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

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands)
					For the year ended December 31,
					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	)
			Postretirement health care and life insurance benefits		2,022			1,429			1,384
			Deferred compensation and other liabilities		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
(The accompanying notes are an integral part of these statements.)

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.

What were the total cost and book value of property, plant, and equipment at December 31, 2011? (Enter the amounts in thousands.)

Total cost		$
Book value		$

Broadening Your Perspective 9-2

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
Provision for income taxes	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:
Cash and cash equivalents	$693,686			$884,642
Accounts receivable—trade	399,499			390,061
Inventories	648,953			533,622
Deferred income taxes	136,861			55,760
Prepaid expenses and other	167,559			141,132
Total current assets	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
Total current liabilities	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	)
Accumulated other comprehensive loss	(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
For the years ended December 31,		2011		2010		2009
In thousands of dollars
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	)
	Deferred income taxes		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:
	Accounts receivable—trade		(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
	Excess tax benefits from stock-based compensation		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

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.)

CONSOLIDATED STATEMENTS OF 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
	Total current assets		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
	Deferred income taxes		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:
	Deferred income taxes		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

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands)
					For the year ended December 31,
					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	)
			Postretirement health care and life insurance benefits		2,022			1,429			1,384
			Deferred compensation and other liabilities		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
(The accompanying notes are an integral part of these statements.)

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		$ 5,856,000
Buildings	$33,550,000
Less: Accumulated depreciation—buildings	23,277,600	10,272,400
Equipment	78,080,000
Less: Accumulated depreciation—equipment	9,760,000	68,320,000
Total plant assets		$84,448,400

During 2015, the following selected cash transactions occurred.

Apr.	1	Purchased land for $4,294,400.
May	1	Sold equipment that cost $1,171,200 when purchased on January 1, 2008. The equipment was sold for $331,840.
June	1	Sold land for $3,123,200. The land cost $1,952,000.
July	1	Purchased equipment for $2,147,200.
Dec.	31	Retired equipment that cost $1,366,400 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.)

Date	Account Titles and Explanation	Debit	Credit




	(To record depreciation on equipment sold)











	(To record depreciation on equipment retired)

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	$ 29,300		$ 8,300	$21,000
Bird	34,100	$ 34,100
Cope	50,100	6,700	5,600		$37,800
DeSpears	46,000					$46,000
Others	135,200	89,900	32,300	13,000
	$294,700	$130,700	$46,200	$34,000	$37,800	$46,000
Estimated percentage uncollectible		4%	7%	15%	28%	56%
Total estimated bad debts	$ 49,906	$ 5,228	$3,234	$5,100	$ 10,584	$25,760

At December 31, 2013, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $6,500.

Journalize the adjusting entry for bad debts at December 31, 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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

Bad Debts Expense


Allowance for Doubtful Accounts

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Journalize the 2014 transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.	March 1, a $790 customer balance originating in 2013 is judged uncollectible.
2.	May 1, a check for $790 is received from the customer whose account was written off as uncollectible on March 1.

No.	Date	Account Titles and Explanation	Debit	Credit
1.

2.

		(To reinstate account previously written off)

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

Allowance for Doubtful Accounts
2013	12/31	Bal.	6,500
	12/31		43,406
	12/31	Bal.	49,906
2014

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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 $3,000 and the aging schedule indicates that total estimated bad debts will be $55,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit