QUESTIONS:

Multiple Choice (1.5 points each)

Use Wendy’s Company’s adjusted trial balance to answer the next two questions. It was prepared BEFORE closing entries. All amounts are in millions of dollars. Wendy’s fiscal year ended on December 29, 2019.

Znalezione obrazy dla zapytania Wendy's logo Adjusted Trial Balance December 29, 2019 (All amounts in millions of dollars)
 Debits Credits 
Cash and other current assets         554   
Property and equipment, net         977   
Goodwill and other noncurrent assets      3,464   
Accounts payable and other current liabilities          350  
Long-term liabilities        4,128 
Common stock            47 
Retained earnings          429 
Dividends           96   
Sales        1,709 
Investment income            33 
Cost of sales         597   
General and administrative expense         379   
Advertising expense         338   
Depreciation and amortization expense         132   
Interest expense         124   
Income tax expense           35   
                  Totals$  6,696 $  6,696 
     
  1. Wendy’s journal entry to close the revenue and expense accounts includes a:
    1. Debit to Sales for $1,709 million.
    1. Debit to Advertising expense for $338 million.
    1. Debit to Retained earnings for $137 million.
    1. Credit to Retained earnings for $429 million.
  • The Retained Earnings balance shown on Wendy’s December 29, 2019 balance sheet (i.e., ENDING Retained earnings) is: ________. 
    • $429 million.
    • $470 million.
    • $566 million.
    • $662 million.

Use the following information from The Boeing Company’s financial statements for the fiscal year ended December 31, 2019 to answer the next four questions. Assume Wages payable will be paid within a year and Unearned revenue will be earned within a year. Accounts are listed in alphabetical order. All amounts are in millions of dollars.

http://www.sahcc.org/wp-content/uploads/Boeing-Logo.jpg
Accounts payable15,553 Investment income1,129
Accounts receivable12,309 Investments (over 1 year)1,092
Accumulated depreciation19,342 Long-term debt19,962
Cash9,485 Other current assets3,268
Common stock1,806 Other long-term liabilities13,527
Cost of sales72,559 Property, plant and equipment31,844
Depreciation expense1,271 Research and development expense1,445
Dividends4,628 Retained earnings1,018
General and administrative expense1,642 Sales revenue76,559
Goodwill and other long-term assets17,802 Short-term debt7,340
Income tax expense623 Short-term investments545
Interest expense784 Unearned revenue51,551
Inventories76,622 Wages payable22,868
  • Calculate Boeing’s Total Current Assets as of December 31, 2019.
    • $103,321 million
    • $102,229 million
    • $98,961 million
    • $25,607 million
  • Calculate Boeing’s Total Current Liabilities as of December 31, 2019.
    • $116,654 million
    • $98,404 million
    • $97,312 million
    • $45,761 million
  • Calculate Boeing’s Total Assets as of December 31, 2019.
    • $133,625 million
    • $151,875 million
    • $152,967 million
    • $172,309 million
  • Calculate Boeing’s Net Income or Net Loss for the year ended December 31, 2019.
    • Net Income of $50,915 million
    • Net Loss of $5,264 million
    • Net Income of $382 million
    • Net Loss of $636 million
  • Which of the following statements is TRUE?
    • A perpetual inventory tracking system provides updated balances for “Cost of Goods Sold” throughout the accounting period.
    • A multi-step income statement shows a subtotal for “Gross Profit.”
    • When goods are sold FOB shipping point, the buyer pays for shipping costs.
    • All of the above statements are true.
    • None of the above statements are true.
  • Gaze Company uses periodic inventory system. On January 27, 2021, the company purchased light fixtures for $500,000 on account, terms 2/10, n/30. Gaze’s journal entry to record the purchase should include a:
    • Credit to Inventory for $490,000.
    • Debit to Purchases for $500,000.
    • Debit to Inventory for $500,000.
    • Credit to Accounts Payable for $490,000.
  • On February 1, 2021, Venti Corporation sold merchandise to a customer for $8,000 on credit, FOB destination, cost of the merchandise sold was $5,500, terms 3/10, n/30. Venti uses perpetual inventory system. What account(s) should Venti Corporation debit on February 1?
    • Inventory for $5,500.
    • Accounts Receivable for $7,760.
    • Cash for $7,760 and Inventory for $240.
    • Accounts Receivable for $8,000.

Problem (36.5 points)

Znalezione obrazy dla zapytania Disney company logoThe Walt Disney Company’s financial statements say: “we are a diversified worldwide entertainment company with operations in the following business segments: Media Networks; Parks, Experiences and Products; Studio Entertainment; and Direct-to-Consumer & Interactive (DTCI). In October 2020, the Company announced a strategic reorganization of our media and entertainment businesses to accelerate the growth of our direct-to-consumer (DTC) strategy.”

Below are the account balances (all normal) for The Walt Disney Company as of October 3, 2020 after adjusting journal entries but before closing entries. The accounts are listed in alphabetical order. All amounts are in millions of U.S. dollars. The Company’s fiscal year ends on the Saturday closest to September 30. Fiscal 2020, ended on October 3, 2020, and fiscal 2019 ended on September 28, 2019. There was no new investment by stockholders during fiscal 2020 (Hint: read this as no change in Common Stock).

Accounts payable      16,801
Accounts receivable      12,708
Accumulated depreciation      35,517
Cash      17,914
Common stock      54,497
Cost of sales      43,880
Current portion of long-term debt        5,711
Depreciation and amortization expense        5,345
Dividends        1,587
Goodwill and other long-term assets     105,295
Income tax expense           699
Interest expense        7,648
Interest revenue        1,689
Inventories        1,583
Investments (long-term)      28,925
Long-term debt      52,917
Other current assets        3,046
Other long-term liabilities      24,492
Property, plant, and equipment      67,595
Retained earnings      47,466
Sales revenue      65,388
Selling, general and administrative expenses      12,369
Unearned revenue        4,116

Required:

Prepare the following for fiscal 2020 for Disney:

Part (a):  Prepare Disney’s Income Statement for the year ended October 3, 2020 (7.5 points).

Znalezione obrazy dla zapytania Disney company logo Income Statement For the year ended October 3, 2020 In millions of $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

Part (b):  Prepare Disney’s Statement of Stockholders’ Equity for the year ended October 3, 2020 (4 points).

Znalezione obrazy dla zapytania Disney company logo Statement of Stockholders’ Equity For the year ended October 3, 2020 In millions of $
         
   
   
   
   
   
         

Part (c): Prepare Disney’s Classified Balance Sheet as of October 3, 2020 (15.5 points).

Znalezione obrazy dla zapytania Disney company logo Balance Sheet As of October 3, 2020 In millions of $
   
ASSETS  
 
 
 
 
          Total Current Assets  
 
 
 
 
          Total Assets 
   
LIABILITIES  
 
 
 
           Total Current Liabilities 
 
 
           Total Liabilities 
STOCKHOLDERS’ EQUITY  
 
 
           Total Stockholders’ Equity 
           Total Liabilities and Stockholders’ Equity 
   

Part (d):  Prepare Disney’s fiscal 2020 two closing journal entries.Your journal entries should be in proper journal entry form (i.e., entries, rather than T accounts). There are more rows than you need. Also answer three short questions below by providing the amount and its meaning where appropriate (9.5 points).

Account TitlesDebitCredit

Short questions:

1. What were the net earnings reported on Disney’s fiscal 2020 income statement?

2. What is the Retained Earnings balance shown on Disney’s October 3, 2020 balance sheet?

3. How much did Disney pay to stockholders during the fiscal year ended October 3, 2020?

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