SOLUTION: ACC 101 Wendys Trial Balance Accounting Question Lab Report

ACC 101 Lab —Winter 2021
Lab Assignment #4
Name:
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.
Adjusted Trial Balance
December 29, 2019
(All amounts in millions of dollars)
Debits
Cash and other current assets
Property and equipment, net
Goodwill and other noncurrent assets
Accounts payable and other current liabilities
Long-term liabilities
Common stock
Retained earnings
Dividends
Sales
Investment income
Cost of sales
General and administrative expense
Advertising expense
Depreciation and amortization expense
Interest expense
Income tax expense
Totals
Credits
554
977
3,464
350
4,128
47
429
96
1,709
33
597
379
338
132
124
35
$ 6,696
$ 6,696
1. Wendy’s journal entry to close the revenue and expense accounts includes a:
a. Debit to Sales for $1,709 million.
b. Debit to Advertising expense for $338 million.
c. Debit to Retained earnings for $137 million.
d. Credit to Retained earnings for $429 million.
2. The Retained Earnings balance shown on Wendy’s December 29, 2019 balance sheet (i.e., ENDING Retained
earnings) is: ________.
a. $429 million.
b. $470 million.
c. $566 million.
d. $662 million.
1
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.
Accounts payable
Accounts receivable
Accumulated depreciation
Cash
Common stock
Cost of sales
Depreciation expense
Dividends
General and administrative expense
Goodwill and other long-term assets
Income tax expense
Interest expense
Inventories
15,553
12,309
19,342
9,485
1,806
72,559
1,271
4,628
1,642
17,802
623
784
76,622
Investment income
Investments (over 1 year)
Long-term debt
Other current assets
Other long-term liabilities
Property, plant and equipment
Research and development expense
Retained earnings
Sales revenue
Short-term debt
Short-term investments
Unearned revenue
Wages payable
1,129
1,092
19,962
3,268
13,527
31,844
1,445
1,018
76,559
7,340
545
51,551
22,868
3. Calculate Boeing’s Total Current Assets as of December 31, 2019.
a. $103,321 million
b. $102,229 million
c. $98,961 million
d. $25,607 million
4. Calculate Boeing’s Total Current Liabilities as of December 31, 2019.
a. $116,654 million
b. $98,404 million
c. $97,312 million
d. $45,761 million
5. Calculate Boeing’s Total Assets as of December 31, 2019.
a. $133,625 million
b. $151,875 million
c. $152,967 million
d. $172,309 million
6. Calculate Boeing’s Net Income or Net Loss for the year ended December 31, 2019.
a. Net Income of $50,915 million
b. Net Loss of $5,264 million
c. Net Income of $382 million
d. Net Loss of $636 million
2
7. Which of the following statements is TRUE?
a. A perpetual inventory tracking system provides updated balances for “Cost of Goods Sold” throughout
the accounting period.
b. A multi-step income statement shows a subtotal for “Gross Profit.”
c. When goods are sold FOB shipping point, the buyer pays for shipping costs.
d. All of the above statements are true.
e. None of the above statements are true.
8. 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:
a. Credit to Inventory for $490,000.
b. Debit to Purchases for $500,000.
c. Debit to Inventory for $500,000.
d. Credit to Accounts Payable for $490,000.
9. 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?
a. Inventory for $5,500.
b. Accounts Receivable for $7,760.
c. Cash for $7,760 and Inventory for $240.
d. Accounts Receivable for $8,000.
3
Problem (36.5 points)
The 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 Directto-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-toconsumer (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
Accounts receivable
Accumulated depreciation
Cash
Common stock
Cost of sales
Current portion of long-term debt
Depreciation and amortization expense
Dividends
Goodwill and other long-term assets
Income tax expense
Interest expense
Interest revenue
Inventories
Investments (long-term)
Long-term debt
Other current assets
Other long-term liabilities
Property, plant, and equipment
Retained earnings
Sales revenue
Selling, general and administrative expenses
Unearned revenue
16,801
12,708
35,517
17,914
54,497
43,880
5,711
5,345
1,587
105,295
699
7,648
1,689
1,583
28,925
52,917
3,046
24,492
67,595
47,466
65,388
12,369
4,116
Required:
Prepare the following for fiscal 2020 for Disney:
a) Income Statement – single step format (7.5 points)
b) Statement of Stockholder’s Equity (4 points)
c) Classified Balance Sheet (15.5 points)
d) Closing journal entries and short questions (9.5 points)
4
Part (a): Prepare Disney’s Income Statement for the year ended October 3, 2020 (7.5 points).
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).
Statement of Stockholders’ Equity
For the year ended October 3, 2020
In millions of $
5
Part (c): Prepare Disney’s Classified Balance Sheet as of October 3, 2020 (15.5 points).
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
6
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 Titles
Debit
Credit
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?
7

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