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ACC 291
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ACC 291 WileyPLUS Assignment: Week 1 Assignment
Resource: WileyPLUS
Click Assignment: Week 1 Assignment within WileyPLUS to complete the following exercises:
 Exercise 8-4
 Exercise 8-11
 BYP 8-1
 BYP 8-2

 Exercise 8-4
 Answer
 The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $87,000;
Credit Sales $820,000; and Sales Returns and Allowances $52,600. (Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
(a) If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the
adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,100 balance is
uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $850 in the trial balance, journalize the adjusting
entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

Exercise 8-11
Suppose the following information was taken from the 2014 financial statements of FedEx Corporation,
a major global transportation/delivery company.
(in millions) 2014 2013
Accounts receivable (gross) $ 3,490 $ 4,420

Accounts receivable (net) 3,335 4,296
Allowance for doubtful accounts 155 124
Sales revenue 35,898 38,861
Total current assets 7,011 7,189
Answer each of the following questions.





 Broadening Your Perspective 8-1
Your answer is correct.
 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.)

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
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
Split dollar officer life insurance 74,209 74,441
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:
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

Cash Flows (in thousands)
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 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

Five Year Summary of Earning and Financial Hightlights
TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio figures)
2011 2010 2009 2008 2007
Sales and Earnings Data
Net product sales $528,369 $517,149 $495,592 $492,051 $492,742
Product gross margin 163,144 167,815 175,817 158,055 165,456
Interest expenses 121 142 243 378 535
Provision for income taxes 16,974 20,005 9,892 16,347 25,401
Net earnings 43,938 53,063 53,157 38,880 52,175
% of net product sales 8.3% 10.3% 10.7% 7.9% 10.6%
% of shareholders' equity 6.6% 8.0% 8.1% 6.1% 8.1%
Per Common Share Data
Net earnings $0.76 $0.90 $0.89 $0.65 $0.85
Cash dvidends declared 0.32 0.32 0.32 0.32 0.32

Stock dividends 3% 3% 3% 3% 3%
Additional Financial Data
Working capital $153,846 $176,662 $154,409 $129,694 $142,163
Net cash provided by opreating
activities
50,390 82,805 76,994 57,333 90,148
Net cash provided by (used by)
investing activities
(51,157) (16,808) (16,364) (7,565) (43,429)
Net cash used in financing
activities
(36,597) (41,011) (38,548) (38,666) (44,842)
Property, plant & equipment
additions
16,351 12,813 20,831 34,355 14,767
Net property, plant & equipment 212,162 215,492 220,721 217,628 201,401
Total assets 857,856 857,959 836,844 813,252 813,134
Long-term debt 7,500 7,500 7,500 7,500 7,500
Shareholders' equity 665,935 667,408 654,244 636,847 640,204
Average shares outstanding 57,892 58,685 59,425 60,152 61,580

Notes to Consolidated Financial Statements ($ in thousands)
Revenue recognition:
Products are sold to customers based on accepted purchase orders which include quantity, sales price
and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns,
allowances and certain advertising and promotional costs, is recognized when products are delivered
to customers and collectability is reasonably assured. Shipping and handling costs of $45,850,
$43,034, and $38,628 in 2011, 2010 and 2009, respectively, are included in selling, marketing and
administrative expenses. Accounts receivable are unsecured. Revenues from a major customer
aggregated approximately 23.3%, 21.4% and 22.9% of net product sales during the years ended
December 31, 2011, 2010 and 2009, respectively.
SEGMENT AND GEOGRAPHIC INFORMATION:
The Company operates as a single reportable segments encompassing the manufacturing and sale of
confectionery products. Its principal manufacturing operations are located in the United States and Canada, and
its principal market is in the United States. The Company also manufactures and sells confectionery products in
Mexico, and exports products to Canada and countries worldwide.
The following geographic data includes net product sales summarized on the basis of the customer location and
long-lived assets based on their location:
2011 2010 2009
Net product sales:
United states $487,185 $471,714 $455,517
Foreign 41,184 45,435 40,075

$528,369 $517,149 $495,592
Long-lived assets:
United states $170,173 $172,087 $176,044
Foreign 41,989 43,405 44,677
$212,162 $215,492 $220,721





 Broadening Your Perspective 8-2
 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
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:
Accounts receivable—trade 399,499 390,061
Inventories 648,953 533,622
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:
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)
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
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

2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)


Financial Position
Assets December 31,
2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024
Total assets $857,856 $857,959
2011 2010

25,333 25,040
14,601 14,212

2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862
Inventories (15,631) (1,447) 455
Others (708) 310 305


Based on the information contained in these financial statements, compute the following 2011 values
for each company. (Round answers to 1 decimal place, e.g. 15.2.)
(1)
Accounts receivable turnover. (For Tootsie Roll, use “Net product sales.” Assume all sales were credit
sales.)
(2) Average collection period for accounts receivable.

Tootsie Roll Hershey Company
Accounts receivable turnover times times
Average collection period days days
Resource: WileyPLUS
Complete the following Week 2 Assignment in WileyPLUS:
 Problem 8-3A
 Brief Exercise 9-11
 DO IT! 9-5
 Exercise 9-7
 Exercise 9-8

 BYP 9-1
 BYP 9.2
 Problem 9-2A
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 $937.7; land $241.9; patents and trademarks (at cost)
$537.8; machinery and equipment $2,185.8; buildings $958; goodwill (at cost) $175.6;
accumulated amortization $53.2; and accumulated depreciation $2,195.
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.
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 $56,840 and has been depreciated $23,520.
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 $37,330.
(c) It was sold for $18,850.
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

$61,550 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 $36,600 and had a
useful life of 4 years with no salvage value. The computer was sold for $4,460 cash.
Dec. 31 Sold a delivery truck for $9,170 cash. The truck cost $23,710 when it was purchased on January 1,
2011, and was depreciated based on a 5-year useful life with a $3,550 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.)
Broadening Your Perspective 9-1
The financial statements of Tootsie Roll are presented below.
Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share
data)
2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157

Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)
Financial Position
Assets December 31,
2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024

Total assets $857,856 $857,959
2011 2010
Common stock, $.69-4/9 par value—120,000 shares authorized—36,479
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
2011 2010 2009
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

Inventories (15,631) (1,447) 455
Others (708) 310 305
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.
The financial statements of The Hershey Company and Tootsie Roll are presented below.
THE HERSHEY COMPANY
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
Net Income $628,962 $509,799 $435,994
Common Stock $1.3800 $1.2800 $1.1900

THE HERSHEY COMPANY
December 31, 2011 2010
ASSETS
Current Assets:
Goodwill 516,745 524,134
Other Assets 138,722 161,212
Total assets $4,412,199 $4,272,732
Long-term Debt 1,748,500 1,541,825
2010
299,269 299,195
in 2010
60,632 60,706
132,871,512 in 2010
(4,258,962) (4,052,101)

THE HERSHEY COMPANY
Net income $628,962 $509,799 $435,994
operations:
28,341 32,055 34,927
30,838 77,935 60,823
Inventories (115,331) (13,910) 74,000

Interest Paid $97,892 $97,932 $91,623
2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)

Financial Position
Assets December 31,
2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024
Total assets $857,856 $857,959
2011 2010

25,333 25,040
14,601 14,212
2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862
Inventories (15,631) (1,447) 455
Others (708) 310 305

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 $ 3,036,000
Buildings $35,400,000
Less: Accumulated depreciation—buildings 12,068,100 23,331,900
Equipment 40,480,000
Less: Accumulated depreciation—equipment 5,060,000 35,420,000
Total plant assets $61,787,900
During 2015, the following selected cash transactions occurred.
Apr. 1 Purchased land for $2,226,400.
May 1 Sold equipment that cost $607,200 when purchased on January 1, 2008. The equipment was
sold for $172,040.
June 1 Sold land for $1,619,200. The land cost $1,012,000.
July 1 Purchased equipment for $1,113,200.
Dec. 31 Retired equipment that cost $708,400 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.)

Solution
Problem 9-2A
May 1:
Accumulated Depreciation—Equipment = ($607,200 x 1/10 x 4/12) = $20,240
Cost $607,200
Accum. depr.—Equipment [($607,200 x 1/10) x 7 + $20,240)] (445,280)
Book value 161,920
Cash proceeds 172,040
Gain on disposal $ 10,120
Dec. 31
Accumulated Depreciation—Equipment = ($708,400 x 1/10) = $70,840
Cost $708,400
Accum. depr.—Equipment ($708,400 x 1/10 x 10) (708,400)
Book value $ 0
Record adjusting entries for depreciation for 2015. (Credit account titles are automatically indented
when amount is entered. Do not indent manually.)
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 $ 24,100 $ 9,100 $15,000
Bird 45,700 $ 45,700
Cope 59,600 8,500 8,900 $42,200
DeSpears 48,600 $48,600
Others 156,700 88,600 43,000 25,100
$334,700 $142,800 $61,000 $40,100 $42,200 $48,600
Estimated percentage uncollectible 5% 7% 14% 24% 59%

Total estimated bad debts $ 55,826 $ 7,140 $4,270 $5,614 $ 10,128 $28,674
At December 31, 2013, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $6,200.
Journalize the adjusting entry for bad debts at December 31, 2013. (Credit account titles are automatically
Problem 8-3A
Post the adjusting entry for bad debts at December 31, 2013.
Bad Debts Expense
Allowance for Doubtful Accounts
Journalize the 2014 transactions: (Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
1. March 1, a $810 customer balance originating in 2013 is judged uncollectible.
2.
May 1, a check for $810 is received from the customer whose account was written off as uncollectible on
March 1.
Post to the allowance account these 2014 events. (Post entries in the order of journal entries posted in
the previous part.)
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 $1,400 and the aging schedule indicates that total estimated bad
debts will be $36,000. (Credit account titles are automatically indented when amount is entered. Do

not indent manually.)
Resource: WileyPLUS
 Problem 9-7A
 Exercise 10-5
 Exercise 10-8
 Exercise 10-13
 Exercise 10-22
 Exercise 10-24
 BYP 10-1
 BYP 10-2
 Problem 10-9A
 Problem 10-13A
 IFRS 10-4
Exercise 10-5
During the month of March, Olinger Company’s employees earned wages of $73,700. Withholdings
related to these wages were $5,638 for Social Security (FICA), $8,637 for federal income tax, $3,570 for
state income tax, and $461 for union dues. The company incurred no cost related to these earnings for
federal unemployment tax but incurred $806 for state unemployment tax.
Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and
wages payable. Assume that wages earned during March will be paid during April. (Credit account
titles are automatically indented when amount is entered. Do not indent manually.)

Prepare the entry to record the company’s payroll tax expense. (Credit account titles are
Exercise 10-8
On August 1, 2014, Ortega Corporation issued $980,400, 6%, 10-year bonds at face value. Interest is payable
annually on August 1. Ortega’s year-end is December 31.
Prepare journal entries to record the issuance of the bonds. (Credit account titles are automatically
Prepare journal entries to record the accrual of interest on December 31, 2014. (Credit account titles are
Prepare journal entries to record the payment of interest on August 1, 2015. (Credit account titles are
Exercise 10-13
Romine Company issued $531,000 of 9%, 10-year bonds on January 1, 2014, at face value. Interest is
payable annually on January 1.
Prepare the journal entries to record the issuance of the bonds. (Credit account titles are

Prepare the journal entries to record the accrual of interest on December 31, 2014. (Credit account
Prepare the journal entries to record the payment of interest on January 1, 2015. (Credit account
Prepare the journal entries to record the redemption of the bonds at maturity, assuming interest for the
last interest period has been paid and recorded. (Credit account titles are automatically indented

Exercise 10-22
Cole Corporation issued $445,000, 7%, 22-year bonds on January 1, 2014, for $360,961. This price
resulted in an effective-interest rate of 9% on the bonds. Interest is payable annually on January 1. Cole
uses the effective-interest method to amortize bond premium or discount.
Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole
Corporation. (Round answers to 0 decimal places, e.g. 125.)
Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal
places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do
Prepare the journal entries to record the accrual of interest and the discount amortization on December
31, 2014. (Round answers to 0 decimal places, e.g. 125. Credit account titles are

Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0
decimal places, e.g. 125. Credit account titles are automatically indented when amount is
Exercise 10-24
Nance Co. receives $327,800 when it issues a $327,800, 5%, mortgage note payable to finance the
construction of a building at December 31, 2014. The terms provide for semiannual installment payments
of $15,662 on June 30 and December 31.
Prepare the schedule using effective-interest method to amortize bond premium or discount of Nance
Co. (Round answers to 0 decimal places, e.g. 125.)
Semiannua
l
Interest
Period
Cash
Payment
Interest
Expense
Reduction
of Principal
Principal
Balance
Issue date
$ $ $ $
6/30/15
12/31/15

Semiannual
Interest
Period
(A)
Cash
Payment
(B)
Interest
Expense
(D x 2.50%)
(C)
Reduction
of Principal
(A) – (B)
(D)
Principal
Balance
(D) – (C)
Issue date
6/30/15
12/31/15
Prepare the journal entries to record the mortgage loan. (Round answers to 0 decimal places, e.g.
125. Credit account titles are automatically indented when amount is entered. Do not indent
manually.)
Date Account Titles and Explanation Debit Credit
Dec. 31, 2014
Prepare the journal entries to record the first two installment payments. (Round answers to 0 decimal
places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do
First Installment Payment
June 30, 2015

Second Installment Payment
Dec. 31, 2015
The financial statements of Tootsie Roll are presented below.
2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157

Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)
Financial Position
Assets December 31,
2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024

Total assets $857,856 $857,959
2011 2010
25,333 25,040
14,601 14,212
2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862

Inventories (15,631) (1,447) 455
Others (708) 310 305
What were Tootsie Roll’s total current liabilities at December 31, 2011? (Enter amount in thousands.)
Current liabilities as at December 31, 2011
$
What was the increase/decrease in Tootsie Roll’s total current liabilities from the prior year? (Enter amount in
thousands.)
Change in current liabilities
$

How much were the accounts payable at December 31, 2011? (Enter amount in thousands.)
Accounts payable
$
The financial statements of The Hershey Company and Tootsie Roll are presented below.
THE HERSHEY COMPANY
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
Net Income $628,962 $509,799 $435,994
Common Stock $1.3800 $1.2800 $1.1900
THE HERSHEY COMPANY
December 31, 2011 2010

ASSETS
Current Assets:
Goodwill 516,745 524,134
Other Assets 138,722 161,212
Total assets $4,412,199 $4,272,732
Long-term Debt 1,748,500 1,541,825
2010
299,269 299,195
in 2010
60,632 60,706
132,871,512 in 2010
(4,258,962) (4,052,101)

THE HERSHEY COMPANY
Net income $628,962 $509,799 $435,994
operations:
28,341 32,055 34,927
30,838 77,935 60,823
Inventories (115,331) (13,910) 74,000

Interest Paid $97,892 $97,932 $91,623
2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)
Financial Position

Assets December 31,
2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024
Total assets $857,856 $857,959
2011 2010

25,333 25,040
14,601 14,212
2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862
Inventories (15,631) (1,447) 455
Others (708) 310 305

NOTE 6—OTHER INCOME (EXPENSE), NET:
Other income (expense), net is comprised of the following:
2011 2010 2009
Interest and dividend income $1,087 $879 $1,439
Gains (losses) on trading securities relating to deferred compensation plans 29 3,364 4,524
Interest expense (121) (142) (243)
Impairment of equity method investment. _ _ (4,400)
Equity method investment loss (194) (342) (233)
Foreign exchange gains (losses) 2,098 4,090 951
Capital gains (losses) (277) (28) (38)
Miscellaneous, net 274 537 100
$2,946 $8,358 $2,100
As of December 31, 2009, management determined that the carrying value of an equity method investment was
impaired as a result of accumulated losses from operations and review of future expectations. The Company
recorded a pre-tax impairment charge of $4,400 resulting in an adjusted carrying value of $4,961 as of
December 31, 2009. The fair value was primarily assessed using the present value of estimated future cash
flows.
Based on the information contained in these financial statements, compute the current ratio for 2011 for each
company. (Round answers to 2 decimal places, e.g. 15.25.)
Hershey Tootsie Roll
Current ratio : 1 :1

Based on the information contained in these financial statements, compute
the following 2011 ratios for each company. (Round answers to 1 decimal
places, e.g. 15.2% or 15.2 times.)
(1) Debt to assets.
(2)
Times interest earned. (Hershey’s total interest expense for 2011 was $94,780,000. See Tootsie Roll’s Note
6 for its interest expense.)
Hershey Tootsie Roll
Debt to assets % %
Times interest earned times
times
Problem 9-7A
In recent years, Farr Company has purchased three machines. Because of frequent employee turnover in
the accounting department, a different accountant was in charge of selecting the depreciation method for
each machine, and various methods have been used. Information concerning the machines is summarized
in the table below.
Machine Acquired Cost
Salvage
Value
Useful Life
(in years)
Depreciation
Method
1 Jan. 1, 2012 $126,000 $39,600 8 Straight-line
2 July 1, 2013 89,000 11,800 5 Declining-balance
3 Nov. 1, 2013 101,610 7,110 7 Units-of-activity
For the declining-balance method, Farr Company uses the double-declining rate. For the units-of-activity
method, total machine hours are expected to be 35,000. Actual hours of use in the first 3 years were:

2013, 800; 2014, 3,950; and 2015, 5,500.
Compute the amount of accumulated depreciation on each machine at December 31, 2015.
MACHINE 1 MACHINE 2 MACHINE 3
Accumulated Depreciation
at December 31
$ $ $
Solution
CLOSE
Problem 9-7A
Year Computation
Accumulated
Depreciation 12/31
MACHINE 1
2012 $86,400a
x 1/8 = $10,800 $10,800
2013 $86,400 x 1/8 = $10,800 21,600
2014 $86,400 x 1/8 = $10,800 32,400
2015 $86,400 X 1/8 = $10,800 43,200
MACHINE 2
2013 $89,000 x 40%b
x 6/12 = $17,800 $17,800
2014 $71,200 x 40% = $28,480 46,280
2015 $42,720 x 40% = $17,088 63,368
MACHINE 3
2013 800 x $2.70c
= $ 2,160 $ 2,160
2014 3,950 x $2.70 = 10,665 12,825
2015 5,500 x $2.70 = 14,850 27,675
a
($126,000 – $39,600) = $86,400
b
(1/5) x 2 = 40%
c
($101,610 – $7,110) ÷ 35,000 = $2.70

If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this
machine in 2013? In 2014?
2013 2014
Depreciation Expense
$ $
Problem 10-9A
Wempe Co. sold $3,012,000, 8%, 10-year bonds on January 1, 2014. The bonds were dated January 1,
2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and
discounts. Financial statements are prepared annually.
Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 104 and
(2) 96. (Credit account titles are automatically indented when amount is entered. Do not
indent manually.)
No. Date Account Titles and Explanation Debit Credit
1. 1/1/14
2. 1/1/14

Prepare amortization tables for issuance of the bonds sold at 104 for the first three interest payments.
Annual
Interes
t
Period
s
Interest to
Be Paid
Interest Expense
to Be Recorded
Premium
Amortization
Unamortized
Premium
Bond
Carrying Value
Issue
date
$ $ $ $ $
1
2
3
Prepare amortization tables for issuance of the bonds sold at 96 for the first three interest payments.
Annual
Interes
t
Period
s
Interest to
Be Paid
Interest Expense
to Be Recorded
Premium
Amortization
Unamortized
Premium
Bond
Carrying Value
Issue
date
$ $ $ $ $
2891520
1

240960 253008 12048 108432 2903568
2 240960 253008 12048 96384 2915616
3 240960 253008 12048 84336 2927664
Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 104 at December 31,
2014.
WEMPE Co.
Balance Sheet (Partial)
December 31, 2014
$
:
$
Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 96 at December 31,
2014.
WEMPE Co.
December 31, 2014

$
:
$
Problem 10-13A
Grace Herron has just approached a venture capitalist for financing for her new business venture, the
development of a local ski hill. On July 1, 2013, Grace was loaned $168,000 at an annual interest rate
of 5%. The loan is repayable over 5 years in annual installments of $38,804, principal and interest, due
each June 30. The first payment is due June 30, 2014. Grace uses the effective-interest method for
amortizing debt. Her ski hill company’s year-end will be June 30.
Prepare an amortization schedule for the 5 years, 2013–2018. (Round answers to 0 decimal places,
e.g. 125.)
Period
Cash
Payment
Interest
Expense
Principal
Reduction
Balance
July 1,
2013
$ $ $ $
June
30,
2014
June
30,
2015

June
30,
2016
June
30,
2017
June
30,
2018
-1
*
Prepare all journal entries for Grace Herron for the first 2 fiscal years ended June 30, 2014, and June 30,
2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented
Show the balance sheet presentation of the note payable as of June 30, 2015. (Hint: Be sure to distinguish
between the current and long-term portions of the note.) (Round answers to 0 decimal places, e.g. 125.)
GRACE HERRON
June 30, 2015
$
$
IFRS 10-4
Ratzlaff Company issues €2 million, 10-year, 8% bonds at 97, with interest payable on July 1 and January

1.
Prepare the journal entry to record the sale of these bonds on January 1, 2014. (Credit account titles
are automatically indented when the amount is entered. Do not indent manually.)
Jan. 1
Assuming instead that the above bonds sold for 104, prepare the journal entry to record the sale of these
bonds on January 1, 2014. (Credit account titles are automatically indented when the amount is
Jan. 1
Resource: WileyPLUS
 Do It! 11-1

 Exercise 11-5
 Exercise 11-07
 BYP 11-1
 BYP 11-2
 Problem 11-5A
 Problem 11-8A
Do It! Review 11-1
Indicate whether each of the following statements is true or false.
1. The corporation is an entity separate and distinct from its owners.
2. The liability of stockholders is normally limited to their investment in the corporation.
3. The relative lack of government regulation is an advantage of the corporate form of
business.
4. There is no journal entry to record the authorization of capital stock.
5. No-par value stock is quite rare today.
Exercise 11-5
Garcia Corporation recently hired a new accountant with extensive experience in accounting for partnerships.
Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about
corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.

May 2 Cash 113,680
Capital Stock 113,680
(Issued 8,120 shares of $11 par value common stock at $14 per share)
10 Cash 637,740
Capital Stock 637,740
(Issued 11,810 shares of $19 par value preferred stock at $54 per share)
15 Capital Stock 7,670
Cash 7,670
(Purchased 590 shares of common stock for the treasury at $13 per share)
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital
stock transactions. (Record entries in the order displayed in the problem statement. Credit account
CLOSE
Exercise 11-7
On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock
$377,200 and retained earnings $438,500.
Pele is considering the following two courses of action:
(1) Declaring a 7% stock dividend on the 94,300 $4 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share.
The current market price is $16 per share.
Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and
outstanding shares.

The stockholders’ equity section of Tootsie Roll Industries’ balance sheet is shown in the Consolidated
Statement of Financial Position. (Note that Tootsie Roll has two classes of common stock. To answer
the following questions, add the two classes of stock together.)
2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)
Financial Position
Assets December 31,

2011 2010
CURRENT ASSETS:
Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024
Total assets $857,856 $857,959
2011 2010

25,333 25,040
14,601 14,212
2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862
Inventories (15,631) (1,447) 455
Others (708) 310 305

What is the par or stated value per share of Tootsie Roll’s common stock? (Round answer to 4 decimal
places, e.g. 1.2531.)
Par or stated value per share
$
The common stock has a par value of $0.69-4/9 or $0.6944 per share.
What percentage of Tootsie Roll’s authorized common stock was issued at December 31, 2011?(Round to 0
decimal places, e.g. 17%)
Percentage of common stock issued
%
There are 160 million shares authorized (120 million class A and 40 million class B) of which 57,504,000
(36,479,000 + 21,025,000) are issued. The percentage is 36% (57,504,000 ÷ 160,000,000).
How many shares of common stock were outstanding at December 31, 2010, and at December 31,
2011? (Enter the answers in thousands.)
2011 2010
Number of shares outstanding
Calculate the payout ratio, earnings per share, and return on common stockholders’ equity for 2011. (Round
earnings per share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal places, e.g.

12.5%.)
The financial statements of The Hershey Company and Tootsie Roll are
presented below.
THE HERSHEY COMPANY
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
Net Income $628,962 $509,799 $435,994
Common Stock $1.3800 $1.2800 $1.1900
THE HERSHEY COMPANY
December 31, 2011 2010
ASSETS
Current Assets:

Goodwill 516,745 524,134
Other Assets 138,722 161,212
Total assets $4,412,199 $4,272,732
Long-term Debt 1,748,500 1,541,825
2010
299,269 299,195
in 2010
60,632 60,706
132,871,512 in 2010
(4,258,962) (4,052,101)
THE HERSHEY COMPANY
Net income $628,962 $509,799 $435,994

operations:
28,341 32,055 34,927
30,838 77,935 60,823
Inventories (115,331) (13,910) 74,000
Interest Paid $97,892 $97,932 $91,623

2011 2010 2009
Total revenue 532,505 521,448 499,331
Total costs 366,263 350,422 320,627
Net earnings $43,938 $53,063 $53,157
Net earnings $43,938 $53,063 $53,157
Net earnings 43,938 53,063 53,157
Cash dividends (18,360) (18,078) (17,790)
Stock dividends (47,175) (46,806) (32,629)
Financial Position
Assets December 31,
2011 2010
CURRENT ASSETS:

Inventories:
Land 21,939 21,696
Buildings 107,567 102,934
455,097 440,974
OTHER ASSETS:
Goodwill 73,237 73,237
Trademarks 175,024 175,024
Total assets $857,856 $857,959
2011 2010
25,333 25,040
14,601 14,212

2011 2010 2009
Net earnings $43,938 $53,063 $53,157
Depreciation 19,229 18,279 17,862
Inventories (15,631) (1,447) 455
Others (708) 310 305

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