Refer to the financial statements included in McCormick & Company, Incorporated’s (NYSE: MKC; Sparks, MD; hereafter, “McCormick” or “the Company”) 2014 Annual Report to answer the following questions. 1.(a) Did the Company’s “Inventories” increase or decrease over the last year?
1.(b) Were there more debits or credits to the Company’s inventory accounts during 2014?
2.(a) Did the Company’s “Prepaid expenses and other current assets” increase or decrease over the last year?
2.(b) Were there more debits or credits to the Company’s prepaid expense and other current asset accounts during 2014?
3.(a) Did the Company’s “Trade accounts payable” increase or decrease over the last year?
3.b) Were there more debits or credits to the Company’s trade accounts payable during 2014?
4.(a) Did the Company’s “Net sales” increase or decrease over the last year?
4.(b) Were there more debits or credits to the Company’s net sales accounts during 2014?
5.(a) Did the Company’s “Interest Expense”increase or decrease over the last year? 5.(b) Were there more debits or credits to the Company’s interest expense accounts during 2014?
6. Assume that, during 2014, the Company purchased an additional $38.3 million in raw materials inventory for cash. Write the journal entry necessary to record this transaction.
7. Assume that interest of $49.7 million was due and paid for by the Company during 2014. Write the journal entry necessary to record these transactions.
8. Assume that all of the Company’s net sales are “on account.” Write the journal entry necessary to record total net sales for 2014.
9. Write the journal entry necessary to record the Company’s “Selling, general, and administrative expenses” for 2014, assuming that 90 percent of the expense was paid for with cash while 10 percent was paid for on credit to regular suppliers.