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978-0078025914 Appendix C Lecture Note
APPENDIX C PRESENT AND FUTURE VALUE CONCEPTS Student Learning Objectives and Related Assignment Materials Copyright © 2016 McGraw-Hill Education Instructor’s Resource Manual, Appendix C C-1 Student Learning Objectives Mini-Exercises Exercises Coached Problem Problems (Groups A & B) Not applicable 1, […]
978-0078025914 Appendix C Solution Manual Part 1
Fundamentals of Financial Accounting, 5/e C-1 Appendix C Present and Future Value Concepts ANSWERS TO QUESTIONS 1. The time value of money is the idea that a dollar received today is worth more than a dollar to be received at […]
978-0078025914 Appendix C Solution Manual Part 2
EC–6 Req. 1 Face value 2,000 bonds x $1,000 each $2,000,000 Present value factor (8%, n=10, Table C.2) x 0.46319 Present value of face amount 926,380 Face value 2,000 bonds x $1,000 each $2,000,000 x Stated Interest Rate x 0.08 […]
978-0078025914 Appendix C Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e C-21 CPC-4 (continued) (c) Begin by using the app to determine the annual coupon payment. Express the interest payment as an interest rate by dividing the (computed) Annual Coupon Payment by the Face Value above, […]
978-0078025914 Appendix C Solution Manual Part 4
ANSWERS TO GROUP B PROBLEM PBC–1 Option 1: Present Values $100,000 = $100,000 Option 2: $6,000 9.81815 = $ 58,909 Option 3: Years 1-10: $5,000 6.71008 = $ 33,550 Years 11-20: + $7,000 6.71008 0.46319* = […]
978-0078025914 Appendix D Lecture Note Part 1
APPENDIX D INVESTMENTS IN OTHER CORPORATIONS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini-Exercises Exercises Coached Problems Problems (Groups A & B) Not applicable 1, 2, 3, 4, 5, 6, 7 1, 2, 3, 4, 5, 6, […]
978-0078025914 Appendix D Lecture Note Part 2
Handout D–1, continued 4. At February 17, 2017, Bellows sold the stock for $115 per share. Prepare the journal entry required to record this transaction and update the appropriate T-accounts: Feb. 17 2017 Note: Start with the beginning balances as […]
978-0078025914 Appendix D Solution Manual Part 1
Appendix D Investments in Other Corporations ANSWERS TO QUESTIONS 1. The appropriate method of accounting for investments in another corporation depends on the level of involvement the investor has over the other company. When the investor controls the affiliate, the […]
978-0078025914 Appendix D Solution Manual Part 2
ED–6 March 10, 2015: Trading Securities ………………………………………………………. 250,000 Cash …………………………………………………………………….. 250,000 Dec. 31, 2015: Net Unrealized Losses/Gains ……………………………………….. 25,000 Trading Securities …………………………………………………… 25,000 Dec. 31, 2016: Net Unrealized Losses/Gains ……………………………………….. 15,000 Trading Securities …………………………………………………… 15,000 Computations: Year Fair Value − […]
978-0078025914 Appendix D Solution Manual Part 3
ANSWERS TO GROUP A PROBLEMS PAD–1 Req. 1 July 12, 2014 Available-for-Sale Securities ……………………………….……….. 30,000 Cash …………………………………………………………………….. 30,000 Dec. 31, 2014 Available-for-Sale Securities ……………………………….……….. 3,000 Net Unrealized Losses/Gains ………………………….. 3,000 May 1, 2015 Cash ……………………………………………………………….……….. 2,000 Dividend Revenue …………………………..…………….……….. 2,000 […]
978-0078025914 Chapter 1 Lecture Note Part 1
CHAPTER 1 BUSINESS DECISIONS AND FINANCIAL ACCOUNTING Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Skills Development Cases Continuing Case LO1-1 Describe various organizational forms and business decision […]
978-0078025914 Chapter 1 Lecture Note Part 2
Supplemental Enrichment Activities Note: These activities would be suitable for individual or group activities. 1. Handout 1–1 Use this handout for an in-class activity designed to review the classification of various accounts, elements, or transactions on the financial statements. The […]
978-0078025914 Chapter 1 Solution Manual Part 1
Chapter 1 Business Decisions and Financial Accounting ANSWERS TO QUESTIONS 1. Accounting is a system of analyzing, recording, and summarizing the results of a business’s activities and then reporting them to decision makers. 2. An advantage of operating as a […]
978-0078025914 Chapter 1 Solution Manual Part 2
M1–14 Amazin’ Corp. Best Tech, Inc. Colossal Corp. Common Stock $5 $15 $100 Dividends 10 5 50 Net Income (a) 25 (d) 20 (g) 100 Retained Earnings, Beginning of Year 30 0 200 Retained Earnings, End of Year (b) 45 […]
978-0078025914 Chapter 1 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 1-21 ANSWERS TO COACHED PROBLEMS CP1-1 Req. 1 NUCLEAR COMPANY Income Statement For the Year Ended December 31 Sales Revenue $ 88,000 Expenses Operating Expenses 57,200 Other Expenses 8,850 Total Expenses 66,050 Net Income $ […]
978-0078025914 Chapter 1 Solution Manual Part 4
Fundamentals of Financial Accounting, 5/e 1-31 ANSWERS TO GROUP B PROBLEMS PB1-1 Req. 1 APEC AEROSPACE CORPORATION Income Statement For the Year Ended December 31 Sales Revenue $ 94,000 Expenses Operating Expenses 60,000 Other Expenses 8,850 Total Expenses 68,850 Net […]
978-0078025914 Chapter 1 Solution Manual Part 5
S1-3 The solutions to this case will depend on the company and/or accounting period selected for analysis. S1-4 Req. 1 The accounting concept that the Rigas family is accused of violating is the separate entity assumption. Req. 2 Based on […]
978-0078025914 Chapter 10 Lecture Note Part 1
CHAPTER 10 LIABILITIES Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre- hensive Problem Skills Develop- ment Cases Continuing Cases LO 10-1 Explain the role of liabilities in […]
978-0078025914 Chapter 10 Lecture Note Part 2
Chapter Outline Teaching Notes e. Reporting Bond Liabilities i. The total face value of a bond plus any related premium or minus any related discount is reported in the liabilities section of the balance sheet. Illustrated in Exhibit 10.5 ii. […]
978-0078025914 Chapter 10 Lecture Note Part 3
HANDOUT 10–1 SOLUTION PAYROLL ENTRIES J&W Buffet Co. employees earned $350,000 in the week ended December 17, 2016. Of this, $26,775 was withheld from employees’ pay for FICA and $62,000 for income taxes. The net pay was directly deposited into […]
978-0078025914 Chapter 10 Solution Manual Part 1
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 10 Liabilities ANSWERS TO QUESTIONS 1. Liabilities are created when a company buys goods and services on credit, obtains […]
978-0078025914 Chapter 10 Solution Manual Part 2
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. M10–13 Debt-to–Assets = Total Liabilities Total Assets = $110,000* = 0.55 $200,000** *$110,000 = $40,000 + $70,000 **$200,000 = $5,000 […]
978-0078025914 Chapter 10 Solution Manual Part 3
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Req. 1 January 1: Cash ………………………………………………………………………. 300,328 Bonds Payable …………………………………………………….. 250,000 Premium on Bonds Payable …………………………………… 50,328 Req. 2 December […]
978-0078025914 Chapter 10 Solution Manual Part 4
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CP10–3 (continued) Req. 3 Balance sheet at December 31: Current Liabilities: Withheld Income Taxes Payable ………………………….. 13,000 FICA Payable ……………………………………………………. […]
978-0078025914 Chapter 10 Solution Manual Part 5
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PA10–3 Req. 1 Salaries and Wages Expense ……………………………….. 80,000 Withheld Income Tax Payable ……………………………. 8,000 FICA Payable ………………………………………………….. 6,000 Charitable […]
978-0078025914 Chapter 10 Solution Manual Part 6
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PB10–4 January 1, 2015—Financial statements: Case A Case B Case C At 100 At 98 At 102 a. Bonds payable […]
978-0078025914 Chapter 10 Solution Manual Part 7
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. S10–2 Req. 1 The Home Depot Debt-to–Assets = Total Liabilities Total Assets February 2, 2014 = $27,996 = 0.691 or […]
978-0078025914 Chapter 11 Lecture Note Part 1
CHAPTER 11 STOCKHOLDERS’ EQUITY Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop- ment Cases Continuing Cases LO 11-1 Explain the role of stock […]
978-0078025914 Chapter 11 Lecture Note Part 2
Chapter Outline Teaching Notes ii. Small stock dividend • Less than 25% of currently outstanding shares. • Transfer is recorded at market value and, so, decrease in Retained Earnings is greater than increase in Common Stock. • Excess of market […]
978-0078025914 Chapter 11 Lecture Note Part 3
HANDOUT 11–1 SOLUTION STOCK TRANSACTIONS Prepare the journal entries required to record the following transactions and then post them to the related T-accounts: Strait Corp. sold 10,000 shares of $1 par value stock for $25 per share on May 1. […]
978-0078025914 Chapter 11 Solution Manual Part 1
Chapter 11 Stockholders’ Equity ANSWERS TO QUESTIONS 1. A corporation is a separate legal entity (authorized by law to operate as if it were an individual). It is owned by a number of persons and/or entities whose ownership is evidenced […]
978-0078025914 Chapter 11 Solution Manual Part 2
M11–14 Last year: P/E Ratio = Market Price per Share ÷ Earnings per Share = $212.50 ÷ $8.50 = 25 This year: P/E Ratio = Market Price per Share ÷ Earnings per Share 25 = Market Price per Share ÷ […]
978-0078025914 Chapter 11 Solution Manual Part 3
E11–11 Req. 1 (a) Dividends …………………………..…………………………..…. 100,000 Dividends Payable …………………………..………………. 100,000 Declaration of preferred dividends. Dividends Payable ……………………………………………… 100,000 Cash …………………………..…………………………..…….. 100,000 Payment of preferred dividends. (b) Dividends …………………………..…………………………..…. 400,000 * Dividends Payable …………………………..………………. 400,000 Declaration of common dividends. Dividends […]
978-0078025914 Chapter 11 Solution Manual Part 4
CP11–4 Case A—Preferred is noncumulative (total amount to distribute, $12,600): Preferred (6,000 shares) Common (30,000 shares) Total Preferred ($60,000 x 8%) ………………………….. $ 4,800 $ 4,800 Balance to common ($12,600 – $4,800) …………………. $7,800 7,800 $ 4,800 $7,800 $12,600 Per […]
978-0078025914 Chapter 11 Solution Manual Part 5
PB11–4 Case A—Preferred is noncumulative (total amount to distribute, $24,000): Preferred (19,000 shares) Common (490,000 shares) Total Preferred ($190,000 x 8%) …………………………..…………. $15,200 $15,200 Balance to common ($24,000 – $15,200) …………………. $8,800 8,800 $15,200 $8,800 $24,000 Per share ……………………………………………………….……. $.80 […]
978-0078025914 Chapter 11 Solution Manual Part 6
C11–2 (continued) Req. 2 (continued) Dividends Payable (L) Bonds Payable (L) Discount on Bonds Payable (xL) Dividends (SE) 0 Beg. 0 Beg. Beg. 0 Beg. 0 10. 3,075 3,075 4. 90,000 17. 17. 8,580 4. 3,075 0 Bal. 90,000 Bal. […]
978-0078025914 Chapter 11 Solution Manual Part 7
C11–2 (continued) Req. 11 (continued) When formulated as a present value calculation, Excel can be used to compute the amount to be invested now, as follows: Using Excel: Using the Financial Calculator App: 11–58 Solutions Manual © 2016 by McGraw–Hill […]
978-0078025914 Chapter 12 Lecture Note Part 1
CHAPTER 12 STATEMENT OF CASH FLOWS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Skills Development Cases Continuing Case LO 12-1 Identify cash flows arising from operating, investing, […]
978-0078025914 Chapter 12 Lecture Note Part 2
Chapter Outline Teaching Notes H. Supplemental Disclosures 1. In addition to their cash flows, all companies are required to report material investing and financing transactions that did not have cash flow effects (called noncash investing and financing activities). 2. These […]
978-0078025914 Chapter 12 Lecture Note Part 3
HANDOUT 12–2, continued The Group, Inc. did not sell any equipment or repay any borrowings during the current year. The company declared and paid dividends in the amount of $3,564 during the current year. Using the information provided above, compute […]
978-0078025914 Chapter 12 Solution Manual Part 1
Chapter 12 Statement of Cash Flows ANSWERS TO QUESTIONS 1. The income statement reports revenues earned and expenses incurred during a period of time. It is prepared on an accrual basis. The balance sheet reports the assets, liabilities, and equity […]
978-0078025914 Chapter 12 Solution Manual Part 2
E12–3 Req. 1 Cash ( …………………………………………………………… 325 Service Revenue …………………………………. 325 Salaries and Wages Payable ………………………….. Salaries and Wages Expense ………………………… 15 85 Cash …………………………………………………. 100 Req. 2 The $225 increase in cash ($325 – $100) should be reported as […]
978-0078025914 Chapter 12 Solution Manual Part 3
E12–14 (continued) Req. 5 Under the indirect method, to convert from the cash basis to the accrual basis, you must make the following adjustments to net income: subtract increases in inventory (a current asset) and add increases in accounts payable […]
978-0078025914 Chapter 12 Solution Manual Part 4
CP12–3 (continued) HUNTER COMPANY Statement of Cash Flows For the Year Ended December 31, 2015 Cash flows from operating activities: Net income……………………………………………………………. $12,000 1 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense ……………………………………………. $ […]
978-0078025914 Chapter 12 Solution Manual Part 5
PA12–6 Req. 1 HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash flows from operating activities: Cash collected from customers1 ……………………………….. $ 38,350 Cash paid for wages to employees2 ………………………….. (35,250 ) Cash paid for […]
978-0078025914 Chapter 12 Solution Manual Part 6
PB12–6 Req. 1 DIVE IN COMPANY Statement of Cash Flows For the Year Ended December 31 Cash flows from operating activities: Cash collected from customers1 ……………………………….. $ 33,450 Cash paid for salaries and wages to employees2 ………… (30,750 ) Cash […]
978-0078025914 Chapter 13 Lecture Note Part 1
CHAPTER 13 MEASURING AND EVALUATING FINANCIAL PERFORMANCE Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Skills Development Cases Continuing Case LO 13-1 Describe the purposes and uses of […]
978-0078025914 Chapter 13 Lecture Note Part 2
Chapter Outline Teaching Notes IV. Supplement 13A: Nonrecurring and Other Special Items LO 13-S1 Describe how nonrecurring and other comprehensive income items are reported. A. Nonrecurring Items 1. Until 2005, three different types of nonrecurring items were reported in income […]
978-0078025914 Chapter 13 Solution Manual Part 1
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 13 Measuring and Evaluating Financial Performance ANSWERS TO QUESTIONS 1. Trend analysis compares individual financial statement line items over […]
978-0078025914 Chapter 13 Solution Manual Part 2
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. E13–2 Req. 1 Gross Profit Percentage = Net Sales Revenue – Cost of Goods Sold Net Sales Revenue 2013 = […]
978-0078025914 Chapter 13 Solution Manual Part 3
Education. E13–14 Current Assets (CA) Current Liabilities (CL) Current Ratio (CA ÷ CL) Start $500,000 ($500,000 ÷ 2) $250,000 2.00 Transaction (1) A/R +15,000 Inventory -12,000 Subtotal 503,000 250,000 2.01 Transaction (2) Dividends pay. +50,000 Subtotal 503,000 300,000 1.68 Transaction […]
978-0078025914 Chapter 13 Solution Manual Part 4
Education. CP13–6 (continued) Req. 2 (continued) The liquidity ratios again favor Blair because the company has a higher current ratio (1.84 vs. 1.75), faster receivables turnover (23.82 vs. 15.00; 15.32 vs. 24.33 days to collect), and faster inventory turnover (9.53 […]
978-0078025914 Chapter 13 Solution Manual Part 5
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWERS TO GROUP B PROBLEMS PB13–1 Req. 1 Tiger Audio Horizontal Analysis Increase (Decrease) in the current year (versus the […]
978-0078025914 Chapter 13 Solution Manual Part 6
13-50 Solutions Manual © 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWERS TO SKILLS DEVELOPMENT CASES S13–1 Answer: D Calculations: Fixed Asset Turnover = Net Revenue Average Net […]
978-0078025914 Chapter 2 Lecture Note Part 1
CHAPTER 2 THE BALANCE SHEET Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini- Exercises Exercises Coached Problems Problems (Groups A & B) Skills Development Cases Continuing Case LO 2-1 Identify financial effects of common business activities that […]
978-0078025914 Chapter 2 Lecture Note Part 2
Chapter Outline Teaching Notes d. To find ending account balance, express the T-account as equations: Start with beginning balance Add “+” side Subtract “–” side Equals ending balance “Spotlight on Financial Reporting” feature addresses the impact of needing extra time […]
978-0078025914 Chapter 2 Lecture Note Part 3
HANDOUT 2–2, continued Spreadsheet Assets = Liabilities + Stockholders’ Equity Ref. Cash + Supplies + Equipment = Accounts Payable + Notes Payable + Common Stock (a) +10,000 = +10,000 (b) +15,000 = +15,000 (c) –20,000 +20,000 = (d) +300 = […]
978-0078025914 Chapter 2 Lecture Note Part 4
HANDOUT 2–4, continued (i) Orders a $900 computer, to be delivered in 90 days. Debit and credit the accounts affected Ensure the equation still balances and debits = credits Assets = Liabilities + Stockholders’ Equity Copyright © 2016 McGraw-Hill Education […]
978-0078025914 Chapter 2 Solution Manual Part 1
Fundamentals of Financial Accounting, 5/e 2-1 © 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 2 The Balance Sheet ANSWERS TO QUESTIONS 1. (a) An asset is a […]
978-0078025914 Chapter 2 Solution Manual Part 2
© 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. M2–18 Assets = Liabilities + Stockholders’ Equity (a) Equipment + 12,000 Accounts Payable + 12,000 (b) Cash – 6,000 Accounts […]
978-0078025914 Chapter 2 Solution Manual Part 3
E2–11 Req. 1 Assets Liabilities Stockholders’ Equity Cash Equipment Accounts Payable ST Notes Payable LT Notes Payable Common Stock Beg. 0 0 0 0 0 0 a. +60,000 +60,000 b. +20,000 +20,000 c. No transaction, therefore no financial effects to […]
978-0078025914 Chapter 2 Solution Manual Part 4
CP2-2 (continued) Req. 2 a. Cash (+A) …………………………………………………………………. 200,000 Common Stock (+SE) ……………………………………………. 200,000 b. Cash (+A) …………………………………………………………………. 30,000 Note Payable (long-term) (+L) …………………………………. 30,000 c. Building (+A) ……………………………………………………………… 141,000 Cash (-A) ……………………………………………………………… 41,000 Note Payable (long-term) (+L) …………………………………. 100,000 […]
978-0078025914 Chapter 2 Solution Manual Part 5
© 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole […]
978-0078025914 Chapter 2 Solution Manual Part 6
Fundamentals of Financial Accounting, 5/e 2-50 PB2-3 (continued) Req. 7 Starbucks Apple Current Ratio = $5,460* = 1.01 Current Ratio = $73,300 = 1.68 $5,380** $43,700 * ($2,560 Cash + $560 AR + $1,110 Inventory + $570 Prepaid + $660 […]
978-0078025914 Chapter 3 Lecture Note Part 1
CHAPTER 3 THE INCOME STATEMENT Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problem Skills Develop- ment Cases Continuing Case LO 3-1 Describe common operating transactions […]
978-0078025914 Chapter 3 Lecture Note Part 2
Chapter Outline Teaching Notes III. Evaluate the Results LO 3-5 Evaluate net profit margin, but beware of income statement limitations. A. Net Profit Margin The “Spotlight on Financial 1. Net Profit Margin = Net Income ÷ Total Revenues Reporting” feature […]
978-0078025914 Chapter 3 Lecture Note Part 3
HANDOUT 3–1 SOLUTION TRANSACTION ANALYSIS AND POSTING TO T-ACCOUNTS The following activities occurred during January 2016. Prepare a journal entry for ensure that the basic accounting equation balances for each transaction. Then, summarize the effects of each transaction in the […]
978-0078025914 Chapter 3 Solution Manual Part 1
Chapter 3 The Income Statement ANSWERS TO QUESTIONS 1. Net Income = Revenues – Expenses. Each element is defined as follows: Revenues – the amounts a business earns by selling goods or services to its customers. Expenses – any costs […]
978-0078025914 Chapter 3 Solution Manual Part 2
M3–14 a. Accounts Receivable (+A) ………………………………………….. 200 Service Revenue (+R, +SE) …………………………………… 200 b. Advertising Expense (+E, –SE) …………………………………….. 50 Cash (-A) …………………………………………………………….. 50 c. Cash (+A) ………………………………………………………………… 200 Service Revenue (+R, +SE) …………………………………… 200 d. Utilities Expense (+E, –SE) […]
978-0078025914 Chapter 3 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 3-21 E3-7 Assets Liabilities Stockholders’ Equity a. Cash –1,000 NE Wages Expense (+E) –1,000 b. Cash +5,000 Note Payable (short-term) +5,000 NE c. Equipment +2,000 Accounts Payable +2,000 NE d. Cash +400 NE Sales Revenue […]
978-0078025914 Chapter 3 Solution Manual Part 4
E3-17 (continued) f. Utilities Expense (+E, –SE) …………………………………………. 1,250 Accounts Payable (+L) …………………………………….. 1,250 g. Accounts Receivable (+A) …………………………………………. 15,900 Service Revenue (+R, +SE) ……………………………… 15,900 h. Cash (+A) ……………………………………………………………….. 12,000 Accounts Receivable (-A) …………………………………. 12,000 i. Accounts Payable (-L) […]
978-0078025914 Chapter 3 Solution Manual Part 5
CP3-4 (continued) Req. 2 8/31 Cash (+A) ……………………………………………………………….. 1,500 Unearned Revenue (+L) …………………………………… 1,500 9/11 Cash (+A) ……………………………………………………………….. 3,800 Service Revenue (+R, +SE) ……………………………… 3,800 9/13 Supplies (+A) …………………………………………………………… 200 Accounts Payable (+L) …………………………………….. 200 9/15 Salaries and Wages Expense […]
978-0078025914 Chapter 3 Solution Manual Part 6
Fundamentals of Financial Accounting, 5/e 3-51 PB3-3 Req. 1 1. Cash (+A) ……………………………………………………………….. 50,000 Common Stock (+SE) ………………………………………. 50,000 2. Equipment (+A) ………………………………………………………… 20,000 Cash (–A) ………………………………………………………. 20,000 3. Cash (+A) ………………………………………………………………… 5,000 Service Revenue (+R, +SE) ……………………………… 5,000 4. […]
978-0078025914 Chapter 3 Solution Manual Part 7
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole […]
978-0078025914 Chapter 4 Lecture Note Part 1
CHAPTER 4 ADJUSTMENTS, FINANCIAL STATEMENTS, AND FINANCIAL RESULTS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Case LO 4-1 Explain […]
978-0078025914 Chapter 4 Lecture Note Part 2
Chapter Outline Teaching Notes LO 4-5 Explain the closing process. E. Closing Temporary Accounts 1. Last step of accounting cycle is referred to as closing process; performed only at the end of the year after the financial statements have been […]
978-0078025914 Chapter 4 Lecture Note Part 3
HANDOUT 4–2 Use the balances in the T-accounts in handout 4–1 to prepare an adjusted trial balance. Deana’s Decorators Adjusted Trial Balance December 31, 2016 Debit Credit Cash Supplies Accounts Receivable Prepaid Rent Prepaid Insurance Certificate of Deposit Interest Receivable […]
978-0078025914 Chapter 4 Lecture Note Part 4
HANDOUT 4–4 CLOSING ENTRIES, POSTING TO T-ACCOUNTS, PREPARATION OF POST-CLOSING TRIAL BALANCE Prepare the required closing entries for Deana’s Decorators using the adjusted account balances set forth in Handout 4–2. Post the entries to the T-accounts shown on the next […]
978-0078025914 Chapter 4 Solution Manual Part 1
Chapter 4 Adjustments, Financial Statements, and Financial Results ANSWERS TO QUESTIONS 1. Adjusting entries are made at the end of the accounting period to record all revenues and expenses that have not been recorded but belong in the current period. […]
978-0078025914 Chapter 4 Solution Manual Part 10
C4–6 (continued) Req. 2 Cash (A) Accounts Receivable (A) Supplies (A) Prepaid Insurance (A) Beg. 10,900 Beg. 800 Beg. 400 Beg. 0 5,700 (1) (9)10,400 600 (7) (6) 1,000 (1) 5,700 4,200 (2) 4,500 (25) Bal. 1,400 Bal. 5,700 (3) […]
978-0078025914 Chapter 4 Solution Manual Part 11
S4–5 The change in estimated depreciation expense will increase net income this year but some depreciation will now extend into next year, decreasing net income then. Although it’s true that GAAP requires the use of estimates in certain instances (such […]
978-0078025914 Chapter 4 Solution Manual Part 2
M4–12 Account Financial Statement? Classification? Normal dr or cr Balance? Interest Expense IS E Dr Prepaid Rent BS CA Dr Amortization Expense IS E Dr Unearned Revenue BS CL Cr Retained Earnings BS SE Cr Accumulated Depreciation BS NCA Cr […]
978-0078025914 Chapter 4 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 4–21 E4–3 Ref / Date Journal Entries and Adjusting Journal Entries (a) Sept 1 Prepaid Rent (+A)……………………………………12,000 Cash (−A)……………………………………. 12,000 Sept 30 Rent Expense (+E, −SE) ($12,000 x 1/6)………. 2,000 Prepaid Rent (−A)……………………………. 2,000 (b) […]
978-0078025914 Chapter 4 Solution Manual Part 4
E4–15 (continued) Req. 4 (a) Preliminary net income = $50,000 – 25,000 – 12,500 = $12,500 (b) Adjusted net income = $50,000 – 25,000 – 21,500 – 1,200 – 1,000 – 390 = $910 Without adjustments, preliminary net income would […]
978-0078025914 Chapter 4 Solution Manual Part 5
CP4–2 (continued) Req. 2 a. Interest Expense (+E, −SE)…………………………. 700 Interest Payable (+L)………………………… 700 To accrue interest expense incurred but not paid. b. Unearned Revenue (−L) ……………………………………… 3,200 Rent Revenue (+R, +SE) ……………………………. 3,200 $4,800 ÷ 6 months = $800 […]
978-0078025914 Chapter 4 Solution Manual Part 6
Fundamentals of Financial Accounting, 5/e 4–51 PB4–1 Req. 1 REGIS CORPORATION Adjusted Trial Balance At June 30, 2013 (in millions) Account Titles Debit Credit Cash $ 200 Accounts Receivable 70 Inventories 140 Prepaid Rent 80 Equipment 770 Accumulated Depreciation–Equipment $ […]
978-0078025914 Chapter 4 Solution Manual Part 7
C4–2 (continued) Req. 1, 3, 5, and 8 (T–accounts) Service Revenue (R) Depreciation Expense (E) Amortization Expense (E) Beg. 0 12/8 160 Beg. 0 12/31(13) 6 Beg. 0 12/31(11) 5 CE1 160 CE1 6 CE1 5 Bal. 0 Bal. 0 […]
978-0078025914 Chapter 4 Solution Manual Part 8
C4–3 (continued) Req. 2 1. Cash (+A) ……………………………………………………… 22 Note Payable (short–term) (+L) ……………….. 22 Borrowed cash on note. 2. Equipment (+A) ……………………………………………… 25 Cash (−A) …………………………………………….. 25 Purchased equipment. 3. Cash (+A) ……………………………………………………… 5 Common Stock (+SE) …………………………..… 5 […]
978-0078025914 Chapter 4 Solution Manual Part 9
C4–4 (continued) Req. 3 LAZY SOFA FURNITURE, INC. Unadjusted Trial Balance At December 31, 2015 (in thousands) Account Titles Debit Credit Cash $ 31 Accounts Receivable 5 Supplies 12 Equipment 27 Accumulated Depreciation–Equipment $ 0 Software 12 Accumulated Amortization 3 […]
978-0078025914 Chapter 5 Lecture Note Part 1
CHAPTER 5 FRAUD, INTERNAL CONTROL, AND CASH Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problem Skills Develop– ment Cases Continuing Cases LO 5-1 Define fraud […]
978-0078025914 Chapter 5 Lecture Note Part 2
Chapter Outline Teaching Notes 3. Cash Paid to Reimburse Employees (Petty Cash) a. Petty cash fund—A system used to reimburse employees for expenditures they have made on behalf of the organization. i. Acts as a control by establishing a limited […]
978-0078025914 Chapter 5 Lecture Note Part 3
HANDOUT 5–1 SOLUTION BANK RECONCILIATION Information from the records and bank statement and of Matrix, Inc. as of July 31, 2016 is set forth below Cash balance per bank, July 31, 2016 $9,610 Cash balance per general ledger, July 31, […]
978-0078025914 Chapter 5 Solution Manual Part 1
Chapter 5 Fraud, Internal Control, and Cash ANSWERS TO QUESTIONS 1. The three categories of employee fraud are: corruption, asset misappropriation, and financial statement fraud. Asset misappropriation is most common. Financial statement fraud is associated with the largest losses. 2. […]
978-0078025914 Chapter 5 Solution Manual Part 2
E5–3 (continued) Req. 2 Because the supervisor was responsible for handling the cash, preparing the cash count sheet, and depositing cash in the bank, the supervisor was able to steal cash without detection. Accounting could have detected the theft by […]
978-0078025914 Chapter 5 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 5-21 © 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWERS TO GROUP A PROBLEMS PA5–1 Req. 1 a. Weakness – By not issuing […]
978-0078025914 Chapter 5 Solution Manual Part 4
C5-1 (continued) Req. 2 Cash (A) Supplies (A) Equipment (A) Beg. 1/1 1/5 1/7 3,800 2,500 5,000 1,000 4,000 4,000 1,500 1/2 1/6 1/15 Beg. 1/3 500 200 Beg. 30,000 1/31 3,000 End. 5,800 End. 700 End. 30,000 Cash Equivalents […]
978-0078025914 Chapter 5 Solution Manual Part 5
C5-1 (continued) Req. 9 Net Profit Margin = Net Income Total Revenue = $2,940 $9,005 = 0.3265 =32.65% Yes Pulse Recording Studio has achieved its objective by having a net profit margin of 32.65%, which exceeds its goal of 10%. […]
978-0078025914 Chapter 6 Lecture Note Part 1
CHAPTER 6 MERCHANDISING OPERATIONS AND THE MULTISTEP INCOME STATEMENT Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre- hensive Problem Skills Develop- ment Cases Continuing Cases LO 6-1 […]
978-0078025914 Chapter 6 Lecture Note Part 2
Chapter Outline Teaching Notes C. Sales on Account and Sales Discounts 1. Sales discount––A sales price reduction given to customers for prompt payment of their account balance. 2. Sales discount is calculated after taking into account any sales returns and […]
978-0078025914 Chapter 6 Solution Manual Part 1
Chapter 6 Merchandising Operations and the Multi-Step Income Statement ANSWERS TO QUESTIONS 1. Service companies sell services and merchandising companies sell physical products. Merchandising companies sell physical products that are purchased from a supplier and manufacturing companies sell physical products […]
978-0078025914 Chapter 6 Solution Manual Part 2
M6–16 (in billions of euro) 2012 2011 Sales 7.1 6.2 COGS 2.4 2.1 Gross Profit 4.7 4.1 Gross Profit Percentage 66.2% 66.1% Luxottica’s increase in gross profit was caused by a combination of both (a) an increase in gross profit […]
978-0078025914 Chapter 6 Solution Manual Part 3
E6–22 Req. 1 WOLVERINE WORLD WIDE INC. Income Statement For the 2012 fiscal year (in millions) Net Sales Revenue …………………………… $ 1,640 Cost of Goods Sold ………………………….. 1,010 Gross Profit……………………………………… 630 Salaries and Wages Expense…………….. 520 Income from Operations ……………………. […]
978-0078025914 Chapter 6 Solution Manual Part 4
PA6-2 (continued) Req. 3 (a) Accounts Receivable …………………………………………………. 550,000 Sales Revenue …………………………………………………….. 550,000 Cost of Goods Sold …………………………………………………… 415,000 Inventory …………………………………………………………….. 415,000 (b) Sales Returns and Allowances ……………………………………. 10,000 Accounts Receivable …………………………………………….. 10,000 (c) Cash ($540,000 x 98%) ………………………………………………. 529,200 […]
978-0078025914 Chapter 6 Solution Manual Part 5
PB6-5 (continued) Req. 2 Perpetual inventory system: January 6 Accounts Receivable ………………………………………………… 600 Sales Revenue (20 units at $30) ……………………..…… 600 Cost of Goods Sold …………………………………………………… 400 Inventory (20 units at $20) …………………………..….……… 400 January 9 Inventory (10 units at […]
978-0078025914 Chapter 6 Solution Manual Part 6
S6-4 (continued) Req. 4 The right thing to do is reliably report all information that is relevant to financial statement users—this is called the full disclosure principle. In this case, top management of the company will use the division’s income […]
978-0078025914 Chapter 7 Lecture Note Part 1
CHAPTER 7 INVENTORY AND COST OF GOODS SOLD Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Cases LO 7-1 Describe […]
978-0078025914 Chapter 7 Lecture Note Part 2
Chapter Outline Teaching Notes B. Comparison to Benchmarks Illustrated in Exhibit 7.7 1. Inventory turnover ratios and the number of days to sell can be helpful in comparing different companies’ inventory management practices. 2. These measures can vary significantly between […]
978-0078025914 Chapter 7 Solution Manual Part 1
Chapter 7 Inventories and Cost of Goods Sold ANSWERS TO QUESTIONS 1. Three goals of inventory management are to make or buy products (1) in sufficient quantities to avoid stock–outs (which could result in lost sales revenue and decreases in […]
978-0078025914 Chapter 7 Solution Manual Part 2
M7–14 (a) Perpetual FIFO Goods in Inventory Goods Sold Unit Total Unit Total Date Description Units Cost Cost Units Cost Cost July 1 Beginning inventory 2,000 $ 40 $ 80,000 July 5 Sold 1,000 units (1,000) 40 (40,000) 1,000 $ […]
978-0078025914 Chapter 7 Solution Manual Part 3
E7–8 Req. 1 Inventory Costing Method Weighted Income Statement Units FIFO LIFO Average Sales Revenue ……………………………….. 4,100 $307,500 $307,500 $307,500 Cost of Goods Sold* ………………………… 4,100 152,800 155,500 153,340 Gross Profit ………………………………….. 154,700 152,000 154,160 Operating Expenses ………………………… 91,500 91,500 […]
978-0078025914 Chapter 7 Solution Manual Part 4
ANSWERS TO COACHED PROBLEMS CP7–1 Req. 1 Unit Total Goods available for sale for all methods: Units Cost Cost Beginning inventory, January 1 200 $30 $6,000 Purchase, March 2 300 32 9,600 Purchase, June 30 250 36 9,000 Goods available […]
978-0078025914 Chapter 7 Solution Manual Part 5
PA7–5 Req. 1 Sherwood Company Income Statements (Corrected) 2012 2013 2014 2015 Net Sales $2,000,000 $2,400,000 $2,500,000 $3,000,000 Cost of goods sold 1,400,000 1,680,000* 1,750,000* 2,100,000 Gross profit $ 600,000 $ 720,000 $ 750,000 $ 900,000 * The $20,000 decrease […]
978-0078025914 Chapter 7 Solution Manual Part 6
C7–2 (continued) COLLEGE COASTERS Adjusted Trial Balance At December 31 Account Titles Debit Credit Cash $ 8,905 Accounts Receivable 2,800 Inventory 275 Prepaid Rent 500 Equipment 810 Accumulated Depreciation–Equipment $ 120 Accounts Payable 910 Income Tax Payable 789 Salaries and […]
978-0078025914 Chapter 8 Lecture Note Part 1
CHAPTER 8 RECEIVABLES, BAD DEBT EXPENSE, AND INTEREST REVENUE Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Cases LO 8-1 […]
978-0078025914 Chapter 8 Lecture Note Part 2
Chapter Outline Teaching Notes 2. Days to Collect—Measures the average number of days from the time from sale on account to collection. a. Days to Collect = 365 ÷ Receivables Turnover Ratio. b. Days to collect ratio measures the average […]
978-0078025914 Chapter 8 Lecture Note Part 3
HANDOUT 8–2 SOLUTION ESTIMATION AND RECORDING OF UNCOLLECTIBLE ACCOUNTS – AGING OF ACCOUNTS RECEIVABLE METHOD Part 1 In 2016, Vandolay reported $300,000 in sales. The company’s allowance for doubtful accounts has an unadjusted credit balance of $12,000. Vandolay Industries accountants […]
978-0078025914 Chapter 8 Solution Manual Part 1
Chapter 8 Receivables, Bad Debt Expense, and Interest Revenue ANSWERS TO QUESTIONS 1. The advantages of extending credit are that it allows a company to compete effectively with competitors who extend credit. The additional gross profit earned from selling on […]
978-0078025914 Chapter 8 Solution Manual Part 2
E8–6 Req. 1 Total Young Old Accounts Receivable $ 500,000 $ 100,000 $ 400,000 Estimated Uncollectible (%) x 5 % x 40 % Estimated Uncollectible ($) $ 165,000 $ 5,000 $160,000 Req. 2 Allowance for Doubtful Accounts 40,000 125,000 Unadjusted […]
978-0078025914 Chapter 8 Solution Manual Part 3
CP8–2 Req. 1 (in thousands) Allowance for Doubtful Accounts 3,400 Beg. balance 700 Bad debt exp. Write–offs 1,100 3,000 End. balance Beg. balance + Additions charged to Bad Debt Expense – Write-offs = Ending balance $3,400 + $700 – $1,100 […]
978-0078025914 Chapter 8 Solution Manual Part 4
PA8–4 (continued) Req. 1 (continued) j. Allowance for Doubtful Accounts AJE = $1,678 desired (see calculation below) – $1,200 current = $ 478 adjustment Total 0–30 31–60 61–90 > 90 Total Accounts Receivable $ 18,000 $ 7,300 $ 8,480 $ […]
978-0078025914 Chapter 8 Solution Manual Part 5
Fundamentals of Financial Accounting, 5/e 8– 41 © 2016 by McGraw– Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWER TO COMPREHENSIVE PROBLEM C8–1 Req. 1 Customer Total Balance June (one […]
978-0078025914 Chapter 8 Solution Manual Part 6
C8–3 (continued) Req. 5 (a) Had OTP used the percentage of sales method to estimate bad debts, the company would have reported $346 ($17,284 x 0.02) of Bad Debt Expense. (b) Had OTP reported $346 of Bad Debt Expense, the […]
978-0078025914 Chapter 9 Lecture Note Part 1
CHAPTER 9 LONG-LIVED TANGIBLE AND INTANGIBLE ASSETS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre- hensive Problem Skills Develop– ment Cases Continuing Case LO 9-1 Define, classify, […]
978-0078025914 Chapter 9 Lecture Note Part 2
Chapter Outline Teaching Notes 7. Partial-Year Depreciation Calculations a. Purchases of long-lived assets seldom occur on the first or last day of the period; depreciation must sometimes be calculated for periods shorter than a year. b. Under the straight-line and […]
978-0078025914 Chapter 9 Solution Manual Part 1
Chapter 9 Long-Lived Tangible and Intangible Assets ANSWERS TO QUESTIONS 1. Long-lived assets are any assets that will not be used up within the next year, which a business retains, not for sale, but for use in the course of […]
978-0078025914 Chapter 9 Solution Manual Part 2
M9–13 Fixed asset turnover ratio: Net Sales = $4,175,000 = 0.50 (Beginning Net Fixed Asset Balance + Ending Net Fixed Asset Balance) ÷ 2 ($8,450,000 + $8,250,000)/2 The fixed asset turnover ratio measures a company’s efficiency at using its investment […]
978-0078025914 Chapter 9 Solution Manual Part 3
E9–13 (a) Trademarks Bal. 1,800 Purch. 216 31 Disposal End. 1,985 (b) Accumulated Amortization Bal. 31 Disposal 10 Amort. 7 (c) Proceeds on disposal $12 – Book value of asset sold Cost 31 Accumulated Amortization 10 21 = Gain (loss) […]
978-0078025914 Chapter 9 Solution Manual Part 4
PA9–3 Req. 1 Date Assets Liabilities Stockholders’ Equity Jan. 2 Cash Equipment –20,000 +250,000 Note Payable (long–term) +230,000 Jan. 2 Equipment ………………………………………………….. 250,000 Cash ……………………………………………………. 20,000 Note Payable (long-term) ………………………… 230,000 Date Assets Liabilities Stockholders’ Equity Jan. 3 Equipment +20,000 […]
978-0078025914 Chapter 9 Solution Manual Part 5
C9–1 (continued) Req. 2 (continued) Income Tax Expense (E) GRID IRON PREP INC. Adjusted Trial Balance As of December 31 Account Titles Debit Credit Cash 55,740 Accounts Receivable 4,000 Allowance for Doubtful Accounts 120 Building 40,000 Accumulated Depreciation–Building 158 Equipment […]
978-0078025914 Chapter 9 Solution Manual Part 6
S9–5 (continued) Req. 2 (continued) unnecessary costs associated with renegotiating the terms of its loan to the company— renegotiations that could ultimately reveal that the company is generating sufficient cash flows to repay the loan (despite what net income suggests […]
AC 128 Midterm 1
The fixed asset turnover ratio is a profitability ratio. Generally Accepted Accounting Principles (GAAP) require profitable companies to distribute some of their earnings to their stockholders. Answer: False The Basic Accounting Equation Feedback: There is no GAAP requirement that companies […]
AC 224 Midterm 1
Worthington Co. issues $500,000 of 5-year, 6% bonds on January 1, 2016. Required: Prepare the journal entry to record the issuance of the bonds under each of the following assumptions: Part a. The bonds are sold at 100. Part b. […]
AC 391 Quiz 3
The return on equity ratio is calculated as: A) dividends paid divided by the average book value of stockholders’ equity. B) net income divided by the average number of outstanding common shares. C) dividends divided by the average number of […]
AC 392 Quiz 3
An error must have been made if which of the following accounts appears on the post-closing trial balance with a balance other than zero? A) Equipment B) Common Stock C) Accumulated Depreciation D) Depreciation Expense The Sarbanes-Oxley Act (SOX) requires […]
AC 466 Midterm Generally
Generally accepted accounting principles (GAAP) require that the inventory be reported at: A) market value. B) historical cost. C) lower of cost or market. D) retail value. A typical classified balance sheet provides no information about which of the following […]
AC 563
Gross profit is not a ledger account name. Creditors are mainly interested in the profitability of a company. Answer: False Feedback: Creditors are mainly interested in a company’s ability to repay a debt. The carrying value of an asset is […]
AC 568
Goods on consignment are goods shipped by the owner to another company that holds the goods and sells them on behalf of the owner. A company does not need to record the receipt of a bill for utilities used during […]
AC 627 Quiz 1
Which of the following ratios is used to evaluate a company’s liquidity? A) Debt-to-assets ratio B) Fixed asset turnover ratio C) Return on equity ratio D) Current ratio Your company sells $50,000 of bonds for an issue price of $48,000. […]
AC 640 Final
The Publish or Perish Printing Company paid a dividend to stockholders. This will be reported on the: A) audit report. B) income statement. C) balance sheet. D) statement of retained earnings. Welles Company uses the direct write-off method of accounting […]
AC 743 Homework
Which of the following is a correct statement? A) The Sales Discounts account is a contra-asset account. B) The Sales Returns & Allowances account is a contra-revenue account. C) The Sales Returns & Allowances account is a credit balance account. […]
AC 775 Test 1
The assignment of costs to cost of goods sold and to inventory using the weighted average method usually yields different results depending on whether a perpetual or a periodic system is used. When costs per unit are increasing, the inventory […]
Acc 104 Quiz
Accrued liabilities could include all of the following except: A) Wages and Salaries Payable. B) Current Portion of Long-Term Debt. C) Income Tax Payable. D) Interest Payable. The main purposes of internal controls include all of the following except: A) […]
ACC 110 Quiz
Which of the following statements about the adjusted and post-closing trial balances is correct? A) The adjusted trial balance is prepared after the financial statements to verify that the numbers are accurate. B) The primary purpose of the post-closing trial […]
ACC 129
Journal entries show the effects of transactions on the elements of the accounting equation, as well as the account balances. The reporting of financing activities is identical under the indirect and direct methods for the statement of cash flows on […]
ACC 161
In a period of falling prices, the inventory costing method that assigns a value to inventory that approximates current cost is: A) FIFO B) LIFO. C) Specific identification. D) Weighted average Mercedes, Co. has the following quarterly financial information. Required: […]
Acc 211 Quiz
Depreciation is added back to net income in a statement of cash flows prepared using the indirect method because it: A) reduces net income but not cash. B) is a cash inflow. C) is a revenue. D) is a valuation […]
Acc 291 Which of the following
Which of the following would be listed as a current liability? A) Cash B) Notes Payable (due in two years) C) Supplies D) Accounts Payable If Salaries and Wages Expense is $450,000 during the year and the beginning and ending […]
ACC 358
On February 16, a company declares a 34¢ dividend to be paid on April 5. There are 1,900,000 shares of common stock issued and outstanding. The entry recorded by the company on February 16 includes a debit to: A) Dividends […]
Acc 378
Every financial statement should have “who, what, and when” in its heading. These include the: A) name of the person preparing the statement, the type of financial statement, and when the financial statement was reported to the SEC. B) name […]
ACC 397 The period of time from
The period of time from buying goods and services to collecting cash from customers is the accounting cycle. Contingent liabilities arise from past transactions, but depend on future events. Answer: True Feedback: Contingent liabilities are potential liabilities that have arisen […]
Acc 415 Test
On September 1, a company purchased a vehicle for $23,000 with a residual value of $3,000. The estimated useful life is 5 years and the company uses the straight-line method. What is the depreciation expense for the year ended December […]
ACC 524 Test 1
A voucher is an internal file that:A)is prepared after an invoice is received.B)is used as a substitute for an invoice.C)is a collection of documents prepared at each step in the voucher system.D)takes the place of a bank check.E)is prepared before […]
ACC 576
Which one of the following is not a current asset? A) Cash B) Supplies C) Equipment D) Prepaid Insurance Assets reported on the balance sheet include: A) Accounts Receivable, Sales Revenue, and Cash. B) Equipment, Supplies Expense, and Cash. C) […]
Acc 590 Test 2
On December 31, 2016, Ditka Inc. had Retained Earnings of $267,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $168,100 and interest revenue of $81,300. The company used supplies in the amount […]
Acc 593 Test 1
Lower of cost or market can be applied on an item or product category basis. Inventory shrinkage is the difference between inventory recorded and inventory counted. Answer: True Feedback: Any discrepancy that exists between inventory recorded in the accounting records […]
Acc 599 Midterm
Use the information above to answer the following question. What journal entry will be recorded by Flynn Company on November 6? A) Debit Inventory and credit Accounts Payable for $5,800 B) Debit Cost of Goods Sold and credit Accounts Payable […]
Acc 619 Quiz 2
Preferred stock differs from common stock in that: A) preferred stock has more voting power and, as such, greater control over the management of the company. B) preferred stockholders are paid dividends before common stockholders. C) preferred stock pays tax-free […]
ACC 711 Quiz 1
The classified balance sheet for a company reported current assets of $1,623,850, total liabilities of $799,540, Common Stock of $1,000,000, and Retained Earnings of $130,260. The current ratio was 2.5. Use the information above to answer the following question. What […]
Acc 748 Final
When the direct write-off method is used: A) the estimated amount of bad debts is debited to Bad Debt Expense. B) the estimated amount of bad debts is debited to Allowance for Doubtful Accounts. C) the estimated amount of bad […]
Acc 773 Homework
Extraordinary repairs, replacements, and additions are added to the appropriate asset accounts rather than being recorded as expenses. You are pleasantly surprised to discover that a popular actress appears on The Tonight Show wearing your company’s jeans. Later, your company’s […]
ACC 816 Which of the following
Which of the following trial balances is used as a source for preparing the income statement? A) Unadjusted trial balance B) Pre-adjusted trial balance C) Adjusted trial balance D) Post-closing trial balance The following account balances appeared on the company’s […]
ACC 848
Companies within the same industry do not always use the same depreciation method, but will use the same expected useful life for the same piece of equipment. A retailer is a company that buys products from manufacturers and sells them […]
ACC 866 Test 2
Which of the following are generally recorded as liabilities on the balance sheet if the loss can be reasonably estimated? A) Remote likelihood liabilities B) Possible contingent liabilities C) Probable contingent liabilities D) Immaterial contingent liabilities A company sells a […]
Accounting 167
The components of an internal control system include control environment, risk assessment, control activities, information and communication, and rationalization. Under the indirect method, changes in current assets are used in determining cash flows from operating activities and changes in current […]
Accounting 218 Test 1
Which of the following is not a reason that a business needs an effective internal control system? A) Ensure that work is completed efficiently and effectively B) Produce reliable and timely accounting information for use by people external to the […]
Accounting 340 Homework
The net amount of a bond liability that appears on the balance sheet is equal to the face value of the bond plus any related discount or minus any related premium. Goods placed in inventory are initially recorded at market […]
Accounting 439 Quiz 1
Faithful representation is a characteristic of external financial reporting that means: A) the financial reports of a business are assumed to include the results of only that business’s activities. B) financial information can be compared across businesses because similar accounting […]
Accounting 573 Choose the
Choose the appropriate letter to match the term and the definition. Not all definitions will be used. Term 1> _____ Cash Inflow 2> _____ Property, Plant, and Equipment 3> _____ Comparative Balance Sheet 4> _____ Free Cash Flow 5> _____ […]
Accounting 717 Homework
If earnings per share (EPS) decreases, it must mean that the company’s net income has fallen. A net profit margin of 15.4% means that the company used 84.6 cents of each sales dollar to cover costs and expenses. Answer: True […]
ACCT 169 A company starts the
A company starts the period with 100 computers in inventory, purchases 30 more, returns 4 of them to suppliers, and has 83 in inventory at the end of the period. If there is no shrinkage, how many computers were sold? […]
Acct 197 Quiz
Generally, a physical count of inventory is performed annually in both a perpetual inventory system and a periodic inventory system. Income tax expense would be found on the income statement of a corporation, but not on the income statement of […]
ACCT 237 Quiz 1
Which of the following ratios is a solvency ratio? A) Net profit margin ratio B) Current ratio C) Fixed asset turnover ratio D) Debt-to-assets ratio Which of the following statements about disposal of long-lived assets is not correct? A) The […]
Acct 239 Quiz 3
In the decline phase, the company continues to enjoy positive operating cash flows but stops spending cash on investing activities and instead uses its cash for financing activities such as repaying lenders and returning excess cash to shareholders. The receivables […]
ACCT 283 Test 1
The records of Alberta Inc. included the following information: Use the information above to answer the following question. What is the inventory turnover ratio? A) 3.87 times B) 4.00 times C) 4.14 times D) 2.00 times A retail chain sells […]
ACCT 320 Test 2
A company loaned $1,000,000 with interest at 7% to another company. The interest revenue from this loan would be reported on the statement of cash flows as a: A) cash inflow from operating activities. B) cash inflow from investing activities. […]
Acct 396 Final
Which of the following statements about the income statement is not correct? A) Amounts received from customers for services performed in the current month would be revenues on the income statement. B) Costs incurred in the current month but not […]
Acct 411
Liquidity measures the ability of a company to meet its current financial obligations. The Securities and Exchange Commission (SEC) is the government agency that has primary responsibility for setting accounting standards in the U.S. Answer: False Feedback: Currently, the Financial […]
ACCT 428 Midterm
Cairo Co. uses the allowance method of accounting for uncollectible accounts. Cairo Co. accepted a $5,000, 12%, 3-month note dated May 16, from Alexandria Co. in exchange for its past-due account receivable. Required: Part a. Prepare the journal entry for […]
Acct 436
If a company uses $100 million of its cash to pay off debt, its stockholders’ equity will increase $100 million. Employee fraud is often grouped into three categories, including corruption, asset misappropriation, and embezzlement. Answer: False Feedback: Employee fraud is […]
Acct 443
The Sarbanes-Oxley Act (SOX) requires top management of companies to sign a report certifying that the financial statements are free of error. As a company uses supplies, an adjustment should be made to decrease an asset account and increase an […]
ACCT 479 Test
Choose the appropriate letter to match the term and the definition. Not all definitions will be used. Term 1> _____ Operating Activities 2> _____ Indirect Method 3> _____ Working Capital 4> _____ Cash Equivalents 5> _____ Investing Activities 6> _____ […]
Acct 499 Which of the following
Which of the following statements about the need for adjustments is not correct? A) Without adjustments, the financial statements present an incomplete and misleading picture of the company. B) Adjusting entries are intended to change the operating results to reflect […]
Acct 532 Homework
The payment of salaries and wages would be reported as an operating activity on the statement of cash flows. When the amount of annual depreciation is revised because of a change in the estimated useful life of an asset, prior […]
Acct 567
A company’s financial records at the end of the year including the following amounts: Use the information above to answer the following question. What is the amount of total assets to be reported on the balance sheet at the end […]
ACCT 576 Test
A classified balance sheet shows a subtotal for current assets and current liabilities. The incentive element of the fraud triangle includes reasons why top management may commit fraud such as enhancing job security and obtaining bigger paychecks. Answer: True Feedback: […]
Acct 606 Quiz 3
The ratio that measures the company’s ability to meet required interest payments is the: A) debt-to-equity ratio. B) current ratio. C) Price/Earnings ratio. D) times interest earned ratio. Which of the following statements about dividends in arrears is correct? A) […]
ACCT 766
A corporation does not have a legal obligation to pay dividends. Sales discounts are discounts that consumers get from buying clearance items at a reduced price. Answer: False Feedback: Sales discounts are deductions from the selling price which are offered […]
Acct 773 Quiz 1
A contra account is added to the account it offsets. A stock that does not pay a dividend is an undesirable investment. Answer: False Feedback: There are two sources of potential return on an investment in stock: the dividend and […]
ACCT 778 Quiz 3
Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold. The company uses a periodic inventory system. Consider the following information: What amounts would be reported as the cost of goods sold and ending […]
ACCT 787 Test The objectives of a
The objectives of a company’s system of internal control include all of the following except: A) completing work efficiently and effectively and protecting assets by reducing the risk of fraud. B) producing reliable and timely accounting information for use by […]
ACCT 817 Test 2
When a company pays its rent in advance, an asset is reported on the balance sheet. Expenses are the costs of operating the business that are paid for in the period covered by the income statement. Answer: False Feedback: Expenses […]
Acct 893 A company uses 100000 in
A company uses $100,000 in cash to pay off $100,000 in notes payable. This would result in a: A) $100,000 debit to Notes Payable and a $100,000 credit to Cash. B) $100,000 credit to Cash and a $100,000 credit to […]
ACT 303 Homework
A company purchases software; it has an estimated useful life of three years. The adjustment to recognize amortization for the use of software would cause which of the following? A) An increase in liabilities, an increase in expenses, and a […]
ACT 320
E. Choudhury Company’s price/earnings ratio is 15.3. Its closest competitor, Bhatt, Inc. has a Price/Earnings ratio of 9.4. Which of the following would not be a valid conclusion to draw from a comparison of the two companies’ Price/Earnings ratios? A) […]
ACT 348 Homework
If a perpetual inventory system is in use, which of the following statements about transactions with customers is correct? A) When a customer pays within the discount period, Accounts Receivable is credited for the full amount. B) If a customer […]
ACT 520
Issuing stock to obtain financing is called equity financing. Callable bonds can be converted to stock. Answer: False Feedback: A bond that an issuing corporation can call in and exchange for cash is referred to as a “callable” bond. A […]
ACT 541 Final
The Acme Corporation starts the year with a beginning inventory of 300 units at $5 per unit. The company purchases 500 units at $4 each in February and 200 units at $6 each in October. Acme sells 150 units during […]
ACT 590 Homework
On December 31, 2015, a company had assets of $16 billion and stockholders’ equity of $8 billion. That same company had assets of $20 billion and stockholders’ equity of $9 billion as of December 31, 2016. During 2016, the company […]
ACT 717
Which of the following ratios does not use net income in its calculation? A) Net profit margin B) Earnings per share C) Return on equity D) Fixed asset turnover Flynn Company ‘s monthly bank statement showed the ending balance of […]
ACT 764
Which of the following would be the best investment? A) A company that pays no dividends, but has substantial net income. B) A company that pays substantial dividends, but whose earnings per share has been declining over the past several […]
ACT 813 Quiz Which of the
Which of the following statements would not explain why a company may want to repurchase its stock? A) To demonstrate to investors that it believes its own stock is worth purchasing. B) To obtain shares to reissue to employees as […]
ACT 896 Quiz 3
Which of the following will happen if the accrual adjustment entry is not made to record an expense incurred but not yet recorded? A) Both expenses and liabilities will be overstated. B) Both expenses and liabilities will be understated. C) […]
MET MG 190
Which of the following statements about equity and debt financing is correct? A) Equity financing is always better than debt financing. B) Equity financing requires dividends to be paid. C) Dividends are tax deductible. D) Equity financing can change stockholder […]
MET MG 249 Test 2
Which of the following statements regarding posting and classification is correct? A) Posting journal entries involves copying the dollar amounts from the ledger into the journal. B) If a $100 debit is erroneously posted to an account as a $100 […]
MET MG 260 Quiz 2
Accrued revenues recorded at the end of the current year: A) often result in cash receipts from customers in the next period. B) often result in cash payments in the next period. C) are also called Unearned Revenues. D) are […]
MET MG 302 Midterm 1
The Allowance for Doubtful Accounts: A) is a contra-revenue account. B) has a normal debit balance. C) is not listed on the chart of accounts of a company that uses the direct write-off method. D) is reported on the Income […]
MET MG 373 Test
To evaluate a company’s net profit margin, it is best to compare it to another company in the same industry. A good voucher system includes procedures and approvals designed to control cash payments. Answer: True Feedback: The voucher system is […]
MET MG 399
Depreciation Expense is $20,000 and the beginning and ending Accumulated Depreciation balances are $150,000 and $155,000, respectively. What is the cash paid for depreciation? A) $20,000 B) $5,000 C) $0 D) $25,000 An understatement of the beginning inventory balance causes […]
MET MG 421 Midterm
Which of the following companies would be least concerned about a low inventory turnover ratio? A) A fish market selling fresh fish B) A hardware company selling drywall screws C) A dairy company selling butter and milk D) A semiconductor […]
MET MG 422 Midterm 1
Many lending agreements require the borrowing company to maintain certain financial standards as demonstrated by its financial statements. This feature is known as a: A) bond certificate. B) loan covenant. C) renegotiation. D) contingent liability. A stock dividend: A) is […]
MET MG 530 Midterm 1
Depreciation Expense is not reported on the statement of cash flows when prepared using the direct method. A transaction is an exchange or event that directly affects the assets, liabilities, or stockholders’ equity of a company. Answer: True Feedback: A […]
MET MG 552 Midterm
An expense: A) will decrease the amount of net income on the income statement. B) will decrease the amount of Common Stock on the balance sheet. C) will be increased with a credit to the account. D) normally has a […]
MET MG 555 Test 2
When cash is paid before the related expense is incurred, an asset is reported on the balance sheet. Intangible assets with limited lives are usually amortized using the straight-line method with no residual value. Answer: True Feedback: The cost of […]
MET MG 560 Homework
The most commonly used inventory costing method in the U.S. is: A) FIFO. B) specific identification. C) LIFO. D) weighted average. Which of the following statements about the Allowance for Doubtful Accounts is correct? A) The Allowance for Doubtful Accounts […]
MET MG 589
A company makes a deferral adjustment that decreased a liability. This must mean that a(n): A) expense account was decreased by the same amount. B) expense account was increased by the same amount. C) revenue account was increased by the […]
MET MG 658 Midterm
On the last day of the month, a company receives $8,000 of cash from customers. Of that amount, $1,000 was for services performed and $7,000 represented payments on account. The journal entry to record the $8,000 cash receipt would include […]
MET MG 699 Quiz 3
Sprinkler Blowout Company entered into the activities listed in the table below. The company’s chart of accounts appears below the list of activities. For each activity, decide whether a transaction has occurred, and, if so, indicate the account(s) that should […]
MET MG 748 Test 1
Your company is planning to issue $1,000 bonds with a stated interest rate of 7% and a maturity date of July 15, 2022. If interest rates fall in the economy so that similar financial investments pay 5%, your company will: […]
MET MG 868 Homework
A company pays $9,000 in interest on notes consisting of $6,000 of interest that was accrued during the last accounting period and $3,000 of interest that accumulated during the current accounting period but has not yet been accrued on the […]
SMG AC 115
Which of the following statements about stock options is not correct? A) Stock options are intended to give upper management the same goals as stockholders. B) When stock options are exercised by upper management, existing stockholders lose voting power. C) […]
SMG AC 181 Midterm 2
Flynn Company ‘s monthly bank statement showed the ending balance of cash of $18,500. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,500, outstanding checks of $2,000, a NSF check of $700, bank […]
SMG AC 197
Choose the appropriate letter to match the term and the definition. Not all definitions will be used. Term 1> _____ Time-Series Analysis 2> _____ Common-Size Financial Statements 3> _____ Management Discussion and Analysis 4> _____ Price/Earnings Ratio 5> _____ Earnings […]
SMG AC 294
If an analyst wanted to assess a company’s long-run survival, which of the following categories of ratios would most likely be used? A) Liquidity B) Market share C) Profitability D) Solvency Which of the following would be in the finished […]
SMG AC 492 Quiz 3
Gains or losses from discontinued operations are reported on a separate line on the income statement net of income tax effects. The going-concern assumption is also known as the continuity assumption. Answer: True Feedback: The going-concern (also called the continuity) […]
SMG AC 500 Quiz 3
Dividing up the continuing life of a company into shorter periods is called the time period assumption. The allowance method for uncollectible accounts conforms to the expense recognition principle. Answer: True Feedback: The allowance method for uncollectible accounts conforms to […]
SMG AC 518 Homework
The purpose of internal controls includes all of the following except: A) improving efficiency. B) producing timely accounting information. C) minimizing errors. D) completely eliminating fraud. Blossom Inc. has an unadjusted debit balance of $3,500 in its Allowance for Doubtful […]
SMG AC 523 Test
PayPal and national credit card companies charge a fee for their services. How do sellers report these transaction fees on their financial statements? A) In current assets on the balance sheet B) As a deduction from net sales revenue on […]
SMG AC 541 Test 1
The specific identification method would probably be most appropriate for which of the following goods? A) Boxes of brass 4-inch drywall screws at Home Depot B) Bottles of suntan lotion in Wal-Mart’s central warehouse C) Sets of tires at the […]
SMG AC 755 Midterm 2
A company pays its workforce on Fridays for a five-day workweek ending on that day. The payroll for a week is $100,000. If the accounting year-end falls on a Tuesday, the adjusting journal entry to record this will include a […]