Financial Accounting, Binder Ready Version: Tools for Business Decision Making 8th Edition

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E1-15 Classify items as assets, liabilities, and stockholders' equity, and prepare accounting equation Suppose the following items were taken from the balance sheet of Nike, Inc. (All items are in millions.) 1. Cash $2,291.1 7. Inventory $2,357.0 2. Accounts receivable 2,883.9 8. Income taxes payable 86.3 3. Common stock 2,874.2 9. Equipment 1,957.7 4. Notes

2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) 2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) 2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) CHAPTER 1 PROBLEM 1-1B other partners. The sole proprietorship form would provide the easiest form.

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($20,000 X .09 X 1/12) ............................ 150 Interest Payable ................................ 150 (c) Interest payable accrued each month ..................... $ 150 Number of months from borrowing to year end .............................................................. X 7 Balance in interest payable account ........................ $1,050 (d) Jan. 1 Notes Payable ........................................... 20,000 Interest Payable ........................................ 1,050

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number of interest periods) **$24,000 $2,400 $3,600 = $18,000; **$18,000 9 = $2,000 or **$2,400 X $2,000,000/$2,400,000 = $2,000 **($2,400,000 $400,000 = $2,000,000; **($2,000,000 X 4% = $80,000) LO 3, 5 BT: AP Difficulty: Medium TOT: 40 min. AACSB: Analytic AICPA FC: Reporting number of interest periods)

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P10-8A Prepare journal entries to record issuance of bonds, interest, straight-line amortization, and balance sheet presentation and balance sheet presentation Fong Corporation sold $2,000,000, 7%, 5 year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. The company uses straight-line amortization on bond

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CHAPTER 11 SOLUTIONS TO PROBLEMSSET C PROBLEM 11-1C Stock (40,000 X $1.60) ......... 64,000 Mar. 1 Cash (5,000 X $102) ........................... 510,000 Preferred Stock (5,000 X $100) ..... 500,000 Paid-in Capital in Excess of Par ValuePreferred Stock (5,000 X $2) ............................... 10,000 May 1 Cash (90,000

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E11-9 Prepare a stockholders' equity section The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Ryder Corporation at December 31, 2017. Common Stock ($2 stated value) $1.600,000 Paid-in Capital in Excess of Par Value-Preferred Stock 45,000 Paid-in Capital in Excess of stated Value-Common Stock 1,050,000 Preferred Stock (8%, $100 Par, noncumulative) 600,000 Retained Earnings 1,334,000 Treasury

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P12-3A Prepare the operating activities section-indirect method The income statement of Munsun Company is presented here. Sales revenue $7,600,000 Cost of goods sold Beginning inventory $1,900,000 Purchases 4,400,000 Goods available for sale 6,300,000 Ending inventory 1,600,000 Total cost of goods sold 4,700,000 Gross profit $2,900,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 1,150,000 Net income $1,750,000 Additional information: 1.

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Bonds payable 17,000 33,000Total liabilities $43,000 $56,000Average total liabilities $49,500Net cash provided by operating activities $38,500Average total liabilities $49,500Cash debt coverage 0.78(b)(3) Free cash flowNet cash provided by operating activities $38,500Less: Capital expenditures 0 Cash dividends 20,000Free cash flows $18,500 Bonds payable 17,000 33,000Total liabilities $43,000 $56,000Average total liabilities $49,500Net cash

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E13-3 Prepare horizontal analysis Here is financial information for Glitter, Inc. December 31, 2017 December 31, 2016 Current assets $106,000 $90,000 Plant assets (net) 400,000 350,000 Current liabilities 99,000 65,000 Long-term liabilities 122,000 90,000 Common stock, $1 par 130,000 115,000 Reained earnings 155,000 170,000 Instructions Prepare a schedule showing a horizontal analysis for 2017, using 2016 as the base year. NOTE:

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E2-4 Prepare asset section of a classified balance sheet Suppose the following information (in thousands of dollars) is available for H. J. Heinz Company - famous for ketchup and other fine food products - for the year ended April 30, 2017. Prepaid insurance $125,765 Buildings $4,033,369 Land 76,193 Cash 373,145 Goodwill 3,982,954 Accounts Receivable 1,171,797 Trademarks

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2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) 2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) 2016 Wiley Kimmel Financial Accounting, 8e (For Instructor Use Only) CHAPTER 2 PROBLEM 2-1B Accounts receivable ...................................... 288 Inventory ......................................................... 692 Prepaid rent ....................................................

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Copyright 2016 WILEY Kimmel, Financial Accounting, 8/e Exercise B (For Instructor Use Only) 2-1 IA Copyrights CS Common stock CL Salaries and wages payable PPE Accumulated CL RE Income taxes payable Retained earnings CL depreciationequipment Unearned sales revenue CA Accounts receivable CA Inventory PPE Land Copyright 2016 WILEY

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CHAPTER 3 (a) NEW DAWN WINDOW WASHING INC. Assets = Liabilities + Stockholders Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Common Stock + Retained Earnings Revenues Expenses

CHAPTER 3 SOLUTIONS TO EXERCISESSET B EXERCISE 3-1B 1. Increase in assets and increase in stockholders equity. 1. Increase in assets and increase in stockholders equity. 1. Increase in assets and increase in stockholders equity. 2. Decrease in assets and decrease in stockholders equity.

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CHAPTER 3 (a) HYMAN INC. Assets = Liabilities + Stockholders Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Common Stock + Retained Earnings Revenues Expenses Dividends

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P3-1A Analyze transactions and compute net income On April 1, Wonder Travel Agency Inc. was established. These transactions were completed during the month. 1. Stockholders invested $30,000 cash in the company in exchange for common stock. 2. Paid $900 cash for April office rent. 3. Purchased office equipment for $3,400 cash. 4. Purchased $200 of advertising in

EXERCISE 3-12B (a) General Journal Date Account Titles and Explanation Debit Credit Apr. 1 Cash ................................................................... Common Stock .......................................... (Issued stock for cash) 25,000 25,000 4 Supplies ............................................................. Accounts Payable .....................................

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E4-13 Prepare a correct income statement The income statement of Norski Co. for the month of July shows net income of $2,000 based on Service Revenue $5,500; Salaries and Wages $2,100; Supplies Expense $900; and Utilities Expense $500. In reviewing the statement, you discover the following: 1. Insurance expired during July of $350 was

2. Two-thirds of the unearned rent revenue was earned during the quarter. 2. Two-thirds of the unearned rent revenue was earned during the quarter. 2. Two-thirds of the unearned rent revenue was earned during the quarter. 4. Supplies on hand total $800. 4. Supplies on hand total $800. 4. Supplies

Accounts Receivable ($138,000 $12,000) ... 126,000 Accounts Receivable ($138,000 $12,000) ... 126,000 Accounts Receivable ($138,000 $12,000) ... 126,000 Copyright 2016 Wiley Kimmel, Financial Accounting, 8/e, Problems: Set C Solutions (For Instructor Use Only) 4-1 Copyright 2016 Wiley Kimmel, Financial Accounting, 8/e, Problems: Set C Solutions (For

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(c) 7. Full disclosure principle. (d) 3. Monetary unit assumption. (e) 6. Materiality. (f) 4. Periodicity assumption. (g) 2. Expense recognition principle. (h) 5. Historical cost principle. (c) 7. Full disclosure principle. (d) 3. Monetary unit assumption. (e) 6. Materiality. (f) 4. Periodicity assumption. (g) 2. Expense recognition principle. (h)

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(a) (1) April 5 Inventory .......................................... 16,000 Accounts Payable .................... 16,000 (a) (1) April 5 Inventory .......................................... 16,000 Accounts Payable .................... 16,000 (a) (1) April 5 Inventory .......................................... 16,000 Accounts Payable .................... 16,000 (3) April 7 Equipment ........................................ 35,000 Accounts Payable .................... 35,000 (3) April 7 Equipment

1. On April 5, purchased merchandise from Mockingbird Company for $20,000 terms 2/10, net/30, FOB shipping point. 1. On April 5, purchased merchandise from Mockingbird Company for $20,000 terms 2/10, net/30, FOB shipping point. 1. On April 5, purchased merchandise from Mockingbird Company for $20,000 terms 2/10, net/30, FOB shipping

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E5-8 Prepare multi-step income statement and calculate profitability ratios In its income statement for the year ended December 31, 2017, Darren Company reported the following condensed data. Salaries and wages expense $465,000 Loss on disposal of plant assets $83,500 Cost of goods sold 987,000 Sales revenue 2,210,000 Interest expense 71,000 Income tax expense 25,000 Interest

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1. No effecttitle passes to purchaser upon shipment when terms are FOB shipping point ............................... 0 1. No effecttitle passes to purchaser upon shipment when terms are FOB shipping point ............................... 0 1. No effecttitle passes to purchaser upon shipment when terms are FOB shipping point ............................... 0 3. Add

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P6-2A Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost with analysis Mullins Distribution markets CDs of numerous performing artists. At the beginning of March, Mullins had in beginning inventory 2,500 CDs with a unit cost of $7. During March, Mullins made the following purchases of CDs. March 5

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E7-8 Prepare bank reconciliation and adjusting entries The following information pertains to Lance Company. 1. Cash balance per bank, July 31, $7,328. 2. July bank service charge not recorded by the depositor $38. 3. Cash balance per books, July 31, $7,364. 4. Deposits in transit, July 31, $2,700. 5. $2,016 collected for Lance Company in July

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2. Segregation of duties. Employees who make the pizzas do not handle cash. 2. Segregation of duties. Employees who make the pizzas do not handle cash. 2. Segregation of duties. Employees who make the pizzas do not handle cash. 4. Physical controls. A cash register is used to record the

compares the contents of the bag with the items indicated on the order invoice. compares the contents of the bag with the items indicated on the order invoice. compares the contents of the bag with the items indicated on the order invoice. Copyright 2016 WILEY Kimmel, Financial Accounting, 8/e Exercise

P8-3A Journalize transactions related to bad debts Presented below is an aging schedule for Bryan Company. Not Yet Total Due 1-30 31-60 61-90 Over 90 Aneesh $24,000 $9,000 $15,000 Bird 30,000 $30,000 Cope 50,000 5,000 5,000 $40,000 DeSpears 38,000 38,000 Others 120,000 72,000 35,000 13,000 $262,000 $107,000 $49,000 $28,000 $40,000 $38,000 Estimated percentage uncollectible 3% 7% 12% 24% 60% Total estimated bad

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Sales Revenue ........................................... 1,700 Feb. 12 Cash .................................................................. 600 Accounts ReceivableMcCarty .............. 600 Mar. 10 Accounts ReceivableMcCarty ..................... 11 Interest Revenue [1% X ($1,700 $600)] ........................ 11 Sales Revenue ........................................... 1,700 Feb. 12 Cash .................................................................. 600 Accounts ReceivableMcCarty .............. 600 Mar. 10 Accounts ReceivableMcCarty ..................... 11 Interest Revenue

income will exceed net cash provided by operating activities, all else being equal. Therefore, this would cause a drop in the quality of earnings ratio. (c) If the company relaxed its credit requirements it should increase its esti-mated bad debts expense. If it doesnt do this, net income in

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E9-5 Determine straight line depreciation for partial period Gotham Company purchased a new machine on October 1, 2017, at a cost of $90,000. The company estimated that the machine has a salvage value of $8,000. The machine is expected to be used for 70,000 working hours during its 8-year life. Instructions Compute the depreciation

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a) 1. Equipment a) 1. Equipment a) 1. Equipment 3. Equipment 3. Equipment 3. Equipment 5. Prepaid Insurance 5. Prepaid Insurance 5. Prepaid Insurance 7. Land Improvements 7. Land Improvements 7. Land Improvements Copyright 2016 WILEY Kimmel, Financial Accounting, 8/e, Challenge

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APPENDIX G TIME VALUE OF MONEY SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 3. 1 K 5. 2 K 7. 2 C 9. 3 K 2. 1 K

FOR INSTRUCTOR USE ONLY APPENDIX H REPORTING AND ANALYZING INVESTMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 9. 1 C 17. 2 C 25. 2 K 33.

Reporting and Analyzing Investments FOR INSTRUCTOR USE ONLY Ans: D, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution: $39,000 ($89,000/5,000 x 2,000) (sell pr. -[(inv. cost/sh. pur.) sh. sold] FOR INSTRUCTOR USE ONLY

Reporting and Analyzing Investments FOR INSTRUCTOR USE ONLY H-41 Solution 171 (5 min.) Jan. 1 Stock Investments ...................................................... 7,050 Cash .................................................................. 7,050 June 1 Cash (600 $0.40) .................................................... 240 Dividend Revenue ............................................. 240 Sept. 15 Cash ............................................................................. 3,400 Loss on

Reporting and Analyzing Investments FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 2, 3, Bloom: AP, Difficulty: Medium, Min: 15, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution 186 (15-20 min.) (a) Feb. 5 Cash ....................................................................... 7,900 Stock Investments ............................................ 7,500 Gain

FOR INSTRUCTOR USE ONLY CHAPTER 1 INTRODUCTION TO FINANCIAL STATEMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 9. 1 K 17. 2 K 25. 3 K

Introduction to Financial Statements FOR INSTRUCTOR USE ONLY Ans: B, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution: $670,000 + ($600,000 $380,000) $140,000 = $750,000 Beg.(R/E + (rev.- exp.) div.) FOR INSTRUCTOR USE

Introduction to Financial Statements FOR INSTRUCTOR USE ONLY 1-41 Be. 184 Determine the missing items. Assets = Liabilities + Stockholders Equity $66,000 $50,000 (a) (b) $18,000 $30,000 $54,000 (c) $40,000 Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic,

Introduction to Financial Statements Solution 197 (Cont.) Liabilities and Stockholders Equity Liabilities Notes payable ............................................................................... $50,000 Accounts payable .......................................................................... 13,000 Total liabilities ........................................................................... $ 63,000 Stockholders equity Common stock ............................................................................... 40,000 Retained earnings .......................................................................... 21,000 61,000 Total liabilities and stockholders equity ................................... $124,000 (Tot. liab. + Com. stock +

FOR INSTRUCTOR USE ONLY CHAPTER 10 REPORTING AND ANALYZING LIABILITIES SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 15. 1 K 29. 2 K 43. 3 C

Reporting and Analyzing Liabilities FOR INSTRUCTOR USE ONLY Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA FOR INSTRUCTOR USE ONLY Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic,

Reporting and Analyzing Liabilities FOR INSTRUCTOR USE ONLY Ans: D, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Reporting FOR INSTRUCTOR USE ONLY Ans: D, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA

Reporting and Analyzing Liabilities FOR INSTRUCTOR USE ONLY 10-61 EXERCISES Ex. 261 Brewer Company has the following selected accounts after posting adjusting entries: Accounts Payable $ 55,000 Notes Payable, 3-month 90,000 Accumulated DepreciationEquipment 14,000 Notes Payable, 5-year, 8% 75,000 Payroll Taxes Expense 6,000

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition *Solution 278 (Cont.) Second Installment Payment 2018 Dec. 31 Interest Expense [($2,200,000 $81,000) 8%] ......... 169,520* Mortgage Payable.................................. 87,480 Cash .............................................. 257,000 *(Mort. loan [ann. pay. (mort. loan 8%)] *Solution 278 (Cont.) Second Installment Payment 2018

FOR INSTRUCTOR USE ONLY CHAPTER 11 REPORTING AND ANALYZING STOCKHOLDERS EQUITY SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Ite m LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 11. 2 K 21. 2 K 31. 3 K

Reporting and Analyzing Stockholders Equity FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution: (10,000 $10) .05 = $5,000 (Pref. sh. Pref. PV) div. rate FOR INSTRUCTOR USE

Reporting and Analyzing Stockholders Equity FOR INSTRUCTOR USE ONLY 11-41 201. The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures. Total asset $400,000 Stockholders equitycommon 200,000 Total stockholders equity 280,000 Sales 120,000 Net income 30,000 Number of shares of common stock

Reporting and Analyzing Stockholders Equity FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution 235 (7 min.) (a) June 15 Cash Dividends ............................................................. 70,000a (70,000* $1.00) Dividends Payable................................................

FOR INSTRUCTOR USE ONLY CHAPTER 12 STATEMENT OF CASH FLOWS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. 1 C 19. 1 C 28. 3 K *37.

Statement of Cash Flows FOR INSTRUCTOR USE ONLY Ans: d, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: None, IMA: FSA FOR INSTRUCTOR USE ONLY Ans: d, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA

Statement of Cash Flows FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution 180 (8-12 min.) Net Income ........................................................................................................... $310,000 Adjustments to reconcile net income to net cash

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition Solution 196 (8 min.) Tucker Corporation Wiggins Corporation Free cash flow $140,000 $60,000 $5,000 = $75,000 $140,000 $90,000 $10,000 = $40,000 Solution 196 (8 min.) Tucker Corporation Wiggins Corporation Free cash flow $140,000 $60,000 $5,000 =

FOR INSTRUCTOR USE ONLY CHAPTER 13 FINANCIAL ANALYSIS: THE BIG PICTURE SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. 1 K 19. 2 K 28. 2 K

Financial Analysis: The Big Picture FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Performance Measurement FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB:

Financial Analysis: The Big Picture FOR INSTRUCTOR USE ONLY 13-41 MC 177. (Cont.) What is the price earnings ratio for this company? a. 6.0 times b. 2.5 times c. 8.0 times d. 4.0 times Ans: A, LO: 3, 4, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic,

Financial Analysis: The Big Picture FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, 4, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Performance Measurement FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, 4, Bloom: AP, Difficulty: Medium,

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, 4, Bloom: AN, Difficulty: Hard, Min: 25, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution 237 (25 min.) (a) Inventory turnover

FOR INSTRUCTOR USE ONLY CHAPTER 2 A FURTHER LOOK AT FINANCIAL STATEMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 2 K 23. 2 K 34. 3

A Further Look at Financial Statements FOR INSTRUCTOR USE ONLY Ans: D, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting FOR INSTRUCTOR USE ONLY Ans: D, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3,

A Further Look at Financial Statements FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Reporting FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB:

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 25, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution 208 (25 min.) DREW CORPORATION Income Statement

FOR INSTRUCTOR USE ONLY CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 2 K 23. 2 K 34. 3 K

The Accounting Information System FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: None, IMA: FSA FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA

The Accounting Information System FOR INSTRUCTOR USE ONLY 3-41 Solution 219 (5 min.) Stockholders Assets = Liabilities + Equity 1. Received cash for services rendered. + NE + 2. Purchased supplies on account. + + NE 3. Paid employees' salaries. NE 4. Dividends paid in cash. NE 5.

The Accounting Information System FOR INSTRUCTOR USE ONLY 3-61 Ex. 241 Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account. Debit or Credit

The Accounting Information System FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 5, Bloom: AP, Difficulty: Medium, Min: 8, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution 253 (8 min.) DEPENDABLE DELIVERY SERVICE Trial Balance July 31, 2017 ___________________________________________________________________________ Debit Credit Cash

FOR INSTRUCTOR USE ONLY CHAPTER 4 ACCRUAL ACCOUNTING CONCEPTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 1 K 23. 1 K 34. 3 K 45.

Accrual Accounting Concepts FOR INSTRUCTOR USE ONLY Ans: B, LO 1, BT: C, Difficulty: Easy, TOT: 1 min., AACSB: Analytic, AICPA BB: None, AICPA FC: Measurement, AICPA PC: Problem Solving, IMA: Business Economics FOR INSTRUCTOR USE ONLY Ans: B, LO 1, BT: C, Difficulty: Easy, TOT: 1 min., AACSB:

Accrual Accounting Concepts FOR INSTRUCTOR USE ONLY Ans: A, LO 2, BT: AP, Difficulty: Medium, TOT: 3 min., AACSB: Analytic, AICPA BB: None, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Report-ing FOR INSTRUCTOR USE ONLY Ans: A, LO 2, BT: AP, Difficulty: Medium, TOT: 3 min., AACSB: Analytic,

Accrual Accounting Concepts FOR INSTRUCTOR USE ONLY 4-61 238. All of the following are required steps in the accounting cycle except: a. journalizing and posting closing entries. b. preparing an adjusted trial balance. c. preparing a post-closing trial balance. d. preparing a work sheet. Ans: D, LO 4,

Accrual Accounting Concepts FOR INSTRUCTOR USE ONLY 4-81 Ex. 271 The adjusted trial balance of Masters Company includes the following balance sheet accounts that frequently require adjustment. For each account, indicate (a) the type of adjusting entry (prepaid ex- penses, unearned revenues, accrued revenues, or accrued expenses) and (b) the

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY 4-100 Ex. 289 The Golden Petting Zoo operates a drive-through tourist attraction in Colorado. The company ad- justs its accounts at the end of each month. The selected accounts appearing below reflect balances after

FOR INSTRUCTOR USE ONLY CHAPTER 5 MERCHANDISING OPERATIONS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 1 K 23. 3 K 34. 4 C 45. 5

Merchandising Operations FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Decision Modeling, AICPA PC: Problem Solving, IMA: Business Economics FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,

Merchandising Operations FOR INSTRUCTOR USE ONLY 5-41 *206. Ramos Company receives a payment on account from Martinez Industries. Based on the original sale of $12,000 using the periodic inventory approach, Ramos honors the 3% cash discount and records the payment. Which of the following is the correct entry

FOR INSTRUCTOR USE ONLY CHAPTER 6 REPORTING AND ANALYZING INVENTORY SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. 1 K 19. 2 K 28. 2 K 37.

Reporting and Analyzing Inventory FOR INSTRUCTOR USE ONLY Ans: D, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Business Economics FOR INSTRUCTOR USE ONLY Ans: D, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,

Reporting and Analyzing Inventory FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Reporting FOR INSTRUCTOR USE ONLY Ans: C, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA

Reporting and Analyzing Inventory FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 2, Bloom: AP, Difficulty: Hard, Min: 20, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution 207 (20 min.) Purchases Sales Units Unit Cost Units Selling Price/Unit 3/1 Beginning inventory 100

Reporting and Analyzing Inventory FOR INSTRUCTOR USE ONLY 6-75 *Ex. 219 (Cont.) Instructions (a) Prepare correct income statement data for the 2 years. (b) What is the cumulative effect of the inventory error on total gross profit for the 2 years? Ans: N/A, LO: 5, Bloom:

FOR INSTRUCTOR USE ONLY CHAPTER 7 FRAUD, INTERNAL CONTROL, AND CASH SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 9. 1 K 17. 1 K 25. 2

Fraud, Internal Control, and Cash FOR INSTRUCTOR USE ONLY Ans: A, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPA PC: None, IMA: FSA FOR INSTRUCTOR USE ONLY Ans: A, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,

Fraud, Internal Control, and Cash FOR INSTRUCTOR USE ONLY 7-41 *199. A petty cash fund should be replenished a. every day. b. at the end of every accounting period. c. once a year. d. as soon as an expense is paid from the fund. Ans: B, LO: 5,

Fraud, Internal Control, and Cash Solution 228 (10 min.) REMINGTON COMPANY Bank Reconciliation September 30 Cash balance per bank statement .................................................. $24,635 Add: Deposits in transit .................................................................. 7,195 31,830 Less: Outstanding checks .............................................................. 2,575 Adjusted cash balance per bank .................................................... $29,255 Cash balance per books ................................................................ $26,100 Add: Collection

FOR INSTRUCTOR USE ONLY CHAPTER 8 REPORTING AND ANALYZING RECEIVABLES SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 2 C 23. 2 K 34. 3 K

Reporting and Analyzing Receivables FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Reporting FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA

Reporting and Analyzing Receivables FOR INSTRUCTOR USE ONLY Ans: D, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Business Economics FOR INSTRUCTOR USE ONLY Ans: D, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB:

Reporting and Analyzing Receivables FOR INSTRUCTOR USE ONLY 8-61 Ex. 231 On December 31, 2016, when its Allowance for Doubtful Accounts had a credit balance of $1,500, Leeds Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2017, Leeds Company determined

FOR INSTRUCTOR USE ONLY CHAPTER 9 REPORTING AND ANALYZING LONG-LIVED ASSETS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOMS TAXOMONY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. 2 K 19. 2 K 28. 3 K

Reporting and Analyzing Long-Lived Assets FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA FOR INSTRUCTOR USE ONLY Ans: A, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,

Reporting and Analyzing Long-Lived Assets FOR INSTRUCTOR USE ONLY Ans: C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics Solution: $180,000 [($2,410,000 + $1,980,000)] 2 = .082 [Net sal. [(end. tot. assets +

Reporting and Analyzing Long-Lived Assets Solution 241 (15 min.) (a) September 30, 2017 Depreciation Expense ................................................................... 12,000 Accumulated DepreciationEquipment ................................ 12,000 (To record depreciation expense for the first 9 months of 2014. $80,000 5 years = $16,000 9/12 = $9,000) [(Cost sal. val.) 5 yrs] 9/12 Cash .................................................................................................. 46,000

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition *Solution 261 (20 min.) Straight-line Depreciable Depreciation Annual Accumulated Year Cost Rate = Depreciation Depreciation Book Value 2015 $34,000,000 5% $1,700,000 $1,700,000 $38,300,000 2016 $34,000,000 5% $1,700,000 3,400,000 36,600,000 2017 $34,000,000 5% $1,700,000 5,100,000 34,900,000 Declining-balance Book