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EXERCISE H-8 (a) Fair Value Adjustment—Trading ($122,000 – $110,000) …………………………………. 12,000 Unrealized Gain—Income ……………………….. 12,000 Unrealized Gain or Loss—Equity ………………….. 4,000 Fair Value Adjustment— Available-for-Sale ………………………………… 4,000 (b) Balance Sheet Current assets Short-term investments, at fair value …………………… $122,000 Investments […]

APPENDIX H Reporting and Analyzing Investments Learning Objectives 1. Explain how to account for debt investments. 2. Explain how to account for stock investments. 3. Discuss how debt and stock investments are reported in the financial statements. Summary of Questions […]

CCC1 CONTINUING COOKIE CHRONICLE she operates the business as a proprietorship she will personally have unlimited liability for the debts of the business. Operating the business as a corporation would limit her liability to her investment in the business. Organizing […]

CT 1-2 COMPARATIVE ANALYSIS PROBLEM (a) (amounts in thousands) Columbia Sportswear Company VF Corporation 2. Net property, plant and equipment $291,563 $ 942,181 activities. 4. Net income $(184,027) $141,859 $(329,555) $1,047,505 1. Total liabilities 3. Net cash provided (used) by […]

Salaries and wages expense 115,131 Accounts payable 49,384 Prepaid insurance 7,818 Service revenue 4,806 Inventory 64,618 Interest expense 1,882 Instructions (a) Prepare a balance sheet as of December 31, 2017. (b) What percentage of assets were acquired by owners’ investment? […]

Utilities expense ……………………………………………… 3,400 Advertising expense ……………………………………….. 2,800 Total expenses ………………………………………… 56,600 Net income ……………………………………………………….…… $11,400 Less: Dividends …………………………………………………………………….. 6,000 Retained earnings, December 31 …………………………………………….. $79,400 CHAPTER 1 SOLUTIONS TO EXERCISES—SET B EXERCISE 1-1B LAVER CO. Income Statement For the […]

CHAPTER 1 Introduction to Financial Statements Learning Objectives 1. Identify the forms of business organization and the uses of accounting information. 2. Explain the three principal types of business activity. 3. Describe the four financial statements, and how they are […]

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 […]

CHAPTER 1 PROBLEM 1-1B other partners. The sole proprietorship form would provide the easiest form. One should avoid a more complicated form of business unless the characteristics of that form are needed. the business to raise cash more easily, which […]

EXERCISE 1-10 (Continued) OTAY LAKES PARK Balance Sheet December 31, 2017 Assets Cash …………………………………………………………… $ 8,500 Supplies ……………………………………………………… 5,500 Equipment ………………………………………………….. 114,000 Total assets ………………………………………………… $128,000 Liabilities and Stockholders’ Equity Liabilities Notes payable ………………………………………. $50,000 Accounts payable ………………………………… 11,000 Total […]

CHAPTER 1 Introduction to Financial Statements PROBLEM 1-1C other partners. The sole proprietorship form would provide the easiest form. One should avoid a more complicated form of business unless the characteristics of that form are needed. significant funds in the […]

CHAPTER 10 SOLUTIONS TO PROBLEMS—SET C PROBLEM 10-1C 12 Unearned Service Revenue ………………… 8,000 Service Revenue …………………………. 8,000 14 Sales Taxes Payable ………………………….. 8,200 Cash …………………………………………… 8,200 20 Accounts Receivable …………………………. 26,250 Sales Revenue …………………………….. 25,000 Sales Taxes Payable (500 […]

Copyright © 2016 WILEY Kimmel Financial Accounting, 8e (For Instructor Use Only) 10–1 (b) $50,000 X Interest Rate X 3/12 = $600 Interest Rate = [$600 ÷ ($50,000 X 3/12)] Interest Rate = 4.8 percent (c) Initial Borrowing: May 15 […]

CT 10-4 INTERPRETING FINANCIAL STATEMENTS (a) Hechinger Home Depot Working capital $1,153 – $938 = $215 $4,933 – $2,857 = $2,076 Current ratio $1,153 ÷ $938 = 1.23:1 $4,933 ÷ $2,857 = 1.73:1 On both measurements Hechinger’s liquidity is low […]

Copyright © 2016 John Wiley & Sons, Inc. Kimmel, Financial Accounting, 8/e, Solutions Manual (For Instructor Use Only) 10–41 *PROBLEM 10-7A 2017 (a) Jan. 1 Interest Payable …………………………… 96,000 Cash …………………………………….. 96,000 (b) Dec. 31 Interest Expense ………………………….. 98,400 Interest […]

PROBLEM 10-1B ($18,480 ÷ 106.25%) …………………. 17,393* Sales Taxes Payable ($18,480 – $17,393) …………………… 1,087 12 Unearned Service Revenue ………………… 8,000 Service Revenue …………………………. 8,000 14 Sales Taxes Payable ………………………….. 8,200 Cash …………………………………………… 8,200 20 Accounts Receivable …………………………. 26,563 Sales […]

EXERCISE 10-10 (a) Jan. 1 Cash ($600,000  1.03) ………………………. 618,000 Bonds Payable …………………………… 600,000 Premium on Bonds Payable ……… 18,000 (Cash received = Face value of bond  1.03) (b) Long-term Liabilities Bonds Payable, due 2027 ………………………… $600,000 Add: […]

CCC10 CONTINUING COOKIE CHRONICLE (a) $2,000 X 9% X 2.5/12 = $38 (b) Total interest expense and interest payable $2,000 X 9% X 9.5/12 = $143 Entry required $143 – $38 accrued to January 31 = $105 Aug. 31 Interest […]

CHAPTER 10 Reporting and Analyzing Liabilities Learning Objectives 1. Explain how to account for current liabilities. 2. Describe the major characteristics of bonds. 3. Explain how to account for bond transactions 4. Discuss how liabilities are reported and analyzed. *5. […]

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 […]

November 1, 2014 Cash …………………………………………………………………………………. 90,000 Notes Payable …………………………………………………………….. 90,000 December 31, 2014 Interest Expense …………………………………………………………………. 4,900 ($70,000 X 12% X 7/12) Interest Payable ……………………………………………………….…. 4,900 March 1, 2015 Notes Payable …………………………………………………………………….. 90,000 Interest Payable ………………………………………………………………….. 750 Interest Expense …………………………………………………………………. […]

CHAPTER 11 SOLUTIONS TO PROBLEMS—SET C PROBLEM 11-1C Stock (10,000 X $2.40) …………. 24,000 Common Stock (10,000 X $2) ….. 20,000 Nov. 1 Cash (4,000 X $103) ……………………… 412,000 Preferred Stock (4,000 X $100) …. 400,000 Paid-in Capital in Excess […]

determine the cash equivalent price. In this case, Curtis and Natalie are receiving shares with a value of $1 per share. This $1 per share is the estimated fair value of the shares being given up in return for the […]

EXERCISE 11-6 (a) June 15 Cash Dividends (69,000* X $1.50) ….. 103,500 Dividends Payable …………………. 103,500 *60,000 shares + 9,000 shares July 10 Dividends Payable ……………………….. 103,500 Cash ……………………………………… 103,500 Dec. 15 Cash Dividends (73,000** X $1.60) …. 116,800 Dividends […]

*PROBLEM 11-8A (a) Jan. 15 Cash Dividends (70,000 X $0.50) …… 35,000 Dividends Payable …………………. 35,000 Feb. 15 Dividends Payable ……………………….. 35,000 Cash ……………………………………… 35,000 Apr. 15 Stock Dividends (7,000 X $14) ………. 98,000 Common Stock Dividends Distributable (7,000 X […]

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 […]

CT 11-1 FINANCIAL REPORTING PROBLEM (a) The common stock has a par value of $0.00001 per share. (b) There are 12,600,000 thousand shares authorized of which 5,866,161 thousand are issued. The percentage is 47% (5,866,161 ÷ 12,600,000). (c) 2014 2013 […]

July 1 Cash (50,000 X $8) ……………………………………………. 400,000 Common Stock (50,000 X $5) …………………….. 250,000 Paid-in Capital in Excess of Par Value-Common Stock (50,000 X $3) ….. 150,000 Stated Value-Common Stock (60,000 X $3) 180,000 July 1 Cash (50,000 X […]

PROBLEM 11-1B Stock (40,000 X $2.60) …………. 104,000 Mar. 1 Cash (5,000 X $102) ……………………… 510,000 Preferred Stock (5,000 X $100) ….. 500,000 Paid-in Capital in Excess of Par Value—Preferred Stock (5,000 X $2) …………………………. 10,000 May 1 Cash (90,000 […]

CHAPTER 11 Reporting and Analyzing Stockholders’ Equity Learning Objectives 1. Discuss the major characteristics of a corporation. 2. Explain how to account for the issuance of common and preferred stock, and the purchase of treasury stock. 3. Explain how to […]

July 1 Cash (40,000 X $6) …………………………. 240,000 Common Stock (40,000 X $5) ……. 200,000 Paid-in Capital in Excess of Par Value—Common Stock (40,000 X $1) …………………………. 40,000 (20,000 X $4) ………………………… 80,000 Common Stock (20,000 X $1) ……. 20,000 […]

CHAPTER 12 SOLUTIONS TO PROBLEMS—SET C PROBLEM 12-1C Transaction SCF Activity Affected Cash inflow, outflow, or no cash flow effect? (a) Recorded depreciation expense on the plant assets. O No cash flow effect (b) Incurred a loss on disposal of […]

PROBLEM 12-1B Transaction SCF Activity Affected Cash Inflow, Outflow, or No Effect? (a) Purchased shares of common treasury stock. F Cash outflow (b) Paid a cash dividend to common stockholders. F Cash outflow (c) Recorded cash sales. O Cash inflow […]

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 […]

(b) Exchange of land for patent. (5) significant noncash investing and financing activity. (c) Sale of building for an amount greater than book value. (3) investing activity, (2) operating activity (deducted from net income). (d) Payment of dividends. (4) financing […]

EXERCISE 12-7 MITCH COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income …………………………………………. $ 93,000) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense ………………….. […]

(b)(2) Cash debt coverage 2017 2016 Accounts payable $19,000 $15,000 Income taxes payable 7,000 8,000 Bonds payable 17,000 33,000 Total liabilities $43,000 $56,000 Average total liabilities $49,500 Net cash provided by operating activities $38,500 Average total liabilities $49,500 Cash debt […]

(c) Noncash investing and financing activities. (d) Financing activities. (e) Investing activities. (f) Operating activities. (g) Operating activities. 12-1 CHAPTER 12 SOLUTIONS TO EXERCISES—SET B EXERCISE 12-1B (a) Noncash investing and financing activities. (b) Financing activities. EXERCISE 12-2B (c) (d) […]

*PROBLEM 12-10A (Continued) Computations: (1) Cash receipts from customers Sales ……………………………………………………………………… $388,460 Deduct: Increase in accounts receivable ………………… 49,800 Cash receipts from customers ……………………………….. $338,660 (2) Cash payments to suppliers Cost of goods sold …………………………………………………. $135,460 Add: Increase in inventory […]

CCC12 CONTINUING COOKIE CHRONICLE Increase in inventory ………………………………. (447) Decrease in prepaid expenses ………………… 250 Decrease in accounts payable ………………… (1,300) Increase in income taxes payable ……………. 2,051 Increase in salaries and wages payable ….. 5,970 Increase in interest payable […]

CHAPTER 12 Statement of Cash Flows Learning Objectives 1. Discuss the usefulness and format of the statement of cash flows. 2. Prepare a statement of cash flows using the indirect method. 3. Use the statement of cash flows to evaluate […]

CHAPTER 13 Financial Analysis: The Big Picture Learning Objectives 1. Explain the concepts of sustainable income and quality of earnings. 2. Apply horizontal analysis and vertical analysis. 3. Analyze a company’s performance using ratio analysis. Summary of Questions by Learning […]

PROBLEM 13-1B (a) Condensed Income Statement For the Year Ended December 31, 2014 Dean Company Gerald Company Dollars Percent Dollars Percent Net sales Cost of goods sold Gross profit Operating expenses Income from operations Other expenses and losses Interest expense […]

EXERCISE 13-3 GLITTER INC. Condensed Balance Sheet December 31 Increase or (Decrease) 2017 2016 Amount Percentage Assets Current assets Plant assets (net) Total assets $106,000 400,000 $506,000 $ 90,000 350,000 $440,000 ($16,000 50,000 ($66,000 (17.8%) (14.3%) (15.0%) Liabilities Current liabilities […]

Loss from operation of division, net of $6,000 tax savings …………………………………… (14,000) Gain on disposal of division, net of $18,000 income taxes ……………………………….. 42,000 Net income ……………………………………………………………………… $428,000 net of $1,000 tax savings …………………………………… (4,000) Gain on disposal of division, […]

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 […]

PROBLEM 13-5A (a) Ratio Target Wal-Mart (All Dollars Are in Millions) (4) Inventory turnover 6.6 ($45,583 ÷ $6,942) 9.0 ($304,657 ÷ $33,836) (6) Profit margin 3.8 % ($2,488 ÷ $65,357) 3.5% ($14,335 ÷ $408,214) (8) Return on assets 5.6 % […]

CHAPTER 13 SOLUTIONS TO PROBLEMS—SET C PROBLEM 13-1C (a) Condensed Income Statement For the Year Ended December 31, 2014 Martin Company Lewis Company Dollars Percent Dollars Percent Gross profit Operating expenses Income from operations Other expenses and losses Interest expense […]

CCC13 CONTINUING COOKIE CHRONICLE (a) 2020 2019 1. Current ratio $39,271 $47,339 = .80:1 $21,760 $39,930 = .57:1 $39, 271 $48,839 $21,760 $37,930 2. Debt to assets $51,839 $116,071 = 47% $37,930 $88,160 = 43% $54,839 $116,071 3. Gross profit […]

Plant assets (net) 440,000 360,000 Current liabilities 95,000 75,000 Long-term liabilities 165,000 100,000 Common stock, $1 par 180,000 120,000 Retained earnings 140,000 175,000 Instructions: (a) Prepare a schedule showing a horizontal analysis for 2014 using 2013 as the base year. […]

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, […]

Cash 11,800 Accounts payable 8,500 Equipment 82,720 Notes payable 93,600 Land 61,000 Accumulated depreciation-equipment 18,720 Insurance expense 700 Interest payable 3,600 Depreciation expense 4,900 Service revenue 17,700 Interest expense 2,200 (b) Compute the following: (1) working capital, (2) current ratio, […]

CHAPTER 2 PROBLEM 2-1B Accounts receivable ……………………………….. 288 Inventory ………………………………………………… 692 Prepaid rent ……………………………………………. 278 Total current assets …………………………. $1,696 Equipment ……………………………………………… 3,036 Less: Accumulated depreciation— equipment ………………………………………….. 145 2,891 Intangible assets Goodwill …………………………………………………. 477 Total assets ……………………………………………………. $5,344 Total […]

EXERCISE 2-10 (Continued) (b) Current ratio = $40,000* $10,000** =4.0: 1 Working capital = $40,000 – $10,000 = $30,000 *$60,000 – $20,000 **$30,000 – $20,000 (Current assets ÷ Current liabilities) and (Current assets – Current liabilities) (c) Liquidity measures indicate […]

CHAPTER 2 A Further Look at Financial Statements Learning Objectives 1. Identify the sections of a classified balance sheet. 2. Use ratios to evaluate a company’s profitability, liquidity, and solvency. 3. Discuss financial reporting concepts. Summary of Questions by Learning […]

CCC2 CONTINUING COOKIE CHRONICLE the revenues and expenses and resulting net income or net loss of a company for a specific period of time. The retained earnings statement summarizes the changes in retained earnings for a specific period of time. […]

CHAPTER 2 SOLUTIONS TO EXERCISES—SET B EXERCISE 2-1B CL Accounts payable CA Inventory CA Accounts receivable LTI Investments PPE Accumulated depreciation—buildings PPE Land PPE Buildings LTL Mortgage payable CA Cash CA Supplies CA IA CL Interest receivable Goodwill Notes payable […]

CHAPTER 2 A Further Look at Financial Statements PROBLEM 2-1C Inventory ……………………………………………………… 910 Prepaid insurance ………………………………………… 221 Total current assets ………………………………. $ 2,558 Property, plant, and equipment Equipment …………………………………………………… 3,870 Less: Accumulated depreciation— equipment …………………………………………… 860 3,010 Intangible assets Goodwill […]

CT 2-4 INTERPRETING FINANCIAL STATEMENTS (a) The percentage decrease in Gap’s total assets during this period is calculated as: $8,544 = 17.3% The average decrease per year can be approximated as: 17.3% 4 years = 4.3% per year $7,065 – […]

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 – Dividends 1. +$20,000 +$20,000 2. […]

CHAPTER 3 SOLUTIONS TO EXERCISES—SET B EXERCISE 3-1B 2. Decrease in assets and decrease in stockholders’ equity. 3. Increase in assets and increase in stockholders’ equity. 4. Increase in assets and increase in stockholders’ equity. 5. Decrease in assets and […]

PROBLEM 3-1A (Continued) (b) Service Revenue ………………………………………………. $12,000 Expenses Salaries and Wages Expense ……………………… $1,800 Rent Expense ……………………………………………. 900 Advertising Expense ………………………………….. 200 2,900 Net Income …………………………………………. $ 9,100 OR Revenues …………………………………………………………. $12,000 Less: Expenses ……………………………………………….. 2,900 Net Income ………………………………………………………. […]

CCC3 CONTINUING COOKIE CHRONICLE 8 Cash ……………………………………………………. 500 Common Stock ………………………………. 500 11 Supplies ………………………………………………. 95 Cash ……………………………………………… 95 14 Supplies ………………………………………………. 125 Cash ……………………………………………… 125 18 No journal entry required. 25 Cash ……………………………………………………. 60 Unearned Service Revenue …………….. 60 […]

EXERCISE 3-8 (Continued) Oct. 6 Debits increase assets: debit Accounts Receivable $10,800. Credits increase revenues: credit Service Revenue $10,800. 10 Debits increase assets: debit Cash $140. Credits increase revenues: credit Service Revenue $140. 27 Debits decrease liabilities: debit Accounts Payable […]

CHAPTER 3 (a) HYMAN INC. Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Common Stock + Retained Earnings Revenues – Expenses – Dividends 1. +$30,000 +$30,000 2. –10,000 +$10,000 4. […]

PROBLEM 3-8B (Continued) Date Account Titles and Explanation Debit Credit Apr. 29 Salaries and Wages Expense ……………………. Cash …………………………………………………. (Paid salaries expense) 1,900 1,900 30 Cash ……………………………………………………….. Accounts Receivable ……………………………….. Sales Revenue (17% X $2,000) ……………… (Received cash and balance […]

CHAPTER 3 The Accounting Information System Learning Objectives 1. Analyze the effect of business transactions on the basic accounting equation. 2. Explain how accounts, debits, and credits are used to record business transactions. 3. Indicate how a journal is used […]

PROBLEM 3-9A (Continued) (d) HILLS LEGAL SERVICES INC. Trial Balance August 31, 2017 Debit Credit Accounts Payable …………………………..…………… Notes Payable …………………………………………….. Common Stock ……………………………………………. Retained Earnings ………………………………………. Dividends ……………………………………………………. Service Revenue …………………………………………. Advertising Expense …………………………………… Salaries and Wages Expense ………………………. […]

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 […]

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 7 Accounts Receivable …………………………………. Service Revenue ………………………………… (Billed clients for services rendered) 3,400 3,400 12 […]

Chapter Three Challenge Exercise 1 LO: 3 Presented below is information related to Shawshank Real Estate Agency. Oct. 1 Pete Shawshank begins business as a real estate agent with a cash investment of $25,000 in exchange for common stock. 2 […]

PROBLEM 4-2A (a) Date Account Titles Debit Credit 1. 2017 June 30 Supplies Expense ……………………………….. Supplies ($2,000 – $720) ………………. 1,280 1,280 2. 30 Utilities Expense …………………………………. Accounts Payable ………………………… 180 180 3. 30 Prepaid Insurance ($2,880 ÷ 12 months) […]

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 […]

4. Supplies on hand total $800. Copyright © 2016 John Wiley & Sons, Inc. Kimmel, Financial Accounting, 8/e, Challenge Exercise Solutions (For Instructor Use Only) Page 4-1 Equipment 40,000 Accumulated Depreciation—Equipment $ 12,600 Notes Payable 25,000 Unearned Rent Revenue 11,100 […]

Copyright © 2016 Wiley Kimmel, Financial Accounting, 8/e, Problems: Set C Solutions (For Instructor Use Only) 4-1 CHAPTER 4 Accrual Accounting Concepts PROBLEM 4-1C (a) 1. Cash ……………………………………………………………… 18,000 Accounts Receivable …………………………..……. 18,000 2. Unearned Service Revenue ……………………………. 11,000 Service […]

ACR 4-3 (Continued) (b) General Journal Date Account Titles Debit Credit Aug. 1 Prepaid Advertising ………………………………….. Cash …………………………………………………. 400 400 3 Rent Expense …………………………………………… Cash …………………………………………………. 380 380 5 Cash ………………………………………………………… Accounts Receivable …………………………. 1,200 1,200 10 Salaries and Wages […]

PROBLEM 4-7A (Continued) (e) 1. Nov. 30 Supplies Expense ……………………………………. 1,320 Supplies ($2,420 – $1,100) …………………. 1,320 2. 30 Salaries and Wages Expense ……………………. 480 Salaries and Wages Payable ……………… 480 3. 30 Depreciation Expense ………………………………. 250 Accumulated Depreciation-Equipment . […]

PROBLEM 4-4C (a) Dec. 31 Accounts Receivable ……………………………… 3,500 Service Revenue ……………………………… 3,500 31 Supplies Expense ………………………………….. 2,900 Supplies …………………………………………. 2,900 31 Insurance Expense ………………………………… 1,560 Prepaid Insurance …………………………… 1,560 31 Depreciation Expense …………………………….. 5,000 Accumulated Depreciation— Equipment ……………………………………. 5,000 […]

CCC4 CONTINUING COOKIE CHRONICLE 8 Cash ……………………………………………………….. 300 Accounts Receivable …………………………. 300 9 Cash ……………………………………………………….. 750 Unearned Service Revenue ……………….. 750 15 Accounts Payable ……………………………………. 50 Cash …………………………………………………. 50 23 Cash ……………………………………………………….. 3,000 Accounts Receivable ………………………………. 1,000 Service Revenue ……………………………….. […]

ACR 4-4 (Continued) (h) Date Account Titles Debit Credit July 31 Service Revenue ……………………………………………… 39,120 Income Summary ……………………………………. 39,120 31 Income Summary ……………………………………………. 32,350 Salaries and Wages Expense …………………… 22,000 Rent Expense ………………………………………….. 4,000 Advertising Expense ……………………………….. 2,200 Supplies Expense […]

© 2016 WILEY (b) Periodicity assumption. (c) No violation. (d) Going concern assumption. (e) Historical cost principle. (f) Economic entity assumption. (c) Revenue should be recognized on a per game basis over the season from April through October. (d) Interest […]

EXERCISE 4-5 (a) Cash Basis Accrual Basis – Operating Expenses – Insurance Expense Net Income 12,000 2,400 $ 7,600 15,800 — $12,200 Service Revenue $22,000 $28,000 (b) The accrual basis of accounting provides more useful information for decision makers because […]

PROBLEM 4-4B (Continued) ABDULLA ADVERTISING AGENCY Retained Earnings Statement For the Year Ended December 31, 2014 Retained earnings, January 1 ………………………… $ 5,500 Add: Net income …………………………………………. 38,810 44,310 Less: Dividends ……………………………………………. 10,000 Retained earnings, December 31 ……………………. $34,310 ABDULLA […]

CHAPTER 4 Accrual Accounting Concepts Learning Objectives 1. Explain the accrual basis of accounting and the reasons for adjusting entries. 2. Prepare adjusting entries for deferrals. 3. Prepare adjusting entries for accruals. 4. Prepare an adjusted trial balance and closing […]

PROBLEM 4-1B (a) 1. Cash ………………………………………………………… 20,000 Accounts Receivable …………………………. 20,000 2. Unearned Service Revenue ………………………. 10,000 Service Revenue ……………………………….. 10,000 3. Cash ………………………………………………………… 40,000 Unearned Service Revenue ……………….. 40,000 Unearned Service Revenue ($40,000 – $17,000) …………………………………. 23,000 Service Revenue […]

PROBLEM 5-1B (a) General Journal Date Account Titles Debit Credit Apr. 2 Inventory …………………………………………………… Accounts Payable ……………………………….. 8,700 8,700 4 Accounts Receivable …………………………………. Sales Revenue …………………………..……….. Cost of Goods Sold ……………………………………. Inventory …………………………………………….. 6,000 3,700 6,000 3,700 5 Freight-Out ………………………………………………… […]

PROBLEM 5-4A (Continued) This plan increased net sales and gross profit but did not change the gross profit rate. This is not surprising since the proposed change affects selling expenses rather than cost of goods sold. An increase in sales […]

CHAPTER 5 SOLUTIONS TO PROBLEMS—SET C PROBLEM 5-1C (a) General Journal Date Account Titles Debit Credit Apr. 2 Inventory …………………………………………………… Accounts Payable ……………………………….. 8,700 8,700 4 Accounts Receivable …………………………………. Sales Revenue …………………………..……….. Cost of Goods Sold ……………………………………. Inventory …………………………………………….. 6,000 […]

CCC5 CONTINUING COOKIE CHRONICLE inventory. Because you are dealing with high value items you should use the perpetual system. 3. You still need to count inventory to ensure that your records are accurate and that the inventory that is supposed […]

(3) April 7 Equipment …………………………………. 35,000 Accounts Payable ……………….. 35,000 Copyright © 2016 WILEY Kimmel, Financial Accounting, 8/e Exercise B (For Instructor Use Only) 1-1 Accounts Payable ……………………………. 3,300 9 Inventory ………………………………………………… 50 Cash ……………………………………………….. 50 10 Accounts Payable …………………………………… […]

3. On April 7, purchased equipment on account for $29,000. (2) April 6 Inventory ……………………………………………………. 500 Cash …………………………………………………. 500 (4) April 8 Accounts Payable ……………………………………….. 3,000 Inventory …………………………………………… 3,000 Copyright © 2016 WILEY Kimmel, Financial Accounting, 8/e, Challenge Exercise Solutions […]

PROBLEM 5-5B WRIGHT COMPANY Income Statement For the Year Ended December 31, 2014 Sales Sales revenue ………………………………… $972,000 Less: Sales returns and allowances ……………………….. $ 46,000 Sales discounts……………………. 12,000 58,000 Net sales ………………………………………………. 914,000 Cost of goods sold ……………………………….. 548,000 […]

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 […]

(a), (c) & (e) Cash 11/19 5,390 11/22 2,300 11/29 675 11/28 3,000 11/29 375 11/29 1,300 11/30 Bal. 3,494 11/28 3,000 11/25 5,000 11/27 1,700 11/30 Bal. 7,100 11/1 Bal. 9,000 11/10 1,900 11/8 3,550 11/20 7,546 Accounts Receivable […]

PROBLEM 5-5C KRITEK COMPANY Income Statement For the Year Ended December 31, 2014 Sales Sales revenue ………………………………….. $708,000* Less: Sales discounts …………………….. 11,300 Net sales …………………………………………. 696,700 Cost of goods sold …………………………………. 460,000 Gross profit ……………………………………………. 236,700 Operating expenses Salaries […]

CHAPTER 5 Merchandising Operations and the Multiple-Step Income Statement Learning Objectives 1. Describe merchandising operations and inventory systems. 2. Record purchases under a perpetual inventory system. 3. Record sales under a perpetual inventory system. 4. Prepare a multiple-step income statement […]

EXERCISE 5-7 (Continued) (b) Yoste Noone Profit margin $11,620 ÷ $84,000 = 14% $17,000 ÷ $100,000 = 17% Gross profit rate $26,000 ÷ $84,000 = 31% $40,000 ÷ $100,000 = 40% (c) Noone has a higher profit margin than Yoste. […]

CCC6 CONTINUING COOKIE CHRONICLE (a) Feb. 2 Purchases ………………………………………… 1,150 Accounts Payable ……………………… 1,150 16 Cash ………………………………………………… 1,100 Sales Revenue …………………………… 1,100 25 Accounts Payable …………………………….. 1,150 Cash …………………………………………. 1,150 Mar. 2 Purchases ………………………………………… 592 Accounts Payable ……………………… 592 30 […]

CHAPTER 6 Reporting and Analyzing Inventory Learning Objectives 1. Discuss how to classify and determine inventory. 2. Apply inventory cost flow methods and discuss their financial effects. 3. Explain the statement presentation and analysis of inventory. *4. Apply inventory cost […]

CHAPTER 6 SOLUTIONS TO PROBLEMS—SET C PROBLEM 6-1C (c) Include $500 in inventory. (d) Exclude the items from Equitz’s inventory. (e) Title to the goods does not transfer to Equitz until March 2. Exclude this amount from the February 28 […]

CT 6-5 REAL-WORLD FOCUS Answers will vary depending on the company chosen. LO 2, 3 BT: S Difficulty: Medium TOT: 30 min. AACSB: Analytic and Technology AICPA FC: Measurement and Reporting Copyright © 2015 John Wiley & Sons, Inc. Kimmel, […]

3. Add to inventory: Title passed to Fallen when goods were shipped ………………………………………………… 15,000 © 2016 WILEY Kimmel Financial Accounting, 8e Exercises: Set B Solutions (For Instructor Use Only) 6-1 therefore, cannot be included in the inventory ………….. (32,000) Correct […]

SOLUTIONS TO PROBLEMS—SET B PROBLEM 6-1B (c) Exclude the goods from Sun’s inventory. The consigned goods are owned by Frederick Inc. No entry is recorded. (d) Include $380 in inventory. (e) Exclude from inventory as the goods were shipped FOB […]

*PROBLEM 6-8A (Continued) (b) Gross profit: LIFO FIFO Moving- Average Sales $15,690 $15,690 $15,690 – Cost of goods sold 8,200 7,825 7,927 Gross profit $ 7,490 $ 7,865 $ 7,763 Ending Inventory $ 1,500 $ 1,875 $ 1,773 In a […]

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 […]

Chapter Six Challenge Exercise 1 Premier Bank and Trust is considering giving Bean Company a loan. Before doing so, they decide that further discussions with Bean’s accountant may be desirable. One area of particular concern is the inventory account, which […]

EXERCISE 6-13 (a) Inventory turnover $16,255 ($3,042 + $2,397) ÷ 2 = $16,255 $2,719.5 = 5.98 Days in inventory  365 =61 days 5.98 (b) Based on data presented: Current ratio $30,857 ÷ $12,753 = 2.42 : 1 After adjusting […]

CHAPTER 7 SOLUTIONS TO PROBLEMS—SET C PROBLEM 7-1C Principles Application to Cash Disbursements Establishment of responsibility. Only the treasurer and assistant trea- surer are authorized to sign checks. Segregation of duties. Invoices must be approved by both the purchasing agent […]

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, […]

CHAPTER 7 Fraud, Internal Control, and Cash Learning Objectives 1. Define fraud and the principles of internal control. 2. Apply internal control principles to cash. 3. Identify the control features of a bank account. 4. Explain the reporting of cash […]

EXERCISE 7-11 (a) Deposits in transit = $74,000 – ($71,000 – $4,800) = $7,800 (b) Outstanding checks = ($73,570 + $360) – ($68,678 – $4,500) = $9,752 (c) PERTH INC. Bank Reconciliation August 31, 2017 Cash balance per bank statement […]

ACR SOLUTION (Continued) (g) HAVENHILL COMPANY Balance Sheet December 31, 2017 Assets Current assets Cash ………………………………………………… $27,420 Accounts receivable …………………………. 1,880 Inventory ………………………………………….. 17,880 Prepaid insurance …………………………….. 1,200 Total current assets …………………….. $48,380 Property, plant, and equipment Equipment ………………………………………. 28,000 […]

CCC7 CONTINUING COOKIE CHRONICLE (1) The cash could be stolen from John’s car before it is deposited in the bank. theft because of a lack of segregation of duties between the handling of cash, bank reconciling process and recording of […]

CHAPTER 7 SOLUTIONS TO PROBLEMS—SET B PROBLEM 7-1B 1. There is no clear establishment of responsibility. All members appear to have the authority to take books and collect cash. take books without completing a receipt. It does not appear that […]

4. Physical controls. A cash register is used to record the sale. 6. Human resource controls. No visible application possible. employee receive, and a third employee approve payment. have physical custody of those assets. 4. Cash should be stored in […]

Copyright © 2016 WILEY Kimmel, Financial Accounting, 8/e Exercise B (For Instructor Use Only) 7-1 (ticket) in registering the sale on the cash register. The cash register produces a tape of all sales. CHAPTER 7 SOLUTIONS TO EXERCISES—SET B 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 […]

CHAPTER 8 SOLUTIONS TO PROBLEMS—SET B PROBLEM 8-1B (a) Total estimated bad debts Number of Days Outstanding Total 0–30 31–60 61–90 91–120 Over 120 Accounts receivable $305,000 $107,000 $60,000 $50,000 $38,000 $50,000 % uncollectible 2% 5% 7.5% 10% 25% Estimated […]

CHAPTER 8 SOLUTIONS TO PROBLEMS—SET C (a) Total estimated bad debts Number of Days Outstanding Total 0–30 31–60 61–90 91–120 Over 120 Accounts receivable $285,000 $107,000 $60,000 $50,000 $38,000 $30,000 % uncollectible 2% 5% 7.5% 10% 14% Estimated bad debts […]

© 2016 WILEY Kimmel Financial Accounting, 8e (For Instructor Use Only) 16 Cash ($8,400 – $84) …………………………………… 8,316 Sales Discounts (1% X $8,400) …………………… 84 Accounts Receivable—Chico Inc.………… 8,400 Cash …………………………………………………………….. 743,000 Accounts Receivable ………………………………. 743,000 (b) Allowance for Doubtful […]

Copyright © 2016 John Wiley & Sons, Inc. Kimmel, Financial Accounting, 8/e, Solutions Manual (For Instructor Use Only) 8-21 EXERCISE 8-17 (Continued) (b) The quality of earnings ratio is net cash provided by operating activities divided by net income. If […]

ACR SOLUTION (Continued) HUDSON CORPORATION Retained Earnings Statement For the Month Ending January 31, 2017 Retained earnings, January 1 …………………………………….. $12,730 Add: Net income ………………………………………………………. 2,011 Retained earnings, January 31 …………………………………… $14,741 HUDSON CORPORATION Balance Sheet January 31, 2017 Assets […]

CHAPTER 8 Reporting and Analyzing Receivables Learning Objectives 1. Explain how companies recognize accounts receivable. 2. Describe how companies value accounts receivable and record their disposition. 3. Explain how companies recognize, value, and dispose of notes receivable. 4. Describe the […]

3 Sales Returns and Allowances …………………………………….. 600 Accounts Receivable—Kirk Company ……………………… 600 9 Cash……. …………………………………………………………………. 3,332 Sales Discounts ($3,400 X 2%) ……………………………………. 68 Accounts Receivable—Kirk Company ……………………… 3,400 31 Accounts Receivable ($8,000 X 1.5%) ………………………….. 120 Interest Revenue ……………………………………………….. 120 […]

The disadvantage is the cost to your business. When a customer makes a purchase using a credit card you will have to pay a percent– age of the sale to the credit card company. The rate varies but 3% would […]

(a) Columbia Sports Wear VF Corporation $141,859 $1,047,505 = 8.4% = 10.3% ($1, 792,209 + $1,605,588) / 2 ($9,980,140 + $10,315,443) / 2 $141,859 $1 2. = 6.8% $2,100,590 1. Return on assets Profit margin ,047,505 = 8.6% $12,154,784 $2,100,590 […]

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 […]

EXERCISE 9-13 Alliance Atlantis Communications Inc.’s change of accounting policy to amortize broadcast rights will probably increase its reported income. Prior to the change, Alliance Atlantis had amortized broadcast rights over a maxi- mum of two years. Their new policy […]

CHAPTER 9 Reporting and Analyzing Long-Lived Assets Learning Objectives 1. Explain the accounting for plant asset expenditures. 2. Apply depreciation methods to plant assets. 3. Explain how to account for the disposal of plant assets. 4. Identify the basic issues […]

ACR 9-1 (Continued) (b) MILO CORPORATION Adjusted Trial Balance December 31, 2017 Debits Credits Notes Payable (due April 30, 2018) ……………… Interest Payable …………………………………………. Notes Payable (due in 2023) ……………………….. Income Taxes Payable ……………………………….. Common Stock ………………………………………….. Retained Earnings ……………………………………… […]

3. Equipment 5. Prepaid Insurance 7. Land Improvements Copyright © 2016 WILEY Kimmel, Financial Accounting, 8/e, Challenge Exercise Solutions (For Instructor Use Only) acquire machinery, which will help the company earn revenue for a number of years. Therefore, the expense […]

5 $ 21,900 6 44,000 7 629,500 8 $36,000 Land Improvements 9 7,300 Property Tax Expense 10 (12,700) $302,000 $695,400 Equipment ………………………………. 25,000 ($750,000 X 1/10 X 4/12) 1 Accumulated Depreciation— Equipment …………………………………….. 400,000 Cash ……………………………………………….. 367,000 Equipment …………………………………. 750,000 […]

CCC9 CONTINUING COOKIE CHRONICLE Part 1 (a) Aug. 31 Website …………………………………….. 1,800 Cash …………………………………… 1,800 (b) Monthly amortization $600 ÷ 24 months = $25 Accumulated amortization August 31, 2018 9 months X $25 = $225 Book value at August 31, […]

3. Equipment 5. Prepaid Insurance 7. Land Improvements Copyright © 2016 John Wiley & Sons, Inc. Kimmel Financial Accounting, 8/e (For Instructor Use Only) 9-1 9. Building Attorney’s fee …………………………………………………… 1,500 Real estate broker’s fee …………………………………….. 5,000 Total ………………………………………………………….. $102,700 […]

APPENDIX G TIME VALUE OF MONEY SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOM’S 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 […]

FOR INSTRUCTOR USE ONLY APPENDIX H REPORTING AND ANALYZING INVESTMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 9. […]

Reporting and Analyzing Investments H-21 (sell. pr./sh. – cost/sh.) × sh. sold 89. A purchase of common stock of Blue Wave Corporation for $29,000 was sold three months later for $30,000. The entry to record the sale would include a […]

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 […]

Reporting and Analyzing Investments H-53 Ex. 186 (Cont.) Instructions (a) Prepare the journal entries to record the 2017 stock transactions. (b) On December 31, 2017, prepare any adjusting entry that might be necessary relative to the trading portfolio. (c) Show […]

FOR INSTRUCTOR USE ONLY CHAPTER 1 INTRODUCTION TO FINANCIAL STATEMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 9. […]

Introduction to Financial Statements 1-21 116. Which financial statement is prepared first? a. Balance sheet b. Income statement c. Retained earnings statement d. Statement of cash flows Ans: B, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA […]

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 Be. 185 Identify which of the following accounts appear on […]

Introduction to Financial Statements FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting Solution 198 (5 min.) GABELLI COMPANY Balance […]

FOR INSTRUCTOR USE ONLY CHAPTER 10 REPORTING AND ANALYZING LIABILITIES SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 15. […]

Reporting and Analyzing Liabilities 10–21 103. A retailer that collects sales taxes is acting as an agent for the a. wholesaler. b. customer. c. taxing authority. d. chamber of commerce. Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, […]

Reporting and Analyzing Liabilities 10–41 Problem Solving, IMA: FSA Solution: $829,960 − $800,000 = $29,960 (Carry. Val. – Face val.) 195. When bonds are retired before maturity, a. only a loss on redemption can be recorded. b. only a gain […]

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 Depreciation—Equipment 14,000 Notes Payable, 5-year, 8% 75,000 Payroll […]

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA: Business […]

FOR INSTRUCTOR USE ONLY CHAPTER 11 REPORTING AND ANALYZING STOCKHOLDERS’ EQUITY SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Ite m LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 […]

Reporting and Analyzing Stockholders’ Equity 11–21 112. Nice Corporation issues 40,000 shares of $100 par value preferred stock for cash at $110 per share. The entry to record the transaction will consist of a debit to Cash for $4,400,000 and […]

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’ equity—common 200,000 Total stockholders’ equity 280,000 Sales 120,000 […]

Reporting and Analyzing Stockholders’ Equity 11–61 Ex. 235 On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred: […]

FOR INSTRUCTOR USE ONLY CHAPTER 12 STATEMENT OF CASH FLOWS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVES AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. […]

Statement of Cash Flows 12–21 102. Accounts receivable arising from sales to customers amounted to $120,000 and $105,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $457,000. Exclusive of […]

Statement of Cash Flows 12–41 10. Patent amortization expense recorded for a period A Be. 180 Lacey Company prepared the tabulation below at December 31, 2017. Net Income …………………………………………. $310,000 Adjustments to reconcile net income to net cash provided by […]

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY 12–58 *Ex. 197 Condensed financial data of Gorni Company appear below: GORNI COMPANY Comparative Balance Sheet December 31 2017 2016 Assets Cash $ 70,000 […]

FOR INSTRUCTOR USE ONLY CHAPTER 13 FINANCIAL ANALYSIS: THE BIG PICTURE SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K […]

Financial Analysis: The Big Picture 13–21 99. A balance sheet that displays only component percentages is called a ________ balance sheet. a. condensed b. common size c. comparative d. trendy Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, […]

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 178. Junebag Corporation reported net income […]

Financial Analysis: The Big Picture 13–61 Be. 218 Vertical analysis (common-size) percentages for Austin Company’s sales, cost of goods sold, and expenses are listed here. Vertical Analysis 2018 2017 2016 Sales revenue 100.0% 100.0% 100.0% Cost of goods sold 61.2 […]

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition 13–78 Ex. 237 (Cont.) Additional information: 1. The inventory turnover is 4.2 times 2. The return on common stockholders’ equity is 14%. The company had no additional paid-in– […]

FOR INSTRUCTOR USE ONLY CHAPTER 2 A FURTHER LOOK AT FINANCIAL STATEMENTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 […]

A Further Look at Financial Statements 2-21 91. Use the following data to calculate the current ratio. Eddy Auto Supplies Balance Sheet December 31, 2017 Cash $ 126,000 Accounts payable $ 165,000 Accounts receivable 120,000 Salaries and wages payable 30,000 […]

A Further Look at Financial Statements 2-41 171. Different companies using the same accounting principles is an application of a. consistency. b. materiality. c. full disclosure. d. comparability. Ans: D, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, […]

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition 2-60 Ex. 208 These items are taken from the financial statements of Drew Corporation for 2017. Retained earnings (beginning of year) $33,000 Utilities expense 2,000 Equipment 56,000 Accounts […]

FOR INSTRUCTOR USE ONLY CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. […]

The Accounting Information System 3-21 114. Which of the following accounts is increased with a debit? a. Dividends b. Service Revenue c. Interest Payable d. Common Stock 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.) Be. 220 At June 1, 2017, Massoth Industries had an Accounts Receivable balance of $18,000. During the month, the company had credit sales of $25,000 and collected […]

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 […]

The Accounting Information System 3-77 Ex. 253 The accounts in the ledger of Dependable Delivery Service contain the following balances on July 31, 2017. Accounts Receivable $16,400 Prepaid Insurance $ 1,800 Accounts Payable 12,400 Maintenance and Repairs Expense 1,200 Cash […]

FOR INSTRUCTOR USE ONLY CHAPTER 4 ACCRUAL ACCOUNTING CONCEPTS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. 1 […]

Accrual Accounting Concepts 4-21 92. The primary difference between prepaid and accrued expenses is that prepaid expenses have: a. been incurred and accrued expenses have not. b. not been paid and accrued expenses have. c. been recorded and accrued expenses […]

Accrual Accounting Concepts 4-41 171. At March 1, I. Repo Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $950 and consumed supplies of $800. If no adjusting entry is made for supplies: a. […]

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. […]

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, […]

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 […]

FOR INSTRUCTOR USE ONLY CHAPTER 5 MERCHANDISING OPERATIONS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S 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 […]

Merchandising Operations 5-21 118. The collection of an $1,500 account within the 2 percent discount period will result in a a. debit to Sales Discounts for $30. b. debit to Accounts Receivable for $1,470. c. credit to Cash for $1,470. […]

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. […]

FOR INSTRUCTOR USE ONLY CHAPTER 6 REPORTING AND ANALYZING INVENTORY SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 10. […]

Reporting and Analyzing Inventory 6-21 90. Sassy Saxophones has the following inventory data: July 1 Beginning inventory 50 units at $120 5 Purchases 300 units at $112 14 Sale 200 units 21 Purchases 150 units at $115 30 Sale 140 […]

Reporting and Analyzing Inventory 6-41 170. Barnett Company had the following records: 2017 2016 Ending inventory $32,650 $30,490 Cost of goods sold 306,300 313,600 What is Barnett’s average days in inventory for 2017? (rounded) a. 37.6 days b. 38.8 days […]

Reporting and Analyzing Inventory 6-61 Ex. 207 Wooderson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Wooderson Company uses the […]

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 […]

FOR INSTRUCTOR USE ONLY CHAPTER 7 FRAUD, INTERNAL CONTROL, AND CASH SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K […]

Fraud, Internal Control, and Cash 7-21 111. Which of the following would be deducted from the balance per bank on a bank reconciliation? a. Outstanding checks. b. Deposits in transit. c. Notes collected by the bank. d. Service charges. Ans: […]

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 […]

Fraud, Internal Control, and Cash FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting 7-61 Ex. 229 The cash records […]

FOR INSTRUCTOR USE ONLY CHAPTER 8 REPORTING AND ANALYZING RECEIVABLES SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXONOMY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K 12. […]

Reporting and Analyzing Receivables 8-21 102. When an account is written off using the allowance method, the a. cash realizable value of total accounts receivable will increase. b. net accounts receivable will decrease. c. allowance account will increase. d. net […]

Reporting and Analyzing Receivables 8-41 189. All of the following statements are true regarding the average collection period except: a. it is a popular variant of the accounts receivable turnover . b. it is used to assess the effectiveness of […]

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 […]

FOR INSTRUCTOR USE ONLY CHAPTER 9 REPORTING AND ANALYZING LONG-LIVED ASSETS SUMMARY OF QUESTIONS BY LEARNING OBJECTIVE AND BLOOM’S TAXOMONY Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT True-False Statements 1. 1 K […]

Reporting and Analyzing Long-Lived Assets 9-21 99. The declining-balance method of depreciation produces a(n) a. decreasing depreciation expense each period. b. increasing depreciation expense each period. c. declining percentage rate each period. d. constant amount of depreciation expense each period. […]

Reporting and Analyzing Long-Lived Assets 9-41 193. The following information is provided for Nguyen Company and Northwest Corporation. (in $ millions) Nguyen Company Northwest Corporation Net income 2017 $165 $420 Net sales 2017 1,650 4,900 Total assets 12/31/15 1,000 2,400 […]

Reporting and Analyzing Long-Lived Assets FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 12, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA Solution 242 (12 min.) a. $700 […]

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition FOR INSTRUCTOR USE ONLY Ans: N/A, LO: 2,6, Bloom: AN, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: […]