©McGraw–Hill Companies, 2015
Solutions Manual, Appendix E
479
SERIAL PROBLEM – SP E
Serial Problem (100 minutes) Parts 1 and 2
SALES JOURNAL
Page 2
Date
Account Debited
Invoice
Number
PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Inventory Cr.
Jan. 13
Liu Corp. ……………………………………………..
n/a
✓
5,200
3,560
26
KC, Inc. ………………………………..……………..
n/a
✓
5,800
4,640
Feb. 23
Delta Co. ……………………………………………..
n/a
✓
3,220
2,660
Mar. 25
Wildcat Services ………………….……….
n/a
✓
2,800
2,002
30
IFM Company …………………………..
n/a
✓
2,220
1,048
31
Totals …………………………………..……………..
19,240
13,910
(106/413)
(502/119)
CASH RECEIPTS JOURNAL
Date
Account Credited
Explanation
PR
Cash
Dr.
Sales
Discount
Dr.
Accounts
Receivable
Cr.
Services
Revenue
Cr.
Other
Accts.
Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
Jan. 9
Gomez Co …………..………………
Invoice, n/a
✓
2,668
2,668
16
Services Revenue ..…………………………
Cash Sales
✓
4,000
4,000
22
Liu Corp …………………………..
Invoice, 1/13
✓
4,653
47
4,700
Feb.11
Alex’s Eng. Co …….…………………….
Invoice, 1/11
✓
5,500
5,500
Mar. 9
Delta Co …………………………..
Invoice, 2/23
✓
3,220
3,220
16
Services Revenue ..…………………………
Cash Sales
✓
5,260
__
_____
5,260
_
_
31
Totals ………………….……….
25,301
47
16,088
9,260
0
0
(101)
(415)
(106)
(403)
(✓)
(502/119)
©McGraw–Hill Companies, 2015
Financial Accounting Fundamentals, 5th Edition
480
Serial Problem (Continued)
PURCHASES JOURNAL
Page 2
Date
Account
Date of
Invoice
Terms
PR
Accounts
Payable
Cr.
Inventory
Dr.
Computer
Supplies
Dr.
Other
Accounts
Dr.
Jan. 7
Kansas Corp ……………………….….
1/7
1/10, n/30
✓
5,800
5,800
26
Kansas Corp ……………………….….
1/26
1/10, n/30
✓
9,000
9,000
Mar. 8
Harris Office Products ………..……………..
3/8
✓
2,730
_____
2,730
31
Totals ………………………………….……………..
17,530
14,800
2,730
0
(201)
(119)
(126)
(✓)
CASH DISBURSEMENTS JOURNAL
Page 2
Date
Ck.
No.
Payee
Account Debited
PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Jan. 4
n/a
Lyn Addie ………….……………….
Wages Expense …………………….
Wages Payable ……………………..
623/210
625
125
500
15
n/a
Not specified …….…………………….
Merchandise Inventory ………….
119
600
600
17
n/a
Kansas Corp …….…………………….
Kansas Corp ………………………….
✓
5,742
58
5,800
31
n/a
Lyn Addie ………….……………….
Wages Expense …………………….
623
1,250
1,250
Feb. 1
n/a
Hillside Mall …………………………..
Prepaid Rent ………………………….
131
2,475
2,475
3
n/a
Kansas Corp …….…………………….
Kansas Corp ………………………….
✓
8,414
90
8,504
5
n/a
Not specified …….…………………….
Advertising Expense …………….
655
600
600
15
n/a
S. Rey ……………….………….
Dividends ………………………………
319
4,800
4,800
26
n/a
Lyn Addie ………….……………….
Wages Expense …………………….
623
1,000
1,000
27
n/a
S. Rey ……………….………….
Mileage Expense …………………..
676
192
192
Mar. 11
n/a
Not Specified …….…………………….
Repairs Expense …………………..
684
960
960
19
n/a
Harris Off. Prod …………………………..
Harris Office Products …………..
✓
3,830
3,830
31
n/a
S. Rey ……………….………….
Mileage Expense …………………..
676
128
___
128
_____
31
Totals ………………..…………
30,616
148
12,630
18,134
(101)
(119)
(✓)
(201)
Serial Problem, Business Solutions (Concluded)
Part 3
GENERAL JOURNAL
Page 2
2016
Jan. 5 Cash ……………………………………………………….… 101 25,000
Common Stock …………………………………. 307 25,000
Additional investment by owner in exchange
for stock.
11 Accounts Receivable—Alex’s Eng. Co ………. 106.1 5,500
Unearned Computer Services Revenue ……… 236 1,500
Computer Services Revenue ……………… 403 7,000
Completed work on project.
Reporting in Action — BTN E-1
1. Apple’s Note 11 reports on its business segment.
2. Apple identifies and describes its reportable segment in its Note 11 as
follows: “The Company manages its business primarily on a geographic basis. The
Company’s reportable operating segments consist of the Americas, Europe, Greater
3.
Segment
Operating
Income
Average
Assets
Return on
Assets
Americas ……………….….
$22,817
$5,589
408.2%
Europe …………………..….
13,025
3,115
418.1
Greater China …………….
8,541
2,132
400.6
Japan …………………….….
6,819
2,315
294.6
Rest of Asia Pacific ..….
3,753
918
408.8
Retail
4,025
3,027
133.0
4. Solution depends on the most recent information obtained.
Comparative Analysis — BTN E-2
1. Apple – Current Year Revenue/Segment Assets
Domestic segment: $ 62,739 / [($ 5,653 + $5,525)/2] = 1122%
2. Apple’s domestic revenue as a percent of its domestic assets is
markedly higher than that of Google’s for the domestic segment. For
the international segment, Apples revenue as a percent of assets is
Ethics Challenge — BTN E-3
1. Independence in fact means that the auditor maintains an objective
point of view of the client. Independence in appearance means that a
2. While auditors are hired by their clients to perform audits, auditors
have a responsibility to the company’s “stakeholders” and the public.
3. Since Erica Gray is a sole practitioner it is questionable whether she
can consult on the client’s accounting system and then remain
objective in subsequent years when she performs the audit of the
company. Large firms often separate consulting and auditing
accuracy of subsidiary ledgers should also be included.
Taking It to the Net — BTN E-5
(See Dell’s Note 15 – Segment Information)
1. Large Enterprise; Public; Small and Medium Business; and Consumer.
2. The Large Enterprise segment reports $1,553 million of operating income
and the Large Enterprise segment reports $3,054 million of assets.
3. Dell’s Operating Income and Total Assets by Segment
($ millions)
Operating
Income 2013
Total Assets 2013 :
Total Assets 2012
Segment Return
on Assets
Large Enterprise …..……
$ 1,553
$3,054 : $2,729
53.7%
Public ………………….……
$ 1,238
$1,940 : $1,873
64.9%
Small & Medium
Business …………………
$ 1,505
$1,161 : $1,107
132.7%
Consumer …………………
$ (11)
$1,138: $1,249
(0.9)%
The Small and Medium Business had the highest segment return on
assets for the fiscal year ended 2013 with a 132.7% return. The other
three segments had returns on assets ranging from (0.9)% to 64.9%.
4. The six product groups reported by Dell include: Desktop PCs, Mobility,
Software and peripherals, Servers and networking, Enhanced services,
and Storage.
($ millions)
2013 Fiscal Year
Mobility ……………………………………………………….
$15,303 26.9%
Desktop PCs ……………………………………………….
12,991 22.8
Servers and networking ……………………………….
9,294 16.3
Software and peripherals ……………………………..
9,257 16.3
Services ……………………………………………………...
8,396 14.7
Storage ……………………………………………………….
1,699 3.0
Totals ………………………………………………………….
$56,940 100.0%
Dell earned more—in both dollars and returns—from its Mobility group;
its Desktop PCs was second in both categories.
Teamwork in Action — BTN E-6
For check figures in the implementation of this activity see the solution
to Problem E-1A or E-1B.
Entrepreneurial Decision — BTN E-7
1. The following special journals are likely to be used:
• Sales journal to record credit sales
• Cash receipts journal to record all cash receipts
• Purchases journal to record credit purchases
2.
Year
One Year
Hence
Two Years
Hence
Three Years
Hence
Four Years
Hence
Five Years
Hence
Sales …………………………
$1.00 mil
1.20 mil
$1.38 mil
$1.725 mil
$2.07 mil
Global Decision — BTN E-8
1. Samsung has the following reported segments:
• Korea
2. Samsung discloses dollar amounts for the following line items:
• Total segment revenue
3. Yes. On most financial measures reported, the Korea segment appears
to dominate Samsung’s other segments.