Type
Solution Manual
Book Title
Financial Accounting Fundamentals 5th Edition
ISBN 13
978-0078025754

978-0078025754 Chapter 1 Solution Manual Part 3

March 26, 2020
Problem 1-9A (Continued)
Part 3
Sony Electric
Income Statement
For Month Ended December 31
Revenues
Electrical fees earned ...................... $7,100
Sony Electric
Statement of Retained Earnings
For Month Ended December 31
Sony Electric
Balance Sheet
December 31
Assets Liabilities
Cash ................................. $59,180 Accounts payable .................... $ 8,550
Accounts receivable ...... 900
Problem 1-9A (Concluded)
Part 3continued
Sony Electric
Statement of Cash Flows
For Month Ended December 31
Cash flows from operating activities
Cash received from customers1 .................................
$ 6,200
Cash flows from investing activities
Purchase of office equipment .....................................
(2,530)
Part 4
If the December 1 investment had been $49,000 cash instead of $65,000 and
Problem 1-10A (15 minutes)
1. Return on assets is net income divided by the average total assets.
Kyzera’s return: $65,000 / $250,000 = 0.26 or 26%.
2. Return on assets seems satisfactory for the risk involved in the
3. We know that revenues less expenses equal net income. Taking the
4. We know from the accounting equation that total financing (liabilities
Problem 1-11A (20 minutes)
1. Return on assets equals net income divided by average total assets.
2. Strictly on the amount of sales to consumers, Coca-Cola’s sales of
$46,542 are less than PepsiCo’s $66,504.
3. Success in returning net income from the average amount invested is
4. The reported figures suggest that Coca-Cola yields a marginally higher
return on assets than PepsiCo. Based on this information alone, we
would be better advised to invest in Coca-Cola than PepsiCo.
Problem 1-12AA (20 minutes)
Case 1 Return: 5% interest or $100/year.
Case 2 Return: Expected winnings from your bet.
Case 3 Return: Expected return on your stock investment (both
Case 4 Return: Expected increase in career earnings and other
Problem 1-13AB (15 minutes)
1.
F
5.
I
Problem 1-14AB (15 minutes)
An organization pursues three major business activities: financing,
investing, and operating.
If financial statements are to be informative about an organization’s
PROBLEM SET B
Problem 1-1B (25 minutes)
Balance Sheet
Income
Statement
Statement of
Cash Flows
Transaction
Total
Assets
Total
Liab.
Total
Equity
Net
Income
Operating
Activities
Investing
Activities
Financing
Activities
1
Owner invests
cash for its stock
+
+
+
Problem 1-2B (40 minutes)
Part 1
Company V
(a) and (b)
Calculation of equity: 12/31/2014 12/31/2015
(c) Calculation of net income for 2015:
Part 2
Company W
(b) Calculation of equity at December 31, 2015:
(c) Calculation of the amount of liabilities at December 31, 2015:
Problem 1-2B (Continued)
Part 3
Company X
First, calculate the beginning and ending equity balances:
12/31/2014 12/31/2015
Then, find the amount of investments by owner during 2015 as follows:
Equity, December 31, 2014 ............................... $ 73,000
Plus stock issuances ........................................ ?
Part 4
Company Y
First, calculate the beginning balance of equity:
Dec. 31, 2014
Next, find the ending balance of equity as follows:
Finally, find the ending amount of assets by adding the ending balance of
equity to the ending balance of liabilities:
Dec. 31, 2015
Problem 1-2B (Concluded)
Part 5
Company Z
First, calculate the balance of equity as of December 31, 2015:
Next, find the beginning balance of equity as follows:
Equity, December 31, 2014 ........................ $ ?
Finally, find the beginning amount of liabilities by subtracting the
beginning balance of equity from the beginning balance of assets:
Dec. 31, 2014
Problem 1-3B (15 minutes)
Safari Company
Balance Sheet
December 31, 2015
Problem 1-4B (15 minutes)
Solar Company
Income Statement
For Year Ended December 31, 2015
Problem 1-5B (15 minutes)
Audi Company
Statement of Retained Earnings
For Year Ended December 31, 2015
Problem 1-6B (15 minutes)
Banji Company
Statement of Cash Flows
For Year Ended December 31, 2015
Cash used by operating activities ...................... $(3,000)
Problem 1-7B (60 minutes) Parts 1 and 2
Assets
=
Liabilities
+
Equity
Date
Cash
+
Accounts
Receivable
+
Equipment
=
Accounts
Payable
+
Common
Stock
-
Dividends
+
Revenues
-
Expenses
June
1
+$130,000
=
+
$130,000
2
- 6,000
=
-
$6,000
4
+
$2,400
=
+ $2,400
Problem 1-7B (Continued)
Part 3
Niko’s Maintenance Co.
Income Statement
For Month Ended June 30
Revenues
Maintenance services revenue .......... $16,925
Expenses
Niko’s Maintenance Co.
Statement of Retained Earnings
For Month Ended June 30
Retained earnings, June 1 ................................ $ 0
Niko’s Maintenance Co.
Balance Sheet
June 30
Assets
Liabilities
Cash ................................
$130,060
Accounts payable ..........................
$ 0
Problem 1-7B (Concluded)
Part 3continued
Niko’s Maintenance Co.
Statement of Cash Flows
For Month Ended June 30
Cash flows from operating activities
Cash received from customers1 .................................
$ 16,250
Problem 1-8B (60 minutes) Parts 1 and 2
Assets
=
Liabilities
+
Equity
Cash
+
Accounts
Receivable
+
Office
Supplies
+
Office
Equipment
+
Building
=
Accounts
Payable
+
Notes
Payable
+
Common
Stock
-
Dividends
+
Reve-
nues
-
Expen-
ses
Bal.
25,000
+
35,000
+
150,000
=
110,000
+
100,000
d.
+
$1,200
+
1,700
+ $2,900
Bal.
25,000
1,200
+
36,700
+
150,000
=
2,900
+
110,000
+
100,000
Bal.
28,250
+
2,800
+
1,200
+
36,700
+
150,000
=
2,900
+
110,000
+
100,000
+
6,800
-
750
h.
- 11,500
-
$11,500
Bal.
16,750
+
2,800
+
1,200
+
36,700
+
150,000
=
2,900
+
110,000
+
100,000
-
11,500
+
6,800
-
750
i.
+ 1,800
-
1,800
Bal.
$15,350
+
$1,000
+
$1,200
+
$36,700
+
$150,000
=
$2,200
+
$110,000
+
$100,000
-
$11,500
+
$6,800
-
$3,250
Problem 1-8B (Concluded)
Part 3

Subscribe Now

Sign up to view full document

View Document