2-21 Solutions
2.27 b. continued.
(3) Building ……………………………………………………. 3,200
Cash ……………………………………………………… 4,130
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
+3,200
+930
–4,130
Acquires building costing $3,200 million and land
costing $930 million, and pays in cash.
(4) Building Fixtures ………………………………………. 860
Accounts Payable …………………………………… 860
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
+860
–860
Acquires building fixtures costing $860 million on
account.
(5) Accounts Payable ………………………………………. 1,500
Cash ……………………………………………………… 1,500
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
2.27 b. continued.
2.28 (Inheritance Brands; dual effects of transactions on balance sheet equation
and journal entries.) (Amounts in Millions)
a. Transaction
Shareholders’
Number Assets = Liabilities + Equity
(1) + $ 550 + $ 550
2-23 Solutions
Solutions 2-24
2.28 b. continued.
(2) Land …………………………………………………………. 250
(3) Prepaid Insurance ……………………………………… 30
(4) Merchandise Inventory ………………………………. 400
(5) Accounts Payable ………………………………………. 400
2-25 Solutions
2.29 (Callen Incorporated; preparing a balance sheet and an income statement.)
(Amounts in Thousands of Euros)
a. CALLEN, INCORPORATED
Balance Sheet
Jan. 31, Jan. 31,
2008 2007
Assets
Cash …………………………………………………… 30,536 2,559
Merchandise Inventory ………………………… 114,249 151,894
b. CALLEN, INCORPORATED
Income Statement
For the Year Ended: Dec. 31, 2008
Solutions 2-26
2-27 Solutions
2.30 (ChemAsia Limited; preparing a balance sheet and an income statement.)
(Amounts in Millions)
a. ChemAsia, Limited
Income Statement
For the Year Ended December 31, 2008
Revenues:
Net Operating Revenues ………………………………………. $ 835,037
Interest and Other Revenues ……………………………….. 3,098
b. ChemAsia, Limited
Comparative Balance Sheet
Dec 31, Dec. 31,
2008 2007
Assets
Noncurrent Assets:
2.30 b. continued.
Liabilities and Shareholders’ Equity
Noncurrent Liabilities:
Long-Term Debt ……………………………………. $ 35,305 $ 30,401
Other Noncurrent Liabilities ………………….. 42,062 36,683
c. Retained Earnings, December 31, 2007 …………………………... $ 213,255
2.31 (LBJ Group; miscellaneous transactions and adjusting entries.) (Amounts
in Millions)
a. (1) Inventories ………………………………………………. 180,000
2.31 continued.
2.31 continued.
2.32 a. continued.
(2) Rental Fees Received in Advance ……………….. 19,000
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
–19,000
+19,000
IncSt → RE
b. (1) Salary Expense ………………………………………… 42,000
Shareholders’
IncSt → RE
Assets
=
Liabilities
+
Shareholders’
Equity
(Class.)
IncSt → RE
Shareholders’
IncSt → RE
Assets
=
Liabilities
+
Shareholders’
(Class.)
2.32 continued.
e. (1) Equipment ……………………………………………….. 728,000
2-33 Solutions
Solutions 2-34
2.33 continued.
b. HANSEN RETAIL STORE
Balance Sheet
December 31, 2008
Assets
Cash ($50,000 + $40,000 – $60,000 – $97,400 + $52,900
+ $54,800 – $34,200 – $2,600) ………………………………… $ 3,500
Accounts Receivable ($116,100 – $54,800) …………………… 61,300
2.34 (Regaldo Department Store; recording transactions and preparing a
balance sheet.) (Amounts in Thousands)
Merchandise
Cash (A) Inventory (A) Prepaid Rent (A)
(1) 500,000 20,000 (2) (5) 200,000 8,000 (6) (4) 60,000
4,000 (2) 3,200 (7)
2-35 Solutions
2.34 a. continued.
b. REGALDO DEPARTMENT STORES
Balance Sheet
January 31, 2008
Assets
Current Assets:
Solutions 2-36
2.35 (Regaldo Department Stores; analysis of transactions and preparation of
income statement and balance sheet.)
a. T-accounts.
Cash (A) Accounts Receivable (A)
√ 247,200 √ 0
Inventory (A) Prepaid Rent (A)
Prepaid Insurance (A) Equipment (A)
Accounts Payable (L) Note Payable (L)
2-37 Solutions
Solutions 2-38
2.35 a. continued.
Common Stock (SE) Retained Earnings (SE)
Sales Revenue (SE) Cost of Goods Sold (SE)
Patent
Insurance Expense (SE) Amortization Expense (SE)
Interest Expense (SE) Income Tax Expense (SE)
2-39 Solutions
2.35 continued.
b. REGALDO DEPARTMENT STORES
Income Statement
For the Month of February 2008
Sales Revenue ………………………………………………………….. $ 257,500
Expenses:
Cost of Goods Sold …………………………………………………. $ 162,400
Solutions 2-40
2.35 continued.
c. REGALDO DEPARTMENT STORES
Comparative Balance Sheet
January 31, February 28,
2008 2008
Assets
Cash …………………………………………………… $ 247,200 $ 124,800
Accounts Receivable …………………………..… 0 110,000
Inventories …………………………………………. 188,800 240,100
Liabilities and Shareholders’ Equity
Accounts Payable ………………………………… $ 32,000 $ 10,900
2.36 (Zealock Bookstore; analysis of transactions and preparation of income
statement and balance sheet.)
Cash (A) Accounts Receivable (A)
(1) 25,000 20,000 (3) (8) 148,200 142,400 (10)