Exercise 1-17 (LO 1-3)
($ in billions)
Total change
in cash
=
Operating
cash flows
+
Investing
cash flows
+
Financing
cash flows
1.
Total change
in cash
=
Operating
cash flows
+
Investing
cash flows
+
Financing
cash flows
2.
Total change
in cash
=
Operating
cash flows
+
Investing
cash flows
+
Financing
cash flows
3.
Total change
in cash
=
Operating
cash flows
+
Investing
cash flows
+
Financing
cash flows
4.
Total change
in cash
=
Operating
cash flows
+
Investing
cash flows
+
Financing
cash flows
5.
in cash
cash flows
cash flows
cash flows
Total change
=
Operating
+
Investing
+
Financing
Exercise 1-18 (LO 1-5)
1.
2.
3.
4.
5.
6.
7.
Exercise 1-19 (LO 1-7)
1.
2.
3.
4.
5.
6.
7.
8.
9.
Exercise 1-20 (LO 1-7)
1.
b.
2.
3.
d.
4.
Chapter 1 – A Framework for Financial Accounting
PROBLEMS: SET A
Problem 1-1A (LO 1-2)
Type of business
activity
Transactions
1.
Financing
Pay amount owed to the bank for previous borrowing
2.
Operating
Pay utility costs
3.
Purchase equipment to be used in operations
4.
Operating
Provide services to customers
5.
Operating
Purchase office supplies
6.
Purchase a building
8.
Operating
Pay for research and development costs
9.
Operating
Pay taxes to the IRS
Problem 1-2A (LO 1-2)
Account classifications
Account Names
1.
Stockholders’ equity
Common stock
6.
Supplies
9.
Income tax payable
Problem 1-3A (LO 1-3)
Longhorn Corporation
Income Statement
Service revenue
$67,700
Expenses:
Cost of goods sold
53,400
Salaries
5,500
Delivery
$ 6,200
Longhorn Corporation
Statement of Stockholders’ Equity
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Beginning balance
$40,000
Add: Net income
Less: Dividends
Ending balance
Problem 1-3A (concluded)
Longhorn Corporation
Balance Sheet
Assets
Liabilities
Cash
$ 1,200
Accounts payable
$ 4,400
Supplies
Salaries payable
Equipment
Total liabilities
Buildings
Stockholders’ Equity
Common stock
44,000
Retained earnings
24,400
Total assets
Chapter 1 – A Framework for Financial Accounting
Problem 1-4A (LO 1-3)
(Suggested order of calculation)
On the statement of stockholders’ equity,
$7,000 + (c) − $3,000 = $10,000
Problem 1-5A (LO 1-3)
Cornhusker Company
Income Statement
For the year ended December 31, 2018
Service revenues
$37,000
Expenses:
Rent
7,000
Utilities
4,900
Salaries
Insurance
3,500
Net income
Cornhusker Company
Statement of Stockholders’ Equity
For the year ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Beginning balance (Jan. 1)
$16,000
$7,300
$23,300
Add: Net income
8,300
Less: Dividends
(3,200)
Ending balance (Dec. 31)
$16,000
$12,400
$28,400
Problem 1-5A (concluded)
Cornhusker Company
Balance Sheet
December 31, 2018
Assets
Liabilities
Cash
$ 4,800
Accounts payable
$ 2,200
Accounts receivable
Salaries payable
Land
Total liabilities
Stockholders’ Equity
Common stock
16,000
Retained earnings
12,400
Total assets
Problem 1-6A (LO 1-7)
Assumption violated
1.
Going concern
2.
Economic entity
4.
Periodicity
Problem 1-7A (LO 1-7)
1.
d.
2.
b.
3.
4.
6.
g.
7.
h.
8.
9.
Chapter 1 – A Framework for Financial Accounting
PROBLEMS: SET B
Problem 1-1B (LO 1-2)
Type of business
activity
Transactions
1.
Operating
Pay for advertising
2.
Financing
Pay dividends to stockholders
5.
Purchase equipment
6.
Sell land
8.
Operating
Pay suppliers for purchase of supplies
9.
Operating
Provide services to customers
10.
Invest in securities of another company
Chapter 1 – A Framework for Financial Accounting
Problem 1-2B (LO 1-2)
Account classifications
Account Names
1.
Asset
Cash
2.
Service Revenue
4.
Asset
Buildings
5.
Advertising Expense
6.
Asset
Equipment
7.
Interest Expense
8.
Accounts Payable
9.
Dividends
10.
Notes Payable
Chapter 1 – A Framework for Financial Accounting
Problem 1-3B (LO 1-3)
Gator Investments
Income Statement
Service revenue
$127,600
Expenses:
Advertising
33,500
Salaries
65,100
Utilities
15,500
Interest
Net income
Gator Investments
Statement of Stockholders’ Equity
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Beginning balance
$100,000
$30,300
$130,300
Issuance of common stock
Less: Dividends
Ending balance
$111,000
$35,100
$146,100
Problem 1-3B (concluded)
Gator Investments
Balance Sheet
Assets
Liabilities
Cash
$ 5,500
Accounts payable
$ 6,400
Equipment
Notes payable
Buildings
Total liabilities
Stockholders’ Equity
Common stock
111,000
Retained earnings
35,100
Total assets