CHAPTER 5 Accounting Systems
Ex. 5-25
a. Horizontal analysis:
Amount Percent
Americas $16,732 $15,620 $1,112 7.1%
*
Difference due to rounding.
b. Vertical analysis:
Amount Percent Amount Percent
Americas $16,732 67.7% $15,620 69.8%
China/Asia Pacific 4,474 18.1% 3,240 14.5%
Channel Development 2,297 9.3% 2,257 10.1%
*
Difference due to rounding.
c. The horizontal analysis indicates that the total revenues of Starbucks increased
by 10.4% from the prior year to the recent year. This increase is explained by Asian
continued consumer preference for Starbucks coffee and continued expansion.
Revenues increased by 38.1% in China/Asia Pacific versus 7.1% in the Americas
and 9.3% in EMEA. This was a noticeable difference in growth. Apparently, there
are more store openings in China/Asia Pacific than in the Americas.
Recent Year Prior Year
Increase/(Decrease)
Recent Year
(in millions)
Prior Year
(in millions)
CHAPTER 5 Accounting Systems
Ex. 5-26
a.
Twenty-First Century Fox, Inc.
Major Product Segments
Cable Network Programming $17,946 56.3%
b. Twenty-First Century Fox, Inc. is moderately diversified. The Cable Network
Programming segment has the largest percent of revenues to total revenues at
56.3%. This segment represents more than half the revenues of the company.
For a Recent
Year (in millions) Percent
CHAPTER 5 Accounting Systems
Ex. 5-27
a. Horizontal analysis:
Amount Percent
KFC $2,644 $3,105 $(461) (14.8)%
Taco Bell 2,056 1,880 176 9.4%
Pizza Hut 988 893 95 10.6%
Total revenues $5,688 $5,878 $(190) (3.2)%
b. Vertical analysis:
* Difference due to rounding.
c. The total revenues have declined by 3.2% between the two years. The largest
decline occurred in the KFC (−14.8%) segment. The vertical analysis indicates
that KFC represents the largest segment as a percent of revenues (46.5%),
Year 2
(in millions)
Year 1
(in millions)
Percent
Year 2 Year 1
Amount
(in millions) Percent
Amount
(in millions)
Increase/(Decrease)
CHAPTER 5 Accounting Systems
Prob. 5-1A
1. and 2.
Page 1
July 21 1 J. Dunlop
22 2 K. Tisdale
24 3 T. Quinn
Page 1
Debit Credit
July 25 Supplies 13 300
Fees Earned 41 300
Description
Date
PROBLEMS
REVENUE JOURNAL
Account Debited
Post.
Ref.
Post.
Ref.
115
Accounts Rec. Dr.
Fees Earned Cr.
350
85
Invoice
No.
JOURNAL
Date
CHAPTER 5 Accounting Systems
Prob. 5-1A (Continued)
Post.
Item Ref. Debit Credit Balance
July 30 R1 170 170
July 21 R1 115 115
Post.
Item Ref. Debit Credit Balance
July 27 R1 225 225
Post.
Item Ref. Debit Credit Balance
July 22 R1 350 350
30 R1 120 470
Name: F. Mintz
Date
Name: K. Tisdale
Date
Date
Name: T. Quinn
D. Chase
Name:
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Name: J. Dunlop
CHAPTER 5 Accounting Systems
Prob. 5-1A (Concluded)
July 31 R1 1,170 1,170
Account No. 13
Post.
Item Ref. Debit Credit Debit Credit
July 25 J1 300 300
Account No. 41
3. a. $1,170 ($170 + $115 + $225 + $190 + $470)
b. $1,170
4. The computerized system is more efficient. Each sales transaction is entered
into an electronic invoice form. The postings to the accounts receivable subsidiary
and fees earned ledgers are automatic. Also, all sums and totals in the subsidiary
ledgers are calculated automatically. There are no separate postings to an
Account: Supplies
Balance
Date
GENERAL LEDGER
Account: Fees Earned
CHAPTER 5 Accounting Systems
Prob. 5-2A
1. and 5.
Account No. 11
Account No. 12
Post.
Item Ref. Debit Credit Debit Credit
Apr. 1 Balance 14,830
25 J1 3,200 11,630
30 R40 23,090 34,720
30 CR36 21,500 13,220
Account No. 14
Account No. 41
Post.
Item Ref. Debit Credit Debit Credit
Apr. 30 R40 23,090 23,090
30 CR36 12,890 35,980
Date
Account: Notes Receivable
Balance
Date
Cash
GENERAL LEDGER
Account: Fees Earned
Account:
Account: Accounts Receivable
Balance
CHAPTER 5 Accounting Systems
Prob. 5-2A (Continued)
2. and 4.
Post.
Item Ref. Debit Credit Balance
Apr. 1 Balance 8,710
5 CR36 8,710 —
22 R40 7,470 7,470
Post.
Item Ref. Debit Credit Balance
Apr. 1 Balance 6,120
6 R40 1,990 8,110
15 CR36 6,120 1,990
16 R40 5,500 7,490
20 CR36 1,990 5,500
Name: Pinecrest Co.
Date
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Name: Ohr Co.
Name: Shilo Co.
Date
Mendez Co.
Name:
CHAPTER 5 Accounting Systems
Prob. 5-2A (Continued)
3., 4., and 5.
Page 40
2 793 Ohr Co.
Page 36
5 Mendez Co. 8,710
15 Pinecrest Co. 6,120
Page 1
25 Notes Receivable 14
Accounts Receivable—Shilo Co. 12/3,200
The subsidiary account of Shilo Co. must also be posted for a $3,000 credit.
6. The sum of the customer balances is in agreement with the controlling account.
Both have balances of $13,220 ($7,470 + $5,500 + $250).
REVENUE JOURNAL
Account Debited
Date
Post.
Ref.
Account Credited
6,120
Date
Post.
Ref.
4,680
Accounts Rec. Dr.
Fees Earned Cr.
Invoice
No.
CASH RECEIPTS JOURNAL
Apr.
Cash
Dr.
Accts.
Rec.
Cr.
Fees
Earned
Cr.
8,710
Apr.
3,200
JOURNAL
Post.
Ref.
Date
Apr.
Description Credit
Debit
CHAPTER 5 Accounting Systems
Prob. 5-3A
1. and 4.
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
Oct. 1 Balance 5,920
31 P30 11,930 17,850
Account No. 15
Account No. 18
Post.
Item Ref. Debit Credit Debit Credit
Oct. 1 Balance 12,300
5 P30 3,980 16,280
Account No. 21
GENERAL LEDGER
Account: Accounts Payable
Office Supplies
Account:
Account: Field Supplies
Balance
Date
Account: Office Equipment
Balance
Date
CHAPTER 5 Accounting Systems
Prob. 5-3A (Continued)
2. and 3.
Post.
Item Ref. Debit Credit Balance
Oct. 1 Balance 780
2 P30 400 1,180
Post.
Item Ref. Debit Credit Balance
Oct. 5 P30 3,980 3,980
Name: Omni Co.
Name: Yamura Co.
Date
Name: Peach Computers Co.
Date
Executive Office Supply Co.
Name:
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Name: Meade Co.
CHAPTER 5 Accounting Systems
Prob. 5-3A (Concluded)
3. and 4.
Page 30
Oct. 2 400 400
53,980 Office Equipment 18 3,980
9320 320
13 1,420 1,420
5. a. $18,110 ($1,020 + $1,180 + $8,620 + $3,980 + $3,310)
b. $18,110
6. Supply chain management e-commerce applications would be used to plan and coordinate transactions with suppliers.
PURCHASES JOURNAL
Field
Supplies
Dr.
Executive Office Supply Co.
Yamura Co.
Account Credited
Meade Co.
Peach Computers Co.
Post.
Ref.
Date
Accounts
Payable
Cr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
CHAPTER 5 Accounting Systems
Prob. 5-4A
1., 2., and 3.
Page 1
16 5,340 5,340
16 21,450 Field Equipment 17 21,450
17 510 510
Date
Apr.
Accounts
Payable
Cr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
PURCHASES JOURNAL
Field
Supplies
Dr.
Best Office Supply Co.
Account Credited
Hydro Supply Co.
Pure Equipment Co.
Post.
Ref.
CHAPTER 5 Accounting Systems
Prob. 5-4A (Continued)
Page 1
Apr. 16 1 Rent Expense 71 3,500
19 2 Field Supplies 14 3,340
Office Supplies 15 400
1. and 2.
Page 1
Apr. 30 Land 19 12,000
Field Equipment 17 12,000
Cash
Cr.
Credit
Date
Description
JOURNAL
Ck.
No.
Account Debited
Date
Debit
3,500
Other
Accounts
Dr.
Accounts
Payable
Dr.
Post.
Ref.
CASH PAYMENTS JOURNAL
400
3,340
Post.
Ref.
CHAPTER 5 Accounting Systems
Prob. 5-4A (Continued)
1.
Post.
Post.
Item Ref. Debit Credit Balance
Apr. 16 P1 5,340 5,340
24 CP1 5,340 —
30 P1 7,650 7,650
Post.
Item Ref. Debit Credit Balance
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Name: Pure Equipment Co.
Date
Name: Hydro Supply Co.
Date
Best Office Supply Co.
Name:
CHAPTER 5 Accounting Systems
Prob. 5-4A (Continued)
2. and 3.
Account No. 11
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
19 CP1 3,340 3,340
30 P1 14,330 17,670
Account No. 15
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
16 P1 21,450 21,450
30 P1 4,700 26,150
30 J1 12,000 14,150
Account No. 19
Land
Account: Office Supplies
Apr.
Account:
Date
GENERAL LEDGER
Account: Field Equipment
Balance
Date
Balance
Field Supplies
Account:
Account: Cash
Apr.
CHAPTER 5 Accounting Systems
Prob. 5-4A (Concluded)
Account No. 21
Account No. 61
Post.
Item Ref. Debit Credit Debit Credit
30 CP1 29,400 29,400
4.
Best Office Supply Co. $ 660
Hydro Supply Co. 7,650
Pure Equipment Co. 6,040
Total accounts payable* $14,350
*The total of the schedule of accounts payable is equal to the balance of the accounts
payable control account.
Account: Accounts Payable
Account: Salary Expense
Apr.
April 30
Balance
Date
AquaFresh Water Testing Service
Accounts Payable Creditor Balances
CHAPTER 5 Accounting Systems
Prob. 5-5A
1., 3., and 4.
Account No. 11
Account No. 12
Post.
Item Ref. Debit Credit Debit Credit
1 Balance 16,200
31 R35 24,060 40,260
31 CR31 18,380 21,880
Account No. 14
Account No. 15
Post.
Item Ref. Debit Credit Debit Credit
1 Balance 6,130
31 CP34 430 6,560
31 P37 970 7,530
Account No. 16
Maintenance Supplies
GENERAL LEDGER
Balance
Accounts Receivable
Account:
Account: Cash
Account: Office Equipment
Balance
Date
Dec.
Account: Office Supplies
Dec.
Date
Account:
CHAPTER 5 Accounting Systems
Prob. 5-5A (Continued)
Account No. 17
Account No. 18
Post.
Item Ref. Debit Credit Debit Credit
1 Balance 120,070
5 P37 46,700 166,770
16 CP34 49,830 216,600
Account No. 19
Account No. 21
Post.
Item Ref. Debit Credit Debit Credit
1 Balance 4,910
31 P37 57,370 62,280
31 CP34 57,240 5,040
Account No. 31
Account No. 32
Post.
Item Ref. Debit Credit Debit Credit
24 CP34 3,760 3,760 Dec.
Account:
Balance
Date
Balance
Date
Dec.
Account: Accumulated Depreciation—Vehicles
Balance
Account: Accumulated Depreciation—Office Equipment
S. Holmes, Drawing
Account: Vehicles
Account: S. Holmes, Capital
Dec.
Account: Accounts Payable
Date
CHAPTER 5 Accounting Systems
Prob. 5-5A (Continued)
Account No. 41
Account No. 51
Post.
Item Ref. Debit Credit Debit Credit
30 CP34 21,160 21,160
Account No. 52
Account No. 53
Post.
Item Ref. Debit Credit Debit Credit
9 CP34 750 750
Account No. 61
Account No. 62
Post.
Item Ref. Debit Credit Debit Credit
1 CP34 5,260 5,260
Balance
Date
Account: Rent Expense
Account: Office Salaries Expense
Dec.
Balance
Date
Account: Maintenance Supplies Expense
Dec.
Account: Fuel Expense
Balance
Date
Account: Fees Earned
Dec.
Account: Driver Salaries Expense