Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
493
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Office Salaries Expense
Acct. No. 620
Date
Explanation
PR
Debit
Credit
Balance
May 15
D2
3,150
3,150
Insurance Expense
Acct. No. 637
Date
Explanation
PR
Debit
Credit
Balance
May 31
Acct. No. 641
Date
Explanation
PR
Debit
Credit
Balance
May 1
D2
Acct. No. 642
Date
Explanation
PR
Debit
Credit
Balance
May 1
D2
2,968
2,968
Acct. No. 650
Date
Explanation
PR
Debit
Credit
Balance
May 31
D2
3,150
6,300
Acct. No. 621
Date
Explanation
PR
Debit
Credit
Balance
May 15
D2
5,320
5,320
D2
5,320
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
494
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
Utilities Expense
Date
Explanation
PR
Debit
Credit
Balance
May 26
D2
1,283
1,283
ACCOUNTS RECEIVABLE LEDGER
Crane Corp.
Date
Explanation
PR
Debit
Credit
Balance
May 26
May 2
6,100
R2
6,100
3,990
Date
Explanation
PR
Debit
Credit
4,725
May 2
R2
4,550
Date
Explanation
PR
Debit
Credit
May 22
6,850
R2
6,850
1,283
Income Summary
Date
Explanation
PR
Debit
Credit
May 31
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
495
Comprehensive Problem, Colo Company (Continued)
Part 2—continued
ACCOUNTS PAYABLE LEDGER
Fink Corp.
Date
Explanation
PR
Debit
Credit
Balance
Date
Explanation
PR
Debit
Credit
Balance
Date
Explanation
PR
Debit
Credit
Balance
Date
Explanation
PR
Debit
Credit
Balance
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
496
Comprehensive Problem, Colo Company (Continued)
Part 3
COLO COMPANY
Income Statement
For Month Ended May 31, 2017
Revenue
Sales …………………………………………………………………
$156,422
Less: Sales discounts ……………………………………..
Sales returns and allowances …………………
Net sales …………………………………………………………..
Less: Cost of goods sold …………………………………..
Gross profit on sales …………………………………………..
Operating expenses
Selling expenses
Depreciation expense—Store equipment ………….
Sales salaries expense …………………………………….
Rent expense—Selling space …………………………..
Store supplies expense ……………………………………
Total selling expenses …………………………………….
General and administrative expenses
Depreciation expense—Office equipment …………
Office salaries expense ……………………………………
Insurance expense ………………………………………….
Rent expense—Office space …………………………..
Office supplies expense …………………………………..
Utilities expense………………………………………………
Total general and administrative expenses ………
Total operating expenses ………………………………….
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
497
Comprehensive Problem, Colo Company (Continued)
Part 3—continued
COLO COMPANY
Statement of Owner’s Equity
For Month Ended May 31, 2017
COLO COMPANY
Balance Sheet
May 31, 2017
Assets
Current assets
Cash ……………………………………………………..
$135,911
Accounts receivable ………………………………
Merchandise inventory …………………………..
Office supplies ………………………………………
Store supplies ……………………………………….
Prepaid insurance ………………………………….
Total current assets ……………………………….
Office equipment……………………………………
Less accumulated depreciation ……………..
Store equipment…………………………………….
Less accumulated depreciation ……………..
Total plant assets…………………………………..
Current liabilities
Accounts payable ………………………………….
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
498
Comprehensive Problem, Colo Company (Concluded)
Part 4
COLO COMPANY
Post-Closing Trial Balance
May 31, 2017
COLO COMPANY
Schedule of Accounts Receivable
May 31, 2017
499
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
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
500
Comparative Analysis — BTN 7-2
1. Apple – Current Year Revenue/Segment Assets
Domestic segment: $ 81,732 / [($12,022 + $9,108)/2] = 774%
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
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
501
Ethics Challenge — BTN 7-3
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
Communicating in Practice — BTN 7-4
The memo should recommend the use of special journals and subsidiary
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
502
Taking It to the Net — BTN 7-5
(See HP’s Note 2 – Segment Information)
1. Personal Systems, Printing, Enterprise Group (“EG”), Enterprise
2. The Enterprise Group segment reports $3,981 million of operating
3. HP’s Operating Income and Total Assets by Segment
$ millions
Operating
Income 2015
Total Assets
2015
Total Assets
2014
Segment Return
on Assets
Personal Systems ……..
$ 1,064
$ 9,534
$12,104
9.8%
$ 3,981
$33,499
$27,236
Software ……………………
$11,226
$10,972
Investments ………………
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503
Teamwork in Action — BTN 7-6
For check figures in the implementation of this activity see the solution
to Problem 7-1A or 7-1B.
Entrepreneurial Decision — BTN 7-7
1. The following special journals are likely to be used:
• Sales journal to record credit sales
2.
Year
One Year
Hence
Two Years
Hence
Three Years
Hence
Four Years
Hence
Five Years
Hence
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 7
Global Decision — BTN 7-8
1. Samsung has the following reported segments:
• Korea
2. Samsung discloses dollar amounts for the following line items: