CHAPTER 1
Accounting in Action
ASSIGNMENT CLASSIFICATION TABLE
Learning Objectives
Questions
Brief
Exercises
Do It!
Exercises
A
Problems
1. Identify the activities and
users associated with
accounting.
1, 2, 3, 4, 5
1, 2
1, 2
2. Explain the building blocks of
6, 7, 8, 9, 10
1, 2
3, 4
3. State the accounting
components.
11, 12, 13, 14
1, 2, 3, 4, 5, 8,
9
3
5, 6, 7, 11
1A, 2A, 4A
4. Analyze the effects of
business transactions on the
accounting equation.
15, 16, 17, 18
6, 7
4
6, 7, 8, 10, 11
1A, 2A, 4A,
5. Understand the four financial
19, 20, 21, 22
10, 11
5
8, 9, 11, 12,
13, 14, 15, 16,
2A, 3A, 4A,
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
Description
Difficulty
Level
Time Allotted
(min.)
1A
Analyze transactions and compute net income.
Moderate
40–50
2A
Analyze transactions and prepare income statement,
retained earnings statement, and balance sheet.
Moderate
50–60
3A
Prepare income statement, retained earnings statement,
and balance sheet.
Moderate
50–60
4A
Analyze transactions and prepare financial statements.
Moderate
40–50
retained earnings statement.
WEYGANDT FINANCIAL AND MANAGERIAL ACCOUNTING 2E
CHAPTER 1
ACCOUNTING IN ACTION
Number
LO
BT
Difficulty
Time (min.)
BE1
3
AP
Simple
2–4
BE2
3
AP
Simple
3–5
BE3
3
AP
Moderate
4–6
BE4
3
AP
Moderate
4–6
BE5
3
K
Simple
2–4
BE6
4
C
Simple
2–4
BE7
4
C
Simple
2–4
BE8
3
C
Simple
2–4
BE9
3
C
Simple
1–2
5
AP
Simple
3–5
5
C
Simple
2–4
K
Simple
2–4
1, 2
K
Simple
2–4
3
K
Simple
2–4
4
AP
Simple
6–8
5
AP
Moderate
8–10
EX1
1
C
Moderate
5–7
EX2
1
C
Simple
6–8
EX3
2
C
Moderate
6–8
EX4
2
C
Moderate
6–8
EX5
3
C
Simple
4–6
EX6
3, 4
C
Simple
6–8
EX7
3, 4
C
Simple
4–6
EX8
4, 5
AP
Moderate
12–15
EX9
5
AP
Simple
12–15
4
AP
Moderate
8–10
AP
Moderate
6–8
5
AP
Simple
8–10
5
AN
Simple
8–10
5
AP
Simple
10–12
5
AP
Simple
6–8
5
AP
Moderate
6–8
5
AP
Moderate
8–10
ACCOUNTING IN ACTION (Continued)
Number
LO
BT
Difficulty
Time (min.)
P1A
3, 4
AP
Moderate
40–50
P2A
3–5
AP
Moderate
50–60
P3A
5
AP
Moderate
50–60
P4A
3–5
AP
Moderate
40–50
P5A
4, 5
AP
Moderate
40–50
5
AN
10–15
10–15
5
10–15
2–6
15–20
Moderate
15–20
5
12–15
2
10–12
Moderate
15–20
5
Moderate
15–20
BYP10
AP
Moderate
15–20
BYP11
10–15
BLOOM’ S TAXONOMY TABLE
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End–of-Chapter Exercises and Problems
Learning Objective
Knowledge
Comprehension
Application
Analysis
Synthesis
Evaluation
1. Identify the activities and users
associated with accounting.
DI1-1
DI1-2
Q1-1
Q1-2
Q1-3
Q1-4
Q1-5
E1-1
E1-2
2. Explain the building blocks of
accounting: ethics, principles,
and assumptions.
Q1-7
Q1-8
Q1-9
Q1–10
DI1-1
DI1-2
Q1-6
E1-3
E1-4
and define its components.
Q1–11
Q1–12
Q1–13
DI1-3
BE1-5
Q1–11
Q1–14
BE1-4
BE1-5
BE1-8
BE1-2
BE1-3
E1–11
P1–2A
transactions on the accounting
equation.
Q1–16
Q1–18
E1-6
E1-7
P1-2A
P1–4A
E1–12
E1–14
People, Planet,
and Profit
Communication Activity
Ethics Case
ANSWERS TO QUESTIONS
1. Yes, this is correct. Virtually every organization and person in our society uses accounting
2. Accounting is the process of identifying, recording, and communicating the economic events of
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell stock.
5. No, this is incorrect. Bookkeeping usually involves only the recording of economic events and
An important concept that accountants follow is the cost principle.
7. The monetary unit assumption requires that only transaction data capable of being expressed in
Questions Chapter 1 (Continued)
13. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
14. Yes, a business can enter into a transaction in which only the left side of the accounting equation
16. (a) Decrease assets and decrease stockholders’ equity.
Questions Chapter 1 (Continued)
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1-1
BRIEF EXERCISE 1-2
BRIEF EXERCISE 1-3
BRIEF EXERCISE 1-4
BRIEF EXERCISE 1-5
(a)
BRIEF EXERCISE 1-6
(c)
–
NE
–
BRIEF EXERCISE 1-7
BRIEF EXERCISE 1-8
BRIEF EXERCISE 1-9
BRIEF EXERCISE 1-10
BRIEF EXERCISE 1-11
SOLUTIONS FOR DO IT! REVIEW EXERCISES
DO IT! 1-1
DO IT! 1-2
DO IT! 1-3
DO IT! 1-4
DO IT! 1-5
SOLUTIONS TO EXERCISES
EXERCISE 1-1
EXERCISE 1-2
EXERCISE 1-3
EXERCISE 1-4
EXERCISE 1-5
EXERCISE 1-6
EXERCISE 1-7
EXERCISE 1-8
EXERCISE 1-8 (Continued)
EXERCISE 1-9
EXERCISE 1-9 (Continued)
EXERCISE 1-10
EXERCISE 1-10 (Continued)
EXERCISE 1-11
EXERCISE 1-11 (Continued)
EXERCISE 1-12
LA GRECA CO.
EXERCISE 1-13
EXERCISE 1-14
EXERCISE 1-14 (Continued)
EXERCISE 1-15
EXERCISE 1-16
EXERCISE 1-17
PAULO COMPANY
(a) FREDONIA REPAIR INC.
Stockholders’ Equity
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
PROBLEM 1-1A (Continued)
(a) LA BRAVA VETERINARY CLINIC
PROBLEM 1-2A (Continued)
(b) LA BRAVA VETERINARY CLINIC
Income Statement
For the Month Ended September 30, 2017
LA BRAVA VETERINARY CLINIC
Retained Earnings Statement
For the Month Ended September 30, 2017
PROBLEM 1-2A (Continued)
LA BRAVA VETERINARY CLINIC
Balance Sheet
September 30, 2017
PROBLEM 1-3A
(a) NIMBUS FLYING SCHOOL
Income Statement
For the Month Ended May 31, 2017
NIMBUS FLYING SCHOOL
Balance Sheet
May 31, 2017
PROBLEM 1-3A (Continued)
NIMBUS FLYING SCHOOL
Balance Sheet (Continued)
May 31, 2017
(b) NIMBUS FLYING SCHOOL
Income Statement
For the Month Ended May 31, 2017
NIMBUS FLYING SCHOOL
Retained Earnings Statement
For the Month Ended May 31, 2017
(a) TERCEK DELIVERIES
Assets
Liabilities
Stockholders’ Equity
Date
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
–
PROBLEM 1-4A (Continued)
(b) TERCEK DELIVERIES
Income Statement
For the Month Ended June 30, 2017
(c) TERCEK DELIVERIES
Balance Sheet
June 30, 2017
PROBLEM 1-5A
CC1 COOKIE CREATIONS
(a) Natalie has a choice between a sole proprietorship and a corporation. A
partnership is not an option since she is the sole owner of the business.
CC1 (Continued)
BYP 1-1 FINANCIAL REPORTING PROBLEM
BYP 1-2 COMPARATIVE ANALYSIS PROBLEM
BYP 1-3 COMPARATIVE ANALYSIS PROBLEM
(a)
(in millions)
Amazon
Wal-Mart
Accounts receivable (net)
Net income
BYP 1-4 REAL–WORLD FOCUS
(c) The skills required in these areas differ as follows:
Financial
Management
(d) Some key job options in accounting:
BYP 1-4 (Continued)
Financial: Financial accountants prepare financial statements based
on general ledgers and participate in important financial decisions
BYP 1-5 DECISION–MAKING ACROSS THE ORGANIZATION
(a) The estimate of the $6,100 loss was based on the difference between
(b) The balance sheet at March 31 is as follows:
CHIP-SHOT DRIVING RANGE COMPANY
Balance Sheet
March 31, 2017
BYP 1-5 (Continued)
(c) Actual net income for March can be determined by adding dividends
to the change in stockholders’ equity during the month as shown
below:
(d) Revenues earned can be determined by adding expenses incurred
BYP 1-6 COMMUNICATION ACTIVITY
To: Ashley Hirano
From: Student
BYP 1-6 (Continued)
A correct balance sheet is as follows:
NEW YORK COMPANY
Balance Sheet
December 31, 2017
BYP 1-7 ETHICS CASE
(a) The students should identify all of the stakeholders in the case; that is,
all the parties that are affected, either beneficially or negatively, by the
action or decision described in the case. The list of stakeholders in this
case are:
BYP 1-8 ALL ABOUT YOU
(a) Answers to the following will vary depending on students’ opinions.
(b) Companies might want to overstate net income in order to potentially
BYP 1-9 ALL ABOUT YOU
In this chapter you saw that there are very specific rules governing
BYP 1-10 FASB CODIFICATION ACTIVITY
BYP 1-11 CONSIDERING PEOPLE, PLANET, AND PROFIT
(a) The 5 aspirations relate to the company’s goals related to sustaining
IFRS EXERCISES
IFRS1-1
IFRS1-2
IFRS1-3 INTERNATIONAL FINANCIAL REPORTING PROBLEM
(a) Grant Thornton UK LLP