Archives: Solution Manual

Chapter 13 – Statement of Cash Flows Chapter 13 Statement of Cash Flows ANSWERS TO QUESTIONS 1. The income statement reports revenues earned and expenses incurred during a period of time. It is prepared on an accrual basis. The balance […]

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 13-01 Requirement 1: Balance Sheet at December 31 12/31/2012 12/31/2011 Change Contributed capital 98,500 65,900 32,600 Retained earnings 85,000 50,900 34,100 Total 256,000$ 208,000$ Correct! Correct! Income statement for 2012 Sales 195,000$ Cost of […]

Solutions Chapter 13 – Set B Exercises – Libby 7e E13–1B. Cash flows from operating activities—indirect method Net income ………………………………………………………………………………….. $26,625 Depreciation expense …………………………………………………………………… 9,500 E13–2B. Req. 1 Cash flows from operating activities—indirect method Net loss ………………………………………………………………………………………. ($5,900 ) Depreciation […]

in fact there are two or more separate legal entities. Intercompany items do not exist for a single corporation. For example, a debt owed by Washington Post (the parent) to its newsprint subsidiary is not reported on a consolidated statement […]

Liquidity Current Ratio 2.55 Company Ticker Quick Ratio 1.38 ANF ARO Activity AEO Inventory 5.92 ANN Accounts 6.43 GPS GES Profitability JCG Gross Profit 38.99% LTD Operating 6.24% JWN Net Profit 3.77% PSUN Return on 13.11% ROST Return on 7.17% […]

Student Name: Class: Requirement 1: Date Account Debit Credit Trading Portfolio Entries: March 1, 2011 Investments in TS 136,000 «- Correct! Cash 136,000 Net unrealized losses/gains 40,000 Requirement 2: Available-for-Sale Portfolio Entries: December 31, 2012 Investments in SAS 48,000 «- […]

Chapter 12 – Reporting and Interpreting Investments in Other Corporations 12–36 AP12–3. Req. 1 The fair value method of accounting for long-term investments must be used in this situation because 6% of the outstanding voting stock of Square Corporation is […]

Chapter 12 – Reporting and Interpreting Investments in Other Corporations Req. 1 The fair value method must be used for both the D common stock and F bonds. The fair value method must be used for D common stock because […]

Chapter 12 – Reporting and Interpreting Investments in Other Corporations 12-1 Chapter 12 Reporting and Interpreting Investments in Other Corporations ANSWERS TO QUESTIONS 1. A short-term investment is one that meets the two tests of (1) ready marketability and (2) […]

Solutions Chapter 12 – Set B Exercises – Libby 7e E12–1B. Req. 1 July 1, 2012: Held-to-maturity investments (+A) ………………………………….. 5,000,000 Cash (–A) …………………………………………………………….. 5,000,000 E12–2B. Questions Method of Measurement Fair value Method Equity Method A Less than 20%. At […]

Chapter 11 – Reporting and Interpreting Owners’ Equity 11–34 P11–11. Item Comparative Effects Explained Cash Dividend on Preferred Stock Dividend on Common a) Through December 31, 2011: Assets None—No cash yet disbursed. None—No entry (no assets to b) On February […]

Chapter 11 – Reporting and Interpreting Owners’ Equity 11–21 E11–19. Item Effect of Cash Dividend (Preferred) Effect of Stock Dividend (Common) Assets –No effect on declaration date. –Decreased by the amount of the dividend ($7,200) on payment date. No effect […]

Chapter 11 – Reporting and Interpreting Owners’ Equity Chapter 11 Reporting and Interpreting Owners’ Equity ANSWERS TO QUESTIONS 1. A corporation is a separate legal entity (authorized by law to operate as an individual). It is owned by a number […]

Student Name: Class: Contributed capital: 65,000$ Instructor Stockholders’ Equity WITT CORPORATION Problem 11-02 McGraw-Hill/Irwin Preferred stock authorized 21,000 shares; issued and outstanding, 6,500 shares 344,000 49,000 181,000 Total contributed capital 639,000 Retained earnings 51,000 Total Stockholders’ Equity 690,000$ Correct! Capital […]

Net decrease ( 50,472) Ending balance 330,002 Treasury stock ( 330,002) Shares Outstanding 3,475,959 Solutions Chapter 11 – Set B Exercises – Libby 7e E11–1B. Computation of End of Year Balance for Treasury Stock: Beginning balance 380,474 Computation of Shares […]

Chapter 10 – Reporting and Interpreting Bonds P10–13. When a bond is sold for a premium, the amount of cash collected is greater than the maturity value. This extra amount is called a bond premium. The recorded value for this […]

Chapter 10 – Reporting and Interpreting Bonds E10–23. Bonds payable (-L) ………………………………………………………. 500,000 Loss on bond call (+Loss, –SE) ……………………………………… 60,000 Discount on bonds payable (-XL,+ L) ………………………….. 25,000 Cash (-A) ………………………………………………………………… 535,000 E10–24. 1. Impacts Statement of Cash Flows […]

Chapter 10 – Reporting and Interpreting Bonds Chapter 10 Reporting and Interpreting Bonds ANSWERS TO QUESTIONS 1. A bond is a liability that may or may not be secured by a mortgage on specified assets. Bonds usually are in denominations […]

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 10-08 ELECTROLUX CORPORATION Requirement 1: Bond Issue Price Principal: $453,920 Interest: 230,707 Bond issue price $684,627 Correct! Why are both stated and effective-interest rates used? Requirement 2: Straight-line Amortization 2011 2012 2013 2014 2015 […]

Solutions Chapter 10 – Set B Exercises – Libby 7e E10–1B. The Atkinson bonds have a coupon interest rate of 7.5%. If bonds with a $10,000 face E10–2B. CASE A: $200,000 x 0.5835 ……………………………………………….. $ 116,700 $16,000 x 5.2064 …………………………………………………. […]

Chapter 09 – Reporting and Interpreting Liabilities E9–22. $25,000 x 5.0330 = $125,825 (purchase price) E9–23. Req. 1 $6,000 x 2.5937 = $15,562 Req. 2 $15,562 – $6,000 = $9,562 (time value of money, or interest) Req. 3 1st year: […]

Chapter 09 – Reporting and Interpreting Liabilities 9-37 P9–14. Req. 1 Future Value of Deposit: $50,000  1.2653 = $63,265 Interest Earned: $953,667 – $780,000 = $173,667 Req. 3 Future Value of Deposit: $250,000  1.5869 = $396,725 Interest Earned: […]

Chapter 09 – Reporting and Interpreting Liabilities Chapter 09 Reporting and Interpreting Liabilities ANSWERS TO QUESTIONS 1. Liabilities are obligations that result from past transactions that require future payment of assets or the future performance of services, that are definite […]

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 09-10 MANSFIELD CORPORATION Requirement 1: GAAP depreciation 50,000$ Correct! Tax depreciation 100,000$ Correct! Book Value: GAAP Tax GAAP Tax Deferred tax liability 2011: 17,000$ Correct! Deferred tax liability 2011: 34,000$ Correct! Is the deferred […]

Solutions Chapter 9 – Set B Exercises – Libby 7e E9–1B. Req. 1 (a) Current assets ($630,000 – $392,000) ……………………. $238,000 Current liabilities: Accounts payable ………………………………………………. $76,000 Income taxes payable ………………………………………… 10,000 Liability for withholding taxes ……………………………….. 5,000 include cash […]

Student Name: Class: Requirement 1: Machine B Units-of-production 2,400 Correct! C Double-declining-balance 5,000 Correct! Debit Credit 10,000 «- Correct! 2,600 2,400 5,000 Accumulated depreciation, Machine C Depreciation expense Accumulated depreciation, Machine A Accumulated depreciation, Machine B Problem 08-03 McGraw-Hill/Irwin Instructor […]

Chapter 08 – Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles 8-56 COMP8-1. (continued) Case D (continued) c. Weighted average Cost of ending inventory: Cost of goods available for sale $18,000 ($1,800 beg. + $16,200 purch.) ÷ […]

Chapter 08 – Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles 8-41 P8–9. Req. 1 January 5, 2010: Cash purchase price ……………………………………………………. $500,000 Less market value of identifiable assets: Req. 2 December 31, 2010: a. Depreciation expense […]

Chapter 08 – Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles 8-21 E8–13. Req. 1a Cash (+A) …………………………………………………………………… 15,000 Accumulated depreciation (−XA, +A) ……………………………… 23,000 Delivery truck (−A) ……………………………………………………. 38,000 Sale of an asset at book value; […]

Chapter 08 – Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles Chapter 08 Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles ANSWERS TO QUESTIONS 1. Long-lived assets are noncurrent assets, which a business retains […]

Solutions Chapter 8 – Set B Exercises – Libby 7e E8–1B. Req. 1 Fixed asset turnover ratio: (in millions) Sales  [(beginning net fixed assets + ending net fixed assets)  2] 2011 2012 2013 $26,806  $1,806.5 $35,499  […]

Chapter 07 – Reporting and Interpreting Cost of Goods Sold and Inventory 7-37 P7–10. (Supplement A) Req. 1 Pretax operating profit (loss) for the current year had FIFO accounting been employed instead of LIFO. Difference in beginning inventory* (LIFO to […]

Chapter 07 – Reporting and Interpreting Cost of Goods Sold and Inventory 7-21 E7–17. Req. 1 Net Income for 2011 will be Overstated. An understatement of purchases produces an understatement of cost of goods sold which produces an overstatement of […]

Chapter 07 – Reporting and Interpreting Cost of Goods Sold and Inventory Chapter 07 Reporting and Interpreting Cost of Goods Sold and Inventory ANSWERS TO QUESTIONS 1. Inventory often is one of the largest amounts listed under assets on the […]

Required: 1. This workbook is organized as follows: Sheet Name Contents AEO Stmts of Stockholders’ Eq American Eagle Outfitters, Inc. Consolidated Statements of Stockholders’ Equity AEO Statements of Cash Flow American Eagle Outfitters, Inc. Consolidated Statements of Cash Flows Urban […]

Student Name: Class: Requirement 1: (a) (b) (c) (d) Average Specific Cost FIFO LIFO Identification Sales revenue* 9,920$ 9,920$ 9,920$ 9,920$ Cost of goods sold** 3,630 3,220 4,040 3,350 Gross profit 6,290$ 6,700$ 5,880$ 6,570$ Correct! Correct! Correct! Correct! Note: […]

Solutions Chapter 7 – Set B Exercises – Libby 7e E7–1B Item Amount Explanation Ending inventory (physical count on December 31, 2011) $36,500 Per physical inventory. a. Goods purchased and in transit + 1,700 Goods purchased and in transit, F.O.B. […]

Chapter 06 – Reporting and Interpreting Sales Revenue, Receivables, and Cash 6-32 AP6–2. 1. Bad debt expense (+E, –SE) …………………………………………….. 6,014 Allowance for doubtful accounts (+XA, –A) ………………… 6,014 2. Allowances for Doubtful Accounts Balance at Beginning of Year Additions […]

Chapter 06 – Reporting and Interpreting Sales Revenue, Receivables, and Cash 6-21 PROBLEMS P6–1. Case A Because Wendy’s collects cash when the coupon books are sold, cash collection is not an issue in this case. In order to determine if […]

Chapter 6 Reporting and Interpreting Sales Revenue, Receivables, and Cash ANSWERS TO QUESTIONS 1. The difference between sales revenue and net sales includes the amount of goods returned by customers because the goods were either unsatisfactory or not desired, sales […]

Student Name: Class: Independent Cases Case A Case B Gross sales revenue 259,000$ 165,000$ Sales returns and allowances 20,000 40,500 Net sales revenue 239,000 124,500 Cost of goods sold 167,300 87,150 Problem 06-03 McGraw-Hill/Irwin Instructor Income Statement Items BERUGU EXPORT […]

Less: Sales returns and allowances (1/10 x $11,000 from C) ….. 1,100 Less: Sales discounts (9/10 x $11,000 from C x 3%) ……………… 297 Less: Credit card discounts ($600 from B x 2%) …………………… 12 Net sales …………………………………………………………………… $16,691 Less: […]

Chapter 05 – Communicating and Interpreting Accounting Information 5-21 P5–3. Req. 1 EXQUISITE JEWELERS Balance Sheet December 31, 2012 Store equipment ………………………………………………… 67,000 Less accumulated depreciation ………………………… 19,000 Total fixed assets ……………………………………….. 48,000 Other Assets Used store equipment held for […]

January 31, February 2, (in thousands, except per share amounts) 2009 2008 $ 473,342 $ 116,061 740,240 625,568 10,706 11,479 251,007 165,810 15,001 24,238 21,363 19,751 $ 1,963,676 $ 1,867,680 Non-current deferred income taxes Other assets, net Total assets Goodwill […]

Student Name: Class: Requirement 1: Assets 58,000$ 67,000 19,000 48,000 9,000 377,500$ Correct! Liabilities 52,500$ 9,000 61,500$ 42,000 103,500 Correct! Stockholders’ Equity Current Liabilities Accounts payable Income taxes payable Total assets Total current liabilities Long-Term Liabilities Note payable Total liabilities […]

Chapter 05 – Communicating and Interpreting Accounting Information Chapter 05 Communicating and Interpreting Accounting Information ANSWERS TO QUESTIONS 1. The primary responsibility for the accuracy of the financial records and conformance with Generally Accepted Accounting Principles (GAAP) of the information […]

Solutions Chapter 5 – Set B Exercises – Libby 7e E5–1B. Req. 1. Kingston, Inc. Consolidated Balance Sheet December 31, Current Year (in millions) Assets CURRENT ASSETS Cash and cash equivalents $ 807 Accounts receivable, net 84,406 Other assets 14,949 […]

2009 2008 62,955 41,291 11,975 12,673 66,220 79,544 Total current liabilities 141,150 133,508 134,084 74,817 Total Liabilities 275,234 208,325 Accrued compensation Accrued expenses and other current liabilities Commitments and contingencies (see Note 11) Shareholders’ equity: Deferred rent and other liabilities […]

Student Name: Class: Requirement 1: (a) Correct! (b) Correct! Requirement 2: Balance Sheet Income Statement Stockholders’ Net Transaction Assets Liabilities Equity Revenues Expenses Income (c) (2,500) NE (2,500) NE 2,500 (2,500) (d) NE (500) 500 500 NE 500 (e) (1,500) […]

Chapter 04 – Adjustments, Financial Statements, and the Quality of Earnings 4-61 COMP4-2. (continued) Req. 6 (a) Current ratio = Current assets  Current liabilities = $49,000  $44,000 = 1.11 This suggests that Furniture Refinishers, Inc., generates $1.40 for […]