Archives: Solution Manual

5-1 CHAPTER 5 Merchandising Operations and the Multiple-Step Income Statement Learning Objectives 1. Identify the differences between a service company and a merchandising company. 2. Explain the recording of purchases under a perpetual inventory system. 3. Explain the recording of […]

Continuing Cookie Chronicle 1 Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 4.) CCC5 Because Natalie has had such a successful first few months, she is considering other opportunities to develop her […]

BYP 4-2 COMPARATIVE ANALYSIS PROBLEM Accounts that provide evidence of the use of accrual accounting are: Balance Sheet Income Statement (a) Hershey Company 1. 2. 3. 4. Prepaid expenses Accrued income taxes Accrued liabilities 2. 3. 4. Insurance (or supplies) […]

PROBLEM 4-8B (Continued) GEOG CLEANERS Retained Earnings Statement For the Month Ended March 31, 2014 Retained earnings, March 1 …………………………….. $ 0 Add: Net income …………………………………………… 2,550 2,550 Less: Dividends …………………………………………….. 900 Retained earnings, March 31 …………………………… $1,650 GEOG CLEANERS […]

PROBLEM 4-3B (Continued) Insurance Expense 8/31 1,500 8/31 Bal. 1,500 Supplies Expense 8/31 3,400 8/31 Bal. 3,400 8/31 Bal. 2,650 Interest Expense 8/31 600 8/31 Bal. 600 Depreciation Expense 8/31 2,650 Copyright © 2013 John Wiley & Sons, Inc. Kimmel, […]

PROBLEM 4-6A (Continued) (b) ASTROMECH TRAVEL COURT Income Statement For the Quarter Ended June 30, 2014 Revenues Rent revenue ($212,000 – $57,000) ………………….. $155,000 Expenses Salaries and wages expense ($80,500 + $1,200) ……………………………………….. $ 81,700 Income tax expense ……………………………………….. 13,400 […]

EXERCISE 4-11 1. Oct. 31 Supplies Expense …………………………………… 2,000 Supplies ($2,500 – $500) …………………………….. 2,000 2. 31 Insurance Expense …………………………………. 100 Prepaid Insurance …………………………… 100 3. 31 Depreciation Expense …………………………….. 75 Accumulated Depreciation— Equipment …………………………………… 75 4. 31 Unearned Service […]

CHAPTER 4 Accrual Accounting Concepts Learning Objectives 1. Explain the revenue recognition principle and the expense recognition principle. 2. Differentiate between the cash basis and the accrual basis of accounting. 3. Explain why adjusting entries are needed, and identify the […]

4-15 Vocabulary Quiz Name _______________ Chapter 4 1. Expenses paid in cash and recorded as assets before they are used or consumed. 2. Entries at the end of an accounting period to transfer the balances of temporary accounts to a […]

4-1 CHAPTER 4 Accrual Accounting Concepts Learning Objectives 1. Explain the revenue recognition principle and the expense recognition principle. 2. Differentiate between the cash basis and the accrual basis of accounting. 3. Explain why adjusting entries are needed, and identify […]

Continuing Cookie Chronicle 1 Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 3.) CCC4 Cookie Creations is gearing up for the winter holiday season. During the month of December 2014, the following […]

CONTINUING COOKIE CHRONICLE (Continued) Common Stock Nov. 8 500 Nov. 15 300 Nov. 30 Bal. 800 Service Revenue Nov.29 100 Nov.30 300 Nov.30 Bal. 300 Utilities Expense Nov. 30 50 Nov. 30 Bal. 50 (c) COOKIE CREATIONS INC. Trial Balance […]

PROBLEM 3-5B (a) Date Account Titles and Explanation Debit Credit May 1 Common Stock …………………………………. (Issued stock for cash) 100,000 Cash………………………………………………………… 100,000 2 No entry—not a transaction. 3 Supplies ………………………………………………….. Accounts Payable ……………………………… (Purchased supplies on account) 800 7 Rent […]

PROBLEM 3-5A (a) Date Account Titles and Explanation Debit Credit Apr. 1 Cash………………………………………………………… Common Stock …………………………………. (Issued shares of stock for cash) 18,000 1 8,000 1 No entry—not a transaction. 2 Rent Expense …………………………………………… Cash …………………………………………………. (Paid monthly office rent) […]

EXERCISE 3-11 (a) Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable + Equipment = Accounts Payable + Common Stock + Revenues – Exp. – Div. Sept. 1 +$20,000 +$20,000 Issued stock 5 –3,000 +$9,000 +$ 6,000 8 +$18,000 […]

CHAPTER 3 The Accounting Information System Learning Objectives 1. Analyze the effect of business transactions on the basic accounting equation. 2. Explain what an account is and how it helps in the recording process. 3. Define debits and credits and […]

3-14 Vocabulary Quiz Name _______________ Chapter 3 1. The group of accounts maintained by a company. 2. A list of a company’s accounts. 3. The procedure of entering transaction data in the journal. 4. Events that require recording in the […]

3-1 CHAPTER 3 The Accounting Information System Learning Objectives 1. Analyze the effect of business transactions on the basic accounting equation. 2. Explain what an account is and how it helps in the recording process. 3. Define debits and credits […]

Continuing Cookie Chronicle 1 Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapters 1 and 2.) CCC3 In November 2014, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue […]

PROBLEM 2-8B (a) The primary objective of financial reporting is to provide information useful for decision making. Since Yocum’s shares appear to be ac- tively traded, investors must be capable of using the information made available by Yocum to make […]

EXERCISE 2-12 (a) 2 Going concern assumption (b) 6 Economic entity assumption (c) 3 Monetary unit assumption (d) 4 Periodicity assumption (e) 5 Historical cost principle (f) 1 Full disclosure principle EXERCISE 2-13 (a) This is a violation of the […]

CHAPTER 2 A Further Look at Financial Statements Learning Objectives 1. Identify the sections of a classified balance sheet. 2. Identify tools for analyzing financial statements and ratios for computing a company’s profitability. 3. Explain the relationship between a retained […]

2-15 Vocabulary Quiz Name _______________ Chapter 2 1. Assets of a relatively permanent nature that are being used in the business and are not intended for resale. 2. The quality of information that indicates the information makes a difference in […]

2-1 CHAPTER 2 A Further Look at Financial Statements Learning Objectives 1. Identify the sections of a classified balance sheet. 2. Identify tools for analyzing financial statements and compute ratios for analyzing a company’s profitability. 3. Explain the relationship between […]

Continuing Cookie Chronicle 1 Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapter 1.) CCC2 After investigating the different forms of business organization, Natalie Koebel decides to operate her business as a corporation, Cookie Creations […]

CCC1 CONTINUING COOKIE CHRONICLE (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. A proprietorship is easier to create and operate because […]

EXERCISE 1-13 (a) SOUTHWEST AIRLINES Statement of Cash Flows For the Year Ended December 31, 2014 (in millions) Cash flows from operating activities Cash received from customers …………………….. $9,823 Cash paid for goods and services ………………… (6,978) Net cash provided […]

CHAPTER 1 Introduction to Financial Statements Learning Objectives 1. Describe the primary forms of business organization. 2. Identify the users and uses of accounting information. 3. Explain the three principal types of business activity. 4. Describe the content and purpose […]

1-14 Vocabulary Quiz Name _______________ Chapter 1 1. The process of identifying, recording, and communicating the economic events of a business to interested users of the information. 2. Debts and obligations of a business. 3. Resources owned by a business. […]

1-1 CHAPTER 1 Introduction to Financial Statements Learning Objectives 1. Describe the primary forms of business organization. 2. Identify the users and uses of accounting information. 3. Explain the three principal types of business activity. 4. Describe the content and […]

Continuing Cookie Chronicle 1 Continuing Cookie Chronicle CCC1 Natalie Koebel spent much of her childhood learning the art of cookie-making from her grandmother. They spent many happy hours mastering every type of cookie imaginable and later devised new recipes that […]

(20 min.) P 3-77 Tidy Car, Inc. Balance Sheet January 31, 2016 ASSETS LIABILITIES Cash (a) $ 29,300 Accounts payable (g) $ 5,000 Accounts receivable (c) 1,500 Advertising payable (h) 200 Supplies (d) 2,000 Salary payable (i) 300 Equipment (e) […]

Focus on Financials: Apple Inc. (15-20 min.) Req. 1 Accrued expenses are expenses that have been incurred but that have not yet been paid as of the balance sheet date. The accrual basis of accounting and the expense recognition principle […]

(continued) P 3-65A Req. 1 (continued) *Retained earnings = $93,000 − $36,300 − $5,300 = $51,400 OR *Retained earnings, January 31, 2015 …………………………. $13,300 Add: Net income ($95,000 − $11,300 − $1,900 − $500 − $26,100 − $4,600) …………………………………. 50,600 […]

Chapter 3 Accrual Accounting & Income Ethics Check (5-10 min.) EC 3-1 a. Integrity b. Due care c. Integrity d. Objectivity and independence Copyright © 2017 Pearson Education Inc. Chapter 3 Accrual Accounting & Income 3– 1 Short Exercises (10 […]

(continued) E 3-41 Req. 1 August 2 through 18 entries are repeated from Solution to E 2-39. Journal DATE ACCOUNT TITLES DEBIT CREDIT Aug. 2 Cash …………………………………………………. 10,000 Common Stock ………………………………. 10,000 2 Rent Expense ……………………………………. 600 Cash ……………………………………………… 600 […]

(10-20 min.) E 3-25A One mechanism for solving this exercise is to prepare the relevant T– accounts, insert the given information, and solve for the unknown amounts, shown in italics. Amounts in millions Receivables Beg. bal. 290 Sales revenue 20,980 […]

(40-50 min.) P 2-69B Req. 1 Cash Accounts Receivable (a) 50,000 (c) 44,000 (g) 13,100 (j) 1,700 (b) 63,000 (e) 5,900 Bal. 11,400 (f) 3,700 (h) 200 (j) 1,700 (k) 1,500 Supplies Bal. 66,800 (d) 210 Bal. 210 Music Equipment […]

Quiz Q2–40 a Q2–41 d Q2–42 d Q2–43 b Q2–44 c Q2-45 b Q2-46 a Q2-47 d Q2-48 a Q2-49 c Q2–50 d Q2–51 a Q2–52 a Q2–53 d Q2–54 a Q2-55 d Q2-56 d Q2-57 d Q2-58 c Q2–59 […]

(15-25 min.) E 2-24A Req. 1 Harper, Inc. Trial Balance September 30, 2016 ACCOUNT DEBIT CREDIT Cash ……………………………………… $15,000* Accounts receivable ………………. 12,100* Inventory ………………………………. 16,800 Supplies………………………………… 200 Land ……………………………………… 50,000 Accounts payable ………………….. $14,940* Common stock ………………………. 47,200* Sales […]