Archives: Solution Manual

Chapter 2 Transaction Analysis Ethics Check (5-10 min.) EC 2-1 a. Due care b. Integrity c. Due care d. Objectivity and independence Copyright © 2017 Pearson Education Inc. Chapter 2 Transaction Analysis 2-1 Short Exercises (5 min.) S 2-1 a. […]

(10-15 min.) E 7-30A Cost of old truck …………………………………………………… $400,000 Less: Accumulated depreciation: ($400,000 − $90,000) × 85 + 165 + 175 + 41 (144,460)* 1,000 _______ Book value of old truck ………………………………………… $255,540 _____ aAlternate solution setup for accumulated […]

Chapter 7 Plant Assets, Natural Resources, & Intangibles Ethics Check (5-10 min.) EC 7-1 a. Integrity b. Due care c. Objectivity and independence d. Integrity Copyright © 2017 Pearson Education Inc. Chapter 7 Plant Assets, Natural Resources, & Intangibles 1 […]

(20-30 min.) E 6-82 Sales increased, the gross profit increased then dropped, and net income slid into a net loss, as shown here: Dollars in millions 2016 2015 2014 Sales $37.9 $36.8 $34.5 Cost of sales 30.7 29.2 27.2 Gross […]

(25-30 min.) P 6-68A Req. 1 (estimate of ending inventory by the gross profit method) Beginning inventory ……………………………….. $ 57,400 Purchases ……………………………………………… $490,300 Less: Purchase discounts …………………… (11,000) Purchase returns ……………………….. (70,800) Net purchases ……………………………………. 408,500 Cost of goods available […]

(15-20 min.) E 6-31B Req. 1 Perpetual System 1. Purchases: Inventory ……………………………………………….. 60,000 Accounts Payable ………………………………. 60,000 2. Sales: Cash ($90,000 × .21) ……………………………….. 18,900 Accounts Receivable ($90,000 × .79) ……….. 71,100 Sales Revenue …………………………………… 90,000 Cost of Goods Sold […]

(20-25 min.) P 8-69B Req. 1 This situation will generate a positive translation adjustment, which is like a gain. The gain occurs because the yen’s current exchange rate, which is used to translate the subsidiary’s net assets, is greater than […]

(20-30 min.) P 8-59A Req. 1 Debt ratio of Spindler considered alone = Total liabilities = $65.3 = 0.767 Total assets $85.1 Req. 2 Spindler SMCC Eliminations Consolidated Totals Debit Credit (a) $13.3 Total assets ……………. $85.1 $169.2 (b) 1.3 […]

(10-15 min.) E 8-29A German Subsidiary: EUROS EXCHANGE RATE DOLLARS Assets 650,000 $1.326 $861,900 Liabilities 300,000 1.326 $397,800 Stockholders’ equity: Common stock 55,000 1.06 58,300 Retained earnings 295,000 1.19 351,050 Accumulated other comprehensive income: Foreign-currency translation adjustment 54,750 650,000 $861,900 […]

Chapter 8 Long-Term Investments & the Time Value of Money Ethics Check (5-10 min.) EC 8-1 a. Due care b. Objectivity and independence c. Integrity d. Integrity Chapter 8 Long-Term Investments & the Time Value of Money 8-1 Copyright © […]

(15-25 min.) E 7-85 Year 1 2 3 4 Millions of Euros (€) 1. Total current assets No effect 2. Equipment, net €3.75 U* €2.5 U** €1.25 U Correct 3. Net income €3.75 U* €1.25 O €1.25 O €1.25 O […]

(15 min.) P7–76B Req. 1 Journal ACCOUNT TITLES DEBIT CREDIT Equipment …………………………………………………………. 109,000 Cash ……………………………………………………………… 109,000 Depreciation Expense — Buildings …………………….. 30,800* Accumulated Depreciation — Buildings ………….. 30,800 Depreciation Expense — Equipment …………………… 38,900** Accumulated Depreciation — Equipment ………… 38,900 […]

Chapter 6 Inventory & Cost of Goods Sold Ethics Check (5-10 min.) EC 6-1 a. Due care b. Integrity c. Objectivity and independence d. Integrity Copyright © 2017 Pearson Education Inc. Chapter 6 Inventory & Cost of Goods Sold 6-1 […]

(continued) P 5-65B Req. 2 December 31 BALANCE SHEET 2017 2016 Current assets: Note receivable ………………………………………… $15,600 $38,000 Interest receivable ……………………………………. 192 364 Copyright © 2017 Pearson Education Inc. Chapter 5 Short Term Investments & Receivables 5-59 (30-40 min.) P […]

Problems (20-30 min.) P 7-66A Req. 1 ITEM LAND LAND IMPROVEMENTS SALES BUILDING GARAGE BUILDING FURNITURE (a) $283,500 $ 76,500 (b) 8,800 (c) $ 31,100 (d) 600 Copyright © 2017 Pearson Education Inc. Chapter 7 Plant Assets, Natural Resources, & […]

(continued) P 5-56A Req. 3 First Data Communications Comparative Balance Sheets (Partial) December 31, 2017 and December 31, 2016 2017 2016 Accounts receivable…………………………..….. $231,000 $215,000 Less: Allowance for doubtful accounts……… (16,168) (4,500) Accounts receivable, net……………………….. $214,832 $210,500 Copyright © 2017 […]

(10-15 min.) E 5-26A Req. 1 Average collection period: Millions of dollars One day’s sales = $565,750 = $1,550 365 Days’ sales in receivables (DSO) = ($4,710 + $3,820) / 2 = 2.75 days (3 days)* (average collection period) $1,550 […]

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

Decision Cases (30-40 min.) Decision Case 1 Req. 1 Based solely on these balance sheets, Insley Sales Co. appears to be the better credit risk because: 1. Queens Service has more assets ($150,000) than Insley Sales ($65,000), but Queens Service […]

(30-45 min.) P 1-61A Req. 1 Beckwith Garden Supply, Inc. Income Statement Year Ended December 31, 2016 Revenue Service revenue ……………………. $457,600 Expenses Salary expense …………………….. $108,500 Interest expense …………………… Utilities expense …………………… 10,200 8,500 Property tax expense ……………. 7,300 […]

(10-15 min.) E 1-29A TO: Owner of Carson Coffee Roasters Corp. FROM: Student Name SUBJECT: Opinion of net income, dividends, financial position, and cash flows Your first month of operations was successful. Revenues totaled $279,600 and net income was $193,900. […]

Chapter 1 The Financial Statements Ethics Check (5-10 min.) EC 1-1 a. Integrity b. Objectivity and independence c. Integrity d. Due care Copyright © 2017 Pearson Education Inc. Chapter 1 The Financial Statements 1-1 Short Exercises (5 min.) S 1-1 […]

(continued) Ethical Issue 1 Req. 3 Legal and ethical consequences Banks have legal requirements in loan agreements that require debtors to maintain certain ratios of assets and liabilities on their books or risk default. Failure of a company to report […]

(continued) P 9-86B Req. 3 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT 2016 a. Dec. 31 Cash …………………………………………………. 1,739,841 Discount on Bonds Payable ………………. 260,159 Convertible Bonds Payable …………… 2,000,000 To issue bonds at a discount. 2017 b. June […]

(continued) P 9-75A Req. 2 Carrying amount at Dec. 31, 2016: Bonds payable, net ($3,000,000 − $180,000 + $9,000 + $9,000) ……………………… $2,838,000 Req. 3 a. Interest expense = $99,000 b. Cash interest paid = $90,000 Interest expense exceeds cash […]

(continued) E 9-42B Req. 2 Total assets = $3,569 million, the sum of total liabilities and stockholders’ equity. (in millions) 2016 Leverage ratio = Total assets ($3,569) Total stockholders’ equity ($1,701) = 2.10 Debt ratio = Total liabilities ($3,569 − […]

(10-20 min.) E 9-26A Req. 1 Accounts payable are amounts owed to suppliers for products or services that have been purchased on account. Accrued expenses are expenses that the company has incurred but not yet paid. They are liabilities for […]

Chapter 9 Liabilities Ethics Check (5-10 min.) EC 9-1 a. Integrity b. Integrity c. Due care d. Objectivity and independence Copyright © 2017 Pearson Education Inc. Chapter 9 Liabilities 9-1 Short Exercises (5-10 min.) S 9-1 Journal DATE ACCOUNT TITLES […]

Chapter 4 Internal Control & Cash Ethics Check (5-10 min.) EC 4-1 a. Integrity b. Objectivity and independence c. Integrity d. Due care Copyright © 2017 Pearson Education Inc. Chapter 4 Internal Control & Cash 4-1 Short Exercises (5 min.) […]

(30-45 min.) P 4-53B Carvel Wireless Cash Budget 2017 Cash balance, beginning $ 7,900 Budgeted cash receipts: Collections from customers ($65,000 × 1.12) 72,800 Receipt of interest 300 81,000 Budgeted cash payments: Cash paid for inventory ($44,000 × 1.20) $52,800 […]

(10-20 min.) E 4-28B F. L. Hill Bank Reconciliation July 31, 2016 BANK: Balance, July 31 $ 294 Add: Deposit in transit 1,220 Less: Outstanding checks: Check No. 626 $ 80 627 280 (360) Adjusted bank balance $1,154 BOOKS: Balance, […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual P13-57B (20-30 min.) Requirement Solution: 1. Discuss the relative strengths and weaknesses of Western Air and Tech Flights. Conclude your discussion by recommending one of the companies’ stocks as an investment. Western Air’s […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual Ethical analysis: Reclassifying a long-term investment as current to meet a debt agreement does not, in itself, brand Turnberry managers as unethical. The managers may have honestly intended to sell the investments in […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual f. Gross profit percentage: 2016: $ 127,000 = 0.51 2015: $ 97,000 = 0.49 $ 250,000 $ 199,000 Chapter 13: Financial Statement Analysis Page 41 of 94 g. Operating income percentage: 2016: $ […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual E13-20A (10-15 min.) Solution: 1. Identify any weaknesses revealed by the statement of cash flows of Beckwith Orchards, Inc. Operations provided very little cash. The company is selling fixed assets to generate cash. […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual S13-1 (5-10 min.) Solution: 2016 2016 2014 Amount Percent Amount Percent (Dollars in thousands) Increase (Decrease) 2013 2016 Perform a horizontal analysis of revenues and net income—both in dollar amounts and in percentages—for […]

(continued) Apple Inc. Req. 2 (in millions) – Analysis The balance sheet reports that Apple increased most of the assets in 2014, except for cash, cash equivalents, and short-term investments. Apple’s liquidity decreased in 2014. Its equity has decreased as […]

Challenge Exercises and Problem (20-30 min.) E 13-61 ORDER OF COMPUTATION Millions Given Current assets ……………………………………………………. $16,150 4 Property, plant, and equipment ……………. $9,750 Given Less Accumulated depreciation …………… (900) 8,850 3 Total assets ($12,500 ÷ 0.50) ……………………………….. $25,000 1 […]

(20-30 min.) P 13-51A Chattanooga Flight’s statement of cash flows reveals only one strong point, a continuing purchase of plant assets. The company’s weaknesses include: 1. Net income and net cash provided by operations are down significantly, with the company […]

(10-15 min.) E 13-23A a. Return on net sales: 2016: ($23,000 – $15,000) = 0.042 2015: ($34,000 – $14,000) = 0.083 $190,000 $240,000 b. Asset turnover: 2016: $190,000 = 0.667 2015: $240,000 = 0.923 $285,000* $260,000** _____ _____ *($300,000 + […]

Chapter 13 Financial Statement Analysis Ethics Check (5-10 min.) EC 13-1 a. Integrity b. Due care c. Objectivity and independence d. Integrity Copyright © 2017 Pearson Education Inc. Chapter 13 Financial Statement Analysis 13-1 Short Exercises (5-10 min.) S 13-1 […]

Exercise 13-16A, Obj. 1 Student Name Course Name Student ID: Date: 2016 2015 Total revenue ………………………………………… 836,000$ 938,000$ Expenses: Cost of goods sold ………..……………….. 408,000$ 409,350$ Selling and general expenses ……………. 238,000 263,000 Interest expense …………………………….. 9,500 14,000 Income tax […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual Cash flows from financing activities: Payment of cash dividends (37,700)$ Issuance of common stock 6,900 Payment of long-term note payable (59,000) Net cash used for financing activities (89,800) Chapter 12: The Statement of […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual P12-67B (40 min.) Requirements Solution: Req. 1 Sales revenue 488,000$ Cost of goods sold [$203,000 + (1 × $40,000)] 243,000 Salary expense 125,000 Rent expense 17,000 1. Prepare Pruitt Motors, Inc.’s, income statement […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual E12-37B (10-15 min.) Solution: a. Compute the following items for the statement of cash flows: a. How much are cash collections from customers? b. How much are cash payments for inventory? $3,000 increase […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual S12-1 (10 min.) Solution: a. State how the statement of cash flows helps investors and creditors perform each of the following functions: a. Predict future cash flows b. Evaluate management decisions Predict future […]

FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual Nyman’s cash flows look strong. Operations are the main source of cash. The Chapter 12: The Statement of Cash Flows Page 21 of 93 company is investing in new plant assets without having […]

(continued) P 12-75B Req. 1 Noncash investing and financing activities: Acquisition of equipment by issuing long-term note payable …………………………….. $13,600 Paid off short-term note payable by issuing common stock …………………………………………. 7,000 Total noncash investing and financing activities … $20,600 Req. […]

(continued) P 12-67B Req. 3 Pruitt Motors, Inc. Statement of Cash Flows Year Ended December 31, 2016 Cash flows from operating activities: Net income ……………………………………………………… $ 54,400 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation […]

Quiz Q12–38 c Q12–39 b Q12–40 c Q12-41 a Q12-42 c Q12-43 b Q12-44 b Q12-45 1. Receiving dividends – operating 2. Paying dividends – financing Q12-46 b [Book value = $12,000 ($18,000 − $6,000); Gain = $4,000; Proceeds = […]