Archives: Solution Manual
978-0078025914 Chapter 9 Lecture Note Part 2
Chapter Outline Teaching Notes 7. Partial-Year Depreciation Calculations a. Purchases of long-lived assets seldom occur on the first or last day of the period; depreciation must sometimes be calculated for periods shorter than a year. b. Under the straight-line and […]
978-0078025914 Chapter 9 Lecture Note Part 1
CHAPTER 9 LONG-LIVED TANGIBLE AND INTANGIBLE ASSETS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre- hensive Problem Skills Develop– ment Cases Continuing Case LO 9-1 Define, classify, […]
978-0078025914 Chapter 8 Solution Manual Part 6
C8–3 (continued) Req. 5 (a) Had OTP used the percentage of sales method to estimate bad debts, the company would have reported $346 ($17,284 x 0.02) of Bad Debt Expense. (b) Had OTP reported $346 of Bad Debt Expense, the […]
978-0078025914 Chapter 8 Solution Manual Part 5
Fundamentals of Financial Accounting, 5/e 8– 41 © 2016 by McGraw– Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWER TO COMPREHENSIVE PROBLEM C8–1 Req. 1 Customer Total Balance June (one […]
978-0078025914 Chapter 8 Solution Manual Part 4
PA8–4 (continued) Req. 1 (continued) j. Allowance for Doubtful Accounts AJE = $1,678 desired (see calculation below) – $1,200 current = $ 478 adjustment Total 0–30 31–60 61–90 > 90 Total Accounts Receivable $ 18,000 $ 7,300 $ 8,480 $ […]
978-0078025914 Chapter 8 Solution Manual Part 3
CP8–2 Req. 1 (in thousands) Allowance for Doubtful Accounts 3,400 Beg. balance 700 Bad debt exp. Write–offs 1,100 3,000 End. balance Beg. balance + Additions charged to Bad Debt Expense – Write-offs = Ending balance $3,400 + $700 – $1,100 […]
978-0078025914 Chapter 8 Solution Manual Part 2
E8–6 Req. 1 Total Young Old Accounts Receivable $ 500,000 $ 100,000 $ 400,000 Estimated Uncollectible (%) x 5 % x 40 % Estimated Uncollectible ($) $ 165,000 $ 5,000 $160,000 Req. 2 Allowance for Doubtful Accounts 40,000 125,000 Unadjusted […]
978-0078025914 Chapter 8 Solution Manual Part 1
Chapter 8 Receivables, Bad Debt Expense, and Interest Revenue ANSWERS TO QUESTIONS 1. The advantages of extending credit are that it allows a company to compete effectively with competitors who extend credit. The additional gross profit earned from selling on […]
978-0078025914 Chapter 8 Lecture Note Part 3
HANDOUT 8–2 SOLUTION ESTIMATION AND RECORDING OF UNCOLLECTIBLE ACCOUNTS – AGING OF ACCOUNTS RECEIVABLE METHOD Part 1 In 2016, Vandolay reported $300,000 in sales. The company’s allowance for doubtful accounts has an unadjusted credit balance of $12,000. Vandolay Industries accountants […]
978-0078025914 Chapter 8 Lecture Note Part 2
Chapter Outline Teaching Notes 2. Days to Collect—Measures the average number of days from the time from sale on account to collection. a. Days to Collect = 365 ÷ Receivables Turnover Ratio. b. Days to collect ratio measures the average […]
978-0078025914 Chapter 8 Lecture Note Part 1
CHAPTER 8 RECEIVABLES, BAD DEBT EXPENSE, AND INTEREST REVENUE Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Cases LO 8-1 […]
978-0078025914 Chapter 7 Solution Manual Part 6
C7–2 (continued) COLLEGE COASTERS Adjusted Trial Balance At December 31 Account Titles Debit Credit Cash $ 8,905 Accounts Receivable 2,800 Inventory 275 Prepaid Rent 500 Equipment 810 Accumulated Depreciation–Equipment $ 120 Accounts Payable 910 Income Tax Payable 789 Salaries and […]
978-0078025914 Chapter 7 Solution Manual Part 5
PA7–5 Req. 1 Sherwood Company Income Statements (Corrected) 2012 2013 2014 2015 Net Sales $2,000,000 $2,400,000 $2,500,000 $3,000,000 Cost of goods sold 1,400,000 1,680,000* 1,750,000* 2,100,000 Gross profit $ 600,000 $ 720,000 $ 750,000 $ 900,000 * The $20,000 decrease […]
978-0078025914 Chapter 7 Solution Manual Part 4
ANSWERS TO COACHED PROBLEMS CP7–1 Req. 1 Unit Total Goods available for sale for all methods: Units Cost Cost Beginning inventory, January 1 200 $30 $6,000 Purchase, March 2 300 32 9,600 Purchase, June 30 250 36 9,000 Goods available […]
978-0078025914 Chapter 7 Solution Manual Part 3
E7–8 Req. 1 Inventory Costing Method Weighted Income Statement Units FIFO LIFO Average Sales Revenue ……………………………….. 4,100 $307,500 $307,500 $307,500 Cost of Goods Sold* ………………………… 4,100 152,800 155,500 153,340 Gross Profit ………………………………….. 154,700 152,000 154,160 Operating Expenses ………………………… 91,500 91,500 […]
978-0078025914 Chapter 7 Solution Manual Part 2
M7–14 (a) Perpetual FIFO Goods in Inventory Goods Sold Unit Total Unit Total Date Description Units Cost Cost Units Cost Cost July 1 Beginning inventory 2,000 $ 40 $ 80,000 July 5 Sold 1,000 units (1,000) 40 (40,000) 1,000 $ […]
978-0078025914 Chapter 7 Solution Manual Part 1
Chapter 7 Inventories and Cost of Goods Sold ANSWERS TO QUESTIONS 1. Three goals of inventory management are to make or buy products (1) in sufficient quantities to avoid stock–outs (which could result in lost sales revenue and decreases in […]
978-0078025914 Chapter 7 Lecture Note Part 2
Chapter Outline Teaching Notes B. Comparison to Benchmarks Illustrated in Exhibit 7.7 1. Inventory turnover ratios and the number of days to sell can be helpful in comparing different companies’ inventory management practices. 2. These measures can vary significantly between […]
978-0078025914 Chapter 7 Lecture Note Part 1
CHAPTER 7 INVENTORY AND COST OF GOODS SOLD Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Cases LO 7-1 Describe […]
978-0078025914 Chapter 6 Solution Manual Part 6
S6-4 (continued) Req. 4 The right thing to do is reliably report all information that is relevant to financial statement users—this is called the full disclosure principle. In this case, top management of the company will use the division’s income […]
978-0078025914 Chapter 6 Solution Manual Part 5
PB6-5 (continued) Req. 2 Perpetual inventory system: January 6 Accounts Receivable ………………………………………………… 600 Sales Revenue (20 units at $30) ……………………..…… 600 Cost of Goods Sold …………………………………………………… 400 Inventory (20 units at $20) …………………………..….……… 400 January 9 Inventory (10 units at […]
978-0078025914 Chapter 6 Solution Manual Part 4
PA6-2 (continued) Req. 3 (a) Accounts Receivable …………………………………………………. 550,000 Sales Revenue …………………………………………………….. 550,000 Cost of Goods Sold …………………………………………………… 415,000 Inventory …………………………………………………………….. 415,000 (b) Sales Returns and Allowances ……………………………………. 10,000 Accounts Receivable …………………………………………….. 10,000 (c) Cash ($540,000 x 98%) ………………………………………………. 529,200 […]
978-0078025914 Chapter 6 Solution Manual Part 3
E6–22 Req. 1 WOLVERINE WORLD WIDE INC. Income Statement For the 2012 fiscal year (in millions) Net Sales Revenue …………………………… $ 1,640 Cost of Goods Sold ………………………….. 1,010 Gross Profit……………………………………… 630 Salaries and Wages Expense…………….. 520 Income from Operations ……………………. […]
978-0078025914 Chapter 6 Solution Manual Part 2
M6–16 (in billions of euro) 2012 2011 Sales 7.1 6.2 COGS 2.4 2.1 Gross Profit 4.7 4.1 Gross Profit Percentage 66.2% 66.1% Luxottica’s increase in gross profit was caused by a combination of both (a) an increase in gross profit […]
978-0078025914 Chapter 6 Solution Manual Part 1
Chapter 6 Merchandising Operations and the Multi-Step Income Statement ANSWERS TO QUESTIONS 1. Service companies sell services and merchandising companies sell physical products. Merchandising companies sell physical products that are purchased from a supplier and manufacturing companies sell physical products […]
978-0078025914 Chapter 6 Lecture Note Part 2
Chapter Outline Teaching Notes C. Sales on Account and Sales Discounts 1. Sales discount––A sales price reduction given to customers for prompt payment of their account balance. 2. Sales discount is calculated after taking into account any sales returns and […]
978-0078025914 Chapter 6 Lecture Note Part 1
CHAPTER 6 MERCHANDISING OPERATIONS AND THE MULTISTEP INCOME STATEMENT Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre- hensive Problem Skills Develop- ment Cases Continuing Cases LO 6-1 […]
978-0078025914 Chapter 5 Solution Manual Part 5
C5-1 (continued) Req. 9 Net Profit Margin = Net Income Total Revenue = $2,940 $9,005 = 0.3265 =32.65% Yes Pulse Recording Studio has achieved its objective by having a net profit margin of 32.65%, which exceeds its goal of 10%. […]
978-0078025914 Chapter 5 Solution Manual Part 4
C5-1 (continued) Req. 2 Cash (A) Supplies (A) Equipment (A) Beg. 1/1 1/5 1/7 3,800 2,500 5,000 1,000 4,000 4,000 1,500 1/2 1/6 1/15 Beg. 1/3 500 200 Beg. 30,000 1/31 3,000 End. 5,800 End. 700 End. 30,000 Cash Equivalents […]
978-0078025914 Chapter 5 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 5-21 © 2016 by McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. ANSWERS TO GROUP A PROBLEMS PA5–1 Req. 1 a. Weakness – By not issuing […]
978-0078025914 Chapter 5 Solution Manual Part 2
E5–3 (continued) Req. 2 Because the supervisor was responsible for handling the cash, preparing the cash count sheet, and depositing cash in the bank, the supervisor was able to steal cash without detection. Accounting could have detected the theft by […]
978-0078025914 Chapter 5 Solution Manual Part 1
Chapter 5 Fraud, Internal Control, and Cash ANSWERS TO QUESTIONS 1. The three categories of employee fraud are: corruption, asset misappropriation, and financial statement fraud. Asset misappropriation is most common. Financial statement fraud is associated with the largest losses. 2. […]
978-0078025914 Chapter 5 Lecture Note Part 3
HANDOUT 5–1 SOLUTION BANK RECONCILIATION Information from the records and bank statement and of Matrix, Inc. as of July 31, 2016 is set forth below Cash balance per bank, July 31, 2016 $9,610 Cash balance per general ledger, July 31, […]
978-0078025914 Chapter 5 Lecture Note Part 2
Chapter Outline Teaching Notes 3. Cash Paid to Reimburse Employees (Petty Cash) a. Petty cash fund—A system used to reimburse employees for expenditures they have made on behalf of the organization. i. Acts as a control by establishing a limited […]
978-0078025914 Chapter 5 Lecture Note Part 1
CHAPTER 5 FRAUD, INTERNAL CONTROL, AND CASH Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problem Skills Develop– ment Cases Continuing Cases LO 5-1 Define fraud […]
978-0078025914 Chapter 4 Solution Manual Part 11
S4–5 The change in estimated depreciation expense will increase net income this year but some depreciation will now extend into next year, decreasing net income then. Although it’s true that GAAP requires the use of estimates in certain instances (such […]
978-0078025914 Chapter 4 Solution Manual Part 10
C4–6 (continued) Req. 2 Cash (A) Accounts Receivable (A) Supplies (A) Prepaid Insurance (A) Beg. 10,900 Beg. 800 Beg. 400 Beg. 0 5,700 (1) (9)10,400 600 (7) (6) 1,000 (1) 5,700 4,200 (2) 4,500 (25) Bal. 1,400 Bal. 5,700 (3) […]
978-0078025914 Chapter 4 Solution Manual Part 9
C4–4 (continued) Req. 3 LAZY SOFA FURNITURE, INC. Unadjusted Trial Balance At December 31, 2015 (in thousands) Account Titles Debit Credit Cash $ 31 Accounts Receivable 5 Supplies 12 Equipment 27 Accumulated Depreciation–Equipment $ 0 Software 12 Accumulated Amortization 3 […]
978-0078025914 Chapter 4 Solution Manual Part 8
C4–3 (continued) Req. 2 1. Cash (+A) ……………………………………………………… 22 Note Payable (short–term) (+L) ……………….. 22 Borrowed cash on note. 2. Equipment (+A) ……………………………………………… 25 Cash (−A) …………………………………………….. 25 Purchased equipment. 3. Cash (+A) ……………………………………………………… 5 Common Stock (+SE) …………………………..… 5 […]
978-0078025914 Chapter 4 Solution Manual Part 7
C4–2 (continued) Req. 1, 3, 5, and 8 (T–accounts) Service Revenue (R) Depreciation Expense (E) Amortization Expense (E) Beg. 0 12/8 160 Beg. 0 12/31(13) 6 Beg. 0 12/31(11) 5 CE1 160 CE1 6 CE1 5 Bal. 0 Bal. 0 […]
978-0078025914 Chapter 4 Solution Manual Part 6
Fundamentals of Financial Accounting, 5/e 4–51 PB4–1 Req. 1 REGIS CORPORATION Adjusted Trial Balance At June 30, 2013 (in millions) Account Titles Debit Credit Cash $ 200 Accounts Receivable 70 Inventories 140 Prepaid Rent 80 Equipment 770 Accumulated Depreciation–Equipment $ […]
978-0078025914 Chapter 4 Solution Manual Part 5
CP4–2 (continued) Req. 2 a. Interest Expense (+E, −SE)…………………………. 700 Interest Payable (+L)………………………… 700 To accrue interest expense incurred but not paid. b. Unearned Revenue (−L) ……………………………………… 3,200 Rent Revenue (+R, +SE) ……………………………. 3,200 $4,800 ÷ 6 months = $800 […]
978-0078025914 Chapter 4 Solution Manual Part 4
E4–15 (continued) Req. 4 (a) Preliminary net income = $50,000 – 25,000 – 12,500 = $12,500 (b) Adjusted net income = $50,000 – 25,000 – 21,500 – 1,200 – 1,000 – 390 = $910 Without adjustments, preliminary net income would […]
978-0078025914 Chapter 4 Solution Manual Part 3
Fundamentals of Financial Accounting, 5/e 4–21 E4–3 Ref / Date Journal Entries and Adjusting Journal Entries (a) Sept 1 Prepaid Rent (+A)……………………………………12,000 Cash (−A)……………………………………. 12,000 Sept 30 Rent Expense (+E, −SE) ($12,000 x 1/6)………. 2,000 Prepaid Rent (−A)……………………………. 2,000 (b) […]
978-0078025914 Chapter 4 Solution Manual Part 2
M4–12 Account Financial Statement? Classification? Normal dr or cr Balance? Interest Expense IS E Dr Prepaid Rent BS CA Dr Amortization Expense IS E Dr Unearned Revenue BS CL Cr Retained Earnings BS SE Cr Accumulated Depreciation BS NCA Cr […]
978-0078025914 Chapter 4 Solution Manual Part 1
Chapter 4 Adjustments, Financial Statements, and Financial Results ANSWERS TO QUESTIONS 1. Adjusting entries are made at the end of the accounting period to record all revenues and expenses that have not been recorded but belong in the current period. […]
978-0078025914 Chapter 4 Lecture Note Part 4
HANDOUT 4–4 CLOSING ENTRIES, POSTING TO T-ACCOUNTS, PREPARATION OF POST-CLOSING TRIAL BALANCE Prepare the required closing entries for Deana’s Decorators using the adjusted account balances set forth in Handout 4–2. Post the entries to the T-accounts shown on the next […]
978-0078025914 Chapter 4 Lecture Note Part 3
HANDOUT 4–2 Use the balances in the T-accounts in handout 4–1 to prepare an adjusted trial balance. Deana’s Decorators Adjusted Trial Balance December 31, 2016 Debit Credit Cash Supplies Accounts Receivable Prepaid Rent Prepaid Insurance Certificate of Deposit Interest Receivable […]
978-0078025914 Chapter 4 Lecture Note Part 2
Chapter Outline Teaching Notes LO 4-5 Explain the closing process. E. Closing Temporary Accounts 1. Last step of accounting cycle is referred to as closing process; performed only at the end of the year after the financial statements have been […]
978-0078025914 Chapter 4 Lecture Note Part 1
CHAPTER 4 ADJUSTMENTS, FINANCIAL STATEMENTS, AND FINANCIAL RESULTS Student Learning Objectives and Related Assignment Materials Student Learning Objectives Mini– Exercises Exercises Coached Problems Problems (Groups A & B) Compre– hensive Problems Skills Develop– ment Cases Continuing Case LO 4-1 Explain […]