Archives: Solution Manual

Chapter 09 – Accounting for Receivables Exercise 9-8 (20 minutes) Feb. 1 Allowance for Doubtful Accounts…………….………….. 6,800 Accounts Receivable—Oakley Co…..……………… 900 Accounts Receivable—Brookes Co…………….….. 5,900 To write off specific accounts. Exercise 9-9 (25 minutes) a. Expense is 3.0% of credit […]

VISUAL #9-2 PROMISSORY NOTE (6) $2,000.00 April 15, 2011 (1) Amount Date For value received, I promise to pay to the order of Plexi-Plus Supply Co. (2) Tobay, New York (7) Two thousand and no/100 ——————-Dollars on June 14, 2011 […]

Chapter 09 – Accounting for Receivables CHAPTER 9 ACCOUNTING FOR RECEIVABLES Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe accounts receivable and how they occur and are recorded. 1 9-1, […]

Chapter 08 – Cash and Internal Controls Problem 8-5B (Concluded) Part 3 There are several possible reasons why some prenumbered checks are missing from the sequence of canceled checks returned with a bank statement. Reasons include: (1) Some of the […]

Chapter 08 – Cash and Internal Controls Problem 8-4A (Concluded) Part 3 a. If the company’s Cash account balance of $27,497 is listed on the bank reconciliation as $27,947 then: b. The bank’s collection of the $8,000 note less the […]

Chapter 08 – Cash and Internal Controls Exercise 8-6 (20 minutes) 1. Jan. 1 Petty Cash…………………………………………….…….…. 200 Cash………………………………………………….……… 200 To establish a petty cash fund. 2. Jan. 8 Postage Expense………………………………………….… 74 Merchandise Inventory*…………………….…….……… 29 3. Jan. 8 Postage Expense………………………………………….… 74 […]

Chapter 08 – Cash and Internal Control VISUAL #8-1 BANK RECONCILIATION Reasons for discrepancies between bank statement balance and checkbook balance: Handle as follows: Unrecorded deposits Add to Bank Balance Outstanding checks Deduct from Bank Balance Bank service charges Deduct […]

Chapter 08 – Cash and Internal Control CHAPTER 8 CASH AND INTERNAL CONTROL Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Define internal control and its purpose and principles. 1, 2, […]

Comprehensive Problem, Colo Company (Continued) Part 2—continued Utilities Expense Acct. No. 690 Date Explanation PR Debit Credit Balance May 26 D2 1,283 1,283 31 G2 1,283 0 Income Summary Acct. No. 901 Date Explanation PR Debit Credit Balance ACCOUNTS RECEIVABLE […]

Serial Problem, Business Solutions (Concluded) Part 3 GENERAL JOURNAL Page 2 2016 Jan. 5 Cash……………………………………………….…………101 25,000 S. Rey, Capital……………….…………..………301 25,000 Additional investment by owner. * An optional additional entry for Jan. 20 is to debit “Loss from Defective Merchandise” and […]

Problem 7-1B (Concluded) Part 3 GRASSLEY COMPANY Trial Balance November 30 Debit Credit Cash…………………………………….……….………….….$100,207 Accounts receivable…………………………………….. 7,975 Accounts payable…………………..………….………… $ 5,635 Long-term notes payable……………………….…….. 88,500 C. Grassley, Capital………………………………………. 40,000 Sales………………………………………………………..….. 68,148 Sales discounts……………………………………………. 506 Costs of goods sold..….………………………………..38,250 Sales salaries […]

Problem 7-2A (Concluded) Part 4 (continued) WISET COMPANY Schedule of Accounts Receivable April 30 Paula Kohr.….….….………………………………. $3,170 Part 5 Analysis component To find the error(s), first re-add the account balances on the schedule of accounts receivable to confirm that the […]

Chapter 07 – Accounting Information Systems Exercise 7-11 (20 minutes) Segment Income (in $ mil.) Segment Assets (in $ mil.) Segment Return on Assets Segment 2015 2014 2015 2014 2015 Specialty Skiing Group………….. $ 72 $ 68 $ 591 $ […]

Solution: Alternate Demonstration Problem Chapter 7 SALES JOURNAL Date Account Debited Invoice Number PR Accts Rec Dr Sales Cr Cost of Goods Sold Debit Inventory Credit Feb. 2 Dale Dent 711 800.00 500.00 4 Gary Glen 712 1,250.00 850.00 11 […]

Chapter 07 – Accounting Information Systems CHAPTER 7 ACCOUNTING INFORMATION SYSTEMS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Identify the fundamental principles and components of accounting information systems. 1, 2, […]

Problem 7-6BA (100 minutes) Parts 1 and 2 SALES JOURNAL Page 2 Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Nov. 8 Cyd Rounder…..………..…..…..…..…..…439 6,550 10 Carlos Mantel………………..……………….440 13,500 15 Tori Tripp..…………………………………….441 5,250 PURCHASES JOURNAL Page 2 […]

PROBLEM SET B Problem 7-4BA (70 minutes) Parts 1 and 2 SALES JOURNAL Page 3 Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. July 5 Kim Nettle……………………..………….918 19,200 6 Ruth Blake…………………….………….919 7,500 13 Ashton Moore……………………..…….920 8,550 CASH […]

Problem 7-5AA (Concluded) Part 4 WISET COMPANY Trial Balance April 30 Debit Credit Cash…………………………………………………..…..$ 35,847 Long-term notes payable………………………… 110,000 B. Wiset, Capital…………………….……….……… 100,000 Purchases……………………….….…….…….…….. 39,425 Purchases returns and allowances…………. 750 Purchases discounts……………….……….……. 546 Sales salaries expense……….……….…….…… 21,500 Advertising expense………….…….……….……. 899 […]

Appendix 7A – Accounting Information Systems Appendix 7A—PERIODIC Accounting Information Systems QUICK STUDIES Quick Study 7-11A (20 minutes) PURCHASES JOURNAL Date Account Date of Invoice Terms PR Account s Payable Cr. Purchases Dr. Office Supplies Dr. Other Accounts Dr. May […]

Problem 6-8BA (30 minutes) Part 1 SHEPARD COMPANY Income Statements Comparing FIFO, LIFO, and Weighted Average For Year Ended December 31, 2015 FIFO LIFO Weighted Average Sales……………………………………………………… $400,000 $400,000 $400,000 Cost of goods sold Inventory, Dec. 31, 2014……….………….……. 48,720 48,720 […]

Problem 6-3B (40 minutes) 1. Compute cost of goods available for sale and units available for sale Beginning inventory……..……………….. 150 units @ $300 $ 45,000 May 6……………………………….…………… 350 units @ $350 122,500 2. Units in ending inventory Units available (from […]

Problem 6-9AB (25 minutes) Part 1 ALASKA COMPANY Estimated Inventory December 31 At Cost At Retail Goods available for sale Beginning inventory…………………………………….. $ 469,010 $ 928,950 Cost of goods purchased…………..…..………..….. 3,376,050 6,381,050 Goods available for sale …………..………………….. $3,845,060 $7,310,000 Cost-to-retail […]

Problem 6-3A (Continued) 3b. LIFO perpetual Date Goods Purchased Cost of Goods Sold Inventory Balance 1/1 600 @ $45.00 = $27,000 2/10 400 @ $42.00= $16,800 600 @ $45.00 400 @ $42.00 = $43,800 3/13 200 @ $27.00= $ 5,400 […]

Chapter 06 – Inventories and Cost of Sales Quick Study 6-22B (15 minutes) Goods available for sale Inventory, January 1……………………………………………………………..$190,000 Cost of goods purchased (net)…………………………….…….….…….. 352,000 Quick Study 6-23 (10 minutes) a. Both IFRS and U.S. GAAP provide broad and […]

Chapter 06 – Inventories and Cost of Sales Chapter 6 Inventories and Cost of Sales QUESTIONS 1. (a) FIFO: The cost of the first (earliest) items purchased in inventory flow to cost of 2. Merchandise inventory is disclosed on the […]

Chapter 06 – Inventories and Cost of Sales VISUAL #6-1 Schedule of Cost of Goods Available Units Cost Total Jan. 1 Beginning Inventory 60 @ $10 = $ 600 Jan. 7 Purchase 90 @ 11 = 990 Jan. 15 Purchase […]

Ethics Challenge, BTN 5-3 — (Concluded) 2. The merchandising company accounts for sales returns using a contra revenue account called Sales Returns and Allowances. A dress returned with a sales bill of $200 would be accounted for as follows: Communicating […]

Serial Problem — SP 5 (Continued) S. Rey, Capital Acct. No. 301 Date Explanation PR Debit Credit Balance 105,360 S. Rey, Withdrawals Acct. No. 302 Date Explanation PR Debit Credit Balance Feb. 15 4,800 4,800 Computer Services Revenue Acct. No. […]

Problem 5-5B (Concluded) Part 4 Current assets Cash ……………………………………………..…….…………… $ 7,400 Merchandise inventory ………………………………….….. 21,300 *$6,600 – $2,800 = $3,800 Quick assets (Cash in this case)…………………….……. $ 7,400 Current liabilities…………………………………………………. $ 18,000 Acid-test ratio ($7,400 / $18,000)………………………..…….. 0.41 Net Sales……………………………………………………….……. […]

PROBLEM SET B Problem 5-1B (40 minutes) May 2 Merchandise Inventory……………………………….. 10,000 Accounts Payable—Havel….……….……….. 10,000 Purchased goods on credit, terms 1/15, n/30. 5 Merchandise Inventory…………………………..…… 250 Cash………………………………………………….… 250 Paid freight on incoming goods. 9 Cash……………………………………….….………….….. 2,500 Sales…………………………………….……….……. 2,500 Sold goods […]

Chapter 05 – Accounting for Merchandising Operations Problem 5-2A (Concluded) Aug. 15 Cash………………………………………..……….……….. 4,508 Sales Discounts*…………………………………….….. 92 Accounts Receivable—Laird…………..….… 4,600 Collected receivable within 2% discount period. *[($5,200 – $600) x 2%] Sold goods on credit, terms 1/10, n/30. 19 Cost […]

Exercise 5-12 (10 minutes) Multiple-Step Income Statement — Sales Related Information Only 20,000 Net sales…………………………………………………………….. 180,000 Exercise 5-13 (20 minutes) The employee’s oversight in omitting these goods from the physical count would cause the cost of the physical count of […]

EXERCISES Exercise 5-1 (30 minutes) Note: The original missing numbers are blocked. (a) (b) (c) (d) (e) Sales……….………..….…. $62,000 $43,500 $46,000 $79,000 $25,600 Cost of goods sold Merch. inv. (beg.)…….. 8,000 17,050 7,500 8,000 4,560 Total cost of merch. purchases….…………. […]

Chapter 05 – Accounting for Merchandising Operations VISUAL #5-1 THE OUTDOOR STORE Income Statement For the Year Ended December 31, 20xx Cost of goods sold Inventory, January 1………………………………….. 40,300 Purchases……..……….……………………..…..…..… 462,000 Less: Purchase discounts …………..$12,000 Purchase returns and allowances..…..…..……..…..… 6,400 […]

Problem 4-6BA (40 minutes) Part 1 SOLUTIONS CO. Work Sheet For Year Ended December 31, 2015 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Dr. Cr. Dr. Cr. Dr. Cr. Cash……….…………….…..….….. 10,000 10,000 Accounts receivable……..….…. (e) 2,450 2,450 Supplies……………………………. 7,600 (b) […]

Problem 4-2B (Continued) Part 3 POWER DEMOLITION COMPANY Income Statement For Year Ended April 30, 2015 Demolition fees earned………………………….……… $187,000 Expenses Depreciation expense–Equipment………………. $ 7,000 Wages expense…………………………………………… 43,400 Interest expense…………………………………………. 3,600 Insurance expense……………………………………… 10,600 POWER DEMOLITION COMPANY Statement of Owner’s […]

Problem 4-1B (Continued) Part 4 SAFE STORAGE CO. Adjusted Trial Balance July 31, 2015 No. Account Title Debit Credit 101 Cash………………………………………….…………….…. $ 22,850 106 Accounts receivable…………………..…………….…. 1,150 124 Office supplies…………………..…….…………….…… 1,525 401 Storage fees earned………………………………..…… 10,950 606 Depreciation expense–Buildings..……………….. 1,500 […]

Problem 4-5A (90 minutes) Part 1 KARISE REPAIRS Income Statement For Year Ended December 31, 2015 Repair fees earned…………..…….…….….….. $90,950 Expenses Depreciation expense—Equipment…….. $ 5,000 Wages expense………………………………….. 37,500 Insurance expense………………..…….….…. 800 4-1 Copyright © 2015 McGraw-Hill Education. All rights reserved. […]

Problem 4-1A (Continued) J. Nozomi, Capital Acct. No. 301 Date Explanation PR Debit Credit Balance 30 Closing 9,750 0 Depreciation Expense–Computer Equipment Acct. No. 612 Date Explanation PR Debit Credit Balance April 30 Adjusting 500 500 30 Closing 500 0 […]

Exercise 4-13 (15 minutes) Current assets: Cash…………………………………………………………….……….. $ 8,000 Accounts receivable………………………………….…………… 17,500 Office supplies……………………………………..…….…………. 3 ,000 Total current assets…………………………………..…….…….. $28 ,500 Current liabilities: Current ratio = = = 1.78 Interpretation: Wilson Trucking Company’s current ratio of 1.78 exceeds the industry […]

Exercise 4-5 (10 minutes) Income Summary balance after closing revenues and expenses: Revenues: $70,000 + $7,000..…………………….. = $77,000 Cr. K. Capri, Capital balance after all closing entries: Beginning balance…………..……………… $20,000 Plus net income……………………………… 26,400 46,400 Less withdrawals……….…………………… 12,000 Ending balance………………………………. […]

Chapter 04 – Completing the Accounting Cycle Chapter 4 Completing the Accounting Cycle QUESTIONS 1. The four-step closing entry process is: (i) close the revenue (and gain) accounts to the Income Summary account, (ii) close the expense (and loss) accounts […]

Reporting in Action — BTN 4-1 1. The revenue items from its income statement must be identified, and those would be credited to Income Summary as step 1 in the closing 2. The total expenses that would be debited to […]

Chapter 04 – Completing the Accounting Cycle VISUAL #4-1 THE ACCOUNTING CYCLE STEPS PURPOSE TIMING 1. Analyze transactions To determine accounts to be debited and credited During the period 2. Journalize To record the daily transactions During the period 3. […]

Chapter 04 – Completing the Accounting Cycle CHAPTER 4 C1. Explain why temporary accounts are closed each period. 2, 3, 4, 5 4-5 4-5 4-1 4-1, 4-4 C2. Identify steps in the accounting cycle. 8 4-8 4-11 4-1 4-3, 4-8 […]

Serial Problem, SP 3 (Continued) Computer Services Revenue Acct. No. 403 Date Explanation PR Debit Credit Balance Oct. 6 4,800 4,800 12 1,400 6,200 28 5,208 11,408 Depreciation Expense—Office Equipment Acct. No. 612 Date Explanation PR Debit Credit Balance Dec. […]

Problem 3-6BA (40 minutes) Part 1 Method that records prepaid expenses and unearned revenues in balance sheet accounts Apr. 1 Prepaid Consulting Fees…………….………………… 2,450 Cash………………………………………………..……. 2,450 Paid for future consulting services. Paid for future advertising. 23 Cash …………………………………………………………… 10,450 Unearned […]

Problem 3-3B (90 minutes) Parts 1 and 2 Cash Accounts Payable Bal. 60,000 Bal. 11,200 Accounts Receivable Salaries Payable Prepaid Insurance C. Alonzo, Capital Unadj. Bal. 19,000 Bal. 71,500 (a) 9,500 Adj. Bal. 9,500 C. Alonzo, Withdrawals Prepaid Rent Bal. […]

Problem 3-3A (Concluded) WELLS TECHNICAL INSTITUTE Balance Sheet December 31, 2015 Assets Accumulated depreciation—Professional library……. (17 ,200) 17,800 Equipment…………………………………………………….…….… 80,000 Accumulated depreciation—Equipment.……….……….. (28 ,200) 51 ,800 Total assets………………………………………………….……….. $123 ,500 Liabilities Accounts payable………………………………………………….. $ 26,000 Salaries payable………………………………..…….………….… 400 Unearned training […]

Exercise 3-11A (30 minutes) a. Dec. 1 Supplies Expense…………………………..…….….…….. 2,000 Cash………………………………………………………… 2,000 Purchased supplies. b. Received fees for work to be done. e. Dec. 31 Supplies……………………………………………..….….…… 1,840 Supplies Expense…………………………………….. 1,840 Adjust expenses for unused supplies. f. Dec. 31 Prepaid Insurance…………………………………………… […]