Archives: Solution Manual
978-0078025549 Chapter 3 Solution Manual Part 1
Question 3-1 (LO 3-1) The revenue recognition principle states that we record revenue in the period in which we earn it. If a company sells products or provides services to a customer in the current year, then Question 3-2 (LO […]
978-0078025549 Chapter 3 Solution Exercise B Part 2
Requirement 3 Blue Hens Corporation Balance Sheet December 31, 2015 Assets Liabilities Cash $ 15,700 Accounts payable $ 9,300 Accts. receivable 132,500 Salaries payable 12,500 Stockholders’ Equity Equipment 280,000 Common stock 126,200 Accum. depr. (156,900) Retained earnings 131,500 * Total […]
978-0078025549 Chapter 3 Solution Exercise B Part 1
1. May 2. 2. Revenue would be recognized as each magazine is delivered. 3. November 21. 4. July 7. 1. May 2. 2. November 21. 3. November 4. 4. One month’s worth of rent expense is recorded each month. 1. […]
978-0078025549 Chapter 2 Solution Problem C Part 2
Problem 2-7C Requirement 1 April 1 Debit Credit Cash 50,000 April 2 Cash 20,000 Common Stock 20,000 (Issue common stock) April 7 Equipment 40,000 Cash 40,000 (Purchase equipment) April 10 Supplies 4,000 Accounts Payable 4,000 (Purchase cleaning supplies on account) […]
978-0078025549 Chapter 2 Solution Problem C Part 1
Transaction Assets = Liabilities + Stockholders’ Equity 1. Obtain a loan at the bank Increase = Increase + No effect 2. Issue common stock to stockholders for 3. Purchase equipment for cash. No effect* =No effect +No effect 4. Pay […]
978-0078025549 Chapter 2 Solution Manual Part 8
Great Adventures, Inc. Trial Balance July 31, 2015 Accounts Debit Credit Cash $ 9,000 Prepaid Insurance 4,800 Supplies 1,800 Equipment 12,000 Additional Perspective P2-1 (continued) Requirement 2 Additional Perspective 2-1 (concluded) Requirement 3 Cash (1) 10,000 (2) 10,000 (8) 2,000 […]
978-0078025549 Chapter 2 Solution Manual Part 7
Problem 2-8B (continued) Requirements 2 and 3 Cash Accounts Receivable Supplies Bal. 3,200 (1) 13,000 1,100 (5) 3,000 (6) Bal. 600 (4) 9,000 7,000 (9) Bal. 700 (3) 1,000 Equipment Accounts Payable Notes Payable Bal. 9,400 (2) 3,500 0 1,000 […]
978-0078025549 Chapter 2 Solution Manual Part 6
Problem 2-4B (LO 2-4) Transactions for Eli’s Insurance Services May 2 Debit Credit Cash 300 May 5 Repairs and Maintenance Expense 425 Accounts Payable 425 (Receive maintenance services on account) May 7 Cash 500 Notes Payable 500 (Receive cash and […]
978-0078025549 Chapter 2 Solution Manual Part 5
Problem 2-8A (connued) (10) Sep. 30 Salaries Expense 4,000 (11) Sep. 30 Dividends 1,100 Cash 1,100 (Pay dividends) Cash 4,000 (Pay salaries for current month) Problem 2-8A (connued) Requirements 2 and 3 Cash Accounts Receivable Supplies Bal. 6,500 (1) 4,700 […]
978-0078025549 Chapter 2 Solution Manual Part 4
Problem 2-2A (LO 2-2) Transaction Assets = Liabilities + Stockholders’ Equity 1. Provide services to $1,600. 2. Pay $400 for current month’s rent. −$400 =$0 +−$400 3. Hire a new employee, who will be paid $500 at the end $0 […]
978-0078025549 Chapter 2 Solution Manual Part 3
Exercise 2-14 (LO 2-5) Cash (1) (4) 5,000 15,000 8,000 9,000 3,000 (2) (3) Transaction (8) is not posted to the Cash T-account because a purchase on account does not involve cash. Exercise 2-15 (LO 2-5) Cash Accounts Receivable (3) […]
978-0078025549 Chapter 2 Solution Manual Part 2
Exercise 2-1 (LO 2-1) 1. d. 2. b. 3. a. 4. e. 5. c. Exercise 2-2 (LO 2-2) Assets =Liabilities +Stockholders’ Equity 1. Increase =No effect +Increase 2. Increase =Increase +No effect 3. Increase =No effect +Increase * One asset […]
978-0078025549 Chapter 2 Solution Manual Part 1
Question 2-1 (LO 2-1) External transactions are transactions between the company and a separate economic entity. Question 2-2 (LO 2-1) 1. Use source documents to identify accounts affected by external transactions. 2. Analyze the impact of the transaction on the […]
978-0078025549 Chapter 2 Solution Exercise B Part 2
Exercise 2-14 Cash (1) (4) 4,000 16,000 8,000 9,000 4,000 (2) (3) Transaction (8) is not posted to the Cash T-account because a purchase on account does not involve cash. (6) 3,000 1,000 7,000 (5) (7) 10,000 Exercise 2-15 Cash […]
978-0078025549 Chapter 2 Solution Exercise B Part 1
1. d. 2. b. 3. a. 4. e. 5. c. Assets =Liabilities +Stockholders’ Equity 1. Increase =No effect +Increase 2. Decrease =No effect +Decrease 3. Increase =Increase +No effect Chapter 2 The Accounting Cycle: During the Period EXERCISES Exercise 2-1 […]
978-0078025549 Chapter 1 Solution Problem C
Type of business activity Transactions 1. Financing Issue common stock. 2. Financing Collect cash from a bank loan. 3. Operating Sell products to customers. 4. Operating Pay workers’ wages. Account classifications Account Names 1. Asset Accounts Receivable 2. Asset Land […]
978-0078025549 Chapter 1 Solution Manual Part 5
Assumption violated 1. Periodicity 2. Monetary unit 3. Going concern 4. Economic entity 1. h. 2. g. 3. f. 4. a. 5. d. 6. e. 7. i. 8. b. 9. c. The three primary forms of business organizations include sole […]
978-0078025549 Chapter 1 Solution Manual Part 4
Problem 1-1B (LO 1-2) Type of business activity Transactions 1. Operating Pay for advertising 2. Financing Pay dividends to stockholders 3. Operating Collect cash from customer for previous sale 4. Investing Purchase a building to be used for operations 5. […]
978-0078025549 Chapter 1 Solution Manual Part 3
Exercise 1-17 (LO 1-3) ($ in billions) Total change in cash =Operating cash flows +Investing cash flows +Financing cash flows 1. Total change in cash =Operating cash flows +Investing cash flows +Financing cash flows 2. Total change in cash =Operating […]
978-0078025549 Chapter 1 Solution Manual Part 2
Exercise 1-4 (LO 1-2) Requirement 1 Revenues − Expenses = Net Income Requirement 2 Assets = Liabilities + Stockholders’ equity $50,000 = $27,000 + $X $50,000 − $27,000 = $23,000 Exercise 1-5 (LO 1-2) Requirement 1 Revenues − Expenses = […]
978-0078025549 Chapter 1 Solution Manual Part 1
Question 1-1 (LO 1-1) Accounting is the language of business. Whereas a basic math class might involve adding, subtracting, and solving for unknown variables, accounting involves learning to measure Question 1-2 (LO 1-1) Those interested in making decisions about a […]
978-0078025549 Chapter 1 Solution Exercise B Part 2
Exercise 1-12 (LO 1-3) Requirement 1 Squirrel Tree Services Balance Sheet Assets Liabilities Cash $ 8,700 Accounts payable $ 9,600 Supplies 1,700 Salaries payable 4,500 Prepaid insurance 3,200 Notes payable 22,700 Building 75,000 Total liabilities 36,800 Stockholders’ Equity Common stock […]
978-0078025549 Chapter 1 Solution Exercise B Part 1
Chapter 1 A Framework for Financial Accounting 1. a. 2. b. 3. a. 4. c. 5. b. 6. a. 7. c. EXERCISES Exercise 1-1 Transaction Account Activity 1. Falcon provides services to customers. Revenue Operating 2. Falcon pays salaries for […]
978-0078025549 Appendix E Appendix E
Differences in accounting standards cause problems for investors in comparing companies whose financial statements are prepared under different accounting rules. Investors unfamiliar with the accounting multinational corporations to comply with multiple sets of accounting rules. The IASB’s main objective is […]
978-0078025549 Appendix D Appendix D Part 3
Requirement 1 January 2 Debit Credit Investments 105,000 February 14 Investments 7,200 Cash 7,200 (Purchase preferred stock) May 15 Cash (300 shares × $62) 18,600 Loss (difference) 2,400 Investments (300 shares × $70) 21,000 (Sell investments below recorded amount) December […]
978-0078025549 Appendix D Appendix D Part 2
Exercise D-4 (LO D-2) Requirement 1 March 1 Debit Credit Investments (3,000 shares × $62) 186,000 July 1 Cash ($1.25 × 3,000 shares) 3,750 Dividend Revenue 3,750 (Receive cash dividends) October 1 Cash (750 shares × $70) 52,500 Investments (750 […]
978-0078025549 Appendix D Appendix D Part 1
Question D-1 (LO D-1) A company might invest in another company to (1) receive dividends, earn interest, and gain from the increase in the value of their investment, (2) temporarily invest excess cash created by Question D-2 (LO D-1) Companies […]
978-0078025549 Appendix C Appendix C Part 2
Exercise C-7 (LO C-3) Annuity payment Annual Rate Interest compounded Period invested Future value of annuity $2,000 13% Annually 30 years $586,398.43a Exercise C-8 (LO C-3) Annuity payment Annual Rate Interest compounded Period invested Present value of annuity Option 1 […]
978-0078025549 Appendix C Appendix C Part 1
Interest is the cost of borrowing money. Simple interest is interest we earn on the initial investment only. Compound interest is the interest Present value tells us the value today of receiving some larger amount in the future. The discount […]
978-0078025587 Chapter 25 Solution Manual Part 5
Title: Problem 25-4B QA_Ori: WINDMIRE COMPANY COMPARATIVE INCOME STATEMENTS (1) (2) (3) Normal New Volume Business Combined Supporting computations Normal direct material cost $384,000 Units of output 300,000 Cost per unit $ 1.28 New business volume 50,000 New business direct […]
978-0078025587 Chapter 25 Solution Manual Part 4
Title: Problem 25-6A QA_Ori: Part 1 ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses Cost of goods sold $469,000 $207,000 $262,000 Direct expenses *Computation notes. Closing Department 200 will eliminate 70% […]
978-0078025587 Chapter 25 Solution Manual Part 3
Title: Problem 25-2A QA_Ori: Part 1 PROJECT Y Net income $ 56,000 PROJECT Z Part 2 PROJECT Y PROJECT Z 4 years 3 years $350,000 $143,500 $350,000 $153,067 Net income $ 36,400 Depreciation expense* 116,667 Net cash flow $153,067 *Annual […]
978-0078025587 Chapter 25 Solution Manual Part 2
Title: Exercise 25-7 QA_Ori: 1. PROJECT C1 Net Cash Flows Present Value of 1 at 12% Present Value of Net Cash Flows Year 1 $ 12,000 0.8929 $ 10,715 PROJECT C2 Net Cash Flows Present Value of 1 at 12% […]
978-0078025587 Chapter 25 Solution Manual Part 1
Title: Question 1 QA_Ori: Capital budgeting decisions require careful analysis because they are generally the Title: Question 2 QA_Ori: Capital budgeting is the process of planning the acquisition or sale of plant assets. Title: Question 3 QA_Ori: Capital budgeting decisions […]
978-0078025587 Chapter 24 Solution Manual Part 5
Title: Problem 24-4B QA_Ori: Part 1 Allocations of joint cost on the basis of sales values Land preparation, seeding, and cultivating: $700,000 Grade Sales Value Percent of Total Allocated Cost No. 1 $ 900,000 62.5% $437,500 Harvesting, sorting, and grading: […]
978-0078025587 Chapter 24 Solution Manual Part 4
Title: Problem 24-4A QA_Ori: Part 1 Allocations of joint costs on the basis of sales values Tree pruning and care: $405,000 Grade Sales Value Percent of Total Allocated Cost No. 1 $450,000 48.0% $194,400 No. 2 300,000 32.0 129,600 No. […]
978-0078025587 Chapter 24 Solution Manual Part 3
Title: Exercise 24-13 QA_Ori: Preliminary calculations Lobster cost (2,400 lbs. x $4.50) $10,800 Labor cost 1,800 Total cost of processed lobsters $12,600 Parts Quantity* Price Total Lobster tails 1,248 lbs. $21 $26,208 Lobster flakes 528 lbs. 14 7,392 Total market […]
978-0078025587 Chapter 24 Solution Manual Part 2
Title: Quick Study 24-15 QA_Ori: Average invested assets = (€12,888 + €13,099) / 2 Title: Quick Study 24-16 QA_Ori: a. Process time 15.0 minutes Inspection time 2.0 minutes Move time 6.4 minutes Wait time 36.6 minutes Manufacturing cycle time 60.0 […]
978-0078025587 Chapter 24 Solution Manual Part 1
Title: Question 1 QA_Ori: Many companies are divided into departments when they become too large to be Title: Question 2 QA_Ori: Operating departments are directly involved in manufacturing or selling the products or services of a business. Service departments support […]
978-0078025587 Chapter 23 Solution Manual Part 7
Part 4 GUADELUPE COMPANY Overhead Variance Report For Month Ended March 31 Volume Variance Expected production level 80% of capacity Production level achieved 90% of capacity Volume variance $6,000 (favorable) Flexible Actual Controllable Variance Budget Results Variances* Variable overhead costs […]
978-0078025587 Chapter 23 Solution Manual Part 6
Part 3 Direct Materials Variances Preliminary computations Actual material used: 69,000 lbs. (given) Direct material cost variances Actual units at actual cost [69,000 lbs. @ $6.10] $420,900 Standard units at standard cost [67,500 lbs. @ $6.00] 405,000 Direct material cost […]
978-0078025587 Chapter 23 Solution Manual Part 5
Title: Problem 23-1B QA_Ori: Part 1 Direct Materials Variances Direct materials cost variances Actual units at actual cost [1,000,000 lbs. @ $4.25] $4,250,000 Direct Materials Price and Quantity Variances Actual Cost AQ x AP AQ x SP Standard Cost SQ […]
978-0078025587 Chapter 23 Solution Manual Part 4
Title: Problem 23-5A QA_Ori: Part 1 Variable or Fixed Classification Per unit Amount Variable costs (total divided by 15,000 units) Indirect materials $ 3.00 Fixed costs (per month) Depreciation—Building $ 24,000 Depreciation—Machinery 80,000 Taxes and insurance 12,000 Supervision 79,000 Total […]
978-0078025587 Chapter 23 Solution Manual Part 3
Title: Exercise 23-9A QA_Ori: 1. Goods in Process Inventory 288,000 To record the favorable price and quantity variances. * This price variance can alternatively be computed and recorded when the direct materials are purchased. 2. Direct Materials Quantity Variance 24,000 […]
978-0078025587 Chapter 23 Solution Manual Part 2
Title: Exercise 23-1 QA_Ori: Item Cost a. Bike frames Variable b. Screws for assembly Variable c. Repair expense for tools (If these costs are only remotely related to volume, they may be better classified as fixed) Variable * Incoming shipping […]
978-0078025587 Chapter 23 Solution Manual Part 1
Title: Question 1 QA_Ori: Fixed budget performance reports have limited usefulness because they do not Title: Question 2 QA_Ori: The primary purpose of a flexible budget is to help managers better evaluate past performance, which can improve their abilities to […]
978-0078025587 Chapter 22 Solution Manual Part 7
Title: Problem 22-7B QA_Ori: Part 1 NABAR MANUFACTURING Sales Budgets July, August, and September 2013 Budgeted Units Budgeted Unit Price Budgeted Total Dollars July 2013 21,000 $17.00 $ 357,000 Part 2 NABAR MANUFACTURING Production Budget July, August, and September 2013 […]
978-0078025587 Chapter 22 Solution Manual Part 6
Title: Problem 22-4B QA_Ori: Part 1 COMP-MEDIA Budgeted Income Statement For Months of July, August, and September, 2013 July August September Sales* $1,265,000 $1,391,500 $1,530,650 Cost of goods sold* 660,000 726,000 798,600 Gross profit 605,000 665,500 732,050 * Volume for […]
978-0078025587 Chapter 22 Solution Manual Part 5
Title: Problem 22-7A QA_Ori: Part 1 ZIGBY MANUFACTURING Sales Budgets April, May, and June 2013 Budgeted Units Budgeted Unit Price Budgeted Total Dollars April 2013 20,500 $23.85 $ 488,925 Part 2 ZIGBY MANUFACTURING Production Budget April, May, and June 2013 […]
978-0078025587 Chapter 22 Solution Manual Part 4
Title: Problem 22-3A QA_Ori: Part 1 Cash collections of credit sales (accounts receivable) From sales in Total % Collected June July April $ 720,000 28% $201,600 Part 2 Budgeted ending inventories (in units) April May June July Next month’s budgeted […]