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978-1259722660 Chapter 4 Solution Manual Part 1
Question 4–1 The income statement is a change statement that reports transactions— Question 4–2 Income from continuing operations includes the revenue, expense, gain, and loss transactions that will probably continue in future periods. It is important to segregate the income […]
978-1259722660 Chapter 4 Lecture Note Part 2
PowerPoint Slides Three PowerPoint presentations of the chapter are available in the Connect Library: 1. With “Concept Checks” useful for classroom presentation, permitting the instructor to intersperse in the presentation short exercises students can be asked to solve individually or […]
978-1259722660 Chapter 4 Lecture Note Part 1
CHAPTER 4 THE INCOME STATEMENT, COMPREHENSIVE INCOME, AND THE STATEMENT OF CASH FLOWS Overview This chapter has a threefold purpose: (1) To consider important issues dealing with the content, presentation, and disclosure of net income and other components of comprehensive […]
978-1259722660 Chapter 3 Solution Manual Part 8
Real World Case 3–10 Requirement 3 a. Note 21 reports the following subsequent event: On February 5, 2014, the Company entered into agreements with Green Mountain Coffee Roasters, Inc. (“GMCR”), providing for the development and introduction of the Company’s global […]
978-1259722660 Chapter 3 Solution Manual Part 7
Communication Case 3–1 IBM manufactures and sells personal and mainframe computers. The computers included as current assets in the balance sheet for the company represent the cost of inventory available for sale. In addition, IBM uses computers in its operations. […]
978-1259722660 Chapter 3 Solution Manual Part 6
Problem 3–6 (concluded) (1) $67,000 + 50,000 in treasury bills considered a cash equivalent. Requirement 2 Cash equivalents—the policy used to determine what items are considered to be cash equivalents. Accounts receivable, net—disclosure on the face of the statement of […]
978-1259722660 Chapter 3 Solution Manual Part 5
Problem 3–4 WEISMULLER PUBLISHING COMPANY Balance Sheet At December 31, 2018 Assets Current assets: Cash and cash equivalents (1) ………………………………………….. $ 95,000 Short-term investments …………………………………………………… 110,000 Property, plant, and equipment: Machinery and equipment ………………………………………………. $320,000 Less: Accumulated depreciation ………………………………………. (110 […]
978-1259722660 Chapter 3 Solution Manual Part 4
Exercise 3–19 1. Debt to equity ratio = Total liabilities ÷ Shareholders’ equity = 1.4 Shareholders’ equity × 1.4 = Total liabilities $2,500,000 × 1.4 = $3,500,000 = Total liabilities Total liabilities + Equity = Total assets $3,500,000 + 2,500,000 […]
978-1259722660 Chapter 3 Solution Manual Part 3
Exercise 3–12 1. (B) in a separate disclosure note. 2. (A) in the summary of significant policies note. 3. (C) on the face of the balance sheet. 4. (B) in a separate disclosure note. 5. (B) in a separate disclosure […]
978-1259722660 Chapter 3 Solution Manual Part 2
Exercise 3–1 1. Total current assets 2. Short-term investments $90,000 – 5,000 – 20,000 – 60,000 = $5,000 3. Retained earnings Current assets + Long-term assets = Current liabilities + Long-term liabilities + Paid-in capital + Retained earnings (RE) $90,000 […]
978-1259722660 Chapter 3 Solution Manual Part 1
Question 3–1 The purpose of the balance sheet, also known as the statement of financial position, is to present the financial position of the company on a particular date. Unlike the income statement, Question 3–2 The balance sheet does not […]
978-1259722660 Chapter 3 Lecture Note Part 2
5. Ethical Dilemma The chapter contains the following ethical dilemma: ETHICAL DILEMMA The Raintree Cosmetic Company has several loans outstanding with a local bank. The debt agreements all contain a covenant stipulating that Raintree must maintain a current ratio of […]
978-1259722660 Chapter 3 Lecture Note Part 1
CHAPTER 3 THE BALANCE SHEET AND FINANCIAL DISCLOSURES Overview Chapter 1 stressed the importance of the financial statements in helping investors and creditors predict future cash flows. The balance sheet, along with accompanying disclosures, provides relevant information useful in helping […]
978-1259722660 Chapter 2 Solution Manual Part 11
Problem 2–13 (continued) EXCALIBUR CORPORATION Balance Sheet At December 31, 2018 Assets Current assets: Cash ……………………………………………………… $ 23,300 Accounts receivable ……………………………….. 32,500 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable …………………………………… $ 26,100 Salaries and wages payable ……………………… 4,500 Note […]
978-1259722660 Chapter 2 Solution Manual Part 10
Problem 2–10 (continued) McGUIRE CORPORATION Income Statement For the Year Ended December 31, 2018 Sales revenue …………………………………………… $342,000 Rent………………………………………………………. 12,000 Depreciation…………………………………………… 3,000 Miscellaneous ……………………………………….. 10,000 Total operating expenses ……………. 110,000 Operating income …………………………………….. 32,000 Other expense: Interest …………………………………………………. 3,600 Net […]
978-1259722660 Chapter 2 Solution Manual Part 9
Requirement 2 Income overstated (understated) Adjustments to revenues: Adjustments to expenses: Overstatement of insurance expense (1,500) Understatement of depreciation expense 6,000 Understatement of interest expense 600 Understatement of supplies expense 1 ,100 Overstatement of net income $3 ,600 Understatement of […]
978-1259722660 Chapter 2 Solution Manual Part 8
Problem 2–6 (continued) INCOME STATEMENT ACCOUNTS Service revenue Miscellaneous expenses _____________________________________________________________________________ _____________________________________________________________________________ 0 1/1 Bal. 0 Salaries expense _____________________________________________________________________________ 1/1 Bal. 0 d. 41,000 _______ 12/31 Bal. 41,000 Requirement 4 Account Title Debits Credits Cash 45,800 Accounts receivable 17,700 Equipment […]
978-1259722660 Chapter 2 Solution Manual Part 7
Problem 2–4 (continued) PASTINA COMPANY Statement of Shareholders’ Equity For the Year Ended December 31, 2018 Total Common Retained Shareholders’ Stock Earnings Equity Balance at January 1, 2018 $60,000 $28,500 $ 88,500 Issue of common stock – 0 – – […]
978-1259722660 Chapter 2 Solution Manual Part 6
Problem 2–2 (continued) Requirements 1 and 3 BALANCE SHEET ACCOUNTS Cash Accounts receivable _____________________________ _____________________________ 1/1 Bal. 5,000 1/1 Bal. 1/31 Bal. Inventory Equipment _____________________________ _____________________________ 1/1 Bal. 5,000 1/1 Bal. 1/10 9,500 2,000 1/1 1/2 5,500 2,800 1/8 1/13 […]
978-1259722660 Chapter 2 Solution Manual Part 5
Exercise 2–21 Requirement 1 June 30 – adjusting entry Salaries and wages expense ($10,000 x 3/5)………………….. 6,000 July 1 – reversing entry Salaries and wages payable…………………………………….. 6,000 ……………………………………..Salaries and wages expense …………………………………………………………………………..6,000 July 2 – payment of salaries Salaries and […]
978-1259722660 Chapter 2 Solution Manual Part 4
Exercise 2–15 Requirement 1 Supplies 11/30 Balance 1,500 Expense 2,000 Requirement 2 Prepaid insurance 11/30 Balance 6,000 Expense ? 12/31 Balance 4,500 Insurance expense for December = $6,000 – 4,500 = $1,500 December 31, 2018 Insurance expense………………………………………………….. 1,500 ……………………………………………………Prepaid insurance […]
978-1259722660 Chapter 2 Solution Manual Part 3
Exercise 2–8 1. Prepaid insurance ($12,000 x 30/36)………………………… 10,000 Insurance expense………………………………………….. 10,000 2. Depreciation expense…………………………………………. 15,000 Accumulated depreciation ……………………………… 15,000 Solutions Manual, Vol.1, Chapter 2 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior […]
978-1259722660 Chapter 2 Solution Manual Part 2
Brief Exercise 2–12 Sales revenue………………………………………………………… 850,000 ……………………………………………………Income summary ……………………………………………………………………….850,000 Solutions Manual, Vol.1, Chapter 2 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Income summary…………………………………………………… 815,000 ………………………………………………….Cost of goods […]
978-1259722660 Chapter 2 Solution Manual Part 1
Question 2–1 External events involve an exchange transaction between the company and a separate economic entity. For every external transaction, the company is receiving Question 2–2 According to the accounting equation, there is equality between the total economic resources of […]
978-1259722660 Chapter 2 Lecture Note
CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS Overview Chapter 1 explained that the primary means of conveying financial information to investors, creditors, and other external users is through financial statements and related notes. The purpose of this chapter is to […]
978-1259722660 Chapter 1 Solution Manual Part 3
Communication Case 1–7 Suggested Grading Concepts and Grading Scheme: Content (70%) _______ 30 Briefly outlines the standard setting process. ______ Role of FASB, SEC. ______ The process. Writing (30%) _______ 6 Terminology and tone appropriate to the audience of a […]
978-1259722660 Chapter 1 Solution Manual Part 2
Exercise 1–2 Requirement 1 Year 2 Year 3 Revenues $350,000 $450,000 Expenses: Rent ($80,000 2) (40,000) (40,000) Requirement 2 Amount owed at the end of year one $ 5,000 Advertising costs incurred in year two 25 ,000 30,000 Amount […]
978-1259722660 Chapter 1 Solution Manual Part 1
Question 1–1 Financial accounting is concerned with providing relevant financial information about various kinds of organizations to different types of external users. The primary Question 1–2 Resources are efficiently allocated if they are given to enterprises that will use them […]
978-1259722660 Chapter 1 Lecture Note Part 2
3. Group/Research Activity The debate over principles-based versus rules-based accounting standards provides an excellent opportunity for class discussion, in-class debate, or for a writing assignment. One suggestion is to form groups of 4 or 5 students to research the issue. […]
978-1259722660 Chapter 1 Lecture Note Part 1
CHAPTER 1 ENVIRONMENT AND THEORETICAL STRUCTURE OF FINANCIAL ACCOUNTING Overview The primary function of financial accounting is to provide useful financial information to users external to the business enterprise. The focus of financial accounting is on the information needs of […]
978-1259722660 Appendix Appendix Part 4
Problem A-3 (continued) Requirement 6 Income Statement ( ) 2018 (8,000) Interest expense 2019 (8,842) Interest expense (158) Interest expense 3,852 Holding gain—interest rate swap (1 ,852) Holding loss—hedged note (7 ,000) Net effect—same as floating interest payment […]
978-1259722660 Appendix Appendix Part 3
Problem A–1 (continued) Requirement 5 Swap Note Jan. 1, 2018 100,000 Dec. 31, 2018 1,759 1,759 Balance 1,759 98,241 Dec. 31, 2019 2,694 2,694 Balance 935 100,935 Dec. 31, 2020 935 935 100 ,000 Balance 0 0 Problem A–1 (continued) […]
978-1259722660 Appendix Appendix Part 2
Exercise A–4 Requirement 1 June 30 Fair value of interest rate swap $11,394 Fair value of note payable $220,000 Fixed rate 10% Floating rate 6% Fixed receipts $5,000 ([10% x ¼] x $200,000) Floating payments (3 ,000) ([6% x ¼] […]
978-1259722660 Appendix Appendix Part 1
AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis […]
978-1259722653 Chapter 17 Solution Manual Part 5
C17-3. Opus One, Inc.: Preparing and analyzing the cash flow statement Requirement 1: Notes: 1) Since the company did not declare or pay any cash or stock dividends 1) The T-accounts for property and equipment and accumulated depreciation are prepared […]
978-1259722653 Chapter 17 Solution Manual Part 4
P17-9. Preparing a statement of cash flows—indirect method (AICPA adapted) Omega Corporation Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flow from Operating Activities: Net income $360,000 Adjustments to reconcile net income to cash provided by […]
978-1259722653 Chapter 17 Solution Manual Part 3
P17-5. Preparing and analyzing cash flow statement Requirement 1: Global Trading Company Statement of Cash Flows For the Year Ended December 31, 2017 Cash flow from operations Net loss for the year ($279,500) Cash flow from operations 354,500 Cash flow […]
978-1259722653 Chapter 17 Solution Manual Part 2
P17-2. Cash flow statement under indirect method 17-1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. P17-3. Determining amounts reported on statement of cash flows (AICPA adapted) Requirement […]
978-1259722653 Chapter 17 Solution Manual Part 1
Financial Reporting & Analysis (7th Ed.) Chapter 17 Solutions Statement of Cash Flows Exercises Exercises E17-1. Deriving a direct method presentation of cash flow from operating activities ABC Mining Company Cash Flow from Operations For the Year Ended December 31, […]
978-1259722653 Chapter 16 Solution Manual Part 5
P16-8. Elimination entries and consolidated balance sheet under acquisition method 16-1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Requirement 3: Plate Salad Eliminations Consolidated Dr Cr Balance […]
978-1259722653 Chapter 16 Solution Manual Part 4
P16-4. Equity method and fair value option Requirement 1: The determination of excess cost and its allocation is as follows: 2017 Journal entries: January 1, 2017 – Initial acquisition DR Investment in Delta Crating $250 $100 million) To record additional […]
978-1259722653 Chapter 16 Solution Manual Part 3
E16-17. Translating foreign currency (AICPA adapted) Because the subsidiary’s functional currency is the local currency unit (LCU), Ward Inc. must use the current rate method to translate the included in the consolidated income statement would be 400,000 x .44 = […]
978-1259722653 Chapter 16 Solution Manual Part 2
Financial Reporting and Analysis (7th Ed.) Chapter 16 Solutions Intercorporate Investments Exercises Exercises E16-1. Accounting for trading and available-for-sale securities (AICPA adapted) Requirement 1: Only the unrealized holding gains/losses from trading securities are recognized as income. from 12/31/16 to 12/31/17 […]
978-1259722653 Chapter 16 Solution Manual Part 1
Financial Reporting and Analysis (7th Ed.) Chapter 16 Solutions Intercorporate Investments Exercises Exercises E16-1. Accounting for trading and available-for-sale securities (AICPA adapted) Requirement 1: Only the unrealized holding gains/losses from trading securities are fair value from 12/31/16 to 12/31/17 = […]
978-1259722653 Chapter 15 Solution Manual Part 5
C15-4. Salesforce.com: Interpreting Share-based Compensation Disclosures (LO 15-7, LO 15-8) All answers involving financial statement amounts are in thousands. Requirement 1: 2015 share-based compensation expense and classification The total amount of share-based compensation expense is $564,765. It The entry would […]
978-1259722653 Chapter 15 Solution Manual Part 4
P15-19. Stock option accounting: Transitioning to current GAAP (LO 15-6) Requirement 1: Under the intrinsic value method allowed by pre-Codification SFAS No. 123, but later disallowed by pre-Codification SFAS No. 123(R), share. In this case, Riley would record $300 of […]
978-1259722653 Chapter 15 Solution Manual Part 3
P15-12. Calculating EPS when the capital structure is complex (LO 15-6) Requirement 1: The preferred stock pays a 10% dividend ($500,000), so there must be $5 million of preferred stock outstanding. Since each each $100 par value preferred share must […]
978-1259722653 Chapter 15 Solution Manual Part 2
P15-5. Analyzing convertible debt (LO 15-9) (AICPA adapted) Requirement 1: Journal entry to record the original issuance of the $10 million convertible bond at par: Notice that this entry does not assign any value to the conversion option. The FASB […]
978-1259722653 Chapter 15 Solution Manual Part 1
Financial Reporting and Analysis (7th Ed.) Chapter 15 Solutions Financial Reporting for Owners’ Equity Exercises Exercises E15-1.Understanding Shareholders’ Equity (LO 15-1, LO 15-3, LO 15-6, LO 15-7) Requirement 1: Preferred stock is a class of “capital stock” that pays dividends […]
978-1259722653 Chapter 14 Solution Manual Part 6
P14-12 Evaluating the effects of unreasonable rate of return assumptions (LO14-3, LO14-4, LO14-6, LO14-9) Requirement 1: US GAAP pension expense New Service Cost $300.00 0 = Pension expense / (income) ($223.80) *0.075 x $6,200 = $465 **[$900 actuarial loss – […]