Archives: Solution Manual

Chapter 6 Merchandise Inventory Review Questions 1. Which principle states that businesses should use the same accounting methods and procedures from period to period? 2. What does the disclosure principle require? The disclosure principle requires that a company must report […]

Critical Thinking Tying It All Together Case 5-1 Macy’s, Inc. is a premier retailer in the United States, operating nearly 900 stores in 45 states. Macy’s, Bloomingdale’s, and Bloomingdale’s Outlet are all brands that operate under Macy’s, Inc. The company […]

Practice Set P5-51 Journalizing purchase and sale transactions, making closing entries, preparing financial statements, and computing the gross profit percentage This problem continues the Crystal Clear Cleaning practice set begun in Chapter 2 and continued through Chapters 3 and 4. […]

Continuing Problem – Part 2 P5-50 Making adjusting and closing entries, preparing financial statements, and computing the gross profit percentage This problem continues the Canyon Canoe Company situation and focuses on nonmerchandising transactions, adjusting and closing entries, and preparing financial […]

P5B-46B Journalizing purchase and sale transactions—periodic inventory system Learning Objective 8 Appendix 5B Journalize the following transactions that occurred in June 2018 for Daley Company. Assume Daley uses the periodic inventory system. No explanations are needed. Identify each accounts payable […]

P5-43B Preparing a multi-step income statement, journalizing closing entries, and preparing a post-closing trial balance Learning Objectives 4, 5 1. Operating Income $59,800 The adjusted trial balance of Rockin Robbin Dance Company at April 30, 2018, follows: Requirements 1. Prepare […]

P5B-39A Journalizing purchase and sale transactions—periodic inventory system Learning Objective 8 Appendix 5B Journalize the following transactions that occurred in March 2018 for Double Company. Assume Double uses the periodic inventory system. No explanations are needed. Identify each accounts payable […]

P5-36A Preparing a multi-step income statement, journalizing closing entries, and preparing a post-closing trial balance Learning Objectives 4, 5 1. Operating Income $67,900 The adjusted trial balance of Rachael Rey Music Company at June 30, 2018, follows: Requirements 1. Prepare […]

E5B-29 Journalizing purchase transactions—periodic inventory system Learning Objective 8 Appendix 5B Lawrence Appliances had the following purchase transactions. Journalize all necessary transactions using the periodic inventory system. Explanations are not required. Sep. 4 Purchased inventory of $6,900 on account from […]

Exercises For all exercises, assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. E5-18 Using accounting vocabulary Learning Objectives 1, 2, 3 Match the accounting terms with the […]

S5-7 Journalizing purchase and sales transactions Learning Objectives 2, 3 On November 4, 2018, Cain Company sold merchandise inventory on account to Tarin Wholesalers, $12,000, that cost $4,800. Terms 3/10, n/30. On November 5, 2018, Tarin Wholesalers paid shipping of […]

Chapter 5 Merchandising Operations Review Questions 1.What is a merchandiser, and what is the name of the merchandise that it sells? A merchandiser is a business that sells merchandise, or goods, to customers. The 2. What are the two types […]

Critical Thinking Tying It All Together Case 4-1 Before you begin this assignment, review the Tying It All Together feature in the chapter. It will also be helpful if you review Hyatt Hotels Corporation’s 2015 annual report ( https://www.sec.gov/Archives/edgar/data/1468174/000146817416000152/h10-k123115.htm ).  […]

Comprehensive Problem 2 for Chapters 1-4: This comprehensive problem is a continuation of Comprehensive Problem 1. Murphy Delivery Service has completed closing entries and the accounting cycle for 2018. The business is now ready to record January 2019 transactions. Jan. […]

Comprehensive Problem 1 for Chapters 1-4: Murphy Delivery Service completed the following transactions during December 2018: Dec. 1 Murphy Delivery Service began operations by receiving $13,000 cash and a truck with a fair value of $9,000 from Russ Murphy. The […]

P4-42, cont., Requirement 5, cont. © 2018 Pearson Education, Inc. 4-1 Cash Accounts Payable Nov. 1 16,000 1,200 Nov. 2 Nov. 26 1,000 4,800 Nov. 3 Nov. 7 1,400 1,500 Nov. 13 Dec. 19 2,000 750 Nov. 4 Nov. 28 […]

P4-39B, cont. Requirement 8 P4A-40B Preparing adjusting entries and reversing entries  Learning Objective 7 Appendix 4A The unadjusted trial balance and adjustment data of Myla’s Motors at December 31, 2018, follow: © 2018 Pearson Education, Inc. 4-1 WILSON’S QUALITY AUTOMOTIVE […]

P4-39B Completing the accounting cycle from journal entries to post-closing trial balance with an optional worksheet Learning Objectives 1, 2, 3, 4, 5 6. Ending Retained Earnings $9,080 On December 1, Curt Wilson began an auto repair shop, Wilson’s Quality […]

P4-38B Completing the accounting cycle from adjusting entries to post-closing trial balance with   an optional worksheet Learning Objectives 1, 2, 3, 4, 5, 6 5. Net Income $17,380 The unadjusted trial balance of Watson Anvils at December 31, 2018, […]

P4-36B Preparing financial statements including a classified balance sheet in report form, preparing closing entries, and using the current ratio to evaluate a company Learning Objectives 1, 3, 6 2. Ending Retained Earnings $60,200 The adjusted trial balance of Bradley […]

P4A-34A Preparing adjusting entries and reversing entries  Learning Objective 7 Appendix 4A The unadjusted trial balance and adjustment data of Martha’s Motors at December 31, 2018, follow: Adjustment data at December 31, 2018: a. Depreciation on equipment, $2,100. b. Accrued […]

P4-33A, cont. Requirement 2 © 2018 Pearson Education, Inc. 4-1 WALDO’S QUALITY AUTOMOTIVE Unadjusted Trial Balance December 31, 2018 Account Title Balance Debit Credit Cash $ 55,990 Accounts Receivable 3,600 Office Supplies 2,800 Prepaid Insurance 1,750 Land 20,000 Equipment 12,000 […]

P4-32A, cont. Requirement 3 P4-32A, cont. Requirement 4 WALTON ANVILS Adjusted Trial Balance December 31, 2018 Account Title Balance Debit Credit Cash $ 13,480 Accounts Receivable 14,500 Prepaid Rent 2,100 Office Supplies 200 Equipment 23,000 Accumulated Depreciation—Equipment $ 1,390 Accounts […]

P4-30A, cont. Requirement 4 Requirement 5 Current ratio = Total current assets* / Total current liabilities* = $93,600 / $39,000 = 2.4 *From the balance sheet The company’s ability to pay current debts improved from 2.3 to 2.4. P4-31A Preparing […]

Problems (Group A) P4-29A Preparing financial statements including a classified balance sheet in report form,   preparing and posting closing entries, and preparing a post-closing trial balance Learning Objectives 1, 3, 4 1. Net Loss $(9,500) The adjusted trial balance […]

E4-25 Preparing closing entries from an adjusted trial balance; preparing a post-closing trial   balance; and calculating the current ratio Learning Objectives 3, 4, 6 Mark’s Bowling Alley’s adjusted trial balance as of December 31, 2018, is presented below: Requirements […]

E4-19 Preparing a worksheet  Learning Objective 2 The unadjusted trial balance of Data Solution at November 30, 2018, follows: Additional information at November 30, 2018: a. Accrued Service Revenue, $800. b. Depreciation, $350. c. Accrued Salaries Expense, $650. d. Prepaid […]

S4-11 Posting closing entries directly to T-accounts  Learning Objective 3 The following balances appear on the books of Sarah Simmons Enterprises: Retained Earnings, $29,600; Dividends, $10,500; Income Summary, $0; Service Revenue, $24,500; Salaries Expense, $6,200; Rent Expense, $3,500; and Advertising […]

Chapter 4 Completing the Accounting Cycle Review Questions 1.What document are financial statements prepared from? The financial statements are prepared from the adjusted trial balance or worksheet. 2. What does the income statement report 3.What does the statement of retained […]

P3-44B, cont. Requirement 5 The ending balances in the accounts are the same, regardless of which of the two approaches is used. Using Excel © 2018 Pearson Education, Inc. 3-1 Adjusting Journal Entry Three: $12,000 Collected in advance on December […]

P3-42B, cont. © 2018 Pearson Education, Inc. 3-1 OFFICE SUPPLIES Account No. Date Item Post Ref. Debit Credit Balance Debit Credit 2018 Dec. 31 Balance 700 Dec. 31 b. 200 500 BUILDING Account No. Date Item Post Ref. Debit Credit […]

P3-40B Journalizing adjusting entries and identifying the impact on financial statements Learning Objectives 3, 5 Harrison Fishing Charters has collected the following data for the December 31 adjusting entries: a. The company received its electric bill on December 31 for […]

P3A-38A Understanding the alternative treatment of prepaid expenses and unearned revenues Learning Objectives 3, 7 Appendix 3A Rapid Way Pack’n Mail completed the following transactions during 2018: Requirements 1. Journalize the transactions assuming that Rapid Way debits an asset account […]

P3-36A Journalizing and posting adjustments to the four-column accounts and preparing an adjusted trial balance Learning Objectives 3, 4 3. Adjusted trial balance $572,040 total The unadjusted trial balance of Guthrie Inn Company at December 31, 2018, and the data […]

SOLUTION Requirement 1 © 2018 Pearson Education, Inc. 3-1 Date Accounts and Explanation Debit Credit a. Dec. 31 Salaries Expense 3,200* Salaries Payable 3,200* To accrue salaries expense. b. Dec. 31 Insurance Expense 4,000* Prepaid Insurance 4,000* To record insurance […]

SOLUTION Requirement 1 E3-28, cont. Requirement 2 If the adjustments in Requirement 1 were not made, net income would be overstated by $7,050 overall. © 2018 Pearson Education, Inc. 3-1 Date Accounts and Explanation Debit Credit a. Jul. 31 Depreciation […]

SOLUTION Requirement 1 Accounts Receivable Salaries Payable Service Revenue Bal. 1,500 0 Bal. 4,100 Bal. Office Supplies Unearned Revenue Salaries Expense Bal. 700 900 Bal. Bal. 800 Prepaid Rent Supplies Expense Bal. 2,240 Bal. 0 Equipment Rent Expense Bal. 8,000 […]

Exercises E3-18 Comparing cash and accrual basis accounting and applying the revenue recognition principle Learning Objectives 1, 2 Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays $1,000 in advance on March 3 […]

S3-9 Journalizing and posting an adjusting entry for unearned revenue Learning Objective 3 Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period. Requirements 1. Record the journal entry to record […]

Chapter 3 The Adjusting Process Review Questions 1. What is the difference between cash basis accounting and accrual basis accounting? 2. Which method of accounting (cash or accrual basis) is consistent with Generally Accepted Accounting Principles? Accrual basis accounting is […]

Practice Set P2-43 Journalizing transactions, posting to T-accounts, and preparing a trial balance Consider the following transactional data for the first month of operations for Crystal Clear Cleaning. Nov. 1 Stockholders contributed $15,000 and a truck, with a market value […]

Using Excel P2-41 Using Excel to journalize and post transactions, and to create financial statements Redmond Corporation started operations on April 1, 2018. Seventeen transactions occurred during April. Financial statements are prepared at the end of the month. Requirements 1. […]

P2-38B Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance Learning Objectives 3, 4 3. Cash Balance $20,250 The trial balance of John Menning, CPA, is dated March 31, 2018: During April, the business completed the […]

P2-36B, cont. © 2018 Pearson Education, Inc. 2-1 Nov. 30 Utilities Expense 650 Utilities Payable 650 30 Dividends 2,800 Cash 2,800 Requirements 2 and 3 Cash Accounts Payable Nov. 1 41,000 27,000 Nov. 7 Nov. 14 2,300 3,500 Nov. 4 […]

P2-34A Preparing financial statements from the trial balance and calculating the debt ratio Learning Objectives 4, 5 2. Ending Retained Earnings $11,788 The trial balance as of July 31, 2018, for Sara Simon, Registered Dietician, is presented below: Requirements 1. […]

P2-31A, cont. © 2018 Pearson Education, Inc. 2-1 PREPAID INSURANCE Account No. 131 Date Item Post Ref. Debit Credit Balance Debit Credit Jan. 30 J1 1,200 1,200 LAND Account No. 141 Date Item Post Ref. Debit Credit Balance Debit Credit […]

SOLUTION Requirement 1 © 2018 Pearson Education, Inc. 2-1 Date Accounts and Explanation Post Ref. Debit Credit July 1 Cash 63,000 Common Stock 63,000 5 Rent Expense 510 Cash 510 9 Land 23,000 Cash 23,000 10 Office Supplies 1,600 Accounts […]

SOLUTION Requirement 2 E2-24, cont. 14 Salaries Expense 510 1,900 Cash 110 1,900 18 Utilities Expense 530 370 Utilities Payable 220 370 21 Accounts Payable 210 500 Cash 110 500 25 Accounts Receivable 120 5,700 Service Revenue 410 5,700 28 […]

E2-18 Analyzing and journalizing transactions Learning Objective 3 Journalize the transactions of Wilke Technology Solutions. Include an explanation with each journal entry. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Advertising; Land; Building; Accounts Payable; Unearned Revenue; Common […]

Exercises E2-10 Using accounting vocabulary Learning Objectives 1, 2, 3, 4 Match the accounting terms with the corresponding definitions. 1. Posting 2. Account 3. Debit 4. Journal 5. Chart of accounts 6. rial balance 7. Normal balance 8. Ledger 9. […]