会计学原理Financial-Accounting-by-Robert-Libby第八版-第三章-答案

会计学原理英文版Accounting Principles。

Accounting is the language of business. It is the process of recording, summarizing, analyzing, andinterpreting financial information. The principles of accounting provide the framework for the preparation and presentation of financial statements. These principles ensure that the financial information is relevant, reliable, and comparable.The basic principles of accounting include the following:1. Accrual Principle: This principle states thatrevenue and expenses should be recognized when they are incurred, regardless of when cash is received or paid. This means that revenue is recorded when it is earned, and expenses are recorded when they are incurred, regardless of when cash is exchanged.2. Matching Principle: This principle states that expenses should be matched with the revenues they help to generate. This ensures that the financial statements accurately reflect the results of operations for a specific period.3. Cost Principle: This principle states that assets should be recorded at their original cost, rather than at their current market value. This provides a reliable and objective basis for valuing assets.4. Full Disclosure Principle: This principle requires that all relevant information that could affect the decisions of financial statement users should be disclosed in the financial statements or in the accompanying notes.5. Going Concern Principle: This principle assumes thata business will continue to operate indefinitely. This allows for the use of historical cost in valuing assets and liabilities, as well as the use of the accrual basis of accounting.6. Materiality Principle: This principle states that information is material if its omission or misstatement could influence the economic decisions of users of financial statements. Materiality is based on the nature and size of the item.7. Conservatism Principle: This principle states that when in doubt, accountants should choose the method that will result in the least favorable financial statement. This helps to ensure that financial statements are not overstated.These principles form the foundation of accounting and are essential for the preparation of accurate and reliable financial statements. By adhering to these principles, accountants can ensure that the financial information they provide is useful for decision-making purposes.In addition to these basic principles, there are also specific accounting standards and regulations that must be followed, such as the Generally Accepted AccountingPrinciples (GAAP) and the International Financial Reporting Standards (IFRS). These standards and regulations provide further guidance on how to prepare and present financial statements in accordance with the principles of accounting.In conclusion, the principles of accounting areessential for the preparation and presentation of financial information. By following these principles, accountants can ensure that the financial statements are relevant, reliable, and comparable. This in turn provides valuable information for decision-making purposes and helps to maintain the integrity and transparency of the financial reporting process.。

会计学原理英文版第Principles of AccountingIntroductionAccounting, often referred to as the language of business, is a systematic process of recording, analyzing, and reporting financial transactions. It provides crucial information to businesses, investors, and other stakeholders about thefinancial health and performance of an organization. Accounting principles serve as the foundation for recording and reporting financial information accurately and consistently. This paper will explore the key principles of accounting and their importance in financial reporting.Accrual PrincipleThe accrual principle states that financial transactions should be recorded in the accounting period in which they occur, rather than when cash is received or paid. This principle ensures that revenues and expenses are recognized in the period in which they are earned or incurred. It enables businesses to present a more accurate and reliable picture of their financial performance.Principle of Historical CostThe historical cost principle states that assets should be recorded and reported at their original cost, which includesboth the purchase price and any other costs necessary to get the asset ready for use. This principle provides businesses with a reliable basis to measure and report their financial position. It also allows for consistent and objective valuation of assets, as opposed to subjective estimation.Matching PrincipleThe matching principle states that businesses should recognize expenses incurred in generating revenue in the same period as the revenue they help to generate. This principle ensures that financial statements accurately reflect the relationship between revenues and the expenses necessary to earn those revenues. By matching revenues and expenses, businesses can present a more accurate measure of their profitability.Conservatism PrincipleThe conservatism principle suggests that when there is uncertainty in accounting estimates, businesses should adopt a more conservative approach. This means that businesses shoulderr on the side of caution and recognize potential losses or expenses rather than potential gains. This principle helps to prevent overstatement of assets and revenues, and increases the reliability of financial statements.Consistency PrincipleMateriality PrincipleThe materiality principle states that businesses should only include information in financial statements if it is significant enough to influence the decision-making of users. This principle allows businesses to focus on the most relevant and important information, while avoiding excessive details that may distort the overall picture. Materiality is determined based on both quantitative and qualitative factors.Importance of Accounting PrinciplesConclusionAccounting principles serve as the foundation for recording, analyzing, and reporting financial transactions. They ensure accuracy, consistency, and reliability in financial reporting. The accrual principle, historical cost principle, matching principle, conservatism principle, consistency principle, and materiality principle are key principles that guide financial accounting practices. By adhering to these principles, businesses can present a more accurate and meaningful picture of their financial health and performance.。

financial accounting robert中文版-回复什么是财务会计？（What is financial accounting?）财务会计是一种会计学分支，主要关注企业的财务数据和信息处理。

它提供了管理层、投资者、债权人和其他利益相关方所需的关于企业财务状况和业绩的可靠信息。

财务会计有几个主要目标。

首先，它旨在提供关于企业财务状况的准确和全面的信息。

该信息帮助各方了解企业的收入、支出、资产和负债等重要指标。

其次，财务会计还要提供有关企业经营业绩的信息，包括销售收入、利润和现金流量等。

最后，财务会计帮助检查企业的合规性，确保其遵守法律、法规和会计准则。

财务会计的核心概念是“会计周期”（accounting cycle）。

会计周期由一系列步骤组成，用于处理和报告企业的财务数据。

以下是财务会计的关键步骤：1. 识别和记录交易：首先，财务会计通过识别和记录企业的交易来开始。

这些交易可能包括销售产品、购买材料、支付工资等。

2. 准备原始账目：在这一步骤中，会计师将交易的细节记录在原始账目中。

原始账目包括会计方程中的资产、负债和所有者权益项。

3. 进行分类和分析：财务会计对原始账目进行分类和分析，将交易归类到不同的财务报表项目中。

这些项目包括资产、负债、所有者权益、收入和费用。

4. 编制财务报表：根据分类和分析的结果，财务会计编制企业的财务报表。

常见的财务报表包括资产负债表、利润表和现金流量表。

5. 审核财务报表：企业的财务报表需要经过外部会计师事务所的审计，以确保其准确性和可靠性。

审计过程包括对企业的账目、凭证和其他相关文件的审查。

6. 报告和分析：最后，财务会计将企业的财务报表通过适当的方式向利益相关方进行报告。

这些报告可以帮助投资者、债权人和管理人员评估企业的财务状况和业绩，并做出相应的决策。

财务会计是企业管理和决策的重要工具。

通过提供准确和可靠的财务信息，它帮助各方了解企业的财务状况和业绩情况，并帮助他们做出明智的决策。

会计学原理FinancialAccountingbyRobertLibby第八版第十一Chapter 11 - Reporting and Interpreting Owners’ EquityChapter 11Reporting and Interpreting Owners’ Equity__ TO __NS1. A corporation is a separate legal entity (authorized by law to operate as an individual).It is owned by a number of persons and/or entities whose ownership is evidenced by shares of capital stock. Its primary advantages are: (a) transferability of ownership, (b) limited liability to the owners, and (c) the ability to accumulate large amounts of resources. 2. The charter of a corporation is a legal document from the state that authorizes itscreation as a separate legal entity. The charter specifies the name of the entity, its purpose, and the kinds and number of shares of capital stock it can issue. 3. (a) Authorized capitalstock―the maximum number of shares of stock that can be sold and issued as specified in the charter of the corporation.(b) Issued capital stock―the total number of shares of capital stock that havebeen issued by the corporation at a particular date. (c) Outstanding capital stock―the number of shares currently owned by thestockholders.4. Common stock―the usual or normal stock of the corporation. It is the voting stockand generally ranks after the preferred stock for dividends and assets distributed upon dissolution. Often it is called the residual equity. Common stock may be either par value or no-par value.Preferred stock―when one or more additional classes of stock are issued, the additional classes are called preferred stock. Preferred stock has modifications that make it different fromcommon stock. Generally, preferred stock has both favorable and unfavorable features in comparison with common stock. Preferred stock usually is par value stock and usually specifies a dividend rate such as D6% preferred stock.‖Chapter 11 - Reporting and Interpreting Owners’ Equity5. Par value is a nominal per share amount established for the common stock and/orpreferred stock in the charter of the corporation, and is printed on the face of each stock certificate. The stock that is sold by a corporation to investors above par value is said to have sold at a premium, while stock that is sold below par is said to have sold at a discount. The laws of practically all states forbid the initial sale of stock by a corporation to investors below par value. No-par value stock does not have an amount per share specified in the charter. As a consequence, it may be issued at any price without involving a discount or a premium. It avoids giving the impression of a value that is not present. 6. The usual characteristics of preferred stock are: (1) dividend preferences, (2) conversion privileges, (3) asset preferences, and (4) nonvoting specifications. 7. The two basic sources of stockholders’ equity are:Contributed capital―the amount invested by stockholders by purchase from the corporation of shares of stock. It is comprised of two separate elements: (1) the par or stated amount derived from the sale of capital stock (common or preferred) and(2) the amount received in excess of par or stated value.Retained earnings―the accumulated amount of all ne t income since the organization of the corporation, less losses and less the accumulated amount of dividends paid by the corporation since organization.8. Stockholders’ equity is accounted for in terms of source. This means that severalaccounts are maintained for the various sources of stockholders’ equity, such as common stock, preferred stock, contributed capital in excess of par, and retained earnings. 9. Treasury stock is a corporation’s own capital stock that was sold (issued) andsubsequently reacquired by the corporation. Corporations frequently purchase shares of their own capital stock for sound business reasons, such as to obtain shares needed for employees’ bonus plans, to influence the market price of the stock, to increase earnings per share amounts, and to have shares on hand for use in the acquisition of other companies. Treasury stock, while held by the issuing corporation, confers no voting, dividend, or other stockholder rights. 10. Treasury stock is reported on the balance she et under stockholders’ equity as adeduction; that is, as contra stockholders’ equity. Any Dgain or loss‖ on treasury stock that has been sold is reported on the financial statements as an addition to contributed capital if a gain; if a loss, it is deducted from any previous contributed capital, or otherwise from retained earnings.Chapter 11 - Reporting and Interpreting Owners’ Equity11. The two basic requirements to support a cash dividend are: (1) cash on hand or theability to obtain cash sufficient to pay the dividend and (2) a sufficient balance in retained earnings, because the dividend represents a return of earnings to the stockholders. A cash dividend reduces both the assets of a corporation and stockholders’ equity by the amount o f the dividend. 12. Cumulative preferred stock has a dividend preference such that, should thedividends on the preferred stock for any year, or series of years, not be paid, dividends cannot be paid to the common stockholders until all such dividends in arrears are paid to the preferred stockholders. Noncumulative preferred stock does not have this preference; therefore, dividends not paid in past periods will never be paid to the preferred stockholders. 13. A stockdividend involves the issuance to the stockholders of a dividend in thecorporation’s own stock (rather than cash). A stock dividend is significantly different from a cash dividend in that the corporation does not disburse any assets, while in the case of a cash dividend, cash is decreased by the amount of the dividend.A cash dividend also reduces total stockholders’ equity by the amount of the dividend. In contrast, a stock dividend does not change total stockholders’ equity. 14. The primary purposes for issuing a stock dividend are: (1) to maintain dividendconsistency; that is, to pay dividends each year either in cash or in capital stock, and (2) to capitalize retained earnings; that is, a stock dividend requires a transfer from the Retained Earnings account to the permanent contributed capital accounts for the amount of the dividend. Although this transfer does not change stockholders’ equity in total, it does cause a shift from retained earnings to contributed capital. 15. When a dividend is declared and paid, the three important dates are:Declaration date―the date on which the board of directors votes the dividend. In the case of a cash dividend, a dividend liability comes into existence on this date and must be recordedas a debit to Retained Earnings and as a credit to Dividends Payable.Date of record―this date usually is about one month after the date of declaration. It is the date on which the corporation extracts from its stockholders’ records the list of individuals owning shares. The dividend is paid only to those names listed on the record date. No entry in the accounts is made on this date.Date of payment―the date on which the cash is disbursed to pay the dividend. It follows the date of record as specified in the dividend announcement. The entry to record the cash disbursement for the dividend is a debit to Dividends Payable and a credit to Cash.Chapter 11 - Reporting and Interpreting Owners’ Equity16. Retained earnings is the accumulated amount of all net income of the corporationless all losses and less the accumulated amount of all dividends declared to date. The primary components of retained earnings are: beginning balance, plus net income, less net losses, minus dividends declared, equals the ending balance.__ TO __E CHOICE1. c) 6. b)2. d) 7. c)3. b) 8. c)4. a) 9. d)5. c) 10. a)Chapter 11 - Reporting and Interpreting Owners’ EquityAuthors’ Recommended Solution Time(Time in minutes)students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Chapter 11 - Reporting and Interpreting Owners’ EquityMINI- __ESM11C1.Stockholders may:a) Vote in the stockholders’ meeting (or by proxy) on major issues concerning management of the corporation. b) Participate proportionately with other stockholders in the distribution of the corporation’s profits. c) Share proportionately with other stockholders in the distribution of corporate assets upon liquidation.Being able to vote is the most important of the rights because this ensures that the owners have an input at the stockholders’ meeting and some control of the management of the corporation, thus enabling them to protect their rights as stockholders. M11C2.Unissued shares = 90,000 (268,000 C 178,000) M11C3.Cash (170,000 $21) (+A) ...........................................3,570,000Common Stock (170,000 $1) (+SE) ......................Capital in Excess of Par (+SE) .................................The journal entry would be different if the par value were $2: Cash (170,000 $21) (+A) ...........................................3,570,000Common Stock (170,000 $2) (+SE) ......................Capital in Excess of Par (+SE) .................................340,000 3,230,000170,000 3,400,000Chapter 11 - Reporting and Interpreting Owners’ EquityM11C4.Common stock is the basic voting stock issued by a corporation. It ranks after preferred stock for dividends and assets distributed upon liquidation of thecorporation. The dividend rate for common stock is determined by the board of directors, and is based on the company’s profitability. The dividend rate forpreferred stock is fixed by a contract. Common stock has more potential for growth than preferred stock if the company is profitable. On the other hand, the investor may lose more money with common stock than with preferred stock if the company is not profitable.Usually, It is advisable to invest in the common stock if you believe the company will be profitable. Common stock will receive a higher return on the $100,000 than preferred stock would.Chapter 11 - Reporting and Interpreting Owners’ EquityM11C7.April 15:Retained Earnings (-SE) .............................................. Dividends Payable (+L) ............................................June 14:Dividends Payable (-L) ................................................. Cash (-A) ..................................................................65,00065,00065,00065,000M11C10.Retained Earnings (-SE) .............................................. Common Stock (+SE) ..............................................800,000800,000Chapter 11 - Reporting and Interp reting Owners’ Equity__ESE11C1.Computation of End of Year Balance for Treasury Stock:Beginning balance Net increase307,532,841 383,407,665Ending balanceComputation of Shares Outstanding: E11C2.Req. 1 The number of authorized shares is specified in the corporate charter: 300,000. Req. 2 Issued shares are the sharessold to the public: 160,000 Req. 3Issued shares 160,000 Treasury stockIssued shares Treasury stock2,109,316,331 1,725,908,666Shares OutstandingOutstanding shares 135,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11C3. Req. 1Stockholders’ EquityContributed capital: Preferred stock, authorized 4,000 shares, issued and outstanding, 3,000 shares ...................................................... $ 24,000 Common stock, authorized 103,000 shares,issued and outstanding, 20,000 shares .................................................... 200,000 Capital in excess of par, preferred .............................................................. 36,000 Capital in excess of stated value, no-par common ..................................... 120,000 Total contributed capital .......................................................................... 380,000 Retained earnings .......................................................................................... 60,000 Total Stockholders’ Equity .......................................................................Req. 2The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders. E11C4.Req. 1 ($30 x 90,000 shares) - $1,600,000 = $1,100,000 Req.2 $900,000 - $1,000,000 + $800,000 = $700,000 Req.3 90,000 shares C 80,000 shares = 10,000 shares Req.4 EPS = $1,000,000 80,000 = $12.50Chapter 11 - Reporting and Interpreting Owners’ EquityE11C5.Req. 1a. Cash (5,600 shares x $20) (+A) ............................................ 112,000 Common stock (5,600 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stock at a premium.b.Cash (1,000 shares x $25) (+A) ............................................ Common stock (1,000 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stockat a premium.25,00056,000 56,000 10,000 15,000Req. 2Stockholders’ EquityContributed capital: Common stock, par $10, authorized 11,500 shares, outstanding 6,600 shares .................................................................... $ 66,000 Contributed capital in excess of par ........................................................ 71,000 Total contributed capital .......................................................................... 137,000 Retained earnings ...................................................................................... 12,000 Stockholders’ equity ...................................................................................Chapter 11 - Report ing and Interpreting Owners’ EquityE11C6. Req. 1Req. 2(Note that this solution is based on the number of Class A common shares that areoutstanding. We elect not to include the Class B shares because they are owned by the Dillard family. Usually, students do not question this assumption but when they do, it permits usto discuss reasons for issuing different types of common stock. In this case, owners of Class B shares are permitted to elect two-thirds of the board of directors, effectively letting the founding family maintain control of a public company). Number of shares outstanding 2022年: 118,529,925 shares issued minus 73,099,319 Number of shares outstanding 2022年: 117,706,523 shares issued minus 61,740,439 Req. 3(In thousands) Retained earnings for 2022年: $3,107,344minusnet income for 2022年$463,909 plus dividends for 2022年$10,002 = $2,653,437 Req. 4(thousand). Req. 5Treasury stock transactions decreased stockholders’ equity by $490,786 (thousand) ($1,846,312 - $1,355,526). Req. 6 For 2022年, treasury stock cost per share: $1,846,312 (thousand) ÷ 73,099,319 shares =Chapter 11 - Reporting and Interpreting Owners’ EquityE11C7.Req. 1a. Cash (50,000 shares x $50) (+A) .......................................... 2,500,000 Common stock (50,000 shares x $2) (+SE) ...................... 100,000 Capital in excess of par, common stock (+SE) ..................2,400,000 Sold common stock at a premium. b.Treasury stock (2,000 shares x $52) (+XSE, -SE) ................ Cash (-A) ........................................................................... Bought treasury stock.104,000104,000Req. 2Stockholders’ EquityContributed capital: Common stock, par $2, authorized 80,000 shares, issued 50,000 shares .......................................................................... $ 100,000 Contributed capital in excess of par ........................................................ 2,400,000 Total contributed capital .......................................................................... 2,500,000 Treasury stock............................................................................................ (104,000 ) Stockholders’ equity ................................................................................... E11C8.Shareholders’ equity (deficit) in thousands:Common stock, par value $.01 per share; 100,000,000 shares authorized, 33,981,509 shares issued and outstanding at December 31, 2022年, 34,150,389 shares issued and outstandingat December 31, 2022年Additional paid-in capital Accumulated deficitTotal shareholders’ equity2022年2022年340 342 198,304 200,524 (118,282 ) (98,733 ) 80,362 102,133Chapter 11 - Reporting and Interpreting Owners’ EquityE11C9.Stockholders’ EquityContributed capital: Preferred stock, 8%, par $50, authorized 59,000 shares, issued and outstanding, 20,000 shares ............................................... $1,000,000 Common stock, par $10, authorized 98,000 shares, issued, 78,000 shares ......................................................................... 780,000 Capital in excess of par, preferred stock ................................................. 600,000 Capital in excess of par, common stock .................................................. 780,000 Treasury stock ..................................................................................... (80,000) Retained earnings* ......................................................................................... 160,000 Total stockholders’ equity........................................................................ *($210,000 C $50,000 = $160,000.) E11C10.a. Cash (20,000 shares x $20) (+A) .......................................... 400,000 Common stock, no-par (+SE) ............................................ .b. Cash (6,000 shares x $40) (+A) ............................................ 240,000 Common stock, no-par (+SE) ...........................................c.Cash (7,000 shares x $30) (+A) ............................................ 210,000 Preferred stock (7,000 shares x $10) (+SE) ...................... Capital in excess of par, preferred (+SE) ..........................400,000 240,000 70,000 140,000Req. 2Yes, it is ethical as long as there is a full disclosure of relevant information. In any arm’slength transaction, an informed buyer will pay the market value of the stock.Chapter 11 - Reporting and Interpreting Owners’ EquityE11C11. Req. 1Number of preferred shares issued: $100,000 Req. 2Number of preferred shares outstanding: 10,000 shares issued minus 500 shares held Req. 3Average sales price per share of preferred stock when issued: ($100,000 + $15,000) ÷ Req. 4Treasury stock transactions decreased stockholders’ equity by $8,000 (same as the decrease in corporate resources in 4 above). Req. 6Treasury stock cost per share: $9,500 ÷Req. 7Req. 8Issue price of common stock $600,000 ÷Chapter 11 - Reporting and Interpreting Owners’ EquityE11C12. Req. 1The number of shares that have been issuedis computed by dividing the common stock account ($4,008 million) by the par value of the shares ($1 per share) or approximately 4,008,000,000 shares. Req. 2Retained earnings end of 2022年 ............ $70,682,000,000 Net income for 2022年 ............................ 10,756,000,000 Dividends for 2022年 ............................... (5,811,600,000 ) Retained earnings end of 2022年 ............ $75,626,400,000The amount of retained earnings is an estimate because we do not know the exactnumber of shares outstanding (because we do not know the number of shares in treasury stock). This number is needed todetermine the amount of dividends paid during 2022年. We based the dividends on the estimate calculated in the previous requirement.E11C13.The treasury stock account is a contra equity account, meaning that it subtracts from the total stockholders’ equity. Cash also decreases on the balance sheet by the same amount.Req. 2Many companies repurchase common stock in order to develop an employee bonus plan that provides workers with shares of the company’s stock as part of their compensation. Because of SEC regulations concerning newly issued shares, companies find it cheaper to give their employees shares of stock that were purchased from stockholders than to issue new shares. In this case, the company mentions the goal of enhancing shareholders’ value. If the company main tains its current level of income, earnings per share will increase with fewer shares outstanding. Themanagement expects that the increase in EPS will be reflected in an increase in stock price. Req. 3Shares that are held in treasury stock do not participate individend payments. As a result, the purchase of treasury stock will reduce the amount of dividends that the company must pay in future years.Chapter 11 - Reporting and Interpreting Owners’ EquityE11C14. Req. 1Stockholders’ Eq uityContributed capital:Common stock, authorized 100,000 shares, issued 34,000 shares, ofwhich 2,000 shares are held as treasury stock .................................. Capital in excess of par ........................................................................ Total contributed capital .................................................................... Retained earnings ................................................................................... Total .................................................................................................. Less: Cost of treasury stock ................................................................. Total Stockholders’ Equity Req. 2The dividend yield ratio is 2.24% ([$16,000 32,000 shares] $22.29). While this yield seems small, it is a typical return on common stock. Investors receive a return from both dividends and stock price appreciation.Treasury stock does not receive dividends. As a result, dividends should be paid on 32,000 shares. E11C15.Req. 1a. Treasury stock (200 shares x $20) (+XSE, -SE) ................... Cash (-A) ........................................................................... Bought treasury stock.b.Cash (40 shares x $25) (+A) ................................................. Treasury stock(40 shares x $20) (-XSE, +SE) .................. Capital in excess of par (+SE) ........................................... Sold treasury stock.Capital in excess of par (-SE) ............................................... Treasury stock (30 shares x $20) (-XSE, +SE) ................ Sold treasury stock.4,0001,000450 1504,000800 200600$680,000 163,000 843,000 89,000 932,000 25,000 c. Cash (30 shares x $15) (+A) .................................................Req. 2It is not possible to make a Dprofit‖ or Dloss‖ on treasury stock transactions. Therefore, these transactions do not affect the income statement.Chapter 11 - Reporting and Interpreting Ow ners’ EquityE11C16.Req. 1 Feb. 1:Treasury stock, common (160 shares x $20) (+XSE, -SE) Cash (-A) ........................................................................July 15:Cash (80 shares x $21) (+A) ............................................. Treasury stock, common (-XSE, +SE) ........................... Capital in excess of par (+SE) .......................................Sept. 1:Cash (50 shares x $19) (+A) ............................................. Capital in excess of par (-SE) ............................................ Treasury stock, common (50 shares x $20) (-XSE, +SE) . Req. 2Dividends are not paid on treasury stock. Therefore, the amount of total cash dividends paid is reduced when treasury stock is purchased. Req. 3The sale of treasury stock for more or less than its original purchase price does not have an impact on net income. Thetransaction affects only balance sheet accounts. The cash received from the sale of treasury stock is a cash inflow which would affect the Statement of Cash Flows in the financing activities section.3,2001,680950 503,2001,600 80 1,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11C17. Req. 1Case 1: When companies unexpectedly announce increases in dividends, stock prices typically increase. Depending on course objective, the instructor may want to discuss research in finance concerning dividend policy.Case 2: Stock price is based on expectations. If the increase in operatingperformance was not expected, the stock price should increase. It is not necessary to increase dividends to have a favorable stock price reaction.Case 3: Stock dividends do not provide any economic valuebut they may have a signal effect and are often associated with increases in cash dividends. As a result, stock dividends do not appear to directly cause an increase in stock price but are often associated with factors that do impact favorably on price.Req.2Stock prices react to underlying economic events and not changes in reporting methods, per se. Markets are relatively effective in recognizing the differencebetween profits generated by operations and profits generated by the use of liberal accounting policies.。

Chapter 11 - Reporting and Interpreting Owners’ EquityChapter 11Reporting and Interpreting Owners’ EquityANSWERS TO QUESTIONS1. A corporation is a separate legal entity (authorized by law to operate as an individual).It is owned by a number of persons and/or entities whose ownership is evidenced by shares of capital stock. Its primary advantages are: (a) transferability of ownership, (b) limited liability to the owners, and (c) the ability to accumulate large amounts of resources.2. The charter of a corporation is a legal document from the state that authorizes itscreation as a separate legal entity. The charter specifies the name of the entity, its purpose, and the kinds and number of shares of capital stock it can issue.3. (a) Authorized capital stock—the maximum number of shares of stock that can besold and issued as specified in the charter of the corporation.(b) Issued capital stock—the total number of shares of capital stock that havebeen issued by the corporation at a particular date.(c) Outstanding capital stock—the number of shares currently owned by thestockholders.4. Common stock—the usual or normal stock of the corporation. It is the voting stockand generally ranks after the preferred stock for dividends and assets distributed upon dissolution. Often it is called the residual equity. Common stock may be either par value or no-par value.Preferred stock—when one or more additional classes of stock are issued, the additional classes are called preferred stock. Preferred stock has modifications that make it different fromcommon stock. Generally, preferred stock has both favorable and unfavorable features in comparison with common stock. Preferred stock usually is par value stock and usually specifies a dividend rate such as ―6% preferred stock.‖Chapter 11 - Reporting and Interpreting Owners’ Equity5. Par value is a nominal per share amount established for the common stock and/orpreferred stock in the charter of the corporation, and is printed on the face of each stock certificate. The stock that is sold by a corporation to investors above par value is said to have sold at a premium, while stock that is sold below par is said to have sold at a discount. The laws of practically all states forbid the initial sale of stock by a corporation to investors below par value. No-par value stock does not have an amount per share specified in the charter. As a consequence, it may be issued at any price without involving a discount or a premium. It avoids giving the impression of a value that is not present.6. The usual characteristics of preferred stock are: (1) dividend preferences, (2)conversion privileges, (3) asset preferences, and (4) nonvoting specifications.7. The two basic sources of stockholders’ equity are:Contributed capital—the amount invested by stockholders by purchase from the corporation of shares of stock. It is comprised of two separate elements: (1) the par or stated amount derived from the sale of capital stock (common or preferred) and(2) the amount received in excess of par or stated value.Retained earnings—the accumulated amount of all net income since the organization of the corporation, less losses and less the accumulated amount of dividends paid by the corporation since organization.8. Stockholders’ equity is accounted for in terms of source. This means that severalaccounts are maintained for the various sources of stockholders’equity, such as common stock, preferred stock, contributed capital in excess of par, and retained earnings.9. Treasury stock is a corporation’s own capital stock that was sold (issued) andsubsequently reacquired by the corporation. Corporations frequently purchase shares of their own capital stock for sound business reasons, such as to obtain shares needed for employees’ bonus plans, to influence the market price of the stock, to increase earnings per share amounts, and to have shares on hand for use in the acquisition of other companies. Treasury stock, while held by the issuing corporation, confers no voting, dividend, or other stockholder rights.10. Treasury stock is reported on the balance sheet under stockholders’equity as adeduction; that is, as contra stockholders’equity. Any ―gain or loss‖ on treasury stock that has been sold is reported on the financial statements as an addition to contributed capital if a gain; if a loss, it is deducted from any previous contributed capital, or otherwise from retained earnings.Chapter 11 - Reporting and Interpreting Owners’ Equity11. The two basic requirements to support a cash dividend are: (1) cash on hand or theability to obtain cash sufficient to pay the dividend and (2) a sufficient balance in retained earnings, because the dividend represents a return of earnings to the stockholders. A cash dividend reduces both the assets of a corporation and stockholders’ equity by the amount of the dividend.12. Cumulative preferred stock has a dividend preference such that, should thedividends on the preferred stock for any year, or series of years, not be paid, dividends cannot be paid to the common stockholders until all such dividends in arrears are paid to the preferred stockholders. Noncumulative preferred stock does not have this preference; therefore, dividends not paid in past periods will never be paid to the preferred stockholders.13. A stock dividend involves the issuance to the stockholders of a dividend in thecorporation’s own stock (rather than cash). A stock dividend is significantly diffe rent from a cash dividend in that the corporation does not disburse any assets, while in the case of a cash dividend, cash is decreased by the amount of the dividend. A cash dividend also reduces total stockholders’ equity by the amount of the dividend.In contrast, a stock dividend does not change total stockholders’ equity.14. The primary purposes for issuing a stock dividend are: (1) to maintain dividendconsistency; that is, to pay dividends each year either in cash or in capital stock, and (2) to capitalize retained earnings; that is, a stock dividend requires a transfer from the Retained Earnings account to the permanent contributed capital accounts for the amount of the dividend. Although this transfer does not change stockholders’ equity in total, it does cause a shift from retained earnings to contributed capital. 15. When a dividend is declared and paid, the three important dates are:Declaration date—the date on which the board of directors votes the dividend. In the case of a cash dividend, a dividend liability comes into existence on this date and must be recorded as a debit to Retained Earnings and as a credit to Dividends Payable.Date of record—this date usually is about one month after the date of declaration. It is the date on which the corporation extracts from its stockholders’ records the list of individuals owning shares. The dividend is paid only to those names listed on the record date. No entry in the accounts is made on this date.Date of payment—the date on which the cash is disbursed to pay the dividend. It follows the date of record as specified in the dividend announcement. The entry to record the cash disbursement for the dividend is a debit to Dividends Payable anda credit to Cash.Chapter 11 - Reporting and Interpreting Owners’ Equity16. Retained earnings is the accumulated amount of all net income of the corporationless all losses and less the accumulated amount of all dividends declared to date.The primary components of retained earnings are: beginning balance, plus net income, less net losses, minus dividends declared, equals the ending balance.ANSWERS TO MULTIPLE CHOICE1. c)2. d)3. b)4. a)5. c)6. b)7. c)8. c)9. d) 10. a)Chapter 11 - Reporting and Interpreting Owners’ EquityAuthors’ Recommended Solution Time(Time in minutes)students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Chapter 11 - Reporting and Interpreting Owners’ EquityMINI- EXERCISESM11–1.Stockholders may:a) Vote in the stockholders’ meeting (or by proxy) on major issues concerningmanagement of the corporation.b) Participate proportionately with other stockholders in the distribution of thecorporation’s profits.c) Share proportionately with other stockholders in the distribution of corporateassets upon liquidation.Being able to vote is the most important of the rights because this ensures that the owners have an input at the stockholders’ meeting and some control of the management of the corporation, thus enabling them to protect their rights as stockholders.M11–2.Unissued shares = 90,000 (268,000 – 178,000)M11–3.Cash (170,000 ⨯ $21) (+A) ...........................................3,570,000Common Stock (170,000 ⨯ $1) (+SE) ......................170,000 Capital in Excess of Par (+SE) .................................3,400,000 The journal entry would be different if the par value were $2:Cash (170,000 ⨯ $21) (+A) ...........................................3,570,000Common Stock (170,000 ⨯ $2) (+SE) ......................340,000 Capital in Excess of Par (+SE) .................................3,230,000Chapter 11 - Reporting and Interpreting Owners’ EquityM11–4.Common stock is the basic voting stock issued by a corporation. It ranks afterpreferred stock for dividends and assets distributed upon liquidation of thecorporation. The dividend rate for common stock is determined by the board of directors, and is based on the company’s profitability. The dividend rate forpreferred stock is fixed by a contract. Common stock has more potential for growth than preferred stock if the company is profitable. On the other hand, the investor may lose more money with common stock than with preferred stock if the company is not profitable.Usually, It is advisable to invest in the common stock if you believe the company will be profitable. Common stock will receive a higher return on the $100,000 than preferred stock would.Chapter 11 - Reporting and Interpreting Owners’ EquityM11–7.April 15:Retained Earnings (-SE) ..............................................65,000Dividends Payable (+L) ............................................65,000 June 14:Dividends Payable (-L) .................................................65,000Cash (-A) ..................................................................65,000M11–10.Retained Earnings (-SE) ..............................................800,000Common Stock (+SE) ..............................................800,000Chapter 11 - Reporting and Interpreting Owners’ EquityEXERCISESE11–1.Computation of End of Year Balance for Treasury Stock:Beginning balance 307,532,841Net increase 75,874,824Ending balance 383,407,665Computation of Shares Outstanding:Issued shares 2,109,316,331Treasury stock ( 383,407,665)Shares Outstanding 1,725,908,666E11–2.Req. 1 The number of authorized shares is specified in the corporate charter: 300,000. Req. 2 Issued shares are the shares sold to the public: 160,000Req. 3 Issued shares 160,000Treasury stock (25,000)Outstanding shares 135,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11–3.Req. 1Stockholders’ EquityContributed capital:Preferred stock, authorized 4,000 shares,issued and outstanding, 3,000 shares ...................................................... $ 24,000 Common stock, authorized 103,000 shares,issued and outstanding, 20,000 shares .................................................... 200,000 Capital in excess of par, preferred .............................................................. 36,000 Capital in excess of stated value, no-par common ..................................... 120,000 Total contributed capital .......................................................................... 380,000 Retained earnings .......................................................................................... 60,000 Total Stockholders’ Equity....................................................................... $440,000 Req. 2The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders.E11–4.Req. 1 ($30 x 90,000 shares) - $1,600,000 = $1,100,000Req. 2 $900,000 - $1,000,000 + $800,000 = $700,000Req. 3 90,000 shares – 80,000 shares = 10,000 sharesReq. 4 EPS = $1,000,000 80,000 = $12.50Chapter 11 - Reporting and Interpreting Owners’ EquityE11–5.Req. 1a. Cash (5,600 shares x $20) (+A) ............................................ 112,000Common stock (5,600 shares x $10) (+SE) ...................... 56,000 Capital in excess of par, common stock (+SE) .................. 56,000 Sold common stock at a premium.b. Cash (1,000 shares x $25) (+A) ............................................ 25,000Common stock (1,000 shares x $10) (+SE) ...................... 10,000 Capital in excess of par, common stock (+SE) .................. 15,000 Sold common stock at a premium.Req. 2Stockholders’ EquityContributed capital:Common stock, par $10, authorized 11,500 shares,outstanding 6,600 shares .................................................................... $ 66,000 Contributed capital in excess of par ........................................................ 71,000 Total contributed capital .......................................................................... 137,000 Retained earnings ...................................................................................... 12,000 Stockholders’ equity ................................................................................... $149,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11–6.Req. 1Common stock, class A at par value: 118,529,925 X $0.01 = $1,185 (thousand)Req. 2(Note that this solution is based on the number of Class A common shares that are outstanding. We elect not to include the Class B shares because they are owned by the Dillard family. Usually, students do not question this assumption but when they do, it permits us to discuss reasons for issuing different types of common stock. In this case, owners of Class B shares are permitted to elect two-thirds of the board of directors, effectively letting the founding family maintain control of a public company).Number of shares outstanding 2012: 118,529,925 shares issued minus 73,099,319 shares held as treasury stock = 45,430,606.Number of shares outstanding 2011: 117,706,523 shares issued minus 61,740,439 shares held as treasury stock = 55,966,084.Req. 3(In thousands) Retained earnings for 2011: $3,107,344minusnet income for 2012 $463,909 plus dividends for 2012 $10,002 = $2,653,437Req. 4As of 2012, treasury stock had decreased corporate resources by $1,846,312 (thousand).Req. 5T reasury stock transactions decreased stockholders’ equity by $490,786 (thousand) ($1,846,312 - $1,355,526).Req. 6For 2012, treasury stock cost per share: $1,846,312 (thousand) ÷ 73,099,319 shares = $25.26.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–7.Req. 1a. Cash (50,000 shares x $50) (+A) .......................................... 2,500,000Common stock (50,000 shares x $2) (+SE) ...................... 100,000 Capital in excess of par, common stock (+SE) .................. 2,400,000 Sold common stock at a premium.b. Treasury stock (2,000 shares x $52) (+XSE, -SE) ................ 104,000Cash (-A) ........................................................................... 104,000 Bought treasury stock.Req. 2Stockholders’ EquityContributed capital:Common stock, par $2, authorized 80,000 shares,issued 50,000 shares .......................................................................... $ 100,000 Contributed capital in excess of par ........................................................ 2,400,000 Total contributed capital .......................................................................... 2,500,000 Treasury stock............................................................................................ (104,000 ) Stockholders’ equity ................................................................................... $2,396,000 E11–8.Shareholders’ equity (deficit) in thousands: 2010 2011 Common stock, par value $.01 per share; 100,000,000 shares authorized,33,981,509 shares issued and outstanding at December 31, 2010,34,150,389 shares issued and outstanding at December 31, 2011 340 342 Additional paid-in capital 198,304 200,524 Accumulated deficit (118,282 ) (98,733 ) Total shareholders’ equity80,362 102,133Chapter 11 - Reporting and Interpreting Owners’ EquityE11–9.Stockholders’ EquityContributed capital:Preferred stock, 8%, par $50, authorized 59,000 shares,issued and outstanding, 20,000 shares ............................................... $1,000,000 Common stock, par $10, authorized 98,000 shares,issued, 78,000 shares ......................................................................... 780,000 Capital in excess of par, preferred stock ................................................. 600,000 Capital in excess of par, common stock .................................................. 780,000 Treasury stock ..................................................................................... (80,000) Retained earnings* ......................................................................................... 160,000 Total stockholders’ equity........................................................................ $3,240,000 *($210,000 – $50,000 = $160,000.)E11–10.Req. 1a. Cash (20,000 shares x $20) (+A) .......................................... 400,000Common stock, no-par (+SE) ............................................ 400,000 .b. Cash (6,000 shares x $40) (+A) ............................................ 240,000Common stock, no-par (+SE) ........................................... 240,000 c. Cash (7,000 shares x $30) (+A) ............................................ 210,000Preferred stock (7,000 shares x $10) (+SE) ...................... 70,000 Capital in excess of par, preferred (+SE) .......................... 140,000 Req. 2Yes, it is ethical as long as there is a fu ll disclosure of relevant information. In any arm’s length transaction, an informed buyer will pay the market value of the stock.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–11.Req. 1Number of preferred shares issued: $100,000 $10 = 10,000Req. 2Number of preferred shares outstanding: 10,000 shares issued minus 500 shares held as treasury stock = 9,500.Req. 3Average sales price per share of preferred stock when issued: ($100,000 + $15,000) ÷10,000 shares = $11.50.Req. 4Decreased corporate resources by $9,500 - $1,500 = $8,000.Req. 5Treasury stock transactions decreased stockholders’ equity by $8,000 (same as the decrease in corporate resources in 4 above).Req. 6Treasury stock cost per share: $9,500 ÷ 500 shares = $19.00.Req. 7Total stockholders’ equity: $741,000.Req. 8Issue price of common stock $600,000 ÷ 8,000 shares = $75.00.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–12.Req. 1The number of shares that have been issuedis computed by dividing the common stock account ($4,008 million) by the par value of the shares ($1 per share) or approximately 4,008,000,000 shares.Req. 2Retained earnings end of 2011 ............ $70,682,000,000Net income for 2012 ............................ 10,756,000,000Dividends for 2012 ............................... (5,811,600,000 )Retained earnings end of 2012 ............ $75,626,400,000The amount of retained earnings is an estimate because we do not know the exact number of shares outstanding (because we do not know the number of shares in treasury stock). This number is needed to determine the amount of dividends paid during 2012. We based the dividends on the estimate calculated in the previous requirement.E11–13.The treasury stock account is a contra equity account, meaning that it subtracts from the total stockholders’ equity. Cash also decreases on the balance sheet by the same amount.Req. 2Many companies repurchase common stock in order to develop an employee bonus plan that provides workers with shares of the company’s stock as part of their compensation. Because of SEC regulations concerning newly issued shares, companies find it cheaper to give their employees shares of stock that were purchased from stockholders than to issue new shares. In this case, the company mentions the goal of enhancing shareholder s’ value. If the company maintains its current level of income, earnings per share will increase with fewer shares outstanding. The management expects that the increase in EPS will be reflected in an increase in stock price.Req. 3Shares that are held in treasury stock do not participate in dividend payments. As a result, the purchase of treasury stock will reduce the amount of dividends that the company must pay in future years.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–14.Req. 1Stockholders’ EquityContributed capital:Common stock, authorized 100,000 shares, issued 34,000 shares, ofwhich 2,000 shares are held as treasury stock .................................. $680,000 Capital in excess of par ........................................................................ 163,000 Total contributed capital .................................................................... 843,000 Retained earnings ................................................................................... 89,000 Total .................................................................................................. 932,000 Less: Cost of treasury stock ................................................................. 25,000 Total Stockholders’ Equity$907,000 Req. 2The dividend yield ratio is 2.24% ([$16,000 ÷ 32,000 shares] ÷ $22.29). While this yield seems small, it is a typical return on common stock. Investors receive a return from both dividends and stock price appreciation.Treasury stock does not receive dividends. As a result, dividends should be paid on 32,000 shares.E11–15.Req. 1a. Treasury stock (200 shares x $20) (+XSE, -SE) ................... 4,000Cash (-A) ........................................................................... 4,000 Bought treasury stock.b. Cash (40 shares x $25) (+A) ................................................. 1,000Treasury stock(40 shares x $20) (-XSE, +SE) (800)Capital in excess of par (+SE) (200)Sold treasury stock.c. Cash (30 shares x $15) (+A) (450)Capital in excess of par (-SE) (150)Treasury stock (30 shares x $20) (-XSE, +SE) (600)Sold treasury stock.Req. 2It is not possible to make a ―profit‖ o r ―loss‖ on treasury stock transactions. Therefore, these transactions do not affect the income statement.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–16.Req. 1Feb. 1:Treasury stock, common (160 shares x $20) (+XSE, -SE) 3,200Cash (-A) ........................................................................ 3,200 July 15:Cash (80 shares x $21) (+A) ............................................. 1,680Treasury stock, common (-XSE, +SE) ........................... 1,600 Capital in excess of par (+SE) (80)Sept. 1:Cash (50 shares x $19) (+A) (950)Capital in excess of par (-SE) (50)Treasury stock, common (50 shares x $20) (-XSE, +SE) 1,000.Req. 2Dividends are not paid on treasury stock. Therefore, the amount of total cash dividends paid is reduced when treasury stock is purchased.Req. 3The sale of treasury stock for more or less than its original purchase price does not have an impact on net income. The transaction affects only balance sheet accounts. The cash received from the sale of treasury stock is a cash inflow which would affect the Statement of Cash Flows in the financing activities section.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–17.Req. 1Case 1: When companies unexpectedly announce increases in dividends, stock prices typically increase. Depending on course objective, the instructor may want to discuss research in finance concerning dividend policy.Case 2: Stock price is based on expectations. If the increase in operatingperformance was not expected, the stock price should increase. It is not necessary to increase dividends to have a favorable stock price reaction.Case 3: Stock dividends do not provide any economic value but they may have a signal effect and are often associated with increases in cash dividends. As a result, stock dividends do not appear to directly cause an increase in stock price but are often associated with factors that do impact favorably on price.Req.2Stock prices react to underlying economic events and not changes in reportingmethods, per se. Markets are relatively effective in recognizing the differencebetween profits generated by operations and profits generated by the use of liberal accounting policies.Chapter 11 - Reporting and Interpreting Owners’ Equity E11–18.Req. 1 Preferred(5,000Shares)Common(50,000Shares) Totala) Noncumulative:Preferred ($50,000 x 10%) ...................................... $ 5,000 $ 5,000 Balance to common ($85,000 – $5,000) ................. $80,000 80,000$ 5,000 $80,000 $85,000 b) Cumulative:Preferred, arrears ($50,000 x 10% x 2 years) ......... $ 10,000 $ 10,000 Preferred, current year ($50,000 x 10%) ................. 5,000 5,000 Balance to common ($85,000 – $10,000 – $5,000) $70,000 70,000$15,000 $70,000 $85,000Req. 2The total dividend amount and dividends per share of common stock were less underthe second assumption because the preferred stock preferences increased while at the same time the total dividend amount remained stable.Req. 3Larger total dividend distributionsare more favorable for the common stockholders.E11–19.ItemEffect of Cash Dividend (Preferred) Effect of Stock Dividend (Common)Assets –No effect on declaration date.–Decreased by the amount of thedividend ($7,200) on paymentdate. No effect because no assets are disbursed.Liabilities –Increased on declaration date($7,200).–Decreased on payment date($7,200). No effect—no entry on declaration date because no contractual liability is created (no assets are disbursed).Stockholders’equity Decreased by the amount of thedividend (retained earningsdecreased by $7,200).–Total stockho lders’ equity notchanged.–Retained earnings reduced andcontributed capital increased bysame amount ($120,000).。

第一章1.下列选项中属于近代会计史中的两个里程碑的是（）。

Which one of thefollowing items could be considered as the two milestones in the modernaccounting history ?( ).答案:帕乔利复式簿记著作的出版和会计职业的出现The publication of Pacioli’s double-entry bookkeeping and the emergence of the accounting profession2.通过归集一定计算对象上的全部费用，借以确定各该对象的总成本和单位成本的一种专门会计方法是（）。

A special accounting method fordetermining the total cost and unit cost of each object by aggregating thetotal expenses of a certain calculation object is ( )答案:成本计算Costcalculation3.会计具有双重属性，即（）。

Accounting has double attributes, namely ( ).答案:技术性与社会性Technicality and sociality4.关于会计的产生与发展，下列说法中正确的有（）。

The following correctstatements on the origin and development of accounting include ( ).答案:经济越发展，会计越重要The faster economy develops, the more importantaccounting is.;会计是生产活动发展到一定阶段的产物Accounting is theproduct of the development of production activities to a certain stage.;会计是为适应生产活动发展的需要而产生的Accounting is generated to meet theneeds of the development of production activities.;会计从产生到现在经历了一个漫长的发展历程 Accounting has experienced a long journey ofdevelopment since its inception.5.下列关于会计作用的说法正确的有（）。

《会计学原理（英文）》教学大纲王燕祥编写工商管理专业课程教学大纲610 目录Chapter 1 Accounting in Action 第一章会计实践活动 (613)学习目标 (613)Teaching and homework hours 教学与作业时间 (613)Reading and References 学生必读和参考书目 (613)Chapter 2 The Recording Process 第二章记录过程 (615)学习目标 (615)Teaching and homework hours 教学与作业时间 (615)Reading and References 学生必读和参考书目 (615)Chapter 3 Adjusting the Accounts 第三章调整账户 (617)学习目标 (617)Teaching and homework hours 教学与作业时间 (617)Reading and References 学生必读和参考书目 (617)Chapter 4 Completion of the Accounting Cycle 第四章完成会计循环 (619)学习目标 (619)Teaching and homework hours 教学与作业时间 (619)Reading and References 学生必读和参考书目 (619)Chapter 5 Accounting for Merchandising Operations 第五章商品经营活动的会计核算 (621)学习目标 (621)Teaching and homework hours 教学与作业时间 (621)Reading and References 学生必读和参考书目 (621)Chapter 6 Inventories 第六章存货 (623)学习目标 (623)Teaching and homework hours 教学与作业时间 (624)Reading and References 学生必读和参考书目 (624)Chapter 7 Accounting Information Systems 第七章会计信息系统 (626)学习目标 (626)Teaching and homework hours 教学与作业时间 (626)Reading and References 学生必读和参考书目 (626)Chapter 8 Internal Control and Cash 第八章内部控制和现金 (628)学习目标 (628)Teaching and homework hours 教学与作业时间 (628)Reading and References 学生必读和参考书目 (628)Chapter 9 Accounting for Receivables 第九章应收款项的会计核算 (630)学习目标 (630)Teaching and homework hours 教学与作业时间 (630)Reading and References 学生必读和参考书目 (630)Chapter 10 Plant Assets, Natural Resources, and Intangible Assets 第十章厂场资产、自然资源和无形资产 (632)会计学原理（英文）学习目标 (632)Teaching and homework hours 教学与作业时间 (632)Reading and References 学生必读和参考书目 (633)Chapter 11 Current Liabilities and Payroll Accounting 第十一章流动负债和工资的核算 (634)学习目标 (634)Teaching and homework hours 教学与作业时间 (634)Reading and References 学生必读和参考书目 (634)Chapter 12 Accounting Principles 第十二章会计原则 (636)学习目标 (636)Teaching and homework hours 教学与作业时间 (636)Reading and References 学生必读和参考书目 (636)Chapter 13 Accounting for Partnerships 第十三章合伙企业的会计核算 (638)学习目标 (638)Teaching and homework hours 教学与作业时间 (638)Reading and References 学生必读和参考书目 (638)Chapter 14 Corporations: Organization and Capital Stock Transactions 第十四章公司：组织和股本交易 (640)学习目标 (640)Teaching and homework hours 教学与作业时间 (640)Reading and References 学生必读和参考书目 (640)Chapter 15 Corporations: Dividends, Retained Earnings, and Income Reporting 第十五章股利、保留盈余和收益报告 (642)学习目标 (642)Teaching and homework hours 教学与作业时间 (642)Reading and References 学生必读和参考书目 (642)Chapter 16 Long-Term Liabilities 第十六章长期负债 (644)学习目标 (644)Teaching and homework hours 教学与作业时间 (644)Reading and References 学生必读和参考书目 (644)Chapter 17 Investments 第十七章投资 (646)学习目标 (646)Teaching and homework hours 教学与作业时间 (646)Reading and References 学生必读和参考书目 (646)Chapter 18 The Statement of Cash Flows 第十八章现金流量表 (648)学习目标 (648)Teaching and homework hours 教学与作业时间 (648)Reading and References 学生必读和参考书目 (648)Chapter 19 Financial Statement Analysis 第十九章财务报表分析 (650)学习目标 (650)Teaching and homework hours 教学与作业时间 (650)Reading and References 学生必读和参考书目 (650)Chapter 20 Managerial Accounting 第二十章管理会计 (652)611工商管理专业课程教学大纲612 学习目标 (652)Teaching and homework hours 教学与作业时间 (652)Reading and References 学生必读和参考书目 (652)Chapter 21 Job Order Cost Accounting 第二十一章分批成本法 (654)学习目标 (654)Teaching and homework hours 教学与作业时间 (654)Reading and References 学生必读和参考书目 (654)Chapter 22 Process Cost Accounting 第二十二章分步成本法 (656)学习目标 (656)Teaching and homework hours 教学与作业时间 (656)Reading and References 学生必读和参考书目 (657)Chapter 23 Cost-V olume-Profit Relationships 第二十三章本量利分析 (658)学习目标 (658)Teaching and homework hours 教学与作业时间 (658)Reading and References 学生必读和参考书目 (659)Chapter 24 Budgetary Planning 第二十四章编制预算 (660)学习目标 (660)Teaching and homework hours 教学与作业时间 (660)Reading and References 学生必读和参考书目 (660)Chapter 25 Budgetary Control and Responsibility Accounting 第二十五章预算控制和责任会计 662 学习目标 (662)Teaching and homework hours 教学与作业时间 (662)Reading and References 学生必读和参考书目 (662)Chapter 26 Performance Evaluation through Standard Costs 第二十六章利用标准成本进行业绩评价 (664)学习目标 (664)Teaching and homework hours 教学与作业时间 (664)Reading and References 学生必读和参考书目 (664)Chapter 27 Incremental Analysis and Capital Budgeting 第二十七章增量分析和资本预算 (666)学习目标 (666)Teaching and homework hours 教学与作业时间 (667)Reading and References 学生必读和参考书目 (667)会计学原理（英文）Chapter 1 Accounting in Action第一章会计实践活动STUDY OBJECTIVESAfter studying this chapter you should be able to:1．Explain what accounting is.2．IDENTIFY THE USERS AND USES OF ACCOUNTING.3．UNDERSTAND WHY ETHICS IS A FUNDAMENTAL BUSINESS CONCEPT.4．EXPLAIN THE MEANING OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLESAND THE COST PRINCIPLE.5．EXPLAIN THE MEANING OF THE MONETARY UNIT ASSUMPTION AND THE ECONOMIC ENTITY ASSUMPTION.6．STATE THE BASIC ACCOUNTING EQUATION AND EXPLAIN THE MEANING OF ASSETS, LIABILITIES, AND OWNER’S EQUITY.7．ANALYZE THE EFFECT OF BUSINESS TRANSACTIONS ON THE BASIC ACCOUNTING EQUATION.8．Understand what the four financial statements are and how they are prepared.学习目标学完本章之后，学生应该能够达到以下目标：1．解释什么是会计。

Chapter 3Operating Decisions and the Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be asfollows: inventory is purchased, cash is paid to suppliers, the productis manufactured and sold on credit, and the cash is collected from thecustomer.2. The time period assumption means that the financial condition andperformance of a business can be reported periodically, usually everymonth, quarter, or year, even though the life of the business is muchlonger.3. Net Income = Revenues + Gains - Expenses - Losses.Each element is defined as follows:Revenues -- increases in assets or settlements of liabilities fromongoing operations.Gains -- increases in assets or settlements of liabilities fromperipheral transactions.Expenses -- decreases in assets or increases in liabilities from ongoing operations.Losses -- decreases in assets or increases in liabilities fromperipheral transactions.4.Both revenues and gains are inflows of net assets. However, revenuesoccur in the normal course of operations, whereas gains occur from transactions peripheral to the central activities of the company. An example is selling land at a price above cost (at a gain) for companies not in the business of selling land.Both expenses and losses are outflows of net assets. However, expenses occur in the normal course of operations, whereas losses occur from transactions peripheral to the central activities of the company. An example is a loss suffered from fire damage.5. Accrual accounting requires recording revenues when earned and recordingexpenses when incurred, regardless of the timing of cash receipts or payments. Cash basis accounting is recording revenues when cash is received and expenses when cash is paid.6. The four criteria that must be met for revenue to be recognized underthe accrual basis of accounting are (1) delivery has occurred or services have been rendered, (2) there is persuasive evidence of an arrangement for customer payment, (3) the price is fixed or determinable, and (4) collection is reasonably assured.7. The expense matching principle requires that expenses be recorded whenincurred in earning revenue. For example, the cost of inventory sold during a period is recorded in the same period as the sale, not when the goods are produced and held for sale.8. Net income equals revenues minus expenses. Thus revenues increase netincome and expenses decrease net income. Because net income increases stockholders’ equity, revenues increase stockholders’ equity and expenses decrease it.9. Revenues increase stockholders’ equity and expenses decreasestockholders’ equity. To increase stockholders’ equity, an account must be credited; to decrease stockholders’ equity, an account must be debited. Thus revenues are recorded as credits and expenses as debits.10.11.12.13.Total net profit margin ratio is calculated as Net Income Net Sales(or Operating Revenues). The net profit margin ratio measures how much of every sales dollar is profit. An increasing ratio suggests that the company is managing its sales and expenses effectively.ANSWERS TO MULTIPLE CHOICE1. c2. a3. b4. b5. c6. c7. d8. b9. a10. bAuthors' Recommended Solution Time(Time in minutes)* Due to the nature of this project, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.MINI-EXERCISESM3–1.TERMG(1)LossesC(2)Expense matchingprincipleF(3)RevenuesE(4)Time period assumptionB(5)Operating cycleM3–2.Cash Basis Income StatementAccrual Basis Income StatementRevenues:Cash salesCustomer deposits $8,0005,000Revenues:Sales tocustomers$18,000Expenses:Inventory purchases Wages paid 1,000900Expenses:Cost of salesWages expenseUtilitiesexpense9,000900 300Net Income $11,100Net Income$7,800M3–3.Revenue Account Affected Amount of Revenue Earned in JulyM3–4.Expense Account Affected Amount of Expense Incurred in JulyM3–5.a.Cash (+A)...........................................15,000Games Revenue (+R, +SE)..........................15,000b.Cash (+A)...........................................3,000Accounts Receivable (+A)............................5,000 Sales Revenue (+R, +SE)..........................8,000c.Cash (+A)...........................................4,000Accounts Receivable (A)........................4,000d.Cash (+A)...........................................2,500Unearned Revenue (+L)............................2,500 M3–6.e.Cost of Goods Sold (+E, SE).......................6,800Inventory (A)..................................6,800f.Accounts Payable (–L) (800)Cash (A) (800)g.Wages Expense (+E, SE)............................3,500Cash (A).......................................3,500h.Insurance Expense (+E, SE) (500)Prepaid Expenses (+A)...............................1,00 Cash (A).......................................1,500i.Repairs Expense (+E, SE) (700)Cash (A) (700)j.Utilities Expense (+E, SE) (900)Accounts Payable (+L) (900)M3–7.Balance Sheet Income StatementTransaction (c) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.M3–8.Balance Sheet Income Statement+1,000i.–700NE–700NE+700–700 j.NE+900–900NE+900–900Transaction (h) results in an increase in an asset (prepaid expenses) and a decrease in an asset (cash). Therefore, the net effect on assets is 500.M3–9.Craig’s Bowling, Inc.Income StatementFor the Month of July 2014Revenues:Games revenue$15,000Sales revenue8,000Total revenues23,000 Expenses:Cost of goods sold6,800Utilities expense900Wages expense3,500Insurance expense500Repairs expense700Total expenses 12,400 Net income$ 10,600M3–10.M3–11.These results suggest that Jen’s Jewelry Company earned approximately $ for every dollar of revenue in 2015, and over time, the ratio has improved. Jen’s has become more effective at managing sales and expenses.As additional analysis:Between 2013 to 2014 and 2014 to 2015, sales have increased at a lower percentage than net income. This suggests that the company has been more effective at controlling expenses than generating revenues.EXERCISESE3–1.TERMK (1) ExpensesE (2) GainsG (3) Revenue realization principleI (4) Cash basis accountingM (5) Unearned revenueC (6) Operating cycleD (7) Accrual basis accountingF (8) Prepaid expensesJ (9) Revenues Expenses = Net IncomeL(10) Ending Retained Earnings =Beginning Retained Earnings + Net Income DividendsDeclaredE3–2.Req. 1Cash Basis Income StatementAccrual Basis Income StatementRevenues:Cash salesCustomer deposits$500,000 70,000Revenues:Sales tocustomers$750,00Expenses:Inventory purchases Wages paidUtilities paid90,000180,30017,200Expenses:Cost of salesWages expenseUtilitiesexpense485,000184,00019,130Net Income$282,500 Net Income$61,870Req. 2Accrual basis financial statements provide more useful information to external users. Financial statements created under cash basis accounting normally postpone ., $250,000 credit sales) or accelerate ., $70,000 customer deposits) recognition of revenues and expenses long before or after goods and services are produced and delivered (until cash is received or paid). They also do not necessarily reflect all assets or liabilities of a company on a particular date.E3–3.ActivitRevenue AccountAmount of RevenueyE3–4.Activity Expense Account Affected Amount of ExpenseE3–5.Balance Sheet Income StatementTransaction (k) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.* A loss affects net income negatively, as do expenses.E3–6.Balance Sheet Income StatementTransaction (f) results in an increase in an asset (property, plant, and equipment) and a decrease in an asset (cash). Therefore, there is no net effect on assets.E3–7.(in thousands)a.Plant and equipment (+A) (636)Cash (A) (636)Debits equal credits. Assets increase and decrease by the same amount.b.Cash (+A) (181)Short-term notes payable (+L) (181)Debits equal credits. Assets and liabilities increase by the sameamount.c.Cash (+A) ..........................................Accounts receivable (+A) ........................... 10,765 28,558Service revenue (+R, +SE) ...................... 39,323 Debits equal credits. Revenue increases retained earnings (part of stockholders' equity). Stockholders' equity and assets increase by the same amount.E3–7. (continued)d.Accounts payable (L) ............................. 32,074Cash (A) ..................................... 32,074 Debits equal credits. Assets and liabilities decrease by the sameamount.e.Inventory (+A) ..................................... 32,305Accounts payable (+L) .......................... 32,305 Debits equal credits. Assets and liabilities increase by the sameamount.f.Wages expense (+E, SE) ........................... 3,500Cash (A) ..................................... 3,500 Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by the same amount.g.Cash (+A) .......................................... 39,043Accounts receivable (A) ..................... 39,043 Debits equal credits. Assets increase and decrease by the same amount.h.Fuel expense (+E, SE) (750)Cash (A) (750)Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by the same amount.i.Retained earnings (SE) (597)Cash (A) (597)Debits equal credits. Assets and stock holders’ equity decrease by the same amount.j.Utilities expense (+E, SE) (68)Cash (A) ..................................... Accounts payable (+L) .......................... 55 13Debits equal credits. Expenses decrease retained earnings (part of stockholders' equity). Together, stockholders' equity and liabilities decrease by the same amount as assets.E3–8.Req. 1a.Cash (+A)...................................... 2,300,000Short-term note payable (+L)............. 2,300,000 Debits equal credits. Assets and liabilities increase by the sameamount.b.Equipment (+A)................................. 98,000Cash (A)............................... 98,000 Debits equal credits. Assets increase and decrease by the same amount.c.Merchandise inventory (+A)..................... 35,000Accounts payable (+L).................... 35,000 Debits equal credits. Assets and liabilities increase by the sameamount.d.Repairs (or maintenance) expense (+E, SE).... 62,000Cash (A)............................... 62,000 Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by the same amount.e.Cash (+A)...................................... 390,000Unearned pass revenue (+L)............... 390,000 Debits equal credits. Since the season passes are sold before VailResorts provides service, revenue is deferred until it is earned.Assets and liabilities increase by the same amount.f. Two transactions occur:(1) Accounts receivable (+A) (800)Ski shop sales revenue (+R, +SE) (800)Debits equal credits. Revenue increases retained earnings (a part of stockholders' equity). Stockholders' equity and assets increase by the same amount.(2) Cost of goods sold (+E, SE) (500)Merchandise inventory (A) (500)Debits equal credits. Expenses decrease retained earnings (a part of stockholders' equity). Stockholders' equity and assets decrease by the same amount.E3–8. (continued)g.Cash (+A)...................................... 320,000Lift revenue (+R, +SE)................... 320,000 Debits equal credits. Revenue increases retained earnings (a part ofstockholders' equity). Stockholders' equity and assets increase by thesame amount.h.Cash (+A)...................................... 3,500Unearned rent revenue (+L)............... 3,500 Debits equal credits. Since the rent is received before the townhouseis used, revenue is deferred until it is earned. Assets and liabilitiesincrease by the same amount.i. Accounts payable (L)......................... 17,500Cash (A)............................... 17,500 Debits equal credits. Assets and liabilities decrease by the sameamount.j.Cash (+A) (400)Accounts receivable (A) (400)Debits equal credits. Assets increase and decrease by the same amount.k.Wages expense (+E, SE)....................... 245,000Cash (A)............................... 245,000 Debits equal credits. Expenses decrease retained earnings (a part ofstockholders' equity). Stockholders' equity and assets decrease by the same amount.Req. 2Accounts ReceivableE3–9.2/1Rent expense (+E, SE) (275)Cash (A) (275)2/2Fuel expense (+E, SE) (490)Accounts payable (+L) (490)2/4Cash (+A) (820)Unearned revenue (+L) (820)2/7Cash (+A) (910)Transport revenue (+R, +SE) (910)2/10Advertising expense (+E, SE) (175)Cash (A) (175)2/14Wages payable (L) ................................ 2,300 Cash (A) ............................... 2,3002/18Cash (+A) ..........................................Accounts receivable (+A) ........................... 1,600 2,200Transport revenue (+R, +SE) .............. 3,8002/25Parts supplies (+A) ................................ 2,550 Accounts payable (+L) .................... 2,5502/27Retained earnings (SE) (200)Dividends payable (+L) (200)E3–10.Req. 1 and 2CashAccounts ReceivableSuppliesEquipmentLandBuildingAccounts PayableUnearned Fee Revenue Note PayableCommon StockAdditional Paid-inCapitalRetained EarningsRebuilding FeesRevenueRent RevenueWages Expense Utilities ExpenseItem (f) is not a transaction; there has been no exchange.E3–10. (continued)Req. 3Net income using the accrual basis of accounting:Revenues$19,850($19,000 + $850)– Expenses 16,900($16,500 + $400)Net Income$ 2,950(accrual basis)Assets=Liabilities+Stockholders’Equity $12,090$ 7,700 $ 1,70024,800 4,440 7,8202,460 48,500 9,36010,420 2,950 netincome7,40025,300$82,470$60,640$21,830Req. 4Net income using the cash basis of accounting:Cash receipts$27,650(transactions a through d)– Cash disbursements 19,760(transactions g, i, and k)Net Income$ 7,890(cash basis)Cash basis net income ($7,890) is higher than accrual basis net income ($2,950) because of the differences in the timing of recording revenues versus receipts and expenses versus disbursements between the two methods. The $7,800 higher amount in cash receipts over revenues includes cash received prior to being earned (from (b), $600) and cash received after being earned (in (d), $7,200). The $2,860 higher amount in cash disbursements over expenses includes cashpaid after being incurred in the prior period (in (g), $2,300), plus cash paid for supplies to be used and expensed in the future (in (k), $960), less an expense incurred in January to be paid in February (in (e), $400).STACEY’S PIANO REBUILDING COMPANYIncome Statement (unadjusted)For the Month Ended January 31, 2014 Operating Revenues:Rebuilding fees revenue$ 19,000 Total operating revenues19,000 Operating Expenses:Wages expense16,500 Utilities expense400 Total operating expenses16,900 Operating Income2,100 Other Item:Rent revenue850 Net Income$ 2,950Req. 1 and 2Cash Accounts Receivable SuppliesEquipment Building Accounts PayableNote PayableMortgage PayableCommon StockAdditional Paid-in Capital Retained EarningsFood Sales RevenueCatering SalesRevenueSupplies ExpenseUtilities Expense Wages ExpenseFuel ExpenseE3–14.Req. 1TRAVELING GOURMET, INC.Income Statement (unadjusted)For the Month Ended March 31, 2014 Revenues:Food sales revenueCatering sales revenueTotal revenues Expenses:Supplies expenseUtilities expenseWages expenseFuel expenseTotal costs and expenses$ 11,900 4,20016,100 10,8304206,280363 17,893Net Loss$ (1,793) Req. 2TransactionO, I, or F Activity(or No Effect) onStatement of CashFlows Direction and Amountof EffectReq. 3The company generated a small loss of 1,793 during its first month of operations, before making any adjusting entries. The adjusting entries for use of the building and equipment and interest expense on the borrowing will increase the loss. Cash flows from operating activities were also negative at $2,973 (= + 11,900 + 2,600 – 10,830 – 363 – 6,280) . So far the company does not appear to be successful, but it is only in its first month of operating a retail store. If sales can be increased without inflating fixed costs (particularly salaries expense), the company may soon turn a profit. It is not unusual for small businesses to report a loss or have negative cash flows from operations as they start up operations.E3–15.Req. 1Transaction Brief Explanationa Issued 10,000 shares of common stock to shareholders for$82,000 cash.b Purchased store fixtures for $15,400 cash.c Purchased $24,800 of inventory, paying $6,200 cash and thebalance on account.d Sold $14,000 of goods or services to customers, receiving$9,820 cash and the balance on account. The cost of the goodssold was $7,000.e Used $1,480 of utilities during the month, not yet paid.f Paid $1,300 in wages to employees.g Paid $2,480 in cash for rent, $620 related to the current monthand $1,860 related to future months.h Received $3,960 cash from customers, $1,450 related to currentsales and $2,510 related to goods or services to be provided inthe future.Req. 2Kate’s Kite CompanyIncome StatementFor the Month Ended April 30, 2014Sales RevenueExpenses:Cost of salesWages expenseRent expenseUtilities expenseTotal expenses$ 15,450 7,0001,300620 1,480 10,400Net Income$ 5,050E3–15. (continued)Kate’s Kite CompanyBalance SheetAt April 30, 2014Assets Liabilities and Shareholders’EquityCurrent Assets:Current Liabilities:Cash$70,400Accounts payable$20,080 Accounts receivable4,180Unearned revenue2,510 Inventory17,800 Total currentliabilities22,590Prepaid expenses1,860Shareholders’ Equity:Total current assets94,240Common stock10,000 Store fixtures15,400Additional paid-in capital72,000Retained earnings5,050Total shareholders’equity87,050Total Assets$109,640Total Liabilities &Shareholders’ Equity$109,64E3–16. Req. 1。

会计学原理FinancialAccountingbyRobertLibby第⼋版第⼆章答案Chapter 2Investing and Financing Decisions andthe Accounting SystemANSWERS TO QUESTIONS1. The primary objective of financial reporting for external users is to providefinancial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity. These users are expected to have a reasonable understanding of accounting concepts and procedures. Usually, they are interested in information to assist them in projecting future cash inflows and outflows of a business.2. (a) An asset is a probable future economic benefit owned or controlled by theentity as a result of past transactions.(b) A current asset is an asset that will be used or turned into cash within oneyear; inventory is always considered a current asset regardless of howlong it takes to produce and sell the inventory.(c) A liability is a probable future sacrifice of economic benefits of the entityarising from preset obligations as a result of a past transaction.(d) A current liability is a liability that will be settled by providing cash, goods,or other services within the coming year.(e) Additional paid-in capital is the owner-provided financing to the businessthat represents the excess of the amount received when the commonstock was issued over the par value of the common stock.(f) Retained earnings are the cumulative earnings of a company that are notdistributed to the owners and are reinvested in the business.3. (a) The separate-entity assumption requires that business transactions areseparate from the transactions of the owners. For example, the purchaseof a truck by the owner for personal use is not recorded as an asset of thebusiness.(b) The stable monetary unit assumption requires information to be reportedin the national monetary unit without any adjustment for changes inpurchasing power. That means that each business will account for andreport its financial results primarily in terms of the national monetary unit,such as Yen in Japan and Australian dollars in Australia.(c) Under the continuity or going-concern assumption, businesses areassumed to operate into the foreseeable future. That is, they are notexpected to liquidate.(d) The historical cost principle requires assets to be recorded at the cash-equivalent cost on the date of the transaction. Cash-equivalent cost is thecash paid plus the dollar value of all noncash considerations.4. Accounting assumptions are necessary because they reflect the scope ofaccounting and the expectations that set certain limits on the way accounting information is reported.5. An account is a standardized format used by organizations to accumulate thedollar effects of transactions on each financial statement item. Accounts are necessary to keep track of all increases and decreases in the fundamental accounting model.6. The fundamental accounting model is provided by the equation:Assets = Liabilities + Stockholders' Equity7. A business transaction is (a) an exchange of resources (assets) and obligations(debts) between a business and one or more outside parties, and (b) certain events that directly affect the entity such as the use over time of rent that was paid prior to occupying space and the wearing out of equipment used to operate the business. An example of the first situation is (a) the sale of goods or services. An example of the second situation is (b) the use of insurance paid prior to coverage.8. Debit is the left side of a T-account and credit is the right side of a T-account. Adebit is an increase in assets and a decrease in liabilities and stockholders' equity. A credit is the opposite -- a decrease in assets and an increase in liabilities and stockholders' equity.9. Transaction analysis is the process of studying a transaction to determine itseconomic effect on the entity in terms of the accounting equation:Assets = Liabilities + Stockholders' EquityThe two principles underlying the process are:* every transaction affects at least two accounts.* the accounting equation must remain in balance after eachtransaction.The two steps in transaction analysis are:(1) identify and classify accounts and the direction and amount of theeffects.(2) determine that the accounting equation (A = L + SE) remains inbalance.10. The equalities in accounting are:(a) Assets = Liabilities + Stockholders' Equity(b) Debits = Credits11. The journal entry is a method for expressing the effects of a transaction onaccounts in a debits-equal-credits format. The title of the account(s) to be debited is (are) listed first and the title of the account(s) to be credited is (are) listed underneath the debited accounts. The debited amounts are placed in a left-hand column and the credited amounts are placed in a right-hand column. 12. The T-account is a tool for summarizing transaction effects for each account,determining balances, and drawing inferences about a company's activities. It isa simplified representation of a ledger account with a debit column on the leftand a credit column on the right.13. The current ratio is computed as current assets divided bycurrent liabilities. Itmeasures the ability of the company to pay its short-term obligations with current assets. A ratio above 1.0 normally suggests good liquidity (that is, the company has sufficient current assets to settle short-term obligations). Sophisticated cash management systems allow many companies to minimize funds invested in current assets and have a current ratio below 1.0. However,a ratio that is too high in relation to other competitors in the industry may indicate inefficient use of resources.14. Investing activities on the statement of cash flows include the buying and sellingof productive assets and investments. Financing activities include borrowing and repaying debt, issuing and repurchasing stock, and paying dividends.MULTIPLE CHOICE1. d 6. c2. d 7. a3. a 8. d4. a 9. b5. d 10. a(Time in minutes)* Due to the nature of these cases and projects, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.MINI-EXERCISESM2–1.F (1) Continuity assumptionH (2) Historical cost principleG (3) CreditsA (4) AssetsI (5) AccountM2–2.D (1) Journal entryC (2) A = L + SE, and Debits = CreditsA (3) Assets = Liabilities + Stockholders’ EquityI (4) LiabilitiesB (5) Income statement, balance sheet, statement of stockholders’ equity, and statement of cash flowsM2–3.(1) N(2) N(3) Y(4) Y(5) Y(6) NCL (1) Accounts PayableCA (2) Accounts ReceivableNCA (3) BuildingsCA (4) CashSE (5) Common StockNCA (6) LandCA (7) Merchandise InventoryCL (8) Income Taxes PayableNCA (9) Long-Term InvestmentsNCL (10) Notes Payable (due in three years)CA (11) Notes Receivable (due in six months)CA (12) Prepaid RentSE (13) Retained EarningsCA (14) SuppliesCL (15) Utilities PayableCL (16) Wages PayableM2–5.Assets = Liabilities + Stockholders’ Equitya. Cash +30,000 Notes payable +30,000b. Cash –10,000Notesreceivable+10,000c. Cash +500 CommonstockAdditionalpaid-incapital+10 +490d. CashEquipment–5,000+15,000Notes payable +10,000e. Cash –2,000 Retainedearnings–2,000Debit CreditAssets Increases DecreasesLiabilities Decreases Increases Stockholders’ equity Decreases IncreasesM2–7.Increase DecreaseAssets Debit CreditLiabilities Credit Debit Stockholders’ equity Credit DebitM2–8.a. Cash (+A) ............................................................................ 30,000Notes Payable (+L) ........................................................ 30,000 b. Notes Receivable (+A)......................................................... 10,000Cash (-A) ....................................................................... 10,000 c. Cash (+A) . (500)Common Stock (+SE) .................................................... Additional Paid-in Capital (+SE)………………………….10 490d. Equipment (+A) ................................................................... 15,000Cash (-A) ....................................................................... 5,000Notes Payable (+L) ........................................................ 10,000 e. Retained Earnings (-SE) ..................................................... 2,000 Cash (-A) ....................................................................... 2,000M2-10.M2–11.DennenInc.Balance SheetAt January 31, 2015Assets LiabilitiesCurrent assets: Current liabilities:Cash $ 14,400 Notes payable $ 43,000 Notes receivable 11,000 Total current liabilities 43,000 Total current assets 25,400 Stockholders’ EquityCommon stock 1,010Equipment 30,100 Additional paid-in capitalRetained earnings 3,490 8,000Total stockholders’ equity12,500Total Assets $55,500 Total Liabilities &Stockholders’ Equity$55,500M2–12.Current Ratio =Current Assets ÷Current Liabilities2011 280,000 ÷155,000 = 1.8062012 270,000 ÷250,000 = 1.080This ratio indicates that Sal’s Taco Company has sufficient current assets to settle current liabilities, but that the ratio has also decreased between 2011and 2012by .726(40%). Sal’s Taco Companyratio is lowerthan Chipotle’s2011ratio (of 3.182), indicating that Sal’s Taco Companyappears to have weaker liquidity than Chipotle; Sal’s has less liquidity to withstand an economic downturn.M2–13.(a) F(b) I(c) F(d) I(e) FEXERCISESE2–1.E (1) TransactionF (2) Continuity assumptionB (3) Balance sheetP (4) LiabilitiesK (5) Assets = Liabilities + Stockholders’ EquityM (6) Notes payableL (7) Common stockH (8) Historical cost principleI (9) AccountQ (10) Dual effectsO (11) Retained earningsA (12) Current assetsC (13) Separate-entity assumptionX (14) Par valueD (15) DebitsJ (16) Accounts receivableN (17) Stable monetary unit assumptionW (18) Faithful representationT (19) RelevanceR (20) Stockholders’ EquityReq. 1Received Given(a) Cash (A) Common stock and Additionalpaid-in capital (SE)(b) Equipment (A) [or Delivery truck]Cash (A)(c) No exchange transaction—(d) Equipment (A) [or Computer equipment]Notes payable (L)(e) Building(A) [or Construction in progress]Cash (A)(f) Intangibles(A) [or Copyright]Cash (A)Cash (A)(g) Retained earnings (SE)[Received a reduction inthe amount available for payment tostockholders](h) Land (A) Cash (A)(i) Intangibles (A) [or Patents]Cash (A) and Notes payable (L) (j) No exchange transaction—(k) Investments (A) Cash (A)(l) Cash (A) Short-term notes payable (L)Cash (A)(m) Note payable (L) [Received a reduction in itspromise to pay]Req. 2The truck in (b) would be recorded as an asset of $18,000. The land in (h) would be recorded as an asset of $50,000. These are applications of the historical cost principle.Req. 3The agreement in (c) involves no exchange or receipt of cash, goods, or services and thus is not a transaction. Since transaction (j) occurs between the owner and others, there is no effect on the business because of the separate-entity assumption.Account Balance SheetCategorizationDebit or CreditBalance(1) Accounts Receivable CA Debit(2) Retained Earnings SE Credit(3) Taxes Payable CL Credit(4) Prepaid Expenses CA Debit(5) Common Stock SE Credit(6) Long-Term Investments NCA Debit(7) Plant, Property, and Equipment NCA Debit(8) Accounts Payable CL Credit(9) Short-Term Investments CA Debit(10) Long-Term Debt NCL CreditE2–4.Event Assets = Liabilities + Stockholders’ Equitya. Cash +40,000 Commonstock Additional paid-in capital+1,000 +39,000b. EquipmentCash +15,000–3,000Notes payable +12,000c. Cash +10,000 Notes payable +10,000d. NotereceivableCash +800 –800e. LandCash +13,000–4,000Mortgage notespayable +9,000Req. 1Event Assets = Liabilities + Stockholders’ Equitya. BuildingsEquipmentCash +172+270–432Notes payable(long-term)+10b. Cash +345 Common stockAdditional paid-incapital +200 +145c. Dividendspayable +145 Retainedearnings –145d. Short-termInvestmentsCash +7,616-7,616e. No effectsf. CashShort-termInvestments +4,313 –4,313Req. 2The separate-entity assumption states that transactions of the business are separate from transactions of the owners. Since transaction (e) occurs between the owners and others in the stock market, there is no effect on the business.a. Cash (+A) ............................................................................ 40,000Common stock (+SE) ..................................................... Additional paid-in capital (+SE)…………………………...1,000 39,000b. Equipment (+A) ................................................................... 15,000Cash (-A) ....................................................................... 3,000Notes payable (+L) ........................................................ 12,000 c. Cash (+A) ............................................................................ 10,000 Notes payable (+L) ......................................................... 10,000d.e. Notes receivable (+A) .........................................................Cash (-A) ......................................................................Land (+A) .............................................................................80013,000800Cash (-A) ....................................................................... 4,000 Mortgage notes payable (+L) ........................................ 9,000 Req. 1a. Buildings (+A) (172)Equipment (+A) (270)Cash (-A) (432)Notes payable (+L) (10)b. Cash (+A) (345)Common stock (+SE) ..................................................... Additional paid-in capital (+SE) 200 145c. Retained earnings (-SE) (145)Dividends payable (+L) (145)d. Short-term investments (+A)................................................ 7,616Cash (-A) ....................................................................... 7,616e. No journal entry required.f. Cash (+A) ............................................................................ 4,313Short-term investments (-A) .......................................... 4,313 Req. 2The separate-entity assumption states that transactions of the business are separate from transactions of the owners. Since transaction (e) occurs between the owners and others in the stock market, there is no effect on the business.Req. 1*6 investors x 8,400 shares each = 50,400 shares issued50,400 shares issued x $0.10 par value per share = $5,040 for common stock Req. 2Assets $ 101,500 = Liabilities $ 13,500 + Stockholders’ Equity $88,000 Req. 3The agreement in (c) involves no exchange or receipt of cash, goods, or services and thus is not a transaction. Since transaction (f) occurs between the owner and others, there is no effect on the business due to the separate-entity assumption. Req. 1Transaction Brief Explanation1 Issued commonstock to shareholders for $15,000 cash. (FastTrackSports Inc. is a corporation because it issues stock. Par value of thestock was $0.10 per share because $1,500 common stock amountdivided by 15,000 sharesissued equals $0.10 per share).2 Borrowed $75,000 cash and signed a short-term note for this amount.3 Purchased land for $16,000; paid $5,000 cash and gave an $11,000short-term note payable for the balance.4 Loaned $4,000 cash; borrower signed a short-term note for this amount(Note Receivable).5 Purchased store fixtures for $9,500 cash.6 Purchased land for $4,000, paid for by signing a short-term note.Req. 2FastTrack Sports Inc.Balance SheetAt January 7, 2014Assets LiabilitiesCurrent Assets Current LiabilitiesCash $71,500 Note payable $90,000 Note receivable 4,000 Total Current Liabilities 90,000 Total Current Assets 75,500 Stockholders’ EquityStore fixtures Land9,50020,000Common stockAdditional paid-in capital1,50013,500 Total Stockholders’ Equity15,000Total Assets $105,000 Total Liabilities &Stockholders’ Equity$105,000Req. 1Transaction Brief Explanation1 Issued commonstock to shareholders for $45,000 cash. (Volz Cleaningis a corporation because it issues stock. Par value is $2.00 per share$6,000 common stock amount divided by 3,000 shares issued equals$2.00 per share).2 Purchased a delivery truck for $35,000; paid $8,000 cash and gave a$27,000 long-term note payable for the balance.3 Loaned $2,000 cash; borrower signed a short-term note for thisamount.4 Purchased short-term investments for $7,000 cash.5 Sold short-term investments at cost for $3,000 cash.6 Purchased computer equipment for $4,000 cash.Req. 2Volz Cleaning, Inc.Balance SheetAt March 31, 2014Assets LiabilitiesCurrent Assets Notes payable $27,000 Cash $27,000 Total Liabilities 27,000 Investments 4,000 Note receivable 2,000Total Current Assets 33,000 Stockholders’ EquityComputer equipment4,000Common stockAdditional paid-in capital6,00039,000Delivery truck 35,000 Total Stockholders’ Equity45,000Total Assets $72,000 Total Liabilities &Stockholders’ Equity$72,000a. Cash (+A) ............................................................................ 70,000Common stock (+SE) ..................................................... Additional paid-in capital…………………………………..5,000 65,000b. No transaction has occurred because there has been noexchange or receipt of cash, goods, or services.c. Cash (+A) ............................................................................ 18,000Notes payable (long-term) (+L) ...................................... 18,000 d. Equipment (+A) ................................................................... 11,000Cash (-A) ....................................................................... 1,500Notes payable (short-term) (+L) ..................................... 9,500 e. Notes receivable (short-term) (+A) ...................................... 2,000 Cash (-A) ....................................................................... 2,000 f. Store fixtures (+A) ............................................................... 15,000 Cash (-A) ....................................................................... 15,000。

financial accounting robert中文版-回复如果您正在寻找《财务会计（Robert）》的中文版，那么您来对地方了。

本文将一步一步回答《财务会计（Robert）》这本书的内容，介绍财务会计的基本原理、会计准则、核算方法和财务报表等方面的知识。

首先，让我们从财务会计的基本概念开始。

财务会计是一个重要的会计领域，它关注企业的财务信息和财务状况。

财务会计的目标是提供有关企业财务情况的准确和可靠的信息，以便投资者、债权人和其他利益相关者能够做出明智的决策。

财务会计遵循一系列会计准则和原则，确保财务信息的准确性和一致性。

这些准则和原则包括公认会计原则（GAAP）和国际财务报告准则（IFRS）。

根据这些准则和原则，企业需要按照特定的方法和原则记录、报告和解释其财务情况。

在财务会计中，核算方法包括单、复式记账法和会计等式等。

单式记账法适用于简单的交易，仅记录每个交易的借方和贷方。

而复式记账法记录每个交易的借贷双方，并保持会计等式的平衡。

会计等式指出了资产、负债和所有者权益之间的关系，即资产=负债+所有者权益。

财务会计过程中的核心任务之一是编制财务报表。

财务报表包括资产负债表、利润表、现金流量表和股东权益变动表。

资产负债表显示企业的资产、负债和所有者权益状况，利润表展示企业在特定期间内的收入和费用情况，现金流量表说明企业的现金流入和流出情况，而股东权益变动表记录了所有者权益的变动情况。

除了以上提及的关键概念和步骤外，财务会计还涉及其他方面的知识，如会计的认定和计量、会计报告的原则和要求、财务会计准则制定的背景和目的等。

此外，还有一些与财务会计相关的概念和方法，如财务分析、内部控制和审计等。

这些内容对于理解和应用财务会计的原理和方法非常重要。

总之，《财务会计（Robert）》的中文版是一本全面介绍财务会计基本原理、会计准则、核算方法和财务报表等方面知识的书籍。

通过学习该书，读者能够掌握财务会计的基本概念和技能，并能在实践中运用这些知识，为企业的决策和管理提供支持。

会计学原理FinancialAccountingbyRobertLibby第⼋版第⼗章答案Chapter 10Reporting and Interpreting BondsANSWERS TO QUESTIONS1. A bond is a liability that may or may not be secured by a mortgage on specifiedassets. Bonds usually are in denominations of $1,000 or $10,000, are transferable by endorsement, and may be bought and sold daily by investors. A bond specifiesa maturity date and rate of interest that will be paid on the principal amount. Bondsusually are issued to obtain cash for long-term asset acquisitions (operational assets) and expansion of the entity.2. A bond indenture is an agreement drawn up by a company planning to sell a bondissue. The indenture specifies the legal provisions of the bond issue such as maturity date, rate of interest, date of interest payments, and any conversion privileges. When a bond is sold, an investor receives a bond certificate (i.e., a bond). All of the bond certificates for a single bond issue are identical in most respects. That is, each certificate states the same maturity date, interest rate, interest dates, and other provisions of the bond issue.3. Secured bonds are supported by a mortgage or pledge of specific assets as aguarantee of payment. Secured bonds are designated on the basis of the type of asset pledged, such as real estate mortgage bonds and equipment trust bonds.Unsecured bonds are not supported by a mortgage or pledge of specific assets asa guarantee of payment at maturity date. Unsecured bonds usually are calleddebentures.4. Callable bonds—bonds that may be called for early retirement at the option of theissuer.Convertible bonds—bonds that may be converted to other securities of the issuer (usually common stock) after a specified future date at the option of the bondholder.5. Several important advantages of bonds compared with capital stock benefit theissuer. The issuance of bonds establishes a fixed amount of liability and a fixed rate of interest on the bond, and interest payments to the bondholders are deductible on the income tax return of the issuer. This deduction for tax purposes reduces the net cost of borrowing. For example, a corporation with a 40% average tax rate and bonds payable with a 10% interest rate would incur a net interest rate of 10% x 60% = 6%.6. The higher the tax rate is, the lower the net cost of borrowing money because theinterest paid on borrowed money is deductible on the income tax return of the borrower. The higher the income tax rate the less the net cost of interest for the borrower. For example, a corporation with an average tax rate of 40% and debt with 10% interest per annum incurs a net interest rate of 10% x 60% = 6%. In contrast, the same corporation with a 20% average tax rate incurs a net interest rate of 10% x 80% = 8%.7. At the date of issuance, bonds are recorded at their current cash equivalent amount;that is, the amount of cash received for the bonds when issued. The recording is in conformity with the cost principle.8. When a bond is issued (sold) at its face amount, it is issued at par. In contrast,when a bond is sold at an amount lower than the par amount, it is issued at a discount, and conversely, when it is sold at a price above par, it is issued at a premium. A bond will sell at a discount when the market, or effective, rate of interest is higher than the stated rate of interest on the bond. In contrast, when the market or effective rate of interest is lower than the statedrate, the bond will sell ata premium. Discounts or premiums on bonds payable are adjustments to theeffective interest rate on the bonds. Therefore, the discount or premium is amortized over the life of the bonds as an increase or decrease in the amount of interest expense for each period.9. The stated rate of interest is the rate specified on a bond, whereas the effectiverate of interest is the market rate at which the bonds are selling currently.10. When a bond is sold at par, the stated interest rate and the effective or marketinterest rate are identical. When a bond is sold at a discount, the stated rate of interest is lower than the effective rate of interest on the bond. In contrast, when a bond is sold at a premium, the stated rate of interest is higher than the effective rate of interest.11. A bond issued at par will have a book or carrying value, or net liability, equal to thepar or principal of the bond. This amount should be reported as the carrying value on each balance sheet date. When a bond is sold at a premium or discount, the premium or discount must be amortized over the outstanding life of the bond. When there is bond discount or premium, the par amount of the bond less the unamortized discount, or plus the unamortized premium, must be reported on the balance sheet as the net liability as follows:Bonds payable ...................................... $100,000 $100,000Less: Unamortized discount .................. 12,000Plus: Unamortized premium .................. 12,000Book value (net liability) ........................ $ 88,000 $112,00012. The basic difference between straight-line amortization and effective-interestamortization of bond discount and premium is that, under straight-line amortization, an equal amount of premium or discount is amortized to interest expense each period. Straight-line amortization per interest period is computed by dividing the total amount of the premium or discount by the number of periods the bonds will be outstanding. Under effective-interest amortization, the amount of premium or discount amortized is different each period. Effective-interest amortization of bond premium and discount correctly measures the current cash equivalent amount of the bonds and the interest expense reported on the income statement based on the issuance entry. It measures the amount of amortization by relating the market (yield) rate to the net liability at the beginning of each period. For this reason interest expense and the bond carrying value are measured on a present value basis. The straight-line method can be used only when the results are not materially different from the results of the effective-interest method.ANSWERS TO MULTIPLE CHOICE1. c)2. c)3. b)4. d)5. c)6. b)7. c)8. c)9. a) 10. c)Authors’ Recommended Solution Time(Time in minutes)* Due to the nature of this project, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.MINI-EXERCISESM10–1. 1. Balance Sheet2. Income Statement3. Statement of Cash Flows4. May be in notes5. Not at all6. May be in notesM10–2.Principal $600,000 ? 0.4564 = $273,840Interest $ 24,000 ?13.5903 = 326,167Issue Price = $600,007* *Issue price should be exactly $600,000. The $7 difference is the result ofrounding the present value factors at four digits.M10–3.Principal $900,000 ? 0.4350 = $391,500Interest $ 27,000?13.2944 = 358,949Issue Price = $750,449M10–4.January 1, 2014:Cash (+A) .............................................................................. 940,000Discount on Bonds Payable (+XL, -L) ................................... 60,000Bonds Payable (+L) .......................................................... 1,000,000 June 30, 2014:Interest Expense (+E, -SE) ($940,000 ? 11%? 1/2) ............. 51,700Discount on Bonds Payable (-XL, +L) ............................... 1,700 Cash (-A) ($1,000,000 ? 10%? 1/2) ................................. 50,000 M10–5.January 1, 2014:Cash (+A) .............................................................................. 580,000Discount on Bonds Payable (+XL, -L) ................................... 20,000Bonds Payable (+L) ........................................................... 600,000 June 30, 2014:Interest Expense (+E, -SE) ................................................... 31,000Discount on Bonds Payable (-XL, +L) ............................... 1,000 Cash (-A) ........................................................................... 30,000 M10–6.Principal $500,000 ? 0.4564 = $228,200Interest $ 25,000 ?13.5903 = 339,758Issue Price = $567,958M10–7.January 1, 2014:Cash (+A) .............................................................................. 620,000Premium on Bonds Payable (+L) ...................................... 20,000 Bonds Payable (+L) ..........................................................600,000 December 31, 2014:Interest Expense (+E, -SE) ................................................... 52,000Premium on Bonds Payable (-L) ........................................... 2,000Cash (-A) ........................................................................... 54,000 M10–8January 1, 2014:Cash (+A) .............................................................................. 910,000Premium on Bonds Payable (+L) ...................................... 60,000 Bonds Payable (+L) ..........................................................850,000 December 31, 2014:Interest Expense (+E, -SE) ($910,000 ? 7%) ........................ 63,700Premium on Bonds Payable (-L) ........................................... 4,300Cash (-A) ($850,000 ? 8%) ................................................ 68,000M10–9.The debt-to-equity ratio and times interest earned ratio are both measures of therisk associated with using debt in the capital structure of a company. A companycould have a high debt-to-equity ratio with relatively little risk if it generated a high level of stable earnings. On the other hand,a company with a lowdebt-to-equityratio might be risky if it was unable to earn any profits. For this reason, mostanalysts look to the times interest earned ratio as a measure of a company’sability to meet its required interest payments.M10–10.If the interest rates fall after the issuance of a bond, the bond’s price will increase.The company will report a loss on the debt retirement. On the balance sheet,cash and bonds payable will decrease. On the income statement, a loss wouldbe recorded.M10–11.When a company issues a bond at a discount, the interest expense each periodwill be more than the cash payment for the interest. When a company issues abond at a premium, the interest expense will be less than the cash payment forthe interest. Neither is affected by the method used to amortize the discount orpremium.M10–12.Cash paid to retire a bond would be reported in the financing activities section ofthe Statement of Cash Flows while cash paid for interest payments would bereported in the operating activities section.EXERCISESE10–1.1. Bond principal, par value, or face value2. Par value or face value3. Face value or par value4. Stated rate, coupon rate, or contract rate5. Debenture6. Callable bonds7. Convertible bondsE10–2.The AT&T bonds have a coupon interest rate of 6.5%. If bonds with a $10,000 face value were purchased, the issue price would be $8,950 and they would provide a cash yield of 7.3%. A decline in value after issuance would have no impact on AT&T’s financial statements.E10–3.CASE A:$100,000 x 0.5835 ........................................................ $ 58,350$8,000 x 5.2064 ............................................................ 41,651Issue price (market and stated rate same) ................... $100,001 (at par; $1rounding error) CASE B:$100,000 x 0.6651 ........................................................ $ 66,510$8,000 x 5.5824 ............................................................ 44,659Issue price (market rate less than stated rate) .............. $111,169 (at a premium) CASE C:$100,000 x 0.5470 ........................................................ $ 54,700$8,000 x 5.0330 ............................................................ 40,264Issue price (market rate more than stated rate) ............ $ 94,964 (at a discount)E10–4.CASE A:$500,000 x 0.6730 ........................................................ $ 336,500$15,000 x 16.3514 ........................................................ 245,271Issue price (market rate less than stated rate) .............. $581,771 (at a premium)CASE B:$500,000 x 0.5537 ........................................................ $ 276,850$15,000 x 14.8775 ........................................................ 223,163Issue price (market rate and stated rate same) ............ $500,013 (at par, $13 CASE C: r ounding error) $500,000 x 0.4350 ........................................................ $ 217,500$15,000 x 13.2944 ........................................................ 199,416Issue price (market rate more than stated rate) ............ $ 416,916 (at a discount)E10–5.Applied Technologies’ ratios look better than Innovative Solutions’ ratios.Applied Technologies has a lower debt-to-equity ratio than Innovative Solutions.This means that they have less debt in their capital structure, and therefore, are a less leveraged company and have less risk than Innovative Solutions. AppliedTechnologies’ times interest earned ratio is higher than the ratio for InnovativeSolutions. This also makes Applied Technologies a less risky company thanInnovative Solutions because Applied Technologies generates a larger amount of income compared to its obligatory payments to creditors than InnovativeSolutions.E10–6.Computations:Interest:$250,000 x 6% x 1/2 = $7,500Present value:$250,000 x 0.6756 = 168,900$ 7,500 x 8.1109 = 60,832Issue price $229,732E10–7.Computations:Interest:$750,000 x 8% = $ 60,000Present value:$750,000 x 0.4224 = 316,800$ 60,000 x 6.4177 = 385,062Issue price $701,862Req. 1January 1:Cash (+A) .............................................................................. 701,862Discount on Bonds Payable (+XL, -L) ................................... 48,138Bonds Payable (+L) ........................................................... 750,000 Req. 2December 31:Interest Expense (+E, -SE) ................................................... 64,814Discount on Bonds Payable (-XL, +L) ............................... 4,814 Cash (-A) ........................................................................... 60,000 Req. 3December 31, 2014:Income statement:Interest expense $ 64,814Balance sheet:Long-term LiabilitiesBonds payable $750,000Less: Unamortized discount ($48,138 - $4,814) 43,324 $706,676E10–8.Computations:Interest:$600,000 x 7.5% x 1/2 = $ 22,500Present value:$600,000 x 0.7168 = 430,080$ 22,500 x 6.6638 = 149,936Issue price $580,016Req. 1January 1:Cash (+A) .............................................................................. 580,016Discount on Bonds Payable (+XL, -L) ................................... 19,984Bonds Payable (+L) ........................................................... 600,000 Req. 2June 30:Interest Expense* (+E, -SE) ................................................. 24,651Discount on Bonds Payable (-XL, +L) ............................... 2,151 Cash (-A) ........................................................................... 22,500 *($580,016 x 8.5% x ?)Req. 3June 30, 2014:Income statement:Interest expense $ 24,651Balance sheet:Long-term LiabilitiesBonds payable $600,000Less: Unamortized discount ($19,984 – $2,151) 17,833 $582,167E10–9.Computations:Interest:$600,000 x 7.5% x 1/2 = $ 22,500Present value:$600,000 x 0.7168 = 430,080$ 22,500 x 6.6638 = 149,936Issue price $580,016Req. 1January 1:Cash (+A) .............................................................................. 580,016Bonds Payable (+L) ........................................................... 580,016 Req. 2June 30:Interest Expense* (+E, -SE) ................................................. 24,651Bonds Payable (+L) ........................................................... 2,151 Cash (-A) ........................................................................... 22,500 *($580,016 x 8.5% x ?)Req. 3June 30, 2014:Income statement:Interest expense $ 24,651Balance sheet:Long-term LiabilitiesBonds payable $582,167E10–10.Req. 1Issue price:1. Par, $500,000 – Carrying value at end of 1 year, $481,100 = $18,900 (unamortized discount for 9 remaining years).2. $18,900 9 years = $2,100 discount amortization per year (straight line).3. $481,100– $2,100 = $279,000 issue price (discount $21,000).Issuance entry:Cash (+A) .............................................................................. 479,000Discount on bonds payable (+XL, -L) .................................... 21,000Bonds payable (+L) ........................................................... 500,000 Req. 2Coupon (stated interest) rate:1. Reported interest expense, $23,100 – Discount amortized, $2,100 = $21,000 (cash interest).2. $21,000 ÷ $500,000 = 4.2% coupon (stated interest) rate.Interest expense:Interest expense (+E, -SE) .................................................... 23,100Discount on bonds payable ($21,000 ÷ 10 years) (-XL, +L) 2,100Cash ($500,000 x 4.2%) (-A) ............................................. 21,000E10–11.1. Issue price: $948. Stated rate, 6%; effective or yield rate, 8% (both were given).2. Discount: $1,000 – $948 = $52.3. $1,000 x 6% = $60.4. 2014, $76; 2015, $77; 2016, $79.5. Balance sheet:2014 $ 9642015 $ 9812016 $1,000 (immediately before retirement)6. Effective-interest amortization was used.E10–11. (continued)7. (a) $1,000 x 6% = $60.(b) $964 x 8% = $77 (rounded).(c) $77 – $60 = $17.(d) $964 + $17 = $981.8. Effective-interest amortization measures the amount of interest expense and netliability for each period on a present value basis. The interest expense and related amortization are based on the actual unpaid balance of the debt and the effective interest rate. Straight-line amortization is an approximation that does not take these factors into consideration. The effective-interest method is conceptuallypreferable but the straight-line method is used widely in practice because ofcomputational simplicity and the materiality concept.E10–12.The effective interest rate for a bond is determined by market forces and not the company. American was able to specify the coupon rate for the bonds whichdetermines the periodic interest payments. It appears that American intended to sell the bonds close to par value which would be achieved by having a coupon rate that was the same as the market rate. The market rate of interest continually changes as the result of such factors as inflation expectations and the level ofbusiness activity. It is virtually impossible to issue a bond at a point when thecoupon rate and the market rate are exactly the same.E10–13.Assuming that both companies offer the same business risk, many people might prefer the bond that had the slightly higher yield which is Walt Disney at 9.5%. If interest rates were to fall significantly, companies might decide to call their bonds and issue new ones at a lower interest rate. In this case, a zero coupon bond offers an extra margin of protection. A zero is sold at a deep discount (say 60% of par). It would be very unusual to see a company call such a bond if it were callable at par.In this case, the PepsiCo bond would be preferred.Many people who are retired desire to have a steady income without engaging in time-consuming transactions. These people would probably not want to buy a zero coupon bond which paid interest only at maturity.E10–14.Computations:Interest:$1,400,000 x 8% x 1/2 = $ 56,000Present value:$1,400,000 x 0.7894 = 1,105,160$ 56,000 x 7.0197 = 393,103Issue price $1,498,263Req. 1January 1:Cash (+A) .............................................................................. 1,498,263Premium on Bonds Payable (+L) ...................................... 98,263 Bonds Payable (+L) ..........................................................1,400,000 Req. 2June 30:Interest Expense (+E, -SE) ................................................... 43,717Premium on Bonds Payable (-L) ........................................... 12,283Cash (-A) ........................................................................... 56,000Req. 3Balance sheet:Long-term LiabilitiesBonds payable $1,400,000Plus: Unamortized premium ($98,263– $12,283) 85,980 $1,485,980Income statement:Interest expense $43,717E10–15.Computations:Interest:$2,000,000 x 5% = $ 100,000Present value:$2,000,000 x 0.4350 = 870,000$ 100,000 x 13.2944 = 1,329,440Issue price $2,199,440Req. 1January 1:Cash (+A) .............................................................................. 2,199,440Premium on Bonds Payable (+L) ...................................... 199,440 Bonds Payable (+L) .......................................................... 2,000,000 Req. 2June 30:Interest Expense (+E, -SE) ($2,199,440 x 4.25%) ............... 93,476Premium on Bonds Payable (-L) ........................................... 6,524Cash (-A) ........................................................................... 100,000 Req. 3Balance sheet:Long-term LiabilitiesBonds payable $2,000,000Plus: Unamortized premium ($199,440 – $6,524) 192,916 $2,192,916Income statement:Interest expense $93,476E10–16.Computations:Interest:$2,000,000 x 5% = $ 100,000Present value:$2,000,000 x 0.4350 = 870,000$ 100,000 x 13.2944 = 1,329,440Issue price $2,199,440Req. 1January 1:Cash (+A) .............................................................................. 2,199,440 Bonds Payable (+L) ........................................................... 2,199,440 Req. 2June 30:Interest Expense (+E, -SE) ($2,199,440 x 4.25%) ............... 93,476 Bonds Payable (-L) ............................................................... 6,524 Cash (-A) ........................................................................... 100,000 Req. 3Balance sheet:Long-term LiabilitiesBonds payable $2,192,916Income statement:Interest expense $93,476E10–17. Req. 1DateCashInterest Interest ExpensePremiumAmortizationNet LiabilityBalance1/1/2014 $10,27812/31/2014 $500 $10,278 x 4% = $411 $89 10,18912/31/2015 500 $10,189 x 4% = $408 92 10,09712/31/2016 500 $10,097 x 4% = $404 96 10,001** $1 rounding errorPresent value computation:Principal: $10,000 x .8890 $ 8,890Interest: 500 x 2.7751 1,388Issue price $10,278Req. 22014 2015 2016 December 31:Interest expense ................... $411 $408 $404Bond liability………………….$10,189 $10,097 $10,000* *Immediately before repayment of principalE10–18.Req. 1Cash is increased on the balance sheet.The statement of cash flows shows an inflow from financing activities. Bonds payable and premium on bonds payable are increased on the balance sheet. The debt-to-equity ratio will be higher. January 1:Cash (+A) .............................................................................. 376,774Premium on bonds payable (+L) ....................................... 76,774 Bonds payable (+L) ........................................................... 300,000 Principal: $300,000 x .7441 .................................................. $223,230Interest: $18,000 x 8.5302 .................................................... 153,544 Issue (sale) price ...................................................... $376,774 E10–18. (continued)Req. 2The interest expense will be increased on the income statement and the cash will be decreased on the balance sheet. The premium on bonds payable will bedecreased on the balance sheet. The debt-to-equity ratio will be decreased and the timesinterestearned ratio will be lower. December 31:Interest expense (+E, -SE) .................................................... 10,323Premium on bonds payable ($76,774 10 periods) (-L) ......... 7,677Cash ($300,000 x 6%) (-A) ................................................ 18,000Req. 3December 31, 2014:Balance Sheet:Long-term LiabilitiesBonds Payable $300,000Add: Unamortized premium ($76,774 - $7,677) 69,097 $369,097。

会计学原理罗炜课堂笔记I am a student taking the Principles of Accounting course taught by Professor Luo Wei. These class notes are essential for my understanding and success in this subject. The content covered in this course is both challenging and intriguing, requiring a strong grasp of accounting concepts and principles. Through attending Professor Luo's lectures and taking detailed notes, I aim to deepen my knowledge and improve my performance in this subject.我是罗炜教授教授的《会计学原理》课程的学生。

这些课堂笔记对于我理解和成功掌握这门课程至关重要。

课程内容既具有挑战性又引人入胜，需要对会计概念和原理有深刻的理解。

通过参加罗教授的讲座并做详细的笔记，我希望加深我的知识，提高我的成绩。

One of the key aspects of accounting principles is the concept of double-entry bookkeeping, which emphasizes the idea that every transaction has two sides – a debit and a credit. This fundamental concept forms the basis of accurate financial record keeping and reporting. Understanding the double-entry system is essential forany aspiring accountant or business professional, as it ensures the integrity and accuracy of financial information.会计原理的一个关键方面是复式记账的概念，强调每笔交易都有借方和贷方。

会计学原理FinancialAccountingbyRobertLibby第⼋版第七章答案Chapter 7Reporting and Interpreting Cost of Goods Sold and InventoryANSWERS TO QUESTIONS1. Inventory often is one of the largest amounts listed under assets on the balancesheet which means that it represents a significant amount of the resources available to the business. The inventory may be excessive in amount, which is a needless waste of resources; alternatively it may be too low, which may result in lost sales. Therefore, for internal users inventory control is very important. On the income statement, inventory exerts a direct impact on the amount of income.Therefore, statement users are interested particularly in the amount of this effect and the way in which inventory is measured. Because of its impact on both the balance sheet and the income statement, it is of particular interest to all statement users. 2. Fundamentally, inventory should include those items, and only those items,legally owned by the business. That is, inventory should include all goods that the company owns, regardless of their particular location at the time.3. The cost principle governs the measurement of the ending inventory amount.The ending inventory is determined in units and the cost of each unit is applied to that number. Under the cost principle, the unit cost is the sum of all costs incurred in obtaining one unit of the inventory item in its present state.4. Goods available for sale is the sum of the beginning inventory and the amount ofgoods purchased during the period. Cost of goods sold is the amount of goods available for sale less the ending inventory.5. Beginning inventory is the stock of goods on hand (in inventory) at the start of theaccounting period. Ending inventory is the stock of goods on hand (in inventory) at the end of the accounting period. The ending inventory of one period automatically becomes the beginning inventory of the next period.6. (a) Average cost–This inventory costing method in a periodic inventorysystem is based on a weighted-average cost for the entire period. At theend of the accounting period the average cost is computed by dividing thegoods available for sale in units into the cost of goods available for salein dollars. The computed unit cost then is used to determine the cost ofgoods sold for the period by multiplying the units sold by this average unitcost. Similarly, the ending inventory for the period is determined bymultiplying this average unit cost by the number of units on hand.(b) FIFO–This inventory costing method views the first units purchased as thefirst units sold. Under this method cost of goods sold is costed at theoldest unit costs, and the ending inventory is costed at the newest unitcosts.(c) LIFO–This inventory costing method assumes that the last unitspurchased are the first units sold. Under this method cost of goods sold iscosted at the newest unit costs and the ending inventory is costed at theoldest unit costs.(d) Specific identification–This inventory costing method requires that eachitem in the beginning inventory and each item purchased during the periodbe identified specifically so that its unit cost can be determined byidentifying the specific item sold. This method usually requires that eachitem be marked, often with a code that indicates its cost. When it is sold,that unit cost is the cost of goods sold amount. It often is characterized asa pick-and-choose method. When the ending inventory is taken, thespecific items on hand, valued at the cost indicated on each of them, is theending inventory amount.7. The specific identification method of inventory costing is subject to manipulation.Manipulation is possible because one can, at the time of each sale, select (pick and choose) from the shelf the item that has the highest or the lowest (or some other) unit cost with no particular rationale for the choice. The rationale may be that it is desired to influence, by arbitrary choice, both the amount of income and the amount of ending inventory to be reported on the financial statements. To illustrate, assume item A is stocked and three are on the shelf. One cost $100;the second one cost $115; and the third cost $125. Now assume that one unit is sold for $200. If it is assumed arbitrarily that the first unit is sold, the gross profit will be $100; if the second unit is selected, the gross profit will be $85; or alternatively, if the third unit is selected, the gross profit will be $75. Thus, the amount of gross profit (and income) will vary significantly depending upon which one of the three is selected arbitrarily from the shelf for this particular sale. This assumes that all three items are identical in every respect except for their unit costs. Of course, the selection of a different unit cost, in this case, also will influence the ending inventory for the two remaining items.8. LIFO and FIFO have opposite effects on the inventory amount reported underassets on the balance sheet. The ending inventory is based upon either the oldest unit cost or the newest unit cost, depending upon which method is used.Under FIFO, the ending inventory is costed at the newest unit costs, and under LIFO, the ending inventory is costed at the oldest unit costs. Therefore, when prices are rising, the ending inventory reported on the balance sheet will be higher under FIFO than under LIFO. Conversely, when prices are falling the ending inventory on the balance sheet will be higher under LIFO than under FIFO.9. LIFO versus FIFO will affect the income statement in two ways: (1) the amount ofcost of goods sold and (2) income. When the prices are rising, FIFO will give a lower cost of goods sold amount and hence a higher income amount than will LIFO. In contrast, when prices are falling, FIFO will give a higher cost of goods sold amount and, as a result, a lower income amount.10. When prices are rising,LIFO causes a lower taxable income than does FIFO.Therefore, when prices are rising, income tax is less under LIFO than FIFO. A lower tax bill saves cash (reduces cash outflow for income tax). The total amount of cash saved is the difference between LIFO and FIFO inventory amounts multiplied by the income tax rate.11. LCM is applied when market (defined as current replacement cost) is lower thanthe cost of units on hand. The ending inventory is valued at market (lower), which (a) reduces net income and (b) reduces the inventory amount reported on the balance sheet. The effect of applying LCM is to include the holding loss on the income statement (as a part of CGS) in the period in which the replacement cost drops below cost rather than in the period of actual sale.12. When a perpetual inventory system is used, the unit cost must be known for eachitem sold at the date of each sale because at that time two things happen: (a) the units sold and their costs are removed fromthe perpetual inventory record and the new inventory balance is determined; (b) the cost of goods sold is determined from the perpetual inventory record and an entry in the accounts is made as a debit to Cost of Goods Sold and a credit to Inventory. In contrast, when a periodic inventory system is used the unit cost need not be known at the date of each sale. In fact, the periodic system is designed so that cost of goods sold for each sale is not known at the time of sale. At the end of the period, under the periodic inventory system, cost of goods sold is determined by adding the beginning inventory to the total goods purchased for the period and subtracting from that total the ending inventory amount. The ending inventory amount is determined by means of a physical inventory count of the goods remaining on hand and with the units valued on a unit cost basis in accordance with the cost principle (by applying an appropriate inventory costing method). ANSWERS TO MULTIPLE CHOICE1. c)2. d)3. a)4. a)5. c)6. c)7. a)8. c)9. c) 10. a)Authors' Recommended Solution Time(Time in minutes)* Due to the nature of these cases and projects, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.MINI-EXERCISESM7–1.Type of BusinessType of Inventory Merchandising ManufacturingWork in process XFinished goods XMerchandise XRaw materials XM7–2.To record the purchase of 90 new shirts in accordance with the cost principle (perpetual inventory system):Inventory (+A) .............................................................. 2,150Cash ( A) .......................................................... 2,150 Cost: $1,800 + $185 + $165 = $2,150.The $108 interest expense is not a proper cost of the merchandise; it is recorded as prepaid interest expense and later as interest expense.M7–3.(1) Part of inventory (2) Expense as incurreda. Wages of factory workers Xb. Costs of raw materials purchased Xc. Sales salaries Xd. Heat, light, and power for the factory building Xe. Heat, light, and power for the headquartersoffice buildingXComputation: Simply rearrange the basic inventory model (BI + P – EI = CGS): Cost of goods sold ................................................. $11,042 million + Ending inventory .................................................... 2,916 million –Beginning inventory ............................................... (3,213) million Purchases .............................................................. $10,745 millionM7–5.(a) Declining costsHighest net income LIFOHighest inventory LIFO(b) Rising costsHighest net income FIFOHighest inventory FIFOM7–6.LIFO is often selected when costs are rising because it reduces the company’s tax liability which increases cash and benefits shareholders. However, it also reduces reported net income.M7–7.Quantity Cost perItem ReplacementCost per ItemLower of Costor MarketReported onBalance SheetItem A 70 $ 110 $100 $100 70 x $100 = $7,000 Item B 30 60 85 60 30 x $60 = $1,800 Total $8,800 M7–8.+ (a) Parts inventory delivered daily by suppliers instead of weekly.NE (b)Extend payments for inventory purchases from 15 days to 30 days.+ (c) Shorten production process from 10 days to 8 days.Understatement of the 2014 ending inventory by $50,000 caused 2014 pretax income to be understated and 2015 pretax income to be overstated by the same amount. Overstatement of the 2014 ending inventory would have the opposite effect; that is, 2014 pretax income would be overstated by $50,000 and 2015 pretax income understated by $50,000. Total pretax income for the two years combined would be correct.EXERCISESE7–1Item Amount ExplanationEnding inventory (physical count onDecember 31, 2014)$34,500 Per physical inventory.a. Goods purchased and in transit + 700 Goods purchased and in transit,F.O.B. shipping point, are ownedby the purchaser.b. Samples out on trial tocustomer + 1,800 Samples held by a customer ontrial are still owned by the vendor;no sale or transfer of ownershiphas occurred.c. Goods in transit to customer Goods shipped to customers,F.O.B. shipping point, are ownedby the customer becauseownership passed when they weredelivered to the transportationcompany. The inventory correctlyexcluded these items.d. Goods sold and in transit + 1,500 Goods sold and in transit, F.O.B.destination, are owned by the selleruntil they reach destination.Correct inventory, December 31, 2014 $38,500E7–2.(Italics for missing amounts only.)Case A Case B Case CNet sales revenue .......... $7,500 $4,800$5,000 Beginning inventory ........ $11,200 $ 7,000 $ 4,000 Purchases .................. 4,500 8,050 9,500Goods available for sale . 15,700 15,050 13,500Ending inventory ............ 9,000 11,050 9,300Cost of goods sold.......... 6,700 4,000 4,200 Gross profit .................. 800 800 800 Expenses .................. 300 1,000 700 Pretax income ................ $ 500 $ (200) $ 100E7–3.E7–4.Computations:Simply rearrange the cost of goods sold equationBI + P – EI = CGSP = CGS – BI + EICost of goods sold ................................... $1,639,188,000 –Beginning inventory .................................. (385,857,000) + Ending inventory ...................................... 569,818,000 Purchases ................................................ $1,823,149,000AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory ($5) ............. 2,000 $10,000 $10,000 $10,000 Purchases (March 21) ($6) ......... 5,000 30,000 30,000 30,000 (August 1) ($8) .......... 3,000 24,000 24,000 24,000Goods available for sale .. 10,000 64,000 64,000 64,000 Ending inventory* ....................... 4,000 30,000 22,000 25,600 Cost of goods sold** ........ 6,000 $34,000 $42,000 $38,400 *Ending inventory computations:FIFO: (3,000 units @ $8) + (1,000 units @ $6) = $30,000.LIFO: (2,000 units @ $5) + (2,000 units @ $6) = $22,000.Average: [(2,000 units @ $5) + (5,000 units @ $6) + (3,000 units @ $8)] =$64,000 ÷ 10,000 units = $6.40 per unit.4,000 units @ $6.40 = $25,600.**Cost of goods sold computations:FIFO: (2,000 units @ $5) + (4,000 units @ $6) = $34,000.LIFO: (3,000 units @ $8) + (3,000 units @ $6) = $42,000.Average: [(2,000 units @ $5) + (5,000 units @ $6) + (3,000 units @ $8)] =$64,000 ÷ 10,000 units = $6.40 per unit.6,000 units @ $6.40 = $38,400.AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory ($5) ............. 2,000 $10,000 $10,000 $10,000 Purchases (March 21) ($4) ......... 6,000 24,000 24,000 24,000 (August 1) ($2) .......... 4,000 8,000 8,000 8,000Goods available for sale .. 12,000 42,000 42,000 42,000 Ending inventory* ....................... 3,000 6,000 14,000 10,500 Cost of goods sold ........... 9,000 $36,000 $28,000 $31,500 *Ending inventory computations:FIFO: (3,000 units @ $2) = $6,000.LIFO: (2,000 units @ $5) + (1,000 units @ $4) = $14,000.Average: [(2,000 units @ $5) + (6,000 units @ $4) + (4,000 units @ $2)] =$42,000 ÷ 12,000 units = $3.50 per unit.3,000 units @ $3.50 = $10,500.**Cost of goods sold computations:FIFO: (2,000 units @ $5) + (6,000 units @ $4) + (1,000 units @ $2) = $36,000.LIFO: (4,000 units @ $2) + (5,000 units @ $4) = $28,000.Average: [(2,000 units @ $5) + (6,000 units @ $4) + (4,000 units @ $2)] =$42,000 ÷ 12,000 units = $3.50 per unit.9,000 units @ $3.50 = $31,500.E7–7.Req. 1BROADHEAD COMPANYIncome StatementFor the Year Ended December 31, 2015Case A Case BFIFO LIFOSales revenue1 .............................. $500,000 $500,000 Cost of goods sold:Beginning inventory ................ $ 27,000 $ 27,000Purchases .............................. 195,000 195,000Goods available for sale2 222,000 222,000 Ending inventory3 .................. 125,000 87,000Cost of goods sold4......... 97,000 135,000 Gross profit .................................. 403,000 365,000 Expenses .................................. 195,000 195,000 Pretax income ................................ $208,000 $170,000 Computations:(1) Sales: (10,000 units @ $50) = $500,000(2) Goods available for sale (for both cases):Units Unit Cost Total Cost Beginning inventory 3,000 $9 $ 27,000Purchase, April 11, 2015 9,000 10 90,000Purchase, June 1, 2015 7,000 15 105,000 Goods available for sale 19,000 $222,000 (3) Ending inventory (19,000 available – 10,000 units sold = 9,000 units):Case A FIFO:(7,000 units @ $15 = $105,000) +(2,000 units @ $10 = $20,000) = $125,000.Case B LIFO:(3,000 units @ $9 = $27,000)+(6,000 units @ $10 = $60,000) = $87,000.E7–7. (continued)Req. 1 (continued)(4) Cost of goods sold (10,000 units sold):Case A FIFO:(3,000 units @ $9 = $27,000) +(7,000 units @ $10 = $70,000) = $97,000Case B LIFO:(7,000 units @ $15 = $105,000) +(3,000 units @ $10 = $30,000) = $135,000Req. 2Comparison of AmountsCase A Case BFIFO LIFOPretax Income $208,000 $170,000Difference $38,000Ending Inventory 125,000 87,000Difference 38,000The above tabulation demonstrates that the pretax income difference between the two cases is exactly the same as the inventory difference. Differences in inventory have a dollar-for-dollar effect on pretax income.Req. 3LIFO may be preferred for income tax purposes because it reports less taxable income (when prices are rising) and hence (a) reduces income tax and (b) as a result reduces cash outflows for the period.E7–8.Req. 1BECK INC.Income StatementFor the Year Ended December 31, 2015Case A Case BFIFO LIFOSales revenue1 .............................. $704,000 $704,000 Cost of goods sold:Beginning inventory ................ $ 35,000 $ 35,000Purchases .............................. 281,000 281,000Goods available for sale2 316,000 316,000 Ending inventory3 .................. 128,000 80,000Cost of goods sold4......... 188,000 236,000 Gross profit .................................. 516,000 468,000 Expenses .................................. 500,000 500,000 Pretax income ................................ $16,000 $(32,000) Computations:(1) Sales: (8,000 units @ $28) + (16,000 units @ $30) = $704,000(2) Goods available for sale (for both cases):Units Unit Cost Total Cost Beginning inventory 7,000 $5 $ 35,000Purchase, March 5, 2015 19,000 9 171,000Purchase, September 19, 2015 10,000 11 110,000 Goods available for sale 36,000 $316,000 (3) Ending inventory (36,000 available – 24,000 units sold = 12,000 units):Case A FIFO:(10,000 units @ $11 = $110,000) +(2,000 units @ $9 = $18,000) = $128,000.Case B LIFO:(7,000 units @ $5 = $35,000)+(5,000 units @ $9 = $45,000) = $80,000.E7–8. (continued)Req. 1 (continued)(4) Cost of goods sold (24,000 units sold):Case A FIFO:(7,000 units @ $5 = $35,000) +(17,000 units @ $9 = $153,000) = $188,000Case B LIFO:(10,000 units @ $11 = $110,000) +(14,000 units @ $9 = $126,000) = $236,000Req. 2Comparison of AmountsCase A Case BFIFO LIFOPretax Income $16,000 $(32,000)Difference $48,000Ending Inventory 128,000 80,000Difference 48,000The above tabulation demonstrates that the pretax income difference between the two cases is exactly the same as the inventory difference. Differences in inventory have a dollar-for-dollar effect on pretax income.Req. 3LIFO may be preferred for income tax purposes because it reports less taxable income (when prices are rising) and hence (a) reduces income tax and (b) as a result reduces cash outflows for the period.E7–9.Req. 1AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory .................... 2,000 $ 76,000 $ 76,000 $ 76,000Purchases................................... 8,000 320,000 320,000 320,000 Goods available for sale .. 10,000 396,000 396,000 396,000 Ending inventory* ....................... 1,800 72,000 68,400 71,280 Cost of goods sold** ........ 8,200 $324,000 $327,600 $324,720Average Income statement FIFO LIFO Cost Sales revenue ....................................... $615,000 $615,000 $615,000 Cost of goods sold................................. 324,000 327,600 324,720 Gross profit ......................................... 291,000 287,400 290,280 Expenses ......................................... 194,500 194,500 194,500 Pretax income ....................................... 96,500 92,900 95,780 Income tax expense (30%) ......... 28,950 27,870 28,734 Net income ......................................... $ 67,550 $ 65,030 $ 67,046*Ending inventory computations:FIFO: 1,800 units @ $40 = $72,000.LIFO: 1,800 units @ $38 = $68,400.Average: [(2,000 units @ $38) + (8,000 units @ $40)] ÷ 10,000 units =$396,000 ÷ 10,000 units = $39.60 per unit.$39.60 x 1,800 units = $71,280.**Cost of goods sold computations:FIFO: (2,000 units @ $38) + (6,200 units @ $40) = $324,000.LIFO: (8,000 units @ $40) + (200 units @ $38) = $327,600.Average: [(8,000 units @ $38) + (8,000 units @ $40)] =$396,000 ÷ 10,000 units = $39.60 per unit.8,200 units @ $39.60 = $324,720.Req. 2FIFO produces a more favorable (higher) net income because when prices are rising it gives a lower cost of goods sold amount. FIFO allocates the old (lower) unit costs to cost of goods sold.LIFO produces a more favorable cash flow than FIFO because, when prices are rising, it produces a higher cost of goods sold amount and lower taxable income and, therefore, lower income tax expense for the period. Cash outflow is less under LIFO by the amount of income tax reduction. LIFO causes these comparative effects because it allocates the new (higher) unit costs to cost of goods sold.E7–9. (continued)Req. 3When prices are falling, the opposite effect occurs–LIFO produces higher net income and less favorable cash flow than does FIFO.E7–10.Req. 1AverageFIFO LIFO Cost Cost of goods sold:Beginning inventory (400 units @ $28) ... $11,200 $11,200 $11,200 Purchases (475 units @ $35) ................. 16,625 16,625 16,625 Goods available for sale ......................... 27,825 27,825 27,825 Ending inventory (525 units)*.................. 18,025 15,575 16,695 Cost of goods sold (350 units)** ............. $ 9,800 $12,250 $ 11,130 *Computation of ending inventory:FIFO: (475 units x $35) + (50 units x $28) = $18,025LIFO: (400 units x $28) + (125 units x $35) = $15,575Average: [(400 units @ $28) + (475 units @ $35)] ÷ 875 units =$27,825 ÷ 875 units = $31.80 per unit.$31.80 x 525 units = $16,695.**Cost of goods sold computations:FIFO: (350 units @ $28) = $9,800.LIFO: (350 units @ $35) = $12,250.Average: [(400 units @ $28) + (475 units @ $35)] ÷ 875 units =$27,825 ÷ 875 units = $31.80 per unit.$31.80 x 350 units = $11,130.Req. 2AverageFIFO LIFO Cost Sales revenue ($50 x 350) ............................... $17,500 $17,500 $17,500 Cost of goods sold............................................. 9,800 12,250 11,130 Gross profit ..................................................... 7,700 5,250 6,370 Expenses ..................................................... 1,700 1,700 1,700 Pretax income ................................................... $ 6,000 $ 3,550 $ 4,670E7–10. (continued)Req. 3Ranking in order of favorable cash flow: The higher rankings are given to the methods that produce the lower income tax expense because the lower the income tax expense the higher the cash savings.(1) LIFO–produces the lowest pretax income, hence the lowest amount of cash to bepaid for income tax.(2) Weighted average–produces next lower pretax income.(3) FIFO–produces the highest pretax income and as a result the highest income tax.This result causes the lowest cash savings on income tax.The above comparative effects occurred because prices were rising. If prices were falling the three methods would have produced the opposite ranking.。