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会计学原理Financial-Accounting-by-Rob ert-Libby第八版-第三章-答案Chapter 3Operating Decisions andthe Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be as follows:inventory is purchased, cash is paid to suppliers, the product is manufactured and sold on credit, and the cash is collected from the customer.2. The time period assumption means that the financial condition andperformance of a business can be reported periodically, usually every month, quarter, or year, even though the life of the business is much longer.3. Net Income = Revenues + Gains - Expenses - Losses.Each element is defined as follows:Revenues -- increases in assets or settlements of liabilities from ongoing operations.Gains -- increases in assets or settlements of liabilities from peripheral transactions.Expenses -- decreases in assets or increases in liabilities from ongoingoperations.Losses -- decreases in assets or increases in liabilities from peripheraltransactions.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 andrecording expenses 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.Financial Accounting, 8/e 3-2 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Financial Accounting, 8/e3-3© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.6. The four criteria that must be met for revenue to be recognized under theaccrual 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. Reve nues 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 (orOperating 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. bFinancial Accounting, 8/e 3-4 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.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 discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Financial Accounting, 8/e 3-5 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Financial Accounting, 8/e 3-6© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.MINI-EXERCISESM3–1.TERMG (1) LossesC (2) Expense matching principle F (3) RevenuesE (4) Time period assumption B(5) Operating cycleM3–2.Cash Basis Income StatementAccrual Basis Income StatementRevenues: Cash sales Customer deposits$8,000 5,000 Revenues: Sales to customers$18,000 Expenses:Inventory purchases Wages paid 1,000 900 Expenses: Cost of sales Wages expense Utilities expense 9,000 900 300Net Income$11,100Net Income $7,800Revenue Account Affected Amount of Revenue Earned in JulyM3–4.Expense Account Affected Amount of Expense Incurred in JulyFinancial Accounting, 8/e 3-7 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.a. Cash (+A) ............................................................................ 15,000Games Revenue (+R, +SE) .......................................... 15,000 b. Cash (+A) ............................................................................ 3,000Accounts Receivable (+A) ................................................ 5,000 Sales Revenue (+R, +SE) ............................................. 8,000 c. Cash (+A) ............................................................................ 4,000Accounts Receivable (-A) ........................................... 4,000 d. Cash (+A) ............................................................................ 2,500Unearned Revenue (+L) ............................................... 2,500 M3–6.e. Cost of Goods Sold (+E, -SE)........................................... 6,800Inventory (-A) ............................................................... 6,800 f. Accounts Payable (–L) (800)Cash (-A) (800)g. Wages Expense (+E, -SE) ................................................. 3,500Cash (-A) ...................................................................... 3,500 h. Insurance Expense (+E, -SE) . (500)Prepaid Expenses (+A) ...................................................... 1,00 Cash (-A) ...................................................................... 1,500 i. Repairs Expense (+E, -SE) .. (700)Cash (-A) (700)j. Utilities Expense (+E, -SE) (900)Accounts Payable (+L) (900)Financial Accounting, 8/e 3-8 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Transaction (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.Transaction (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.Financial Accounting, 8/e 3-9 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Craig’s Bowling, Inc.Income StatementFor the Month of July 2014Revenues:Games revenue $15,000Sales revenue 8,000Total revenues 23,000Expenses:Cost of goods sold 6,800Utilities expense 900Wages expense 3,500Insurance expense 500Repairs expense 700Total expenses 12,400Net income $ 10,600M3–10.Financial Accounting, 8/e 3-10 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.M3–11.These results suggest that Jen’s Jewelry Company earned approximately $0.31 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 - Dividends DeclaredE3–2.Req. 1Cash Basis Income StatementAccrual Basis Income StatementRevenues:Cash sales Customer deposits $500,00070,000Revenues:Sales tocustomers$750,000Expenses:Inventory purchases Wages paidUtilities paid90,000180,30017,200Expenses:Cost of salesWages expenseUtilities expense485,000184,00019,130Net 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 (e.g., $250,000 credit sales) or accelerate (e.g., $70,000 customer deposits) recognition of revenues and expenses long before or after goods andservices 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.Activity Revenue AccountAmount of RevenueActivity Expense AccountAmount of ExpenseE3–5.Transaction (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.Transaction (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 same amount.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 same amount.e. Inventory (+A) ................................................................... 32,305Accounts payable (+L) .............................................. 32,305 Debits equal credits. Assets and liabilities increase by the same amount.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 thesame 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 thesame amount.i. Retained earnings (-SE) (597)Cash (-A) (597)Debits equal credits. Assets and stock holders’ equity decrease by thesame 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 same amount.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 same amount.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 thesame amount.e.Cash (+A) ................................................................... 390,000Unearned pass revenue (+L) ......................... 390,000 Debits equal credits. Since the season passes are sold before Vail Resorts provides service, revenue is deferred until it is earned. Assets andliabilities 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 ofstockholders' equity). Stockholders' equity and assets increase by thesame amount.(2) Cost of goods sold (+E, -SE) (500)Merchandise inventory (-A) (500)Debits equal credits. Expenses decrease retained earnings (a part ofstockholders' equity). Stockholders' equity and assets decrease by thesame 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 townhouse isused, revenue is deferred until it is earned. Assets and liabilities increase by the same amount.i. Accounts payable (-L) ............................................. 17,500Cash (-A) ........................................................ 17,500 Debits equal credits. Assets and liabilities decrease by the same amount. 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 thesame amount.Req. 22/1 Rent expense (+E, -SE) (275)Cash (-A) (275)2/2 Fuel expense (+E, -SE) (490)Accounts payable (+L) (490)2/4 Cash (+A) (820)Unearned revenue (+L) (820)2/7 Cash (+A) (910)Transport revenue (+R, +SE) (910)2/10 Advertising expense (+E, -SE) (175)Cash (-A) (175)2/14 Wages payable (-L) ......................................................... 2,300Cash (-A) ......................................................... 2,3002/18 Cash (+A) ..........................................................................Accounts receivable (+A) ................................................ 1,600 2,200Transport revenue (+R, +SE) ......................... 3,800 2/25 Parts supplies (+A) .......................................................... 2,550Accounts payable (+L) ................................... 2,550 2/27 Retained earnings (-SE) .. (200)Dividends payable (+L) (200)Req. 1 and 2Accounts Unearned Fee NoteAdditional Paid-inRebuilding Fees RentItem (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 $ 2,950Assets = 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 $ 7,890Cash 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 cash paid 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 revenues 19,000 Operating Expenses:Wages expense 16,500 Utilities expense 400 Total operating expenses 16,900 Operating Income 2,100 Other Item:Rent revenue 850 Net Income $ 2,950Req. 1 and 2Common Additional RetainedFood Sales Revenue Catering Sales RevenueE3–14.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 $ 11,9004,20016,10010,8304206,28036317,893Net Loss $ (1,793) Req. 2Transaction O, I, or F Activity (or No Effect) on Statement ofDirection and AmountReq. 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 $82,000cash.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 $9,820cash and the balance on account. The cost of the goods sold 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 month and$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 in thefuture.Req. 2Kate’s Kite CompanyIncome StatementFor the Month Ended April 30, 2014Sales Revenue Expenses:Cost of salesWages expenseRent expenseUtilities expenseTotal expenses $ 15,4507,0001,3006201,48010,400Net Income $ 5,050Kate’s Kite CompanyBalance SheetAt April 30, 2014Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities:Cash $70,400 Accounts payable $20,080 Accounts receivable 4,180 Unearned revenue 2,510 Inventory 17,800 Total current liabilities 22,590 Prepaid expenses 1,860 Shareholders’ Equity:Total current assets 94,240 Common stock 10,000 Store fixtures 15,400 Additional paid-in capital 72,000Retained earnings 5,050Total shareholders’equity87,050Total Assets $109,640 Total Liabilities &Shareholders’ Equity$109,640E3–16.Req. 1Assets = Liabilities + Stockholders’ Equity $ 3,200 $ 2,400 $ 800 8,000 5,600 4,0006,400 1,600 3,200 $17,600 $9,600 $ 8,000Req. 2Accounts Long-TermAccounts Unearned Long-TermAdditionalConsulting Fee InvestmentRent ExpenseE3–16. (continued)Req. 3Revenues $58,400 ($58,000 from sales + $400 on investments)– Expenses 56,400 ($36,000 + $12,000 + $800 + $7,600)Net Income $ 2,000Assets = Liabilities + Stockholders’ Equity$ 1,120 $ 1,600 $ 80012,400 7,200 4,0006,400 1,600 2,7202,000 net income $19,920 $10,400 $ 9,520 Req. 4Net Profit Margin = Net Income = $2,000 = 0.0345Ratio Sales (Operating) Revenues $58,000* or 3.45% * The $400 of investment income is not an operating revenue and is not included in the computation.The increasing trend in the net profit margin ratio (from 2.5% in 2013 to 2.9% in 2014 and then to 3.45% in 2015) suggests that the company is managing its sales and expenses more effectively over time.E3–17.Req. 1Accounts receivable increases with customer sales on account and decreases with cash payments received from customers.Prepaid expenses increase with cash payments of expenses related to future periods and decrease as these expenses are incurred over time.Unearned subscriptions increase with cash payments received from customers for goods or services to be provided in the future and decreases when those goods or services are provided.Req. 2Trade Accounts ReceivablePrepaidExpensesUnearnedSubscriptionsComputations:Beginning + “+”-“-”= EndingTrade accounts receivable 717 + 5,240 -??==6935,264Prepaid expenses 95 + 203 -??==107191Unearned subscriptions 224 + 2,690 -??==2312,683E3–18.ITEM LOCATION1. Description of a company’sprimary business(es). Letter to shareholders;Management’s Discussion and Analysis; Summary of significant accounting policies note2. Income taxes paid. Notes; Statement of cash flows3. Accounts receivable. Balance sheet4. Cash flow from operatingactivities.Statement of cash flows5. Description of a company’srevenue recognition policy. Summary of significant accounting policies note6. The inventory sold during theyear.Income statement (Cost of Goods Sold)7. The data needed to compute thenet profit margin ratio.Income statementPROBLEMSP3-1.Transactions Debit Credita. Example: Purchased equipment for use in the business;5 1, 8paid one-third cash and signed a note payable for thebalance.b. Paid cash for salaries and wages earned by employees thisperiod.15 1 c. Paid cash on accounts payable for expensesincurred last period.7 1d. Purchased supplies to be used later; paid cash. 3 1e. Performed services this period on credit. 2 14f. Collected cash on accounts receivable for servicesperformed last period. 1 2g. Issued stock to new investors. 1 11, 12h. Paid operating expenses incurred this period.15 1i. Incurred operating expenses this period to be paidnext period.15 7 j. Purchased a patent (an intangible asset); paid cash. 6 1 k. Collected cash for services performed this period. 1 14 l. Used some of the supplies on hand for operations.15 3 m. Paid three-fourths of the income tax expense for the year;the balance will be paid next year.16 1, 10 n. Made a payment on the equipment note in (a); the paymentwas part principal and part interest expense.8, 17 1 o. On the last day of the current period, paid cash for aninsurance policy covering the next two years. 4 1a. Cash (+A) ........................................................................... 40,000Common stock (+SE) (20)Additional paid-in capital (+SE) ................................ 39,980 b. Cash (+A) ........................................................................... 60,000Note payable (long-term) (+L) ..................................... 60,000 c. Rent expense (+E, -SE) .................................................... 1,500Prepaid rent (+A) ............................................................... 1,500 Cash (-A) ...................................................................... 3,000 d. Prepaid insurance (+A) ..................................................... 2,400Cash (-A) ..................................................................... 2,400 e. Furniture and fixtures (or Equipment) (+A) ..................... 15,000Accounts payable (+L) ............................................... 12,000Cash (-A) ..................................................................... 3,000 f. Inventory (+A) .................................................................... 2,800Cash (-A) ..................................................................... 2,800 g. Advertising expense (+E, -SE) .. (350)Cash (-A) (350)h. Cash (+A) (850)Accounts receivable (+A) (850)Sales revenue (+R, +SE) ............................................ 1,700 Cost of goods sold (+E, -SE) . (900)Inventory (-A) (900)i. Accounts payable (-L) ...................................................... 12,000Cash (-A) ..................................................................... 12,000 j. Cash (+A) (210)Accounts receivable (-A) (210)。
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.。
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.。
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。
会计学原理知识点归纳（第一、二章）班级：13国会2班助教：席梦娇第一章知识点梳理1.accounting：熟记定义ers of accounting information：external users：例如…（主要使用financial accounting）internal users：例如…（主要使用managerial accounting）3.fundamentals of accounting（1）GAAP：two organizations to establish GAAP private group：FASBgovernment group：SEC（2）IFRS：issued by IASB< international accounting standard aboard> （3）accounting principles：熟记四条principles的定义（4）accounting assumptions：熟记四条assumptions的定义，了解business entities的分类4.accounting equation：重点掌握5.financial statements：熟记四表一注的构成及编制顺序第二章知识点梳理：1.source documents：熟记定义2.account、general ledger、T-account ：熟记书写格式3.double-entry accounting：注意理解（每一笔分录有Dr.必有Cr.，Dr. Cr.必相等）4.recording process：analyzing journals post to ledger trial balance5.preparing trial balance：重点掌握编制步骤Chapter 31.accounting period：常用的几种会计分期2.accrual basis VS cash basis：熟记定义，常考点，可能出名词解释。
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).。
会计学原理英文版Accounting PrinciplesIntroductionAccounting principles refer to the fundamental concepts and guidelines that underpin the field of accounting. These principles provide a framework for recording, reporting, and analyzing financial transactions and information. They help ensure consistency and comparability in financial statements, enabling stakeholders to make informed decisions.The Accounting EquationAt the core of accounting principles is the accounting equation, which states that assets equal liabilities plus owner's equity. This equation forms the basis for maintaining balance in financial records. It expresses the relationship between resources owned by the business (assets), the sources of funding for those resources (liabilities), and the owners' claims to those resources (equity).Double-Entry SystemThe double-entry system is another key accounting principle. It requires that every transaction be recorded with equal debits and credits in the accounting records. This system ensures that the accounting equation remains in balance and enables the detection and correction of errors.Revenue RecognitionRevenue recognition is an important accounting principle used to determine when and how to recognize revenue. According to this principle, revenue should be recognized when it is both earned and realizable. This means that revenue is recognized when the company has fulfilled its obligations to provide goods or services and can reasonably expect to receive payment.Expense RecognitionExpense recognition, also known as matching principle, requires that expenses be recorded in the same period as the related revenues. This principle ensures that expenses are matched with the revenues they help generate, providing a more accurate depiction of the financial performance of a business.ConservatismThe principle of conservatism guides accountants to be cautious and to err on the side of understating rather than overstating assets and revenues. This principle helps prevent overvaluing assets and inflating financial results, promoting transparency and reliability. MaterialityThe materiality principle suggests that financial information should be reported if its omission or misstatement could influence the economic decisions of users. This principle recognizes that not all information is equally significant and allows for the omission of immaterial details to avoid unnecessary clutter in financialstatements.Going ConcernThe going concern principle assumes that a business will continue to operate indefinitely unless there is evidence to the contrary. This principle allows accountants to prepare financial statements under the assumption that the company will continue its operations in the foreseeable future, except when liquidation or cessation of operations is imminent.ConclusionAccounting principles provide a foundation for accurate and reliable financial reporting. By adhering to these principles, accountants ensure consistency, comparability, and transparency in financial statements, enabling stakeholders to evaluate a company's financial position and make informed decisions. Understanding and applying these principles is essential for anyone involved in the field of accounting.。
《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。
financial accounting robert中文版
《财务会计（中文版）》是由Robert N. Anthony（罗伯特·安东尼）等人撰写的一本关于财务会计的教材。
该教材综合了财务会计的基本概念、原则和技术，并介绍了财务报表的编制和分析方法。
该教材分为十一章，涵盖了财务会计的各个方面。
第一章介绍了财务会计的基本概念和目标，以及财务报表的作用和用途。
第二章讨论了财务会计的基本原则和假设，以及会计周期和准则的应用。
第三章介绍了会计核算的基本步骤和方法，包括账户的分类和记账的规则。
第四章讨论了财务会计中的会计方程和会计等式，并介绍了会计科目和会计凭证的编制。
第五章介绍了财务报表的编制和分析方法，包括资产负债表、损益表和现金流量表。
第六章讨论了财务报表的调整和审计，以及财务报表的披露要求。
第七章介绍了财务会计中的现金和应收账款管理，包括现金流量预测和现金管理的方法。
第八章讨论了财务会计中的库存和长期资产管理，包括库存估值和资产折旧的方法。
第九章介绍了财务会计中的负债和所有者权益管理，包括负债成本和所有者权益的计算方法。
第十章讨论了财务会计中的收入和费用管理，包括收入的确认和费用的计提方法。
第十一章介绍了财务会计中的财务分析和决策，包括财务比率和投资决策的分析方法。
《财务会计（中文版）》是一本系统和全面介绍财务会计的教材，适用于大学本科和研究生的会计专业学生，以及从事财务会计工作的人员阅读和参考。
会计学原理FinancialAccountingbyRobertLibby答案Chapter 1Financial Statements and Business Decisions***** TO *****NS1.Accounting is a system that collects and processes (analyzes, measures, and records)financial information about an organization and reports that information to decision makers.2.Financial accounting involves preparation of the four basic financial statements andrelated disclosures for external decision makers. Managerial accounting involves the preparation of detailed plans, budgets, forecasts, and performance reports for internal decision makers.3.Financial reports are used by both internal and external groups and individuals. Theinternal groups are comprised of the various managers of the entity. The external groups include the owners, investors, creditors, governmental agencies, other interested parties, and the public at large.4.Investors purchase all or part of a business and hope to gain by receiving part of whatthe company earns and/or selling the company in the future at a higher price than they paid. Creditors lend money to a company for a specific length of time and hope to gain by charging interest on the loan.5.In a society each organization can be defined as a separate accounting entity. Anaccounting entity is the organization for which financial data are to be collected.Typical accounting entities are a business, a church, agovernmental unit, a university and other nonprofit organizations such as a hospital and a welfare organization. A business typically is defined and treated as a separate entity because the owners, creditors, investors, and other interested parties need to evaluate its performance and its potential separately from other entities and from its owners.6.Name of StatementAlternative Title(a) Income Statement(a)Statement of Earnings; Statement of Income; Statement of Operations(b)Balance Sheet(b)Statement of Financial Position(c)Audit Report(c)Report of Independent AccountantsIrwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-113.The accounting equation for the balance sheet is: Assets = L iabilities + Stockholders’Equity. Assets are the probable (expected) future economic benefits owned by the entity as a result of past transactions. They are the resources owned by the business at a given point in time such as cash, receivables, inventory, machinery, buildings, land, and patents. Liabilities are probable (expected) debts or obligations of the entity as a result of past transactions which will be paid with assets or services in the future. They are the obligations of the entity such as accounts payable, notes payable, and bonds payable. Stockholders’ equity is financing provided by owners of the business and operations. It is the claim of the owners to the assets of the business after the creditor claims have been satisfied. It may be thought of as the residual interest because it represents assets minus liabilities.14.The accounting equation for the statement of cash flows is: Cash flows from operating activities + Cash flows from investing activities + Cash flows fromfinancing activities = Change in cash for the period. The net cash flows for the period represent the increase or decrease in cash that occurred during the period. Cash flows from operating activities are cash flows directly related to earning income (normal business activity including interest paid and income taxes paid). Cash flows from investing activities include cash flows that are related to the acquisition or sale of productive assets used by the company. Cash flows from financing activities are directly related to the financing of the enterprise itself.15.The accounting equation for the statement of retained earnings is: Ending RetainedEarnings = Beginning Retained Earnings + Net Income - Dividends. It begins with beginning-of-the-year Retained Earnings which is the prior year’s ending retained earnings reported on the balance sheet. The current year's Net Incomereported on the income statement is added and the current year's Dividends are subtracted from this amount. The ending Retained Earnings amount is reported on the end-of-periodbalance sheet.16.Marketing managers and credit managers use customers' financial statements todecide whether to extend them credit for their purchases. Purchasing managers use potential suppliers' financial statements to judge whether the suppliers have theresources necessary to meet current and future demand. Human resource managers use financial statements as a basis for contract negotiations, to determine what pay rates the company can afford. The net income figure even serves as a basis to pay bonuses not only to management, but to other employees through profit sharing plans.17.The Securities and Exchange Commission (SEC) is the U.S. government agencywhich determines the financial statements that public companiesmust provide to stockholders and the measurement rules used in producing those statements. The Financial Accounting Standards Board (FASB) is the private sector body given the primary responsibility to work out the detailed rules which become generally accepted accounting principles.7.The heading of each of the four required financial statements should include thefollowing:(a) Name of the entity(b) Name of the statement(c) Date of the statement, or the period of time(d) Unit of measure8.(a)The purpose of the income statement is to present information about therevenues, expenses, and the income of the entity for a specified period of time.(b)The purpose of the balance sheet is to report the financial position of an entity at a given date, that is, to report information about the assets, obligations and stockholders’ equity of the entity as of a specific date.(c)The purpose of the statement of cash flows is to present information about the flow of cash into the entity (sources), the flow of cash out of the entity (uses), and the net increase or decrease in cash during the period.(d)The statement of retained earnings reports the cumulative amount of earnings for a corporation less any dividends declared and paid.9.The income statement and the statement of cash flows are dated “For the Year EndedDecember 31, 20X,” because they report the inflows and outflowsof resources during a period of time. In contrast, the balance sheet is dated “At December 31, 20X”because it represents the resources, obligations and stockholders’ equity at a specific date.10.Assets are important to creditors and investors because assets provide a basis forjudging whether sufficient resources are available to operate the company. Assets are also important because they could be sold for cash in the event the company goes out of business. Liabilities are important to creditors and investors because the company must be able to generate sufficient cash from operations or further borrowing to meet the payments required by debt agreements. If a business does not pay its creditors, the law may give the creditors the right to force the sale of assets sufficient to meet their http://.cn income is the excess of total revenues over total expenses. Net loss is the excess of total expenses over total revenues. Breakeven is when the total revenues and total expenses are exactly equal.12.The accounting equation for the income statement is Revenues - Expenses = Net Income. Thus, the three major items reported on the income statement are (1) revenues, (2) expenses, and (3) income.Irwin/McGraw-Hill The McGraw-Hill Companies, Inc., 20011-2 Solutions Manual18.Management is responsible for preparing the financial statements and otherinformation contained in the annual report and for the maintenance of a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, at appropriate cost, that transactions are processed in accordance with company authorization and are properly recorded and reported in the financial statements, and that assets are adequately safeguarded. Independentexamine the financial reports (prepared by management) and the underlying records to assure that the reports represent what they claim and conform with generally accepted accounting principles (GAAP). 19.A sole proprietorship is an unincorporated business owned by one individual. Apartnership is an unincorporated association of two or more individuals to carry on a business. A corporation is a business that is organized under the laws of a particular state whereby a charter is granted and the entity is authorized to issue shares of stock as evidence of ownership by the owners (i.e., stockholders).20.A CPA firm normally renders three services: auditing, management advisory services,and tax services. Auditing involves examination of the records and financial reports to determine whether they “fairly present” the financial position and results of operations of the entity. Management advisory service involves management advice to the individual business enterprises and other entities. It is like a consulting firm. Tax service involves providing tax planning advice to clients (both individuals and businesses) and preparation of their tax returns.Authors' Recommended Solution Time(Time in minutes)AlternateCases andMini-exercisesExercisesProblemsProblemsProjectsNo.TimeNo.TimeNo.TimeNo.TimeNo.Time********-*************-********-********-********-**********9259*************************143014** 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.Irwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-5*****ESE1C1.Term or AbbreviationDefinitionK(1)SECA.A system that collects and processes financialG(2)Auditinformation about an organization and reports that (3)Sole proprietorshipinformation to decision makers.E(4)CorporationB.Measurement of information about an entity in theA(5)Accountingmonetary unitCdollars or other national currency.D(6)Separate entityC.An unincorporated business owned by two or more(7)Audit reportpersons.F(8)Cost principleD.The organization for which financial data are to beC(9)Partnershipcollected (separate and distinct from its owners).O(10)AICPAE.An incorporated entity that issues shares of stock as(11)FASBevidence of ownership.H(12)CPAF.Initial recording of financial statement elements atB(13)Unit of measureacquisition cost.N(14)GAAPG.An examination of the financial reports to assure that they(15)Publicly tradedrepresent what they claim and conform with generally accepted accounting principles.H.Certified Public Accountant.I.An unincorporated business owned by one person.J.A report that describes the auditors’ opinion of thefairness of the financial statement presentations and the evidence gathered to support that opinion.K.Securities and Exchange Commission.L.Financial Accounting Standards Board.M.A company that can be bought and sold by investors onestablished stock exchanges .N.Generally Accepted Accounting Principles.O.American Institute of Certified Public Accountants.MINI-*****ESM1C1.ElementFinancial StatementB(1)ExpensesA. Balance SheetD(2)Cash Flow from Investing ActivitiesB. Income StatementA(3)AssetsC. Statement of Retained EarningsC(4)DividendsD. Statement of Cash FlowsB(5)RevenuesD(6)Cash Flow from Operating ActivitiesA(7)LiabilitiesD(8)Cash Flow from Financing ActivitiesM1C2.SE(1)Retained earnings(2)Accounts receivable(3)Sales revenue(4)Property, plant, and equipmentE(5)Cost of goods sold expense(6)Inventories(7)Interest expense(8)Accounts payableA(9)LandM1C3.AbbreviationFull Designation(1)CPACertified Public Accountant(2)GAAPGenerally Accepted Accounting Principles(3)CMACertified Management Accountant(4)AICPAAmerican Institute of Certified Public Accountants(5)SECSecurities and Exchange Commission(6) FASBFinancial Accounting Standards BoardIrwin/McGraw-Hill The McGraw-Hill Companies, Inc., 20011-6 Solutions ManualE1C2.L(1)Accounts payableA(2)Accounts receivableA(3)Cash and cash equivalentsE(4)Cost of products soldA(5)Property, plant and equipmentE(6)Income taxesE(7)InterestexpenseA(8)InventoriesA(9)LandE(10)Marketing, administrative, and other operating expensesL(11)Long-term debtR(12)Net salesL(13)Notes payableSE(14)Retained earningsL(15)Taxes payableE1C3.L(1)Accounts payableA(10)BuildingsA(2)Accounts receivableA(11)Cash and cash equivalents E(3)Cost of goods soldA(12)LandE(4)Distribution and warehousingA(13)Machinery and equipment L(5)Dividends payableE(14)Marketing, selling andadvertisingE(6)General and administrativeR(15)Net salesL(7)Income taxes payable L(16)Notes payable to banks A(8)InventoriesE(17)Provision for income taxes* A(9)InvestmentsSE(18)Retained earnings*Note that “Provision for income taxes” is a common synonym for “Income tax expense.”Honda Motor Co., Ltd.Balance Sheet as of March 31, 20A(in millions of Yen)Cash and cash equivalents150,554Trade accounts, notes, and other receivables817,761Inventories606,689Investments212,294Net property, plant and equipment1,008,196Other assets 213,845Total assetsAccounts payable and other current liabilities 1,308,748Long-term debt569,479Other liabilities94,485Contributedcapital281,208Retained earnings755,419Total liabilities an d stockholders’ equityIrwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-9E1C7.WAL-MART STORES, INC.Income StatementFor the Quarter ended October 31, 20A(in thousands)Net sales$20,417,717Rental and other income Total revenues$20,652,833 Cost of sales$16,200,873Operating, selling and general and 3,340,263administrative expensesInterest costs184,190Total costs and expenses19,725,326Pretax income$ 927,507Provision for income taxes* 339,422Net income*Note that “Provision for income taxes” is a common synonym for “Income tax expense.”E1C8.HOME REALTY, *****RATEDIncome StatementFor the Year Ended December 31, 20CRevenue:Commissions earned ($150,000+$16,000)$166,000 Rental service fees 20,000Total revenues $186,000Expenses:Salaries expense$ 62,000 Commission expense 35,000 Payroll tax expense 2,500 Rent expense ($2,200+$200)* 2,400 Utilities expense 1,600 Promotion and advertising expense 8,000 Miscellaneous expenses 500Total expenses (excluding income taxes)112,000Pretax income$74,000Income tax expense 18,500Net Income*$2,200 has been paid for 11 months ($200 per month) plus $200 owed for December.Req. 1READ MORE STOREBalance SheetAt December 31, 20AASSETS*****TIESCash$48,900Accounts payable $8,000Accounts receivable26,000Note payable2,000Storeand office equipment48,000Interest payable 120 Total liabilities$10,120*****LDERS’ *****ontributed capital$100,000Retained earnings12,780 Total stockholders’ equity112,780Total liabilities andTotal assets$122,900stockholders' equity$122,900Req. 2Net income for the year was $12,780. This is the first year of operations and no dividends were declared or paid to stockholders; therefore, retained earnings is $12,780 (which represents income for one year).E1C6.THE *****ATE SHOPIncome StatementFor the Month of January 20ARevenue from Sales:Sales:Cash$120,000On credit1,000Total sales revenue$121,000Expenses:Cost of goods sold$ 40,000Salaries, rent, supplies, and otherexpenses (paid in cash)38,000Utilities600Total Expenses78,600Net IncomeIrwin/McGraw-Hill The McGraw-Hill Companies, Inc., 20011-10Solutions ManualE1C9.ABCDTotal Expenses = $50,000 - $13,000 =EE1C10.CLAY *****TIONIncome StatementFor the Month of January 20ATotal revenues$130,000Less: Total expenses (excluding income tax) 80,000Pretax income$ 50,000Less: Income tax expense15,000Net incomeCLAY *****TIONBalance SheetAt January 31, 20AAssets Cash$30,000 Receivables from customers 15,000 Merchandise inventory 42,000Total assetsLiabilities:Payables to suppliers$11,000 Income taxes payable15,000Total liabilities26,000Stockholders' equity:Contributed capital (2,600 shares)$26,000 Retained earnings (from income statement above) 35,00061,000Total liabilities and stockholders' equity1.Average monthly revenue, $216,000÷ 12 = $18,000.2.Monthlyrent, $21,000 ÷ 12 = $1,750.3.“Supplies, $25,000” is an expense because it represents the cost of supplies used inperforming the services sold. Use of the supplies caused their purchase cost to be an expense of the period when used.4.“Interest” is an expense because it represents the cost of borrowing. The company hasan outstanding loan (from another party) and this $8,000 is the amount of interest(owed, if not already paid) on that debt; therefore the interest for 20A on the loan is an expense of 20A (whether or not paid by December 31).5.Average income tax rate, $21,000 ÷ $60,000 = 35%.6.Standing alone, the income statement does not report, or make it possible todetermine, the ending cash balance. This financial item isreported on the balance sheet under assets and on the cash flow statement as the final amount reported.7.Price/earnings ratio, $468,000/$39,000 = 12.E1C12.(O)(1)Cash paid to suppliers and employeesO(2)Cash received from customers(O)(3)Income taxes paidO(4)Interest and dividends received(O)(5)Interest paidI(6)Proceeds from sale of investment in Conner Peripherals, Inc.(I)(7)Purchases of property, plant, and equipment(F)(8)Repayment of borrowingsIrwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-13*****S(Note to the instructor: Most students find the Problems in this chapter to be quite challenging.)P1C1.Req. 1**********Income StatementFor the Year Ended December 31, 20ATotal sales revenue (given)$140,000Total expenses (given) 89,100Pretax income50,900Income tax expense ($50,900 x 30%) 15,270Net incomeReq. 2***** *****Balance SheetAt December 31, 20AAssets:Cash (given)$25,000Receivables from customers (given) 12,000Inventory of merchandise (given) 90,000Equipment (given)Total Assets Liabilities:Accounts payable$47,370Salary payable (given)Total Liabilities$ 49,370Stockholders' equity:Contributed capital (given)$87,000Retained earnings*Total stockholders' equity122,630Total liabilities and stockholders' equity*Beginning RE ($C0C) + Net income ($35,630) C Dividends ($C0C) = Ending RE ($35,630).NITSU *****TURING *****TIONStatement of Cash FlowsFor the Year Ended December 31, 20DCash flow from operating activitiesRevenues$270,000 Expenses (180,000)Net cash flow from operating activities $90,000Cash flow from investing activities Sale of land 15,000 Purchase of new machines (38,000)Net cash flow from investing activities (23,000)Cash flow from financing activities Sale of capital stock 30,000 Payment on long-term notes (80,000) Payment of cash dividends (22,000)Net cash flow from financing activities (72,000)Net decrease in cash (5,000)Cash at beginning of year 63,000Cash at end of year E1C14.Req. 1PAUL'S *****SCash Flow from OperationsFor the Month of January 20ACash InflowsCash services$105,000Cash Outflows:Salaries and wages$50,000Other expenses paid 26,000Total cash outflowsDifference: Net increase (decrease) in cashReq. 2Reconciliation with income: Income (positive)$40,500 Noncash services (30,500) Noncash expenses ($3,000 + $2,000 + $500 + $13,500) 19,000 Net increase (decrease) in cashIrwin/McGraw-Hill The McGraw-Hill Companies, Inc., 20011-14 Solutions ManualP1C2.Req. 1SUSAN'S LAWN *****Income StatementFor the Three Months Ended August 31, 20ARevenues from services:Lawn serviceCcash$12,600Ccredit800Total revenues$13,400Expenses:Gas, oil, and lubrication ($920+$200) 1,120Pickup repairs 210Repair of mowers75Miscellaneous supplies used 80Helpers (wages) 4,500Payroll taxes175Preparation of payroll tax forms 25Insurance 125Telephone 110Interest expense on note paid 75Equipment use cost (depreciation)500Total expenses6,995Net incomeReq. 2Because the above report reflects only revenues, expenses, and net income, it is reasonable to suppose that Susan would need the following:(1)A balance sheetCthat is, a statement that reports for the business, at the end of 20A, each asset (name and amount, such as Cash, $XX), each liability (such as Wages Payable, $XX), and stockholders’ equity.(2)A Statement of Cash FlowsCthat is, a statement of the inflows and outflows of cash during the period in three categories: operations, investing, and financing.Req. 1Req. 2CExplanationTransactionIncomeCash(a)$+66,000$+55,000All services performed increase income;cash received during the period was, $66,000 x 5/6 = $55,000. (b)C0C +30,000Cash borrowed is not income.(c)C0CC2,700Purchase of the truck does not represent an expense; cash outflow was, $9,000 x30% = $2,700.(d)C36,000C30,000All expenses incurred reduce income; cash expended was, $36,000 x 5/6 =$30,000.(e)C2,400C2,250Not all of the supplies were used; expense is the amount used, $3,000 x 4/5 = $2,400.Cash paid during the quarter was, $3,000 x3/4= $2,250.(f)C21,000C10,500All of the wages incurred reduce income,$21,000; cash paid during the quarter was, $21,000 x 1/2 = $10,500. The $10,500 owed will be paid on the next payroll date.Based only on the above:Income (loss)Cash inflow (outflow)Irwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-17P1C4. (continued)Req. 4The amount of net resources (i.e., assets minus liabilities) for West Company, assuming the amounts provided by the owners are acceptable, would be:Assets ($322,000C$190,000)$132,000Liabilities97,000Net resources of the companyReq. 1The personal residences of the organizers are not resources of the business entity. Therefore, they should be excluded.Req. 2It is not indicated whether the $68,000 listed for service trucks and equipment is their cost when acquired or the current market value on December 31, 20A.Req. 3The list of company resources (i.e., assets) suggests the following areas of concern:Company resources:(1)Cash, inventories, and bills due from customers (i.e., accounts receivable)Ctheseitems tend to fluctuate; they may be significantly more or less atdate of the loan and during the term of the loan.(2)Service trucks and equipmentCas noted above, it is not indicated whether the $68,000 is cost when acquired or current market value on December 31, 20A.(3) Personal residencesCas noted above, these items are not resources of the business entity and should be excluded. Usually they would not be subject to creditors' claims against the corporation. Also, there is no indication whether the $190,000 is cost at acquisition or current market value at December 31, 20A. Also, there is no indication as to any amounts that might be owed on the residences.Company obligations:(4)Unpaid wages of $19,000, which are now due, pose a serious problem becauseonly $12,000 cash currently is available.(5)Unpaid taxes and accounts payable to suppliersCit is not clear when thesepayments of $8,000 and $10,000, respectively, are due (cash needed to pay them is a problem).(6)The $50,000 owed on the service trucks probably is long term; however, short-terminstallments may be requiredCthese details are very important to the bank.(7)Loan from organizerCthe expected payment date and interest rate are important issues for which details are not provided. This is a major cash demand.In general, the bank should request more details about the specific resources and debts. The personal residences are not a part of the resources of the business entity. The bank should request that the owners provide audited information about the entity's assets and debts.Irwin/McGraw-Hill The McGraw-Hill Companies, Inc., 20011-18Solutions Manual*****TE *****SAP1C1.Req. 1*****N *****TIONIncome StatementFor the Year Ended June 30, 20CTotal sales revenue (given)$90,000Total expenses (given) 60,500Pretax income29,500Income tax expense ($29,500 x 30%) 8,850Net incomeReq. 2*****N *****TIONBalance SheetAt June 30, 20CAssets:Cash (given)$13,150Receivables from customers (given) 9,500Inventory of merchandise (given) 57,000Equipment (given) 36,000Total Assets Liabilities:Accounts payable (given)$31,500Salary payable (given)1,500Total Liabilities$ 33,000Stockholders' equity:Contributed capital (given)$62,000Retained earnings*20,650Total stockholders' equityTotal liabilities and stockholders' equity* Beginning RE ($0) + Net income ($20,650) C Dividends ($0) = Ending RE ($20,650).Req. 1ABEL *****C REPAIR *****, INC.Income StatementFor the Three Months Ended December 31, 20ARevenues from services:Electric repair servicesCcash$32,000Ccredit3,000Total revenues$35,000Expenses:Electrician's assistant (wages) 8,500Payroll taxes175Supplies used on jobs9,500Oil, gas, and maintenance on truck 1,200Insurance700Rent ($500+$200) 700Utilities and telephone 825Miscellaneous expenses600Depreciation of truck and tools (use)1,200Total expenses23,400Pretax income11,600Income taxes ($11,600 x 30%)3,480Net income Req. 2Because the above report reflects only revenues, expenses, and net income, it is reasonable to suppose that John would have need for the following:(1)A statement that reports for the business, at the end of 20A, each asset (name and amount such as Cash, $XX), and each liability (such as Income taxes payable, $XX), and stockholders' equity; that is, a balance sheet.(2)A statement of the sources and uses of cash during the period;that is, a statement of cash flows.Irwin/McGraw-HillThe McGraw-Hill Companies, Inc., 2001Financial Accounting, 2/e1-21$133,363,000= $28,069,000 + $105,294,000CASES AND *****S CP1C1.1.Net income was $54,118 thousand or $54,118,000. This is disclosed on the income statement. The instructor should note that the reported numbers are in thousands. Some students will erroneously report income as $54,118. Students should also be warned that different companies often use different terminology―some companies may use the term “net earnings” to describe net http://.cn sales were $587,600,000. This is also disclosed on the income statement.3.Inventory is $49,688,000. This is disclosed on the balance sheet.4.Cash and cash equivalents increased by $23,581,000 during the year. This amount can be computed from the balance sheet or it can be found on the statement of cash flows.5.The auditor is Ernst Young. This is found on the auditor’s report (in this case, called the “report of independent auditors”).CP1C2.1.It sells a variety of general consumer products, especially clothing.2.Yes. It reported increased sales, record earnings, and increasing growth rates.3.The company’s fiscal year ends on January 31.4.a. Balance SheetsC2 yearsb. Income StatementsC3 yearsc. Cash Flow StatementsC3 years。
Chapter 3Operating Decisions and the Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be as follows: inventory ispurchased, cash is paid to suppliers, the product is manufactured and sold on credit,and the cash is collected from the customer.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 much longer.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, revenues occur in thenormal 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 recording expenseswhen incurred, regardless of the timing of cash receipts payments. Cash basis accounting is recording revenues when cash received and expenses when cash is paid.or is12.6.The four criteria that must be met for revenue to be recognized under the accrual basis of accounting are (1) delivery has occurred or services have been rendered, (2) there is persuasive evidenee of an arran geme nt for customer payme nt, (3) the price is fixed or determ in able, and (4) collecti on is reas on ably assured.7.The expe nse match ing prin ciple requires that expe nses be recorded whe n incurred in earning revenue. For example, the cost of inventory sold duri ng a period is recorded in the same period as the sale, not whe n the goods are produced and held for sale.8.Net in come equals reve nues minus expe nses. Thus reve nues in crease net in come and expe nses decrease net in come. Because net in come in creases stockholders ' equity, reve nues in crease stockholders ' equity and expe nses decrease it.9.Reve nues in crease stockholders ' equity and expe nses decreasestockholders ' equity. To in crease stockholders ' equity, an acco unt must be credited; to decrease stockholders ' equity, an account must be debited. Thus reve nues are recorded as credits and expe nses as debits.13. Total net profit margin ratio is calculated as Net In comeNet Sales (or Operat ing Reve nu es). The net profit margin ratio measures how much of every sales dollar is profit. An in creas ing ratio suggests that the compa ny is managing its sales and expe nses effectively.ANSWERS TO MULTIPLE CHOICE1. c2. a3. b4. b5. c6. c7. d8. b9. a10. bAuthors' Recomme nded Soluti on Time(Time in min utes)* Due to the nature of this project, it is very difficult to estimate the amount of time students willneed to complete the assignment. As with anyopen-ended project, it is possible for students to devote a large amount of time to these assig nmen ts. While stude nts ofte n ben efit 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, whe n our goal is to sharpe n research skills, we devoteclass time discuss ing research strategies. When we want the stude nts to focus on a real acco un ti ng issue, we offer suggesti ons about possible compa nies or in dustries.MINI-EXERCISESM3- 1._________________ TERM G (1)L ossesC (2)Expe nse matchi ng _____ prin ciple F (3)Reve nuesE (4)Time periodassumpti on B (5)Operat ing cycleM3- 2.Cash BasisAccrual Basis In come Stateme ntIn come Stateme ntReve nu es:Reve nu es: Cash sales$8,000 Sales to $18,000Customer deposits5,000customersExpe nses:Expe nses: Inven tory purchases 1,000 Cost of sales 9,000 Wages paid900Wages expe nse 900Utilities 300expenseNet In come$11,100Net In come$7,800M3- 4.Reve nue Acco unt AffectedAmount of Reve nue Earned in Julya. Cash (+A) ......................................................................................... 15,000Games Reve nue (+R, +SE) ........................................................................ 15,000b. Cash (+A) ........................................................................................... 3,000Acco unts Receivable (+A) ................................................................ 5,000 Sales Reve nue (+R, +SE) ............................................................................. 8,000c. Cash (+A) ........................................................................................... 4,000Acco unts Receivable ( A) .............................................................................. 4,000d. Cash (+A) ........................................................................................... 2,500Unearned Reve nue (+L) ............................................................................... 2,500 M3- 6.e. Cost of Goods Sold (+E, SE) ............................................................. 6,800Inven tory ( A) ............................................................................................ 6,800f. Accounts Payable ( - L) (800)Cash ( A) (800)g. Wages Expe nse (+E, SE) ................................................................. 3,500Cash ( A) ........................................................................................................ 3,500h. In sura nee Expe nse (+E, SE) (500)Prepaid Expe nses (+A) ....................................................................... 1,00 Cash ( A) ........................................................................................................ 1,500i. Repairs Expe nse (+E, SE) (700)Cash ( A) (700)j. Utilities Expe nse (+E, SE) (900)Acco unts Payable (+L) (900)Tran sact ion (c) results in an in crease in an asset (cash) and a decrease in an asset (acco unts receivable). Therefore, there is no net effect on assets.M3- 8.Tran sact ion (h) results in an in crease in an asset (prepaid expe nses) and adecrease in an asset (cash). Therefore, the net effect on assets is 500.Craig ' s Bowling, Inc. In come Stateme nt For the Month of July 2014Reve nu es:Games reve nue Sales reve nue Total reve nues Expe nses:Cost of goods soldUtilities expe nse Wages expe nseIn sura nee expe nse Repairs expe nse Total expe nses Net in comeM3- 10.$15,000 8,000 23,000 6,800 900 3,500 500 700 12,400 $ 10,600These 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 expe nses.Betwee n 2013 to 2014 and 2014 to 2015, sales have in creased at a lower perce ntage tha n net in come. This suggests that the compa ny has bee n more effective at con trolli ng expe nses tha n gen erat ing reve nu es.EXERCISESE3 - 1.TERM K (1) Expe nses E (2) Gai nsG (3) Reve nue realizati on prin ciple I (4) Cash basisacco unting M (5) Unearned reve nue C (6) Operati ng cycleD (7) Accrual basis acco unting F(8) Prepaid expe nsesJ (9) Reve nuesExpe nses = Net In comeL (10) Ending Reta ined Earnings =Beg inning Reta ined Earnings + Net In come DeclaredE3 - 2. Req. 1Cash BasisAccrual Basis In come Stateme ntIn come Stateme ntReve nu es:Reve nu es:Cash sales$500,000 Sales to $750,000 Customer deposits 70,000 customersNet In come$282,500 Net In come$61,870Req. 2Accrual basis financial statements provide more useful information to external users.Divide ndsExpe nses:Inven tory purchases 90,000 Wages paid 180,300 Utilities paid17,200 Expe nses:Cost of sales 485,000 Wages expe nse 184,000 Utilities19,130 expense ________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.Activity Reve nue Acco unt Amount of Reve nueActivity Expe nse Acco unt Affected Amount of Expe nseE3 - 5.Bala nee In come StatemeTran sact ion (k) results in an in crease in an asset (cash) and a decrease in an asset (acco unts receivable). Therefore, there is no net effect on assets.A loss affects net in come n egatively, as do expe nses.E3 - 6.Tran sact ion (f) results in an in crease in an asset (property, pla nt, and equipme nt) and a decrease in an asset (cash). Therefore, there is no net effect on assets.E3 - 7.(in thousa nds)a. Pla nt and equipme nt (+A) (636)Cash ( A) (636)Debits equal credits. Assets in crease and decrease by the same amount.b. Cash (+A) (181)Short-term no tes payable (+L) (181)Debits equal credits. Assets and liabilities in crease by the same amount.c. Cash (+A) .......................................................................................... 10,765Acco unts receivable (+A) .................................................................. 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. Acco unts payable ( L) ....................................................................... 32,074Cash ( A) ......................................................................................................... 32,074 Debits equal credits. Assets and liabilities decrease by the same amount.e. Inven tory (+A) ................................................................................... 32,305Acco unts payable (+L) ................................................................................... 32,305 Debits equal credits. Assets and liabilities in crease by the same amount.f. Wages expe nse (+E, SE) .................................................................... 3,500Cash ( A) ........................................................................................................... 3,500 Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.g. Cash (+A) ........................................................................................... 39,043Acco unts receivable ( A) ................................................................... 39,043 Debits equal credits. Assets in crease and decrease by the same amount.h. Fuel expe nse (+E, SE) (750)Cash ( A) (750)Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.i. Reta ined earnings ( SE) (597)Cash ( A) (597)Debits equal credits. Assets and stock holders ' equity decrease by thesame amount.j. Utilities expe nse (+E, SE) (68)Cash ( A) (55)Acco unts payable (+L) (13)Debits equal credits. Expe nses decrease reta ined 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 in crease by the same amount.b. Equipme nt (+A)............................... 98,000Cash ( A) ..................................................................................... 98,000 Debits equal credits. Assets in crease and decrease by the same amount.c. Mercha ndise inven tory (+A) ................. 35,000Acco unts payable (+L) ............................................................. 35,000 Debits equal credits. Assets and liabilities in crease by the same amount.d. Repairs (or maintenan ce) expe nse (+E, SE).... 62,000Cash ( A) .................................................................................. 62,000 Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.e. Cash (+A) .......................................................................... 390,000Unearned pass reve nue (+L) .................................................... 390,000 Debits equal credits. Since the seas on passes are sold before Vail Resorts provides service, reve nue is deferred un til it is earn ed. Assets and liabilities in crease by the same amount.f. Two tran sacti ons occur:(1) Acco unts receivable (+A) (800)Ski shop sales reve nue (+R, +SE) (800)Debits equal credits. Reve nue in creases reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets in crease by the same amount.⑵ Cost of goods sold (+E, SE) (500)Mercha ndise inven tory ( A) (500)Debits equal credits. Expe nses decrease reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets decrease by the same amount.E3 - 8. (continued)g. Cash (+A) ........................................................................... 320,000Lift reve nue (+R, +SE) ........................................................... 320,000 Debits equal credits. Reve nue in creases reta ined earnings (a part of stockholders'equity). Stockholders' equity and assets in crease by the same amount.h. Cash (+A) ............................................................................. 3,500Unearned rent reve nue (+L) .................................................... 3,500 Debits equal credits. Since the rent is received before the townhouse is used,revenue is deferred until it is earned. Assets and liabilities in crease by the sameamount.i. Acco unts payable ( L) ....................................................... 17,500Cash ( A) ................................................................................... 17,500 Debits equal credits. Assets and liabilities decrease by the same amount.j. Cash (+A) (400)Acco unts receivable ( A) (400)Debits equal credits. Assets in crease and decrease by the same amount.k. Wages expe nse (+E, SE) ................................................ 245,000Cash ( A) .................................................................................... 245,000 Debits equal credits. Expe nses decrease reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets decrease by the same amount.Req. 22/1 Rent expe nse (+E, SE) (275)Cash ( A) (275)2/2 Fuel expe nse (+E, SE) (490)Acco unts payable (+L) (490)2/4 Cash (+A) (820)Unearned reve nue (+L) (820)2/7 Cash (+A) (910)Tran sport reve nue (+R, +SE) (910)2/10 Advertising expense (+E, SE) (175)Cash ( A) (175)2/14 Wages payable ( L) ........................................................................ 2,300Cash ( A) ........................................................................................ 2,3002/18 Cash (+A) .......................................................................................... 1,600 Acco unts receivable (+A) ................................................................... 2,200Tran sport revenue (+R, +SE) ..................................................................... 3,8002/25 Parts supplies (+A) ............................................................................ 2,550Acco unts payable (+L) ............................................................................... 2,5502/27 Retained earnings ( SE) (200)Divide nds payable (+L) (200)Req. 1 and 2Rebuild ing Fees Revenue Re ntRevenueWages Expe Utilities ExpeItem (f) is not a tran sact ion; there has bee n no excha nge.E3 - 10. (con ti nued) Req. 3Net in come using the accrual basis of acco un ti ng:Revenues $19,850 ($19,000 + $850)-Expenses16,900 ($16,500 + $400) Net In come $ 2,950(accrual basis)Assets=Liabilities+Stockholders 'Equity $12,090 $ 7,700$ 1,700 24,800 4,4407,820 2,460 48,5009,360 10,4202,950 netin come7,400 25,300$82,470 $60,640$21,830Req. 4Net in come using the cash basis of acco unting:Cash receipts $27,650 - Cash disburseme nts 19,760Net In come $ 7,890(cash basis)Cash basis net in come ($7,890) is higher tha n accrual basis net in come ($2,950) because ofthe differe nces in the timi ng of recordi ng reve nues versus receipts and expe nses versusdisburseme nts betwee n the two methods. The $7,800 higher amount in cash receipts over reve nues in cludes 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 disburseme nts over expe nses in cludes cash paid after being in curred in the prior period (in (g), $2,300), plus cash paid for supplies to be used and expe nsed in the future (in (k), $960), less an expe nse in curred in January to be paid in February (in (e), $400).(tra nsactions (tra nsactio a through d) g, i, and k )E3 - 11.STACEY S PIANO REBUILDING COMPANYIn come Stateme nt (un adjusted)For the Mon th En ded Jan uary 31,2014Operati ng Reve nu es:Rebuild ing fees reve nue Total operati ng reve nuesOperati ng Expe nses:Wages expe nseUtilities expe nseTotal operati ng expe nses Operat ing In comeOther Item:Rent reve nueNet In come $ 19,000~~19,00016,50040016,9002,100850 $ 2,950Cateri ng Sales Food Sales Reve nue RevenueWages Expe nseBeg.(i)6,280 _______6,280Fuel ExpenseBeg.(h)363363E3 - 14.Req. 1 TRAVELING GOURMET, INC.In come Stateme nt (un adjusted)For the Month Ended March 31,2014Reve nu es:Food sales reve nue $ 11,900Cateri ng sales reve nue 4,200Total reve nues 16,100 Expe nses:Supplies expe nse 10,830Utilities expe nse 420Wages expe nse 6,280Fuel e xpense363Total costs and expe nses17,893 Net Loss $ (1,793)Req. 2O, I, or F ActivityTran sact ion (or No Effect) on Direction and AmountStateme nt of Cash of EffectFlowsReq. 3The compa ny gen erated a small loss of 1,793 duri ng its first monthoperations, before making any adjusting entries. The adjusting entriesuse of the buildi ng and equipme nt and in terest expe nse on the borrow ing will in crease the loss. Cash flows from operat ing activities were also n egative atof for$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 fixedcosts (particularly salaries expense), the company may soon turn a profit. Itis not unusual for small businesses to report a loss or have negative cash flows from operations as they start up operations.E3 - 15.Brief Expla nati onIssued 10,000 shares of com mon stock to shareholders for $82,000 cash. Purchased store fixtures for $15,400 cash.Purchased $24,800 of in ve ntory, payi ng $6,200 cash and the bala nee on acco unt.Sold $14,000 of goods or services to customers, recei ving $9,820 cash and the bala nee on acco unt. The cost of the goods sold was $7,000. Used $1,480 of utilities duri ng the mon th, not yet paid.Paid $1,300 in wages to employees.Paid $2,480 in cash for rent, $620 related to the curre nt month and $1,860 related to future mon ths.Received $3,960 cash from customers, $1,450 related to curre nt sales and $2,510 related to goods or services to be provided in the future.Kate ' s Kite CompanyIn come Stateme ntFor the Month Ended April 30, 2014Sales Reve nue Expe nses:Cost of sales Wages expe nse Rent expe nse Utilities expe nseTotal expe nsesNet In comeReq. 1 Tran sact ionab cde f ghReq. 2$ 15,450 7,000 1,300 620 1,480 10,400 $ 5,050E3 - 15. (con ti nued)Kate ' s Kite CompanyBala nee SheetAt April 30, 2014Assets Liabilities and Shareholders 'EquityCurre nt Assets: Curre nt Liabilities:Cash $70,400 Acco unts payable $20,080 Acco unts receivable 4,180 Unearned reve nue 2,510 Inven tory 17,800 Total curre nt 22,590liabilitiesPrepaid expe nses 1,860 Shareholders ' Equity :Total curre nt assets 94,240 Common stock 10,000 Store fixtures 15,400 Additi onal paid-i n capital 72,000Reta ined earnings 5,050Total shareholders '87,050equityTotal Liabilities &Total Assets $109,640 Shareholders ' Equity $109,640E3 - 16.Req. 1Assets = Liabilities +Stockholders ' Equity $ 3,200 $ 2,400 $ 8008,000 5,600 4,0006,400 1,600 3,200$17,600 $9,600 $ 8,000Wages Expe nseTravel Expe nseUtilities Expe nseE3 - 16. (con ti nued) Req. 2CashBeg. 3,200 (a) 48,000(b) 5.600 (c) 400 (e) 1.60057,200(d)480 (g) 1,120Acco unts Payable(d) 1,600 2,400 Beg.800 f)1,600Beg. 6,400Lon g-Term Inv estme nts 6,400Lon g-Term Notes Payable1,600 Beg.Common Stock800 Beg.800Additio nai Paid-in Cap itai4,000 Beg. 1,600Reta ined Earnings(g) | 3,200 Beg. 4802,720Con suit ing 4,000Rent Expe$58,400 ($58,000 from sales + $400 on in vestme nts) 56,400 ($36,000 + $12,000 + $800 + $7,600) $ 2,000 Assets =Liabilities +Stockholders ' Equity$ 1,120 $ 1,600$ 80012,400 7,2004,000 6,400 1,6002,7202,000 net in come $19,920$10,400$ 9,520Req. 4* The $400 of inv estme nt in come is not an operat ing reve nue and is not in cluded in thecomputatio n.The in creas ing trend in the net profit margin ratio (from % in 2013 to % in 2014 and the n to % in 2015) suggests that the compa ny is man agi ng its sales and expe nses more effectively over time. E3 - 16. (con ti nued) Req. 3Revenues -Expenses Net In come Net Profit Margin RatioNet In come Sales (Operat ing) Reve nues =$2,000$58,000*or %E3 - 17. Req. 1Acco unts receivable in creases with customer sales on acco unt and decreases with cash payme nts received from customers.Prepaid expe nses in crease with cash payme nts of expe nses related to future periods and decrease as these expe nses are in curred over time.Unearned subscripti ons in crease with cash payme nts received from customers for goods or services to be provided in the future and decreases whe n those goods or services are provided. Req. 2Computati ons:Beg inning+ Trade acco unts 717+ receivablePrepaid 95+expensesUnearned 224 +subscripti ons“. ____________________________________________________________________________________________________________ I™-I ■+_= Ending 5,240 ? = 693 ? = 5,264 203 ? =107 ? = 191 2,690? = 231 ?=2,683Trade Acco untsReceivable1/1 7175,240 12/31 6935,264Prepaid ExpensesUnearned Subscriptio nsE3 - 18.ITEM LOCATION1. Description of a company ' sprimary business(es).2. Income taxes paid.3. Accounts receivable.4. Cash flow from operatingactivities.5. Description of a company 'srevenue recognition policy.6. The inventory sold during theyear.7. The data needed to compute thenet profit margin ratio.Letter to shareholders; Managemen't s Discussion and Analysis Summary of significant accounting policies noteNotes; Statement of cash flowsBalance sheetStatement of cash flowsSummary of significant accounting policies noteIncome statement (Cost of Goods Sold) Income statementPROBLEMSP3-1.Tran sact ions Debit Credita.5 1,8Example: Purchased equipme nt for use in the bus in ess; paid one-third cash and sig ned a note payable for the bala nee.b.Paid cash for salaries and wages earned by employees this period. 15 1c. Paid cash on acco unts payable for expe nses in curred last period.7 1d. Purchased supplies to be used later; paid cash. 3 1e. Performed services this period on credit. 2 14f. Collected cash on acco unts receivable for services performed lastperiod. 1 2g. Issued stock to new inv estors. 1 11,12h. Paid operati ng expe nses in curred this period. 15 1i.In curred operati ng expe nses this period to be paid n ext period. 15 7 j. Purchased a pate nt (an intan gible asset); paid cash. 6 1 k. Collected cash for services performed this period. 1 14 l. Used some of the supplies on hand for operati ons. 15 3 m.16 1, 10Paid three-fourths of the in come tax expe nse for the year;the bala nee will be paid n ext year.n. Made a payme nt on the equipme nt note in ( a); the payme ntwas part prin cipal and part in terest expe nse. 8, 17 1o. On the last day of the curre nt period, paid cash for an in sura neepolicy coveri ng the n ext two years. 4 1a. Cash (+A) ......................................................................................... 40,000Common stock (+SE) (20)Additio nal paid-in capital (+SE) ................................................................. 39,980b. Cash (+A) ......................................................................................... 60,000Note payable (Ion g-term) (+L) .................................................................... 60,000c. Rent expe nse (+E, SE) ...................................................................... 1,500Prepaid rent (+A) ................................................................................ 1,500 Cash ( A) ..................................................................................................... 3,000d. Prepaid in sura nee (+A) .................................................................... 2,400Cash ( A) .................................................................................................... 2,400e. Furn iture and fixtures (or Equipme nt) .................................................. (+A) 15,000Acco unts payable (+L) ............................................................................... 12,000Cash ( A) .................................................................................................... 3,000f. Inven tory (+A) ................................... 2,800Cash ( A) .................................................................................................... 2,800g. Advertis ing expe nse (+E, SE) (350)Cash ( A) (350)h. Cash (+A) (850)Acco unts receivable (+A) (850)Sales reve nue (+R, +SE) ............................................................................. 1,700Cost of goods sold (+E, SE) (900)Inven tory ( A) (900)i. Acco unts payable ( L) ...................................................................... 12,000Cash ( A) .................................................................................................... 12,000j. Cash (+A) (210)Acco unts receivable ( A) (210)。
