,SOLUTION MANUAL FOR Financial Accounting,
14th edition Wendy M. Tietz
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Chapter 1
Financial Statements
Ethics Check
(5-10 min.) EC 1-1
a. Objectivity and independence
b. Due care
c. Integrity
d. Integrity
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-1
, Short Exercises
(10 min.) S 1-1
a. Corporation, limited partners of a Limited-liability partnership (LLP)
and Limited-liability company (LLC). If any of these businesses
fails and cannot pay its liabilities, creditors cannot force the
owners to pay the business’s debts from the owners’ personal
assets. Creditors can go after the general partner of a limited
liability partnership.
b. Proprietorship. There is a single owner of the business, so the
owner is answerable to no other owner.
c. Partnership. If the partnership fails and cannot pay its liabilities,
creditors can force the partners to pay the business’s debts from
their personal assets. A partnership affords more protection for
creditors than a proprietorship because there are two or more
owners to share this liability.
(5 min.) S 1-2
1. The entity assumption applies.
2. Application of the entity assumption will separate Osmond’s
personal assets from the assets of Simple Treats, Inc. This will help
Osmond, investors, and lenders know how much assets, liabilities
and equity the business has, and this knowledge will help all
parties evaluate the business realistically.
1-2 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5-10 min.) S 1-3
a. Stable-monetary-unit assumption
b. Historical cost principle; $300 is the accounting value of the
laptop
c. Historical cost principle; the sale price is the amount actually
received from the sale
d. Entity assumption
(10 min.) S 1-4
Computed amounts in boxes
Total Assets = Total Liabilities + Stockholders’ Equity
a. $660,000 = $300,000 + $360,000
b. 85,000 = 50,000 + 35,000
c. 350,000 = 75,000 + 275,000
(5 min.) S 1-5
1. Liabilities = Assets − Owners’ Equity
2. Owners’ Equity = Assets − Liabilities
This way of determining the amount of owners’ equity applies to
any company or your household.
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-3
, (5-10 min.) S 1-6
a. Land A g. Retained earnings S
b. Accrued expenses payable L h. Prepaid expenses A
c. Supplies A i. Accounts payable L
d. Equipment A j. Accounts receivable A
e. Notes payable L k. Merchandise inventory A
f. Long-term debt L l. Common stock S
(5-10 min.) S 1-7
1. Assets are the economic resources of a business that are expected
to produce a benefit in the future.
Owners’ (stockholders’) equity represents the insider claims of a
business, the owners’ interest in its assets.
Assets and owners’ equity differ in that assets are resources and
owners’ equity is a claim to assets.
Assets must be at least as large as owners’ equity, so equity can
be smaller than assets.
2. Both liabilities and owners’ (stockholders’) equity are claims to
assets.
Liabilities are the outsider claims to the assets of a business; they
are obligations to pay creditors.
Owners’ equity represents the insider claims to the assets of the
business; they are the owners’ interest in its assets.
1-4 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5 min.) S 1-8
1. Revenues and expenses 2. Net income (or net loss)
(10 min.) S 1-9
a. Salary expense I
b. Dividends R, C
c. Accounts payable B
d. Net income I, R, C
e. Common stock B
f. Inventory B
g. Interest revenue I
h. Cash B, C
i. Retained earnings R, B
j. Long-term debt B
k. Increase or decrease in cash C
l. Net cash provided by operating activities C
m. Sales revenue I
n. Net cash used for financing activities C
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-5
, (15-20 min.) S 1-10
a. Paying large dividends will cause retained earnings to be low.
b. Heavy investing activity and paying off debts can result in a cash
shortage even if net income has been high.
c. The single best source of cash for a business is operating activities.
This source of cash is best because it results from the core
operations of the business. Operating activities should be the main
source of cash for a business.
d. Borrowing, issuing stock, and selling land, buildings, and equipment
can bring in cash even when the company has experienced losses.
Reducing accounts receivable and inventory can also increase cash
flow.
(5 min.) S 1-11
a. I f. I
b. B g. R
c. C h. C
d. R i. B
e. B
1-6 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5 min.) S 1-12
MacKensie Services Corporation
Income Statement
Year Ended December 31, 2024
(millions)
Revenues ....................................................... $394
Expenses ....................................................... 171
Net income..................................................... $223
(5 min.) S 1-13
Journey Corporation
Statement of Retained Earnings
Year Ended December 31, 2024
(millions)
Retained earnings, December 31, 2023 ....... $270
Add: Net income ($460 − $380) ................... 80
Less: Dividends declared ............................. (64)
Retained earnings, December 31, 2024 ....... $286
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-7
, (10-15 min.) S 1-14
Jackson Corporation
Balance Sheet
December 31, 2024
(in millions)
ASSETS
Current assets:
Cash ........................................................................... $ 52
Accounts receivable.................................................. 23
Total current assets .................................................. 75
Long-term assets ............................................................ 45
Total assets ..................................................................... $120
LIABILITIES
Current liabilities:
Accounts payable ...................................................... $ 21
Total current liabilities .............................................. 21
Long-term liabilities:
Long-term notes payable .......................................... 31
Total liabilities ................................................................. 52
STOCKHOLDERS’ EQUITY
Common stock ................................................................ 28
Retained earnings ........................................................... 40
Total stockholders’ equity.............................................. 68
Total liabilities and stockholders’ equity ...................... $120
1-8 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
14th edition Wendy M. Tietz
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Chapter 1
Financial Statements
Ethics Check
(5-10 min.) EC 1-1
a. Objectivity and independence
b. Due care
c. Integrity
d. Integrity
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-1
, Short Exercises
(10 min.) S 1-1
a. Corporation, limited partners of a Limited-liability partnership (LLP)
and Limited-liability company (LLC). If any of these businesses
fails and cannot pay its liabilities, creditors cannot force the
owners to pay the business’s debts from the owners’ personal
assets. Creditors can go after the general partner of a limited
liability partnership.
b. Proprietorship. There is a single owner of the business, so the
owner is answerable to no other owner.
c. Partnership. If the partnership fails and cannot pay its liabilities,
creditors can force the partners to pay the business’s debts from
their personal assets. A partnership affords more protection for
creditors than a proprietorship because there are two or more
owners to share this liability.
(5 min.) S 1-2
1. The entity assumption applies.
2. Application of the entity assumption will separate Osmond’s
personal assets from the assets of Simple Treats, Inc. This will help
Osmond, investors, and lenders know how much assets, liabilities
and equity the business has, and this knowledge will help all
parties evaluate the business realistically.
1-2 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5-10 min.) S 1-3
a. Stable-monetary-unit assumption
b. Historical cost principle; $300 is the accounting value of the
laptop
c. Historical cost principle; the sale price is the amount actually
received from the sale
d. Entity assumption
(10 min.) S 1-4
Computed amounts in boxes
Total Assets = Total Liabilities + Stockholders’ Equity
a. $660,000 = $300,000 + $360,000
b. 85,000 = 50,000 + 35,000
c. 350,000 = 75,000 + 275,000
(5 min.) S 1-5
1. Liabilities = Assets − Owners’ Equity
2. Owners’ Equity = Assets − Liabilities
This way of determining the amount of owners’ equity applies to
any company or your household.
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-3
, (5-10 min.) S 1-6
a. Land A g. Retained earnings S
b. Accrued expenses payable L h. Prepaid expenses A
c. Supplies A i. Accounts payable L
d. Equipment A j. Accounts receivable A
e. Notes payable L k. Merchandise inventory A
f. Long-term debt L l. Common stock S
(5-10 min.) S 1-7
1. Assets are the economic resources of a business that are expected
to produce a benefit in the future.
Owners’ (stockholders’) equity represents the insider claims of a
business, the owners’ interest in its assets.
Assets and owners’ equity differ in that assets are resources and
owners’ equity is a claim to assets.
Assets must be at least as large as owners’ equity, so equity can
be smaller than assets.
2. Both liabilities and owners’ (stockholders’) equity are claims to
assets.
Liabilities are the outsider claims to the assets of a business; they
are obligations to pay creditors.
Owners’ equity represents the insider claims to the assets of the
business; they are the owners’ interest in its assets.
1-4 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5 min.) S 1-8
1. Revenues and expenses 2. Net income (or net loss)
(10 min.) S 1-9
a. Salary expense I
b. Dividends R, C
c. Accounts payable B
d. Net income I, R, C
e. Common stock B
f. Inventory B
g. Interest revenue I
h. Cash B, C
i. Retained earnings R, B
j. Long-term debt B
k. Increase or decrease in cash C
l. Net cash provided by operating activities C
m. Sales revenue I
n. Net cash used for financing activities C
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-5
, (15-20 min.) S 1-10
a. Paying large dividends will cause retained earnings to be low.
b. Heavy investing activity and paying off debts can result in a cash
shortage even if net income has been high.
c. The single best source of cash for a business is operating activities.
This source of cash is best because it results from the core
operations of the business. Operating activities should be the main
source of cash for a business.
d. Borrowing, issuing stock, and selling land, buildings, and equipment
can bring in cash even when the company has experienced losses.
Reducing accounts receivable and inventory can also increase cash
flow.
(5 min.) S 1-11
a. I f. I
b. B g. R
c. C h. C
d. R i. B
e. B
1-6 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
, (5 min.) S 1-12
MacKensie Services Corporation
Income Statement
Year Ended December 31, 2024
(millions)
Revenues ....................................................... $394
Expenses ....................................................... 171
Net income..................................................... $223
(5 min.) S 1-13
Journey Corporation
Statement of Retained Earnings
Year Ended December 31, 2024
(millions)
Retained earnings, December 31, 2023 ....... $270
Add: Net income ($460 − $380) ................... 80
Less: Dividends declared ............................. (64)
Retained earnings, December 31, 2024 ....... $286
Copyright © 2025 Pearson Education Inc. Chapter 1 Financial Statements 1-7
, (10-15 min.) S 1-14
Jackson Corporation
Balance Sheet
December 31, 2024
(in millions)
ASSETS
Current assets:
Cash ........................................................................... $ 52
Accounts receivable.................................................. 23
Total current assets .................................................. 75
Long-term assets ............................................................ 45
Total assets ..................................................................... $120
LIABILITIES
Current liabilities:
Accounts payable ...................................................... $ 21
Total current liabilities .............................................. 21
Long-term liabilities:
Long-term notes payable .......................................... 31
Total liabilities ................................................................. 52
STOCKHOLDERS’ EQUITY
Common stock ................................................................ 28
Retained earnings ........................................................... 40
Total stockholders’ equity.............................................. 68
Total liabilities and stockholders’ equity ...................... $120
1-8 Financial Accounting 14/e Solutions Manual Copyright © 2025 Pearson Education Inc.
