Instructor’s
Solution Manual
Tracie Miller
Stephanie Poindexter
Financial and Managerial
Accounting:
The Financial Chapters
9th Edition
Tracie Miller, Franklin University
Stephanie Poindexter, Dallas College
Brenda Mattison, Tri-County Technical College
Complete Chapters (Chap 1 to 15) + Appx F:B
Copyright © 2027
, Chapter F:1
Accounting and the Business Environment
Try Its!
TI-F:1-1
1. e 2. a 3. d 4. b 5. f 6. c
TI-F:1-2
1. d 2. f 3. i 4. c 5. a 6. h 7. b 8. g 9. e
TI-F:1-3
ASSETS = LIABILITIES + EQUITY
Contributed
+
Capital Retained Earnings
Common
– Dividends + Revenues – Expenses
Stock
$71,288 = $2,260 + ? – $14,420 + $53,085 – $28,675
$71,288 = $2,260 + $59,038 – $14,420 + $53,085 – $28,675
TI-F:1-4
ASSETS = LIABILITIES + EQUITY
Contributed
+ Retained Earnings
Capital
Accounts Accounts Common Service Gas
Date Cash + + Equipment = + – Dividends + –
Receivable Payable Stock Revenue Expense
May 1 +1,700 = +1,700
3 +1,440 = +1,440
Bal. $1,700 + $1,440 = $1,440 + $1,700
5 +200 = +200
Bal. $1,700 + $200 + $1,440 = $1,440 + $1,700 + $200
17 −60 −60
Bal. $1,640 + $200 + $1,440 = $1,440 + $1,700 + $200 − $60
28 −300 = −300
Bal. $1,340 + $200 + $1,440 = $1,440 + $1,700 – $300 + $200 – $60
©2027 1-1
,TI-F:1-5
DR PAINTING
Income Statement
Month Ended March 31, 20x1
Revenue:
Service Revenue $ 7,000
Expenses:
Salaries Expense $ 800
Utilities Expense 200
Total Expenses 1,000
Net Income $ 6,000
DR PAINTING
Statement of Retained Earnings
Month Ended March 31, 20x1
Retained Earnings, March 1, 20x1 $ 0
Net income for the month 6,000
6,000
Dividends (1,500)
Retained Earnings, March 31, 20x1 $ 4,500
DR PAINTING
Balance Sheet
March 31, 20x1
Assets Liabilities
Cash $ 22,300 Accounts Payable $ 1,000
Accounts Receivable 1,400
Supplies 1,800 Stockholders’ Equity
Truck 20,000 Common Stock 40,000
Retained Earnings 4,500
Total Stockholders’ Equity 44,500
Total Assets $ 45,500 Total Liabilities and Stockholders’ Equity $ 45,500
TI-F:1-6
Return on assets = Net income / Average total assets
= $5,000 / (($76,000 + $80,250) / 2)
= $5,000 / $78,125
= 6.4%
© 2027 1-2
, Quick Checks
1. d 2. c 3. a 4. c 5. c 6. a 7. c 8. a 9. b 10. a 11. c
Review Questions
1. Accounting is the information system that measures business activities, processes the information
into reports, and communicates the results to decision makers. Accounting is the language of
business.
2. Financial accounting provides information for external decision makers, such as outside investors,
lenders, customers, and the federal government. Managerial accounting focuses on information for
internal decision makers, such as the company’s managers and employees.
3. Individuals use accounting information to help them manage their money, evaluate a new job, and
better decide whether they can afford to make a new purchase. Business owners use accounting
information to set goals, measure progress toward those goals, and make adjustments when needed.
Investors use accounting information to help them decide whether or not a company is a good
investment and once they have invested, they use a company’s financial statements to analyze how
their investment is performing. Creditors use accounting information to decide whether to lend
money to a business and to evaluate a company’s ability to make the loan payments. Taxing
authorities use accounting information to calculate the amount of income tax that a company has to
pay.
4. Certified Public Accountants (CPAs) are licensed professional accountants who serve the general
public. They work for public accounting firms, businesses, government, or educational institutions.
A Chartered Global Management Accountant (CGMA) is an accountant who has advanced
knowledge in finance, operations, strategy, and management. Certified Management Accountants
(CMAs) specialize in accounting and financial management knowledge. They work for a single
company. Certified Financial Planners (CFPs) work with individuals to help them budget, plan for
retirement, save for education, and manage their finances.
5. The FASB oversees the creation and governance of accounting standards. They work with
governmental regulatory agencies, congressionally created groups, and private groups.
6. The guidelines for accounting information are called GAAP. It is the main U.S. accounting rule
book and is currently created and governed by the FASB. Investors and lenders must have
information that is relevant and has faithful representation in order to make decisions and GAAP
provides the framework for this financial reporting.
7. A sole proprietorship has a single owner, terminates upon the owner’s death or choice, the owner has
personal liability for the business’s debts, and it is not a separate tax entity. A partnership has two or
more owners, terminates at partner’s choice or death, the partners have personal liability, and it is
not a separate tax entity. A corporation is a separate legal entity, has one or more owners, has
indefinite life, the stockholders are not personally liable for the business’s debts, and it is a separate
tax entity. A limited-liability company has one or more members and each is only liable for his or
her own actions, has an indefinite life, and is not a separate tax entity.
© 2027 1-3
Solution Manual
Tracie Miller
Stephanie Poindexter
Financial and Managerial
Accounting:
The Financial Chapters
9th Edition
Tracie Miller, Franklin University
Stephanie Poindexter, Dallas College
Brenda Mattison, Tri-County Technical College
Complete Chapters (Chap 1 to 15) + Appx F:B
Copyright © 2027
, Chapter F:1
Accounting and the Business Environment
Try Its!
TI-F:1-1
1. e 2. a 3. d 4. b 5. f 6. c
TI-F:1-2
1. d 2. f 3. i 4. c 5. a 6. h 7. b 8. g 9. e
TI-F:1-3
ASSETS = LIABILITIES + EQUITY
Contributed
+
Capital Retained Earnings
Common
– Dividends + Revenues – Expenses
Stock
$71,288 = $2,260 + ? – $14,420 + $53,085 – $28,675
$71,288 = $2,260 + $59,038 – $14,420 + $53,085 – $28,675
TI-F:1-4
ASSETS = LIABILITIES + EQUITY
Contributed
+ Retained Earnings
Capital
Accounts Accounts Common Service Gas
Date Cash + + Equipment = + – Dividends + –
Receivable Payable Stock Revenue Expense
May 1 +1,700 = +1,700
3 +1,440 = +1,440
Bal. $1,700 + $1,440 = $1,440 + $1,700
5 +200 = +200
Bal. $1,700 + $200 + $1,440 = $1,440 + $1,700 + $200
17 −60 −60
Bal. $1,640 + $200 + $1,440 = $1,440 + $1,700 + $200 − $60
28 −300 = −300
Bal. $1,340 + $200 + $1,440 = $1,440 + $1,700 – $300 + $200 – $60
©2027 1-1
,TI-F:1-5
DR PAINTING
Income Statement
Month Ended March 31, 20x1
Revenue:
Service Revenue $ 7,000
Expenses:
Salaries Expense $ 800
Utilities Expense 200
Total Expenses 1,000
Net Income $ 6,000
DR PAINTING
Statement of Retained Earnings
Month Ended March 31, 20x1
Retained Earnings, March 1, 20x1 $ 0
Net income for the month 6,000
6,000
Dividends (1,500)
Retained Earnings, March 31, 20x1 $ 4,500
DR PAINTING
Balance Sheet
March 31, 20x1
Assets Liabilities
Cash $ 22,300 Accounts Payable $ 1,000
Accounts Receivable 1,400
Supplies 1,800 Stockholders’ Equity
Truck 20,000 Common Stock 40,000
Retained Earnings 4,500
Total Stockholders’ Equity 44,500
Total Assets $ 45,500 Total Liabilities and Stockholders’ Equity $ 45,500
TI-F:1-6
Return on assets = Net income / Average total assets
= $5,000 / (($76,000 + $80,250) / 2)
= $5,000 / $78,125
= 6.4%
© 2027 1-2
, Quick Checks
1. d 2. c 3. a 4. c 5. c 6. a 7. c 8. a 9. b 10. a 11. c
Review Questions
1. Accounting is the information system that measures business activities, processes the information
into reports, and communicates the results to decision makers. Accounting is the language of
business.
2. Financial accounting provides information for external decision makers, such as outside investors,
lenders, customers, and the federal government. Managerial accounting focuses on information for
internal decision makers, such as the company’s managers and employees.
3. Individuals use accounting information to help them manage their money, evaluate a new job, and
better decide whether they can afford to make a new purchase. Business owners use accounting
information to set goals, measure progress toward those goals, and make adjustments when needed.
Investors use accounting information to help them decide whether or not a company is a good
investment and once they have invested, they use a company’s financial statements to analyze how
their investment is performing. Creditors use accounting information to decide whether to lend
money to a business and to evaluate a company’s ability to make the loan payments. Taxing
authorities use accounting information to calculate the amount of income tax that a company has to
pay.
4. Certified Public Accountants (CPAs) are licensed professional accountants who serve the general
public. They work for public accounting firms, businesses, government, or educational institutions.
A Chartered Global Management Accountant (CGMA) is an accountant who has advanced
knowledge in finance, operations, strategy, and management. Certified Management Accountants
(CMAs) specialize in accounting and financial management knowledge. They work for a single
company. Certified Financial Planners (CFPs) work with individuals to help them budget, plan for
retirement, save for education, and manage their finances.
5. The FASB oversees the creation and governance of accounting standards. They work with
governmental regulatory agencies, congressionally created groups, and private groups.
6. The guidelines for accounting information are called GAAP. It is the main U.S. accounting rule
book and is currently created and governed by the FASB. Investors and lenders must have
information that is relevant and has faithful representation in order to make decisions and GAAP
provides the framework for this financial reporting.
7. A sole proprietorship has a single owner, terminates upon the owner’s death or choice, the owner has
personal liability for the business’s debts, and it is not a separate tax entity. A partnership has two or
more owners, terminates at partner’s choice or death, the partners have personal liability, and it is
not a separate tax entity. A corporation is a separate legal entity, has one or more owners, has
indefinite life, the stockholders are not personally liable for the business’s debts, and it is a separate
tax entity. A limited-liability company has one or more members and each is only liable for his or
her own actions, has an indefinite life, and is not a separate tax entity.
© 2027 1-3
