Solution manual for accounting 28th edition by carl F F F F F F FF F
s warren christine jonickultimate guide graded A+
F F F F F FF F F
,guaranteed pass F F
1. Some users of accounting information include managers, employees, investors, cr
F F F F F F F F F F
editors, customers, and the government.
F F F F
2. The role of accounting is to provide information for managers to use in operating the
F F F F F F F F F F F F F F F
business. In addition, accounting provides information to others to use in assessing the
F F F F F F F F F F F F F
economic performance and condition of the business.
F F F F F F
3. The corporate form allows the company to obtain large amounts of resources by issuing
F F F F F F F F F F F F F F
stock. For this reason, most companies that require large investments in property, plant, and
F F F F F F F F F F F F F F
equipment are organized as corporations. F F F F
4. No. The business entity concept limits the recording of economic data to transactions
F F F F F F F F F F F F F
directly affecting the activities of the business. The payment of the interest of $4,500 is
F F F F F F F F F F F F F F F
a personal transaction of Josh Reilly and should notlbe recorded by Dispatch Deli
F F F F F F F F F F F F F
very Service. F
5. The land should be recorded atlits costlof $167,500 to Reliable Repair Service. This is c
F F F F F F F F F F F F F F F
onsistent with the cost concept. F F F F
6. a.
No. The offer of $2,000,000 and the increase in the assessed value should not
F F F F F F F F F F F F F F
be recognized in the accounting records because land is recorded on the costlbasis.
F F F F F F F F F F F F
b.
Cash would increase by $2,125,000, land would decrease by $900,000, and
F F F F F F F F F F F
owner’s equity would increase by $1,225,000. F F F F F
7. An account receivable is a claim against a customer for goods or services sold. An acco unt
F F F F F F F F F F F F F F F F F
payable is an amount owed to a creditor for goods or services purchased. Therefo re, an
F F F F F F F F F F F F F F F F
account receivable in the records of the seller is an account payable in the recor ds of the
F F F F F F F F F F F F F F F F F F
purchaser.
8. (b) The business realized net income of $91,000 ($679,000 –l$588,000).
F F F F F F F F F
9. (a) The business incurred a net loss of $75,000 ($640,000 – $715,000).
F F F F F F F F F F F F
10. (a) Net income or net loss
F F F F F
(b) Owner’s equity at the end of the period F F F F F F F
(c) Cash at the end oflthe period F F F F F
, CHAPTER 1 Introduction to Accounting and Business
PRACTICE EXERCISES F
PE 1-1A
F
$597,000. Under the costlconcept, the land should be recorded at the costlto Boulder Repa
F F F F F F F F F F F F F F
ir Service.
F
PE 1-1B
F
$369,500. Under the costlconcept, the land should be recorded at the cost to Clementine R
F F F F F F F F F F F F F F F
epair Service.
F
PE 1-2A
F
a. A = L + OE F F F F
$518,000l = $165,000 + O F F F F F
E OE = $353,000 F F F
b. A = L + OE F F F F
+$86,200 = +$25,000 F F F
+ OE OE = +$61,200 F F F F
OE on December 31, 20Y9 = $353,000 + $61,200
F F F F F F F F
= $414,200 F
PE 1-2B
F
a. A = L + OE F F F F
$382,000 = $94,000 + OE F F F F F
OE = $288,000 F F
b. A = L + OE F F F F
–
$63,000 = +$35,000 + O F F F F F
E OE = –$98,000 F F F
OE on December 31, 20Y9 = $288,000 – $98,000
F F F F F F F F
= $190,000 F
PE 1-3A
F
(2) Asset (Accounts Receivable) increases by $22,400;
F F F F F
Owner’s Equity (Delivery Service Fees) increases by $22,400.
F F F F F F F
(3) Liability (Accounts Payable) decreases by $4,100; A
F F F F F F F
sset (Cash) decreases by $4,100.
F F F F
1-2
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 1 Introduction to Accounting and Business
(4) Asset (Cash) increases by $14,700;
F F F F
Asset (Accounts Receivable) decreases by $14,700.
PE 1-3B
F F F F F
(5) Asset (Cash) decreases by $1,600;
F F F F
Owner’s Equity (Terry Young, Drawing) decreases by $1,600.
F F F F F F F
(2) Owner’s Equity (Advertising Expense, increases) decreases by $6,750; As
F F F F F F F F F
set (Cash) decreases by $6,750.
F F F F
(3) Asset (Supplies) increases by $2,920;
F F F F
Liability (Accounts Payable) increases by $2,920.
F F F F F
(4) Asset (Accounts Receivable) increases by $20,460;
F F F F F
Owner’s Equity (Delivery Service Fees) increases by $20,460.
F F F F F F F
(5) Asset (Cash) increases by $11,410;
F F F F
Asset (Accounts Receivable) decreases by $11,410.
F F F F F
PE 1-4A
F
Up-in-the-Air Travel Service F F
Income Statement F
For the Year Ended April 30, 20Y7
F F F F F F
Fees earned F $1,870,000
Expenses:
Wages expense F $1,115,000
Office expense F 343,000
Miscellaneous expense F 21,000
Total expenses F 1,479,000
Net income
F $ 391,000
F
PE 1-4B
F
Zenith Travel Service F F
Income Statement F
For the Year Ended August 31, 20Y4
F F F F F F
Fees earned F $899,600
Expenses:
Wages expense F $539,800
Office expense F 353,800
Miscellaneous expense F 14,400
Total expenses F 908,000
Net loss
F $ (8,400
F
PE 1-5A
F
Up-in-the-Air Travel Service F F
Statement of Owner’s Equity For F F F F F
the Year Ended April 30, 20Y7
F F F F F
1-3
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 1 Introduction to Accounting and Business
Jerome Foley, capital, May 1, 20Y6
F F F F F $ 876,000
F
Additional investment by owner during year
F F F F F $ 52,000
F
Net income for the year
F F F F 391,000
Withdrawals (34,000
Increase in owner’s equity
F F F 409,000
Jerome Foley, capital, April 30, 20Y7
F F F F F $1,285,000
PE 1-5B
F
Zenith Travel Service F F
Statement oflOwner’s Equity F F
For the Year Ended August 31, 20Y4 F F F F F F
Megan Cox, capital, September 1, 20Y3
F F F F F $456,000
Additional investment by owner during year
F F F F F $ 43,200
F
Netlloss for the yearF F F (8,400
Withdrawals (21,600
Increase in owner’s equity
F F F 13,200
Megan Cox, capital, August 31, 20Y4
F F F F F $469,200
PE 1-6A
F
Up-in-the-Air Travel Service F F
Balance Sheet F F
April 30, 20Y7 F F
Assets
Cash $ 170,000
F
Accounts receivable F 417,000
Supplies 16,000
Land 772,000
Total assets
F $1,375,000
Liabilities
Accounts payable F $ 90,000
Owner’s Equity F
Jerome Foley, capital
F F 1,285,000
Total liabilities and owner’s equity
F F F F $1,375,000
1-4
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
s warren christine jonickultimate guide graded A+
F F F F F FF F F
,guaranteed pass F F
1. Some users of accounting information include managers, employees, investors, cr
F F F F F F F F F F
editors, customers, and the government.
F F F F
2. The role of accounting is to provide information for managers to use in operating the
F F F F F F F F F F F F F F F
business. In addition, accounting provides information to others to use in assessing the
F F F F F F F F F F F F F
economic performance and condition of the business.
F F F F F F
3. The corporate form allows the company to obtain large amounts of resources by issuing
F F F F F F F F F F F F F F
stock. For this reason, most companies that require large investments in property, plant, and
F F F F F F F F F F F F F F
equipment are organized as corporations. F F F F
4. No. The business entity concept limits the recording of economic data to transactions
F F F F F F F F F F F F F
directly affecting the activities of the business. The payment of the interest of $4,500 is
F F F F F F F F F F F F F F F
a personal transaction of Josh Reilly and should notlbe recorded by Dispatch Deli
F F F F F F F F F F F F F
very Service. F
5. The land should be recorded atlits costlof $167,500 to Reliable Repair Service. This is c
F F F F F F F F F F F F F F F
onsistent with the cost concept. F F F F
6. a.
No. The offer of $2,000,000 and the increase in the assessed value should not
F F F F F F F F F F F F F F
be recognized in the accounting records because land is recorded on the costlbasis.
F F F F F F F F F F F F
b.
Cash would increase by $2,125,000, land would decrease by $900,000, and
F F F F F F F F F F F
owner’s equity would increase by $1,225,000. F F F F F
7. An account receivable is a claim against a customer for goods or services sold. An acco unt
F F F F F F F F F F F F F F F F F
payable is an amount owed to a creditor for goods or services purchased. Therefo re, an
F F F F F F F F F F F F F F F F
account receivable in the records of the seller is an account payable in the recor ds of the
F F F F F F F F F F F F F F F F F F
purchaser.
8. (b) The business realized net income of $91,000 ($679,000 –l$588,000).
F F F F F F F F F
9. (a) The business incurred a net loss of $75,000 ($640,000 – $715,000).
F F F F F F F F F F F F
10. (a) Net income or net loss
F F F F F
(b) Owner’s equity at the end of the period F F F F F F F
(c) Cash at the end oflthe period F F F F F
, CHAPTER 1 Introduction to Accounting and Business
PRACTICE EXERCISES F
PE 1-1A
F
$597,000. Under the costlconcept, the land should be recorded at the costlto Boulder Repa
F F F F F F F F F F F F F F
ir Service.
F
PE 1-1B
F
$369,500. Under the costlconcept, the land should be recorded at the cost to Clementine R
F F F F F F F F F F F F F F F
epair Service.
F
PE 1-2A
F
a. A = L + OE F F F F
$518,000l = $165,000 + O F F F F F
E OE = $353,000 F F F
b. A = L + OE F F F F
+$86,200 = +$25,000 F F F
+ OE OE = +$61,200 F F F F
OE on December 31, 20Y9 = $353,000 + $61,200
F F F F F F F F
= $414,200 F
PE 1-2B
F
a. A = L + OE F F F F
$382,000 = $94,000 + OE F F F F F
OE = $288,000 F F
b. A = L + OE F F F F
–
$63,000 = +$35,000 + O F F F F F
E OE = –$98,000 F F F
OE on December 31, 20Y9 = $288,000 – $98,000
F F F F F F F F
= $190,000 F
PE 1-3A
F
(2) Asset (Accounts Receivable) increases by $22,400;
F F F F F
Owner’s Equity (Delivery Service Fees) increases by $22,400.
F F F F F F F
(3) Liability (Accounts Payable) decreases by $4,100; A
F F F F F F F
sset (Cash) decreases by $4,100.
F F F F
1-2
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 1 Introduction to Accounting and Business
(4) Asset (Cash) increases by $14,700;
F F F F
Asset (Accounts Receivable) decreases by $14,700.
PE 1-3B
F F F F F
(5) Asset (Cash) decreases by $1,600;
F F F F
Owner’s Equity (Terry Young, Drawing) decreases by $1,600.
F F F F F F F
(2) Owner’s Equity (Advertising Expense, increases) decreases by $6,750; As
F F F F F F F F F
set (Cash) decreases by $6,750.
F F F F
(3) Asset (Supplies) increases by $2,920;
F F F F
Liability (Accounts Payable) increases by $2,920.
F F F F F
(4) Asset (Accounts Receivable) increases by $20,460;
F F F F F
Owner’s Equity (Delivery Service Fees) increases by $20,460.
F F F F F F F
(5) Asset (Cash) increases by $11,410;
F F F F
Asset (Accounts Receivable) decreases by $11,410.
F F F F F
PE 1-4A
F
Up-in-the-Air Travel Service F F
Income Statement F
For the Year Ended April 30, 20Y7
F F F F F F
Fees earned F $1,870,000
Expenses:
Wages expense F $1,115,000
Office expense F 343,000
Miscellaneous expense F 21,000
Total expenses F 1,479,000
Net income
F $ 391,000
F
PE 1-4B
F
Zenith Travel Service F F
Income Statement F
For the Year Ended August 31, 20Y4
F F F F F F
Fees earned F $899,600
Expenses:
Wages expense F $539,800
Office expense F 353,800
Miscellaneous expense F 14,400
Total expenses F 908,000
Net loss
F $ (8,400
F
PE 1-5A
F
Up-in-the-Air Travel Service F F
Statement of Owner’s Equity For F F F F F
the Year Ended April 30, 20Y7
F F F F F
1-3
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 1 Introduction to Accounting and Business
Jerome Foley, capital, May 1, 20Y6
F F F F F $ 876,000
F
Additional investment by owner during year
F F F F F $ 52,000
F
Net income for the year
F F F F 391,000
Withdrawals (34,000
Increase in owner’s equity
F F F 409,000
Jerome Foley, capital, April 30, 20Y7
F F F F F $1,285,000
PE 1-5B
F
Zenith Travel Service F F
Statement oflOwner’s Equity F F
For the Year Ended August 31, 20Y4 F F F F F F
Megan Cox, capital, September 1, 20Y3
F F F F F $456,000
Additional investment by owner during year
F F F F F $ 43,200
F
Netlloss for the yearF F F (8,400
Withdrawals (21,600
Increase in owner’s equity
F F F 13,200
Megan Cox, capital, August 31, 20Y4
F F F F F $469,200
PE 1-6A
F
Up-in-the-Air Travel Service F F
Balance Sheet F F
April 30, 20Y7 F F
Assets
Cash $ 170,000
F
Accounts receivable F 417,000
Supplies 16,000
Land 772,000
Total assets
F $1,375,000
Liabilities
Accounts payable F $ 90,000
Owner’s Equity F
Jerome Foley, capital
F F 1,285,000
Total liabilities and owner’s equity
F F F F $1,375,000
1-4
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
