SOLUTIONS MANUAL
Financial & Managerial Accounting
Carl S. Warren, Jefferson P. Jones, and William B. Tayler
ST
──────────────────────────────────────────────────
16th Edition
UV
IA
?_
AP
PR
OV
ED
? ?
, TABLE OF CONTENTS
Financial & Managerial Accounting (16th Edition) - Solutions Manual
Carl Warren, Jefferson Jones, William Tayler
ST
Chapter 1 Introduction to Accounting and Business
Chapter 2 Analyzing Transactions
Chapter 3 The Adjusting Process
UV
Chapter 4 The Accounting Cycle
R
Chapter 5 Accounting for Retail Businesses
U
Chapter 6 Inventories
Chapter 7 Internal Control and Cash
IA
SE
Chapter 8 Receivables
Chapter 9 Long-Term Assets: Fixed and Intangible
?_
Chapter 10 Liabilities: Current, Installment Notes, and Contingencies
IS
Chapter 11 Liabilities: Bonds Payable
Chapter 12 Corporations: Organization, Stock Transactions, and Dividends
O
AP
Chapter 13 Statement of Cash Flows
N
Chapter 14 Financial Statement Analysis
Chapter 15 Introduction to Managerial Accounting
N
Chapter 16 Job Order Costing
PR
Chapter 17 Process Costing
O
Chapter 18 Activity-Based Costing
C
Chapter 19 Support Department and Joint Cost Allocation
OV
Chapter 20 Cost-Volume-Profit Analysis
ED
Chapter 21 Variable Costing for Management Analysis
Chapter 22 Budgeting
Chapter 23 Evaluating Variances from Standard Costs
M
ED
Chapter 24 Evaluating Decentralized Operations
Chapter 25 Differential Analysis and Product Pricing
Chapter 26 Capital Investment Analysis
Chapter 27 Lean Manufacturing and Activity Analysis
??
Chapter 28 The Balanced Scorecard and Corporate Social Responsibility
, CHAPTER 1
INTRODUCTION TO ACCOUNTING AND BUSINESS
DISCUSSION QUESTIONS
ST
1. Some users of accounting information include managers, employees, investors, creditors,
customers, and the government.
2. The role of accounting is to provide information for managers to use in operating the business.
UV
In addition, accounting provides information to others to use in assessing the economic
performance and condition of the business.
3. The corporate form allows the company to obtain large amounts of resources by issuing stock.
For this reason, most companies that require large investments in property, plant, and equipment
are organized as corporations.
IA
4. No. The business entity assumption limits the recording of economic data to transactions directly
affecting the activities of the business. The payment of the interest of $4,500 is a personal
transaction of Josh Reilly and should not be recorded by Dispatch Delivery Service.
?_
5. The land should be recorded at its cost of $167,500 to Reliable Repair Service. This is consistent
with the cost principle.
6. a. No. The offer of $2,000,000 and the increase in the assessed value should not be recognized
in the accounting records.
AP
b. Cash would increase by $2,125,000, land would decrease by $900,000, and stockholders’
equity would increase by $1,225,000.
7. An account receivable is a claim against a customer for goods or services sold. An account
payable is an amount owed to a creditor for goods or services purchased. Therefore, an account
PR
receivable in the records of the seller is an account payable in the records of the purchaser.
8. (b) The business realized net income of $91,000 ($679,000 – $588,000).
9. (a) The business incurred a net loss of $75,000 ($640,000 – $715,000).
10. (a) Net income or net loss
OV
(b) Common stock and retained earnings at the end of the period
(c) Cash at the end of the period
ED
??
, CHAPTER 1 Introduction to Accounting and Business
BASIC EXERCISES
BE 1–1
$320,000. Under the cost principle, the land should be recorded at the cost to Tin
Roofing.
ST
BE 1–2
a. A = L + SE
UV
$690,000 = $375,000 + SE
SE = $315,000
b. A = L + SE
$690,000 + $80,000 = $375,000 + $51,500 + SE
IA
$770,000 = $426,500 + SE
SE = $343,500
?_
BE 1–3
(2) Expense (Advertising Expense) increases by $3,500;
Asset (Cash) decreases by $3,500.
AP
(3) Asset (Supplies) increases by $2,500;
Liability (Accounts Payable) increases by $2,500.
(4) Asset (Accounts Receivable) increases by $18,750;
Revenue (Delivery Service Fees) increases by $18,750.
PR
(5) Asset (Cash) increases by $14,150;
Asset (Accounts Receivable) decreases by $14,150.
OV
BE 1–4
A-One Travel Service
Income Statement
For the Year Ended August 31, 20Y6
Fees earned $1,150,000
ED
Expenses:
Wages expense $640,000
Office expense 150,000
Miscellaneous expense 45,000
??
Total expenses (835,000)
Net income $ 315,000
Financial & Managerial Accounting
Carl S. Warren, Jefferson P. Jones, and William B. Tayler
ST
──────────────────────────────────────────────────
16th Edition
UV
IA
?_
AP
PR
OV
ED
? ?
, TABLE OF CONTENTS
Financial & Managerial Accounting (16th Edition) - Solutions Manual
Carl Warren, Jefferson Jones, William Tayler
ST
Chapter 1 Introduction to Accounting and Business
Chapter 2 Analyzing Transactions
Chapter 3 The Adjusting Process
UV
Chapter 4 The Accounting Cycle
R
Chapter 5 Accounting for Retail Businesses
U
Chapter 6 Inventories
Chapter 7 Internal Control and Cash
IA
SE
Chapter 8 Receivables
Chapter 9 Long-Term Assets: Fixed and Intangible
?_
Chapter 10 Liabilities: Current, Installment Notes, and Contingencies
IS
Chapter 11 Liabilities: Bonds Payable
Chapter 12 Corporations: Organization, Stock Transactions, and Dividends
O
AP
Chapter 13 Statement of Cash Flows
N
Chapter 14 Financial Statement Analysis
Chapter 15 Introduction to Managerial Accounting
N
Chapter 16 Job Order Costing
PR
Chapter 17 Process Costing
O
Chapter 18 Activity-Based Costing
C
Chapter 19 Support Department and Joint Cost Allocation
OV
Chapter 20 Cost-Volume-Profit Analysis
ED
Chapter 21 Variable Costing for Management Analysis
Chapter 22 Budgeting
Chapter 23 Evaluating Variances from Standard Costs
M
ED
Chapter 24 Evaluating Decentralized Operations
Chapter 25 Differential Analysis and Product Pricing
Chapter 26 Capital Investment Analysis
Chapter 27 Lean Manufacturing and Activity Analysis
??
Chapter 28 The Balanced Scorecard and Corporate Social Responsibility
, CHAPTER 1
INTRODUCTION TO ACCOUNTING AND BUSINESS
DISCUSSION QUESTIONS
ST
1. Some users of accounting information include managers, employees, investors, creditors,
customers, and the government.
2. The role of accounting is to provide information for managers to use in operating the business.
UV
In addition, accounting provides information to others to use in assessing the economic
performance and condition of the business.
3. The corporate form allows the company to obtain large amounts of resources by issuing stock.
For this reason, most companies that require large investments in property, plant, and equipment
are organized as corporations.
IA
4. No. The business entity assumption limits the recording of economic data to transactions directly
affecting the activities of the business. The payment of the interest of $4,500 is a personal
transaction of Josh Reilly and should not be recorded by Dispatch Delivery Service.
?_
5. The land should be recorded at its cost of $167,500 to Reliable Repair Service. This is consistent
with the cost principle.
6. a. No. The offer of $2,000,000 and the increase in the assessed value should not be recognized
in the accounting records.
AP
b. Cash would increase by $2,125,000, land would decrease by $900,000, and stockholders’
equity would increase by $1,225,000.
7. An account receivable is a claim against a customer for goods or services sold. An account
payable is an amount owed to a creditor for goods or services purchased. Therefore, an account
PR
receivable in the records of the seller is an account payable in the records of the purchaser.
8. (b) The business realized net income of $91,000 ($679,000 – $588,000).
9. (a) The business incurred a net loss of $75,000 ($640,000 – $715,000).
10. (a) Net income or net loss
OV
(b) Common stock and retained earnings at the end of the period
(c) Cash at the end of the period
ED
??
, CHAPTER 1 Introduction to Accounting and Business
BASIC EXERCISES
BE 1–1
$320,000. Under the cost principle, the land should be recorded at the cost to Tin
Roofing.
ST
BE 1–2
a. A = L + SE
UV
$690,000 = $375,000 + SE
SE = $315,000
b. A = L + SE
$690,000 + $80,000 = $375,000 + $51,500 + SE
IA
$770,000 = $426,500 + SE
SE = $343,500
?_
BE 1–3
(2) Expense (Advertising Expense) increases by $3,500;
Asset (Cash) decreases by $3,500.
AP
(3) Asset (Supplies) increases by $2,500;
Liability (Accounts Payable) increases by $2,500.
(4) Asset (Accounts Receivable) increases by $18,750;
Revenue (Delivery Service Fees) increases by $18,750.
PR
(5) Asset (Cash) increases by $14,150;
Asset (Accounts Receivable) decreases by $14,150.
OV
BE 1–4
A-One Travel Service
Income Statement
For the Year Ended August 31, 20Y6
Fees earned $1,150,000
ED
Expenses:
Wages expense $640,000
Office expense 150,000
Miscellaneous expense 45,000
??
Total expenses (835,000)
Net income $ 315,000
