,Solution manual for Financial Accounting with
International Financial Reporting Standards,
4th Edition by Jerry J. Weygandt
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, CHAPTER 1
Accounting in Action
ASSIGNMENT CLASSIFICATION TABLE
Brief
Learning Objectives Questions Exercises Do It! Exercises Problems
1. Identify the activities and 1, 2, 3, 4, 5 1 1, 2
users associated with
accounting.
2. Explain the building blocks of 6, 7, 8, 9, 10 2 3, 4
accounting: ethics, principles,
and assumptions.
3. State the accounting 11, 12, 13, 22 1, 2, 3, 4, 5, 6 3 5 1
equation, and define its
components.
4. Analyze the effects of 14, 15, 16, 18 7, 8, 9 4 6, 7, 8 1, 2, 4, 5
business transactions on the
accounting equation.
5. Describe the five financial 17, 19, 20, 21 10, 11 5 9, 10, 11, 12, 2, 3, 4, 5
statements and how they are 13, 14, 15, 16,
prepared. 17, 18
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-1
,ASSIGNMENT CHARACTERISTICS TABLE
Problem Difficulty Time Allotted
Number Description Level (min.)
1 Analyze transactions and compute net income. Moderate 40–50
2 Analyze transactions and prepare income statement, Moderate 50–60
retained earnings statement, and statement of financial
position.
3 Prepare income statement, retained earnings statement, Moderate 50–60
and statement of financial position.
4 Analyze transactions and prepare financial statements. Moderate 40–50
5 Determine financial statement amounts and prepare Moderate 40–50
retained earnings statement.
1-2 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
, WEYGANDT FINANCIAL ACCOUNTING IFRS 4E
CHAPTER 1
ACCOUNTING IN ACTION
Number LO BT Difficulty Time (min.)
BE1 3 AP Simple 2–4
BE2 3 AP Simple 3–5
BE3 3 AP Moderate 4–6
BE4 3 AP Moderate 4–6
BE5 3 C Simple 2–4
BE6 3 C Simple 2–4
BE7 4 C Simple 2–4
BE8 4 C Simple 2–4
BE9 4 C Simple 1–2
BE10 5 AP Simple 3–5
BE11 5 C Simple 2–4
DI1 1 K Simple 2–4
DI2 2 K Simple 2–4
DI3 3 AP Simple 6–8
DI4 4 AP Moderate 8–10
DI5 5 AP Moderate 10–12
EX1 1 C Moderate 5–7
EX2 1 C Simple 6–8
EX3 2 C Moderate 6–8
EX4 2 C Moderate 6–8
EX5 3 C Simple 4–6
EX6 4 C Simple 6–8
EX7 4 C Simple 4–6
EX8 4 AP Moderate 12–15
EX9 5 AP Simple 12–15
EX10 5 AP Moderate 8–10
EX11 5 AP Moderate 6–8
EX12 5 AP Simple 8–10
EX13 5 AN Simple 8–10
EX14 5 AP Simple 10–12
EX15 5 AP Simple 6–8
EX16 5 AP Moderate 6–8
EX17 5 AP Moderate 6–8
EX18 5 C Simple 2–4
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-3
, ACCOUNTING IN ACTION (Continued)
Number LO BT Difficulty Time (min.)
P1 3, 4 AP Moderate 40–50
P2 4, 5 AP Moderate 50–60
P3 5 AP Moderate 50–60
P4 4, 5 AP Moderate 40–50
P5 4, 5 AP Moderate 40–50
CT1 5 AN Simple 10–15
CT2 5 AN Simple 10–15
CT3 6 C Simple 15–20
CT4 4 E Moderate 15–20
CT5 5 E Simple 12–15
CT6 2 E Simple 10–12
CT7 - C Simple 10–15
1-4 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
, Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
BLOOM’ S TAXONOMY TABLE
Learning Objective Knowledge Comprehension Application Analysis Synthesis Evaluation
1. Identify the activities and users DI1-1 Q1-1 Q1-5
associated with accounting. Q1-2 E1-1
Q1-3 E1-2
Q1-4
2. Explain the building blocks of DI1-2 Q1-6
accounting: ethics, principles, Q1-7 E1-3
and assumptions. Q1-8 E1-4
Q1-9
Q1-10
3. State the accounting equation, Q1-11 BE1-5 Q1-22 P1-1
and define its components. Q1-12 BE1-6 BE1-1
Q1-13 E1-5 BE1-2
BE1-3
BE1-4
DI1-3
4. Analyze the effects of business Q1-14 BE1-8 DI1-4 P1-5
transactions on the accounting Q1-15 BE1-9 E1-8
equation. Q1-16 E1-6 P1-1
Q1-18 E1-7 P1-2
BE1-7 P1-4
5. Describe the five financial Q1-17 Q1-21 E1-16 E1-13
statements and how they are Q1-19 BE1-10 E1-17
prepared. Q1-20 DI1-5 P1-2
BE1-11 E1-9 P1-3
E1-18 E1-10 P1-4
E1-11 P1-5
E1-12
E1-14
E1-15
Expand Your Critical Thinking Real–World Focus Financial Reporting Decision–Making Across
Considering Comparative Analysis the Organization
People, Planet, Communication Activity
and Profit Ethics Case
All About You
1-5
, ANSWERS TO QUESTIONS
1. Yes, this is correct. Virtually every organization and person in our society uses accounting
information. Businesses, investors, creditors, government agencies, and not-for-profit organizations
must use accounting information to operate effectively.
2. Accounting is the process of identifying, recording, and communicating the economic events of
an organization to interested users of the information. The first step of the accounting process is
therefore to identify economic events that are relevant to a particular business. Once identified
and measured, the events are recorded to provide a history of the financial activities of the
organization. Recording consists of keeping a chronological diary of these measured events in an
orderly and systematic manner. The information is communicated through the preparation and
distribution of accounting reports, the most common of which are called financial statements.
A vital element in the communication process is the accountant’s ability and responsibility to
analyze and interpret the reported information.
3. (a) Internal users are those who plan, organize, and run the business and therefore are officers
and other decision makers.
(b) To assist management, accounting provides internal reports. Examples include financial
comparisons of operating alternatives, projections of income from new sales campaigns,
and forecasts of cash needs for the next year.
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell shares.
(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
5. No, this is incorrect. Bookkeeping usually involves only the recording of economic events and
therefore is just one part of the entire accounting process. Accounting, on the other hand, involves
the entire process of identifying, recording, and communicating economic events.
6. Jackie Remmers Travel Agency should report the land at £85,000 on its December 31, 2020
statement of financial position. This is true not only at the time the land is purchased, but also
over the time the land is held. In determining which measurement principle to use (cost or fair
value) companies weigh the factual nature of cost figures versus the relevance of fair value. In
general, companies use cost. Only in situations where assets are actively traded do companies
apply the fair value principle extensively. An important concept that accountants follow is the
historical cost principle.
7. The monetary unit assumption requires that only transaction data capable of being expressed in
terms of money be included in the accounting records. This assumption enables accounting to
quantify (measure) economic events.
8. The economic entity assumption requires that the activities of the entity be kept separate and
distinct from the activities of its owners and all other economic entities.
9. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
1-6 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
10. One of the advantages Teresa Alvarez would enjoy is that ownership of a corporation is repre-
sented by transferable shares. This would allow Teresa to raise money easily by selling
a part of her ownership in the company. Another advantage is that because holders of the shares
(shareholders) enjoy limited liability, they are not personally liable for the debts of the corporate
entity. Also, because ownership can be transferred without dissolving the corporation, the corporation
enjoys an unlimited life.
11. The basic accounting equation is Assets = Liabilities + Equity.
12. (a) Assets are resources owned by a business. Liabilities are claims against assets. Put more
simply, liabilities are existing debts and obligations. Equity is the ownership claim on total
assets.
(b) Equity is affected by shareholders’ investments, dividends, revenues, and expenses.
13. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
14. Yes, a business can enter into a transaction in which only the left side of the accounting equation
is affected. An example would be a transaction where an increase in one asset is offset by
a decrease in another asset. An increase in the Equipment account which is offset by a decrease
in the Cash account is a specific example.
15. Business transactions are the economic events of the enterprise recorded by accountants
because they affect the basic equation.
(a) No, the death of the president of the company is not a business transaction as it does not
affect the basic equation.
(b) Yes, supplies purchased on account is a business transaction as it affects the basic equation.
(c) No, an employee being fired is not a business transaction as it does not affect the basic
equation.
16. (a) Decrease assets and decrease equity.
(b) Increase assets and decrease assets.
(c) Increase assets and increase equity.
(d) Decrease assets and decrease liabilities.
17. (a) Income statement. (d) Statement of financial position.
(b) Statement of financial position. (e) Statement of financial position and retained
(c) Income statement. earnings statement.
(f) Statement of financial position.
18. No, this treatment is not proper. While the transaction does involve a receipt of cash, it does not
represent revenues. Revenues are the gross increase in equity resulting from business activities
entered into for the purpose of earning income. This transaction is simply an additional
investment made by one of the owners of the business.
19. Yes. Net income does appear on the income statement—it is the result of subtracting expenses
from revenues. In addition, net income appears in the retained earnings statement—it is shown
as an addition to the beginning-of-period retained earnings. Indirectly, the net income of a company
is also included in the statement of financial position. It is included in the Retained Earnings
account which appears in the equity section of the statement of financial position.
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-7
, Questions Chapter 1 (Continued)
20. (a) Ending equity balance ...................................................................................... £198,000
Beginning equity balance ................................................................................. 158,000
Net income....................................................................................................... £ 40,000
(b) Ending equity balance ...................................................................................... £198,000
Beginning equity balance ................................................................................. 158,000
40,000
Deduct: Investment ......................................................................................... 13,000
Net income....................................................................................................... £ 27,000
21. (a) Total revenues (£30,000 + £70,000) ................................................................ £100,000
(b) Total expenses (£26,000 + £40,000) ................................................................ £66,000
(c) Total revenues ................................................................................................. £100,000
Total expenses................................................................................................. 66,000
Net income....................................................................................................... £34,000
22. TSMC’s accounting equation at December 31, 2016 was NT$1,886,455,302 = NT$496,404,176 +
NT$1,390,051,126.
1-8 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
International Financial Reporting Standards,
4th Edition by Jerry J. Weygandt
Hello all ,
We have all what you need with best price
Our email :
Our website :
testbanks-store.com
, CHAPTER 1
Accounting in Action
ASSIGNMENT CLASSIFICATION TABLE
Brief
Learning Objectives Questions Exercises Do It! Exercises Problems
1. Identify the activities and 1, 2, 3, 4, 5 1 1, 2
users associated with
accounting.
2. Explain the building blocks of 6, 7, 8, 9, 10 2 3, 4
accounting: ethics, principles,
and assumptions.
3. State the accounting 11, 12, 13, 22 1, 2, 3, 4, 5, 6 3 5 1
equation, and define its
components.
4. Analyze the effects of 14, 15, 16, 18 7, 8, 9 4 6, 7, 8 1, 2, 4, 5
business transactions on the
accounting equation.
5. Describe the five financial 17, 19, 20, 21 10, 11 5 9, 10, 11, 12, 2, 3, 4, 5
statements and how they are 13, 14, 15, 16,
prepared. 17, 18
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-1
,ASSIGNMENT CHARACTERISTICS TABLE
Problem Difficulty Time Allotted
Number Description Level (min.)
1 Analyze transactions and compute net income. Moderate 40–50
2 Analyze transactions and prepare income statement, Moderate 50–60
retained earnings statement, and statement of financial
position.
3 Prepare income statement, retained earnings statement, Moderate 50–60
and statement of financial position.
4 Analyze transactions and prepare financial statements. Moderate 40–50
5 Determine financial statement amounts and prepare Moderate 40–50
retained earnings statement.
1-2 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
, WEYGANDT FINANCIAL ACCOUNTING IFRS 4E
CHAPTER 1
ACCOUNTING IN ACTION
Number LO BT Difficulty Time (min.)
BE1 3 AP Simple 2–4
BE2 3 AP Simple 3–5
BE3 3 AP Moderate 4–6
BE4 3 AP Moderate 4–6
BE5 3 C Simple 2–4
BE6 3 C Simple 2–4
BE7 4 C Simple 2–4
BE8 4 C Simple 2–4
BE9 4 C Simple 1–2
BE10 5 AP Simple 3–5
BE11 5 C Simple 2–4
DI1 1 K Simple 2–4
DI2 2 K Simple 2–4
DI3 3 AP Simple 6–8
DI4 4 AP Moderate 8–10
DI5 5 AP Moderate 10–12
EX1 1 C Moderate 5–7
EX2 1 C Simple 6–8
EX3 2 C Moderate 6–8
EX4 2 C Moderate 6–8
EX5 3 C Simple 4–6
EX6 4 C Simple 6–8
EX7 4 C Simple 4–6
EX8 4 AP Moderate 12–15
EX9 5 AP Simple 12–15
EX10 5 AP Moderate 8–10
EX11 5 AP Moderate 6–8
EX12 5 AP Simple 8–10
EX13 5 AN Simple 8–10
EX14 5 AP Simple 10–12
EX15 5 AP Simple 6–8
EX16 5 AP Moderate 6–8
EX17 5 AP Moderate 6–8
EX18 5 C Simple 2–4
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-3
, ACCOUNTING IN ACTION (Continued)
Number LO BT Difficulty Time (min.)
P1 3, 4 AP Moderate 40–50
P2 4, 5 AP Moderate 50–60
P3 5 AP Moderate 50–60
P4 4, 5 AP Moderate 40–50
P5 4, 5 AP Moderate 40–50
CT1 5 AN Simple 10–15
CT2 5 AN Simple 10–15
CT3 6 C Simple 15–20
CT4 4 E Moderate 15–20
CT5 5 E Simple 12–15
CT6 2 E Simple 10–12
CT7 - C Simple 10–15
1-4 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
, Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
BLOOM’ S TAXONOMY TABLE
Learning Objective Knowledge Comprehension Application Analysis Synthesis Evaluation
1. Identify the activities and users DI1-1 Q1-1 Q1-5
associated with accounting. Q1-2 E1-1
Q1-3 E1-2
Q1-4
2. Explain the building blocks of DI1-2 Q1-6
accounting: ethics, principles, Q1-7 E1-3
and assumptions. Q1-8 E1-4
Q1-9
Q1-10
3. State the accounting equation, Q1-11 BE1-5 Q1-22 P1-1
and define its components. Q1-12 BE1-6 BE1-1
Q1-13 E1-5 BE1-2
BE1-3
BE1-4
DI1-3
4. Analyze the effects of business Q1-14 BE1-8 DI1-4 P1-5
transactions on the accounting Q1-15 BE1-9 E1-8
equation. Q1-16 E1-6 P1-1
Q1-18 E1-7 P1-2
BE1-7 P1-4
5. Describe the five financial Q1-17 Q1-21 E1-16 E1-13
statements and how they are Q1-19 BE1-10 E1-17
prepared. Q1-20 DI1-5 P1-2
BE1-11 E1-9 P1-3
E1-18 E1-10 P1-4
E1-11 P1-5
E1-12
E1-14
E1-15
Expand Your Critical Thinking Real–World Focus Financial Reporting Decision–Making Across
Considering Comparative Analysis the Organization
People, Planet, Communication Activity
and Profit Ethics Case
All About You
1-5
, ANSWERS TO QUESTIONS
1. Yes, this is correct. Virtually every organization and person in our society uses accounting
information. Businesses, investors, creditors, government agencies, and not-for-profit organizations
must use accounting information to operate effectively.
2. Accounting is the process of identifying, recording, and communicating the economic events of
an organization to interested users of the information. The first step of the accounting process is
therefore to identify economic events that are relevant to a particular business. Once identified
and measured, the events are recorded to provide a history of the financial activities of the
organization. Recording consists of keeping a chronological diary of these measured events in an
orderly and systematic manner. The information is communicated through the preparation and
distribution of accounting reports, the most common of which are called financial statements.
A vital element in the communication process is the accountant’s ability and responsibility to
analyze and interpret the reported information.
3. (a) Internal users are those who plan, organize, and run the business and therefore are officers
and other decision makers.
(b) To assist management, accounting provides internal reports. Examples include financial
comparisons of operating alternatives, projections of income from new sales campaigns,
and forecasts of cash needs for the next year.
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell shares.
(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
5. No, this is incorrect. Bookkeeping usually involves only the recording of economic events and
therefore is just one part of the entire accounting process. Accounting, on the other hand, involves
the entire process of identifying, recording, and communicating economic events.
6. Jackie Remmers Travel Agency should report the land at £85,000 on its December 31, 2020
statement of financial position. This is true not only at the time the land is purchased, but also
over the time the land is held. In determining which measurement principle to use (cost or fair
value) companies weigh the factual nature of cost figures versus the relevance of fair value. In
general, companies use cost. Only in situations where assets are actively traded do companies
apply the fair value principle extensively. An important concept that accountants follow is the
historical cost principle.
7. The monetary unit assumption requires that only transaction data capable of being expressed in
terms of money be included in the accounting records. This assumption enables accounting to
quantify (measure) economic events.
8. The economic entity assumption requires that the activities of the entity be kept separate and
distinct from the activities of its owners and all other economic entities.
9. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
1-6 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
10. One of the advantages Teresa Alvarez would enjoy is that ownership of a corporation is repre-
sented by transferable shares. This would allow Teresa to raise money easily by selling
a part of her ownership in the company. Another advantage is that because holders of the shares
(shareholders) enjoy limited liability, they are not personally liable for the debts of the corporate
entity. Also, because ownership can be transferred without dissolving the corporation, the corporation
enjoys an unlimited life.
11. The basic accounting equation is Assets = Liabilities + Equity.
12. (a) Assets are resources owned by a business. Liabilities are claims against assets. Put more
simply, liabilities are existing debts and obligations. Equity is the ownership claim on total
assets.
(b) Equity is affected by shareholders’ investments, dividends, revenues, and expenses.
13. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
14. Yes, a business can enter into a transaction in which only the left side of the accounting equation
is affected. An example would be a transaction where an increase in one asset is offset by
a decrease in another asset. An increase in the Equipment account which is offset by a decrease
in the Cash account is a specific example.
15. Business transactions are the economic events of the enterprise recorded by accountants
because they affect the basic equation.
(a) No, the death of the president of the company is not a business transaction as it does not
affect the basic equation.
(b) Yes, supplies purchased on account is a business transaction as it affects the basic equation.
(c) No, an employee being fired is not a business transaction as it does not affect the basic
equation.
16. (a) Decrease assets and decrease equity.
(b) Increase assets and decrease assets.
(c) Increase assets and increase equity.
(d) Decrease assets and decrease liabilities.
17. (a) Income statement. (d) Statement of financial position.
(b) Statement of financial position. (e) Statement of financial position and retained
(c) Income statement. earnings statement.
(f) Statement of financial position.
18. No, this treatment is not proper. While the transaction does involve a receipt of cash, it does not
represent revenues. Revenues are the gross increase in equity resulting from business activities
entered into for the purpose of earning income. This transaction is simply an additional
investment made by one of the owners of the business.
19. Yes. Net income does appear on the income statement—it is the result of subtracting expenses
from revenues. In addition, net income appears in the retained earnings statement—it is shown
as an addition to the beginning-of-period retained earnings. Indirectly, the net income of a company
is also included in the statement of financial position. It is included in the Retained Earnings
account which appears in the equity section of the statement of financial position.
Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 1-7
, Questions Chapter 1 (Continued)
20. (a) Ending equity balance ...................................................................................... £198,000
Beginning equity balance ................................................................................. 158,000
Net income....................................................................................................... £ 40,000
(b) Ending equity balance ...................................................................................... £198,000
Beginning equity balance ................................................................................. 158,000
40,000
Deduct: Investment ......................................................................................... 13,000
Net income....................................................................................................... £ 27,000
21. (a) Total revenues (£30,000 + £70,000) ................................................................ £100,000
(b) Total expenses (£26,000 + £40,000) ................................................................ £66,000
(c) Total revenues ................................................................................................. £100,000
Total expenses................................................................................................. 66,000
Net income....................................................................................................... £34,000
22. TSMC’s accounting equation at December 31, 2016 was NT$1,886,455,302 = NT$496,404,176 +
NT$1,390,051,126.
1-8 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only)
