,Solution manual for Financial Accounting with
International Financial Reporting Standards,
5th Edition by Jerry J. Weygandt
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, CHAPTER 1
Accounting in Action
Learning Objectives
1. Identify the activities and users associated with accounting.
2. Explain the building blocks of accounting: ethics, principles, and assumptions.
3. State the accounting equation and define its components.
4. Analyze the effects of business transactions on the accounting equation.
5. Describe the five financial statements and how they are prepared.
*6. Explain the career opportunities in accounting.
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-1
, 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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
5. The four most common types of data analytics and the basic question each one addresses are:
Descriptive (What happened?), Diagnostic (Why did it happen?), Predictive (What is likely to
happen?), and Prescriptive (What should we do about it?).
LO 1 BT: K Difficulty: E TOT: 2 min. AACSB: Data Analytics AICPA FC: Measurement Analysis and Interpretation
6. 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.
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
7. Remmers Travel Agency should report the land at £85,000 on its December 31, 2025 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 basis 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 basis
extensively. An important concept that accountants follow is the historical cost basis.
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
1-2 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
8. 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.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
9. 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.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
10. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
11. 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.
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
12. The basic accounting equation is Assets = Liabilities + Equity.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
13. (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.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
14. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
15. 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.
LO 3, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
16. 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.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-3
,Questions Chapter 1 (Continued)
17. (a) Decrease assets and decrease equity.
(b) Increase assets and decrease assets.
(c) Increase assets and increase equity.
(d) Decrease assets and decrease liabilities.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
18. (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.
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
19. 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.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
20. 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.
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
21. (a) Ending equity balance ...................................................................................... £198,000
Less: Beginning equity balance ........................................................................ 158,000
Net income....................................................................................................... £ 40,000
(b) Ending equity balance ...................................................................................... £198,000
Less: Beginning equity balance ........................................................................ 158,000
40,000
Less: Investment ............................................................................................. 13,000
Net income....................................................................................................... £ 27,000
LO 5, BT: AN, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
22. (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
LO 5, BT: AN, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
23. TSMC’s accounting equation at December 31, 2020 was NT$2,760,600.5 = NT$924,836.7+
NT$1,835,763.8.
LO 3, BT: AP, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
1-4 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
, SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1.1
(a) ¥88,000 – ¥50,000 = ¥38,000 (Equity).
(b) ¥45,000 + ¥70,000 = ¥115,000 (Assets).
(c) ¥94,000 – ¥60,000 = ¥34,000 (Liabilities).
LO 3, BT: AP, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.2
(a) £120,000 + £232,000 = £352,000 (Total assets).
(Liabl. + Equity = Assets)
(b) £190,000 – £80,000 = £110,000 (Total liabilities).
(Assets –Equity = Liabl.)
LO 3, BT: AP, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.3
(a) (€800,000 + €150,000) – (€300,000 – €60,000) = €710,000
(Equity).
[(Beg. assets + incr.) – (Beg. liabl. – decrease) = Equity]
(b) (€300,000 + €100,000) + (€800,000 – €300,000 – €70,000) = €830,000
(Assets).
[(Beg. liabl. + incr.) + (Beg, equity – decr.) = Assets
(c) (€800,000 – €80,000) – (€800,000 – €300,000 + €120,000) = €100,000
(Liabilities).
[(Beg. assets – decr.) – (Beg. equity + incr.) = Liabl.]
LO 3, BT: AP, Difficulty: Easy, TOT: 5 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.4
Equity
Share
Capital
Assets = Liabilities + Ordinary – Dividends + Revenues – Expenses
(a) X = 90,000 + 150,000 – 40,000 + 450,000 – 340,000
X = 90,000 + 220,000
X = 310,000
(b) 57,000 = X + 35,000 – 7,000 + 52,000 – 35,000
57,000 = X + 45,000
X = 12,000 ( 57,000 – 45,000)
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-5
,BRIEF EXERCISE 1.4 (Continued)
(c) 660,000 = ( 660,000 x 2/3) + X (Equity)
660,000 = 440,000 + X
X = 220,000
LO 3, BT: AP, Difficulty: Moderate, TOT: 6 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.5
A (a) Accounts receivable A (d) Supplies
L (b) Salaries and wages payable E (e) Share capital—
Ordinary
A (c) Equipment L (f) Notes payable
LO 3, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.6
E (a) Advertising expense D (e) Dividends
R (b) Service revenue R (f) Rent revenue
E (c) Insurance expense E (g) Utilities expense
E (d) Salaries and wages expense
LO 3, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.7
Assets Liabilities Equity
(a) + + NE
(b) + NE +
(c) – NE –
LO 4, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.8
Assets Liabilities Equity
(a) + NE +
(b) – NE –
(c) NE NE NE
LO 4, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
1-6 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
,BRIEF EXERCISE 1.9
R (a) Received cash for services performed
NE (b) Paid cash to purchase equipment
E (c) Paid employee salaries
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.10
GRANDE LTD.
Statement of Financial Position
December 31, 2025
Assets
Accounts receivable ..................................................................... £ 62,500
Cash ............................................................................................... 49,000
Total assets ............................................................................ £111,500
Equity and Liabilities
Equity
Share capital-ordinary ........................................................... £ 21,500
Liabilities
Accounts payable .................................................................. 90,000
Total equity and liabilities ............................................. £111,500
(Accts. rec. + Cash = Share cap.-ord. + Accts. pay.)
LO 5, BT: AP, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.11
SFP (a) Notes payable
IS (b) Advertising expense
SFP (c) Share capital-ordinary
SFP (d) Cash
IS (e) Service revenue
LO 5, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-7
, SOLUTIONS FOR DO IT! EXERCISES
DO IT! 1.1
1. False. The three steps in the accounting process are identification,
recording, and communication.
2. True.
3. False. Financial accounting provides reports to help investors and
creditors evaluate a company.
4. True.
5. True.
LO 1, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
DO IT! 1.2
1. False. IFRS are issued by the IASB.
2. False. The standards of conduct by which actions are judged as right or
wrong, honest or dishonest, fair or not fair, are ethics.
3. False. The primary accounting standard-setting body in the United
States is the Financial Accounting Standards Board (FASB).
4. True.
5. True.
LO 2, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
DO IT! 1.3
1. Dividends is dividends (D); it decreases equity.
2. Rent Revenue is revenue (R); it increases equity.
3. Advertising Expense is an expense (E); it decreases equity.
4. When the shareholders invest Cash in the business, it is investment by
Shareholders (I); it increases equity.
LO 3, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
1-8 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
International Financial Reporting Standards,
5th 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
Learning Objectives
1. Identify the activities and users associated with accounting.
2. Explain the building blocks of accounting: ethics, principles, and assumptions.
3. State the accounting equation and define its components.
4. Analyze the effects of business transactions on the accounting equation.
5. Describe the five financial statements and how they are prepared.
*6. Explain the career opportunities in accounting.
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-1
, 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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
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.
LO 1, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
5. The four most common types of data analytics and the basic question each one addresses are:
Descriptive (What happened?), Diagnostic (Why did it happen?), Predictive (What is likely to
happen?), and Prescriptive (What should we do about it?).
LO 1 BT: K Difficulty: E TOT: 2 min. AACSB: Data Analytics AICPA FC: Measurement Analysis and Interpretation
6. 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.
LO 1, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
7. Remmers Travel Agency should report the land at £85,000 on its December 31, 2025 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 basis 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 basis
extensively. An important concept that accountants follow is the historical cost basis.
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
1-2 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
8. 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.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
9. 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.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Measurement, Analysis and Interpretation
10. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
LO 2, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
11. 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.
LO 2, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
12. The basic accounting equation is Assets = Liabilities + Equity.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
13. (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.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
14. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
LO 3, BT: K, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
15. 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.
LO 3, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
16. 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.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-3
,Questions Chapter 1 (Continued)
17. (a) Decrease assets and decrease equity.
(b) Increase assets and decrease assets.
(c) Increase assets and increase equity.
(d) Decrease assets and decrease liabilities.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
18. (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.
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
19. 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.
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
20. 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.
LO 5, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
21. (a) Ending equity balance ...................................................................................... £198,000
Less: Beginning equity balance ........................................................................ 158,000
Net income....................................................................................................... £ 40,000
(b) Ending equity balance ...................................................................................... £198,000
Less: Beginning equity balance ........................................................................ 158,000
40,000
Less: Investment ............................................................................................. 13,000
Net income....................................................................................................... £ 27,000
LO 5, BT: AN, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
22. (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
LO 5, BT: AN, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
23. TSMC’s accounting equation at December 31, 2020 was NT$2,760,600.5 = NT$924,836.7+
NT$1,835,763.8.
LO 3, BT: AP, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
1-4 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
, SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1.1
(a) ¥88,000 – ¥50,000 = ¥38,000 (Equity).
(b) ¥45,000 + ¥70,000 = ¥115,000 (Assets).
(c) ¥94,000 – ¥60,000 = ¥34,000 (Liabilities).
LO 3, BT: AP, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.2
(a) £120,000 + £232,000 = £352,000 (Total assets).
(Liabl. + Equity = Assets)
(b) £190,000 – £80,000 = £110,000 (Total liabilities).
(Assets –Equity = Liabl.)
LO 3, BT: AP, Difficulty: Easy, TOT: 3 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.3
(a) (€800,000 + €150,000) – (€300,000 – €60,000) = €710,000
(Equity).
[(Beg. assets + incr.) – (Beg. liabl. – decrease) = Equity]
(b) (€300,000 + €100,000) + (€800,000 – €300,000 – €70,000) = €830,000
(Assets).
[(Beg. liabl. + incr.) + (Beg, equity – decr.) = Assets
(c) (€800,000 – €80,000) – (€800,000 – €300,000 + €120,000) = €100,000
(Liabilities).
[(Beg. assets – decr.) – (Beg. equity + incr.) = Liabl.]
LO 3, BT: AP, Difficulty: Easy, TOT: 5 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.4
Equity
Share
Capital
Assets = Liabilities + Ordinary – Dividends + Revenues – Expenses
(a) X = 90,000 + 150,000 – 40,000 + 450,000 – 340,000
X = 90,000 + 220,000
X = 310,000
(b) 57,000 = X + 35,000 – 7,000 + 52,000 – 35,000
57,000 = X + 45,000
X = 12,000 ( 57,000 – 45,000)
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-5
,BRIEF EXERCISE 1.4 (Continued)
(c) 660,000 = ( 660,000 x 2/3) + X (Equity)
660,000 = 440,000 + X
X = 220,000
LO 3, BT: AP, Difficulty: Moderate, TOT: 6 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.5
A (a) Accounts receivable A (d) Supplies
L (b) Salaries and wages payable E (e) Share capital—
Ordinary
A (c) Equipment L (f) Notes payable
LO 3, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.6
E (a) Advertising expense D (e) Dividends
R (b) Service revenue R (f) Rent revenue
E (c) Insurance expense E (g) Utilities expense
E (d) Salaries and wages expense
LO 3, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.7
Assets Liabilities Equity
(a) + + NE
(b) + NE +
(c) – NE –
LO 4, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.8
Assets Liabilities Equity
(a) + NE +
(b) – NE –
(c) NE NE NE
LO 4, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
1-6 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
,BRIEF EXERCISE 1.9
R (a) Received cash for services performed
NE (b) Paid cash to purchase equipment
E (c) Paid employee salaries
LO 4, BT: C, Difficulty: Easy, TOT: 2 min., AACSB: None, AICPA FC: Reporting
BRIEF EXERCISE 1.10
GRANDE LTD.
Statement of Financial Position
December 31, 2025
Assets
Accounts receivable ..................................................................... £ 62,500
Cash ............................................................................................... 49,000
Total assets ............................................................................ £111,500
Equity and Liabilities
Equity
Share capital-ordinary ........................................................... £ 21,500
Liabilities
Accounts payable .................................................................. 90,000
Total equity and liabilities ............................................. £111,500
(Accts. rec. + Cash = Share cap.-ord. + Accts. pay.)
LO 5, BT: AP, Difficulty: Easy, TOT: 4 min., AACSB: Analytic, AICPA FC: Reporting
BRIEF EXERCISE 1.11
SFP (a) Notes payable
IS (b) Advertising expense
SFP (c) Share capital-ordinary
SFP (d) Cash
IS (e) Service revenue
LO 5, BT: C, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only) 1-7
, SOLUTIONS FOR DO IT! EXERCISES
DO IT! 1.1
1. False. The three steps in the accounting process are identification,
recording, and communication.
2. True.
3. False. Financial accounting provides reports to help investors and
creditors evaluate a company.
4. True.
5. True.
LO 1, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
DO IT! 1.2
1. False. IFRS are issued by the IASB.
2. False. The standards of conduct by which actions are judged as right or
wrong, honest or dishonest, fair or not fair, are ethics.
3. False. The primary accounting standard-setting body in the United
States is the Financial Accounting Standards Board (FASB).
4. True.
5. True.
LO 2, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
DO IT! 1.3
1. Dividends is dividends (D); it decreases equity.
2. Rent Revenue is revenue (R); it increases equity.
3. Advertising Expense is an expense (E); it decreases equity.
4. When the shareholders invest Cash in the business, it is investment by
Shareholders (I); it increases equity.
LO 3, BT: K, Difficulty: Easy, TOT: 3 min., AACSB: None, AICPA FC: Reporting
1-8 Copyright © 2022 WILEY Weygandt Financial Accounting, IFRS, 5/e, Solutions Manual (For Instructor Use Only)
